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南玻B:2019年半年度报告(英文版) 下载公告
公告日期:2019-08-23

CSG HOLDING CO., LTD.

SEMI-ANNUAL REPORT 2019

Chairman of the Board:

CHEN LIN

August 2019

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 all responsibilities, individual and/or joint, for the facticity, accuracy andcompleteness of the whole contents.Ms. Chen Lin, Chairman of the Board, Mr. Wang Jian, responsible person in charge of accountingand Ms.Wang Wenxin, principal of the financial department (accounting officer) confirm that theFinancial Report enclosed in the semi-annual report of the Company is true, accurate and complete.All directors were present at the meeting of the Board for deliberating the semi-annual report of theCompany in person.This report involves future plans and some other forward-looking statements, which shall not beconsidered as virtual promises to investors. Investors are kindly reminded to pay attention topossible risks.Details of the risk factors and countermeasures of future development have been well-described inthis report, please find in Section IV Performance Discussion and Analysis.The Company has no plans of cash dividend distribution, bonus shares being sent or convertingcapital reserve into share capital.This report is prepared both in Chinese and English. Should there be any inconsistency between theChinese and English versions, the Chinese version shall prevail.

Content

Section I Important Notice, Content and Paraphrase ...... 1

Section II. Company Profile & Financial Highlights ........................................................................... 4

Section III Overview of the Company’s Business ...... 7

Section IV. Performance Discussion and Analysis ............................................................................ 11

Section V. Important Events ............................................................................................................... 23

Section VI. Changes in Shares and Particulars about Shareholders .................................................. 42

Section VII. Particulars about Directors, Supervisors, Senior Executives and Employees ............... 49

Section VIII. Financial Report ........................................................................................................... 51

Section IX. Documents available for Reference .............................................................................. 142

Paraphrase

ItemRefers toContent
Company, the Company, CSG or the GroupRefers toCSG Holding Co., Ltd.
Foresea LifeRefers toForesea Life Insurance Co., Ltd.
Ultra-thin electronic glassRefers toThe electronic glass with thickness between 0.1~1.1mm
Second-generation energy-saving glassRefers toDouble silver coated glass
Third-generation energy-saving glassRefers toTriple silver coated glass
AG glassRefers toAnti-glare glass
AF glassRefers toAnti-fingerprint glass

Section II. Company Profile & Financial Highlights

I. Company Profile

Short form of the stockSouthern Glass A、Southern Glass BStock code000012、200012
Listing stock exchangeShenzhen 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 CompanyCSG Holding Co., Ltd.
Abbr. of legal English name of the CompanyCSG
Legal RepresentativeChen Lin

II. Person/Way to contact

Secretary of the BoardRepresentative of securities affairs
NameYang XinyuChen Chunyan
Contact addressCSG 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
E-mailsecurities@csgholding.comsecurities@csgholding.com

III. Other information

1. Way of contact

Whether registered address, office address and their postal codes, website address and email address of the Company changed in thereport period or not

□ Applicable √Not applicable

The registered address, office address and their postal codes, website address and email address of the Company did not change inthe report period. More details can be found in Annual Report 2018.

2. Information disclosure and preparation place

Whether information disclosure and preparation place changed in the report period or not

□Applicable √ Not applicable

The newspapers designated by the Company for information disclosure, the website designated by CSRC for disclosing semi-annualreport and preparation place of semi-annual report did not change in the report period. More details can be found in Annual Report2018.

3. Other relevant information

Whether other relevant information changed in the report period or not

□Applicable √ Not applicable

IV. Main accounting data and financial indexesWhether it has retroactive adjustment or re-statement on previous accounting data for accounting policy changed and accountingerror correction or not

□Yes √ No

The report period (Jan. to Jun.2019)The same period of last yearIncrease/decrease year-on-year
Operating income (RMB)4,888,237,5785,471,169,598-10.65%
Net profit attributable to shareholders of the listed company (RMB)377,342,401352,837,1536.95%
Net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses (RMB)283,939,444334,049,718-15.00%
Net cash flow arising from operating activities (RMB)767,982,465764,564,0880.45%
Basic earnings per share (RMB/Share)0.120.12-
Diluted earnings per share (RMB/Share)0.120.119.09%
Weighted average ROE4.09%4.09%-
End of this periodEnd of last yearIncrease/decrease in this period-end over that of last year-end
Total assets (RMB)18,447,187,07019,114,234,184-3.49%
Net assets attributable to shareholders of the listed company (RMB)9,355,037,4739,103,154,5712.77%

The total share capital of the company as of the previous trading day of disclosure:

The total share capital of the company as of the previous trading day of disclosure (share)3,108,196,163
Fully diluted earnings per share calculated with latest equity (RMB/share)0.12

V. Difference of accounting data under domestic and overseas accounting standards

1. Differences of the net profit and net assets disclosed in financial report prepared under international andChinese accounting standards

□ Applicable √ Not applicable

No such differences in the report period.

2. Difference of the net profit and net assets disclosed in financial report prepared under overseas andChinese accounting standards

□ Applicable √ Not applicable

No such differences in the report period.

3.Explanation of the difference of accounting data under domestic and overseas accounting standards

□ Applicable √ Not applicable

VI. Items and amounts of extraordinary profit (gains)/loss

√Applicable □ Not applicable

Unit: RMB

ItemAmountNote
Gains/losses from the disposal of assets (including the write-off that accrued for impairment of assets)370,969
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)107,755,413
Other non-operating income and expenditure except for the aforementioned items-2,626,912
Profits and losses from external entrusted loans5,345,912
Less: Impact on income tax15,155,936
Impact on minority shareholders’ equity (post-tax)2,286,489
Total93,402,957--

It did not exist that items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss in Q&AAnnouncement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss inthe report period.

Section III Overview of the Company’s BusinessI. 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 productsand technologies are very popular at home and abroad. Its main business covers R&D, manufacturing and sales of high quality floatglass and architectural glass, solar glass, silicon material, renewable energy products such as PV battery and modules, and newmaterials and information display products such as ultra-thin electronic glass and display devices. It also provides one-stop servicessuch as project development, construction, operation and maintenance of solar photovoltaic power plants.

Flat glass industryCSG has ten float glass production lines representing domestic advanced technology located in Dongguan, Chengdu, Langfang,Wujiang and Xianning, two solar calendered glass production lines and twelve solar glass deep processing production lines, and itowns quartz sand raw material bases in Jiangyou, Sichuan Province and Qingyuan, Guangdong Province. At present, the annualcapacity of various kinds of high-grade float glass is about 2.5 million tons, and the products cover high-grade float glass andultra-white float glass with thickness from 1.3mm to 25mm, each performance indicator of which has reached domestic leading level.Those products are widely used in high-grade buildings, decoration and furniture, mirror, automotive windshield, scanner, copierlight trans missive plate, home appliance panel, display devices protection and solar energy field. With annual capacity of about 0.43million tons of solar glass, the Company has deep processing capacity of 60 million square meters per year, mainly produces andsells 2.0-4.0mm solar processed glass. The Company has always adhered to the principle of continuous innovation andtransformation and upgrading, implemented a differentiated competition strategy, and improved the profitability of flat glass industry.In 2019, the second production line of the subsidiary Chengdu CSG Glass Co., Ltd. switched to ultra-white float glass production,further enhancing the proportion of CSG in the ultra-white float glass market. The Company accelerates technological reform ofproduction line of photovoltaic glass to improve production capacity of 1.6-2.5mm double-glass thin glass, strengthens thedevelopment of overseas markets for continuously increasing the proportion of overseas income, and expands the marketdevelopment of high value-added products such as ultra-white glass and their overseas markets, further enhancing the marketcompetitiveness of CSG's flat glass industry.Architectural glass industry

As one of the nation's largest suppliers of high-grade engineering and architectural glass, CSG has five architectural andenergy-saving glass processing bases located in Tianjin, Dongguan, Xianning, Wujiang and Chengdu. The Company possesses theinternational advanced glass deep-processing equipment and testing instruments, and its products basically cover all kinds ofarchitectural glass. R&D and application of coating technology of the Company keep pace with the world and its technology ofhigh-end product is even of the world’s top level. Following the second generation of energy-saving glass products, the Company hassuccessively developed the third generation and multi-function energy-saving glass products with continuous improvingenergy-saving and heat-preservation effect. Its high-quality energy-saving LOW-E insulating glass has always led the domestichigh-end building energy-saving glass market. At present, the Company’s LOW-E coated glass and LOW-E coated insulating glasshave reached annual capacity of more than 36.00 million square meters and 16.00 million square meters respectively.The Company’s quality management system for engineering and architectural glass has been respectively approved by organizationsof UK AOQC and Australia QAS. The product quality which meets the national standards of the US, the UK and Australia enablesCSG has an advantage in the international tendering and bidding. Since 1988, CSG's engineers and technicians have beencontinuously participating in the formulation and compilation of various national standards and industry standards. Various

high-quality architectural glass of the Company has been used in many landmark buildings at home and abroad, such as BeijingCapital International Airport, CCTV, China Resources Headquarters Building, Shenzhen KingKey100 Building, Shenzhen Shen NinePioneer Park, Shenzhen Trade Qianhai Center, Ping An International Finance Centre, Hangzhou International Airport, HangzhouEurope finance City, Shanghai Qiantan Iron Lion Gate Center, Chengdu Zhongjiao International Center, Changsha World TradeCenter, Hefei Evergrande Center, Beijing subsidiary administrative center, Beijing Daxing International Airport, Qingdao JiaodongInternational Airport, Chengdu International Finance Center, Hangzhou Hampton and other more than ten Hilton Hotels, Hong KongFour Seasons Hotel, Melbourne Airport, Midtown, International Centre of Abu Dhabi and Korea LCT.Furthermore, the newly invested Jade Glass project of this year is undergoing a process ramp-up and it will be put into operationsoon. This project will open up the high level interior decoration glass market for CSG in the future, and further strengthen the futurecompetitive advantages of CSG in the field of construction engineering.Solar Energy industry

CSG has entered solar photovoltaic industry since 2005 and is one of enterprises which firstly enter the field in China. After morethan ten years of construction, operation and technological upgrading, CSG has built an industry chain in the field, covering high-purity polysilicon materials, high-efficiency silicon wafer, silicon solar cell and modules, and the design and construction of solarphotovoltaic power plants, by which the Company ensures the stable quality and best cost-efficiency of its PV products to customers.The Company now produces 9,000 ton/year of high purity polysilicon, 2.2 GW/year of silicon wafer, 0.85GW/year of solar cell, and

0.4GW/year of modules. The quality and performance indicators of the Company's polysilicon have reached the advanced level in theindustry and its reserved production technology of electronic-grade polysilicon has entered the stage of technical demonstration. Inorder to actively cope with the industrial change that new technologies are continuously introduced into the industry, the Companyhas taken the initiative in technical transformation and upgrading of polysilicon. Meanwhile, the Company is also promotingpolysilicon and silicon wafer projects of Yichang CSG, technological innovation, expansion and reconstruction projects of perc solarcell module in Dongguan in order to enhance the anti-risk capacity of its PV industry chain and drive the balanced, stabledevelopment of its PV industry chain. When the projects are completed, the quality and performance indicators of the Company'spolysilicon, silicon wafers and silicon solar cells will greatly increase while the manufacturing costs will be cut down further and thegeneral competitiveness of the chain will be further improved.To build the whole solar industry chain, the Company established Shenzhen CSG PV Energy Co., Ltd., a wholly-owned subsidiary, in2015, of which the main business is to invest and develop solar power plants and extend CSG's solar energy industry to cover highlyvalue-added terminal applications. By making the investment and operation of PV plants bigger and stronger, the internal resourcesare effectively integrated, which will help the Company to enhance the competitiveness of its solar energy industry.Electronic glass and display industry

The Company currently owns four electronic glass production bases, Hebei Panel, Yichang Photoelectric, Qingyuan CSG andXianning Photoelectric. CSG electronic glass industry is divided into high aluminum and medium aluminum, with 0.20-8.0mmproducts categorized into high aluminum glass series products and 0.20-1.1mm products into medium aluminum glass seriesproducts respectively. The products are widely applied in mobile intelligent terminal display and body protection, ITO conductivecomponent, and extended to military security, new type vehicle display screen, special traffic vehicles, smart home appliances andother fields. Through active and effective product R&D and market development, CSG electronic glass has become an importantalternative for protective glass substrates for well-known consumer electronics brands at home and abroad.In December 2018, the second phase of the subsidiary Qingyuan CSG Energy Saving New Materials Co., Ltd. started constructionand is expected to be completed and put into operation in 2020. In this project, a unique one-kiln and two-line process is adopted toproduce 0.33-1.1mm ultra-white and ultra-thin electronic glass, 3-4mm or 15-22mm ultra-white special glass at the same time. Afterthe completion of the project, the product structure and combination of the Company in the field of electronic glass products can beimproved, which will effectively reduce the manufacturing cost, increase the market share of the electronic glass business, andimprove the Company's comprehensive competitiveness in electronic glass industry.

Since the establishment of Shenzhen CSG Display Technology Co., Ltd. in 2000, with nearly 20 years of experience in the field oftouch display, the Company's main products and core technologies cover three major businesses, namely vacuum magnetronsputtering coating, yellow light pattern forming and TP module processing. The Company positioned its products to middle andhigh-end customers at home and abroad, and now has formed two complete touch industry chains. One of the industry chains is“glass coating→glass yellow light pattern forming→glass touch module processing” with electronic glass as substrate, the mainproducts of which cover high-grade & middle-grade ITO conductive glass, glass Sensor/G-TP module and differential products ofglass substrate composite coating like Anti-reflection glass (AR), Anti-fingerprint glass (AF), Semi-translucent glass, Reflective andSemi-transparent Optics Coating Glass (RT), Diamond-like carbon (DLC). The other industry chain is “substrate coating→flexibleyellow light pattern processing→flexible touch module manufacturing” with flexible optical film as substrate, the main products ofwhich cover high-grade and medium-grade ITO conductive film, ITO copper film, film Sensor/F-TP module, etc. In recent years, theCompany has successfully realized the business transformation to the automotive touch field, established the TS16949 qualitymanagement system for the automotive industry, and continuously continued to increase the investment layout in the automotivesector. At present, the products in the automotive field cover products such as vehicle glass sensor, vehicle touch module, vehiclemulti-function cover, and vehicle touch display integrated module. In the first half of this year, the high-end AG glass automationproduction line for the vehicle-mounted central control panel market has been able to produce high-quality sodium-calcium AG glassand high-alumina AG glass in mass production, which will become a new profit contributor for CSG's display industry. With years ofdevelopment, CSG has become a high-quality supplier of electronic application materials in the display touch-control industry, aswell as a supplier of touch-sensors and TP modules, which can provide customers with a full range of one-stop TP solutions.II. Major changes in main assets

1. Details of major changes in main assets

Main assetsNote of major changes
Equity assetsNo significant changes in equity assets during the report period
Fixed assetsNo significant changes in fixed assets during the report period
Intangible assetsNo significant changes in intangible assets during the report period
Construction in progressMainly due to the transfer of construction in progress to fixed assets
Accounts receivableMainly due to the increase in accounts receivable of some subsidiaries
Assets held for saleMainly due to the disposal of assets held for sale in the current period
Other current assetsMainly due to the recovery of entrusted loans during the period

2. Main overseas assets

□ Applicable √ Not applicable

III. Core Competitiveness Analysis

① The Company currently has built complete industry chains in the involved industries, which has complementary advantage. Inglass industry, the Company has set up the industry chain as quartz sand → high quality float glass → architectural energy-savingglass. In the solar energy industry, the Company has finished the comprehensive construction of industry chain from high purity

polysilicon materials, silicon wafer processing to cell and its module, photovoltaic rolled glass, etc. and extended to terminalapplication of PV power plant. With the improvement of technology in the chains, the industrial advantages emerged.

② The Company possesses a complete industry layout. At present, the Company has established large production bases in EastChina, West China, South China, North China and Central China, which enables the Company to be closer to the market and servethe market better.

③ The Company has capability of technology innovation and product innovation. It owns independent intellectual property rights ofhigh-end float glass production process. The technology level of ultra-thin electronic glass is in the leading position in China. TheCompany also keeps its R&D and production of energy-saving glass in line with the world’s advanced level, and its technique andtechnology in the field of solar energy keep leading position in domestic market.

④ The Company possesses high anti-risk capability. It has established an effective internal control system. Meanwhile, themanagement and control ability of account receivable and inventory stand in a high level within the industry. CSG’s managementteam has an international perspective and an open management philosophy. It aims to achieve the transfer of capacity and continuesto expand new business fields along with the national policies of the Belt and Road based on the intensive development of CSG'smain business, making the Company be bigger and stronger, so as to be a comprehensive industrial group.

Section IV. Performance Discussion and Analysis

I. OverviewIn the first half year of 2019, the global economic situation was turbulent and risk events occurred frequently. Under the backgroundof a slowdown in the global economic growth and increasing uncertainty, the market environment for entity economies becameextremely severe.Confronting the complex and volatile market environment, all the industries the Company involved were facing certain operatingpressure, to which the management team and the divisions of the Company responded positively, taking great effort to resolvedifficulties, and the Company achieved preferable business performance in the first half year of 2019. Although the Company lostpart of its revenue compared with the same period of last year due to the technical upgrade of polysilicon and polysilicon wafer, theCompany's overall profit increased year on year. In the first half year of 2019, the Company achieved operating income of RMB4,888 million, net profit of RMB 387 million, with a year-on-year increase of RMB 28 million and growth rate of 7.70%, and netprofit attributable to the parent company of RMB 377 million, with a year-on-year increase of RMB 25 million and growth rate of

6.95 %.

Glass industry:

In the first half year of 2019, due to the impact of the rising cost of natural gas fuel, the overall slowdown in real estate growth andthe adverse effects of Sino-US trade friction on automotive glass and industrial glass exports, the glass industry was generally underpressure, the prices of which fluctuated to a certain extent. By taking a series of measures, the Company had achieved good businessperformance. In the first half year of 2019, the glass industry achieved operating income of RMB 3,670 million with an increase of

0.13% and net profit of RMB 355 million, with a decrease of 19.90%. The detail is as follows:

Flat glass: In the first half year of 2019, influenced by the rising cost of glass production resulted by the rising price of natural gasfuel, and the slowdown of downstream demand, the operation of the flat glass industry was under pressure and the overallperformance showed a certain year-on-year decline. To cope with unfavorable effects of the industry, the Company effectivelyreduced the negative impact of rising fuel costs and falling industry prices through continuous promotion of industry synergies,product structure optimization, cost reduction and efficiency enhancement.Architectural glass: In the first half year of 2019, under the pressure of industry changes and intensified competition, the Companyadopted a series of management measures, including improving and running marketing network to improve service quality,promoting informatization and automation to increase production efficiency, and strengthening cost control and assessment to lowercosts effectively, and the performance of the architectural glass industry bucked the trend and increased significantly, maintaining itsleading position in this industry.Solar energy industry:

Affected by the policy, PV market still was hovering at the bottom in the first half year of 2019, especially in the manufacturing marketof upstream materials. Meanwhile, affected by the rapid expansion of new production capacity in the regions with low electrovalenceand the continuous introduction of new technologies, the operation and development of the solar energy industry were under greatpressure. In order to actively cope with the severe market environment, in addition to the technical upgrade of polysilicon andpolysilicon wafer in the early stage, in the first half year of 2019, the Company adopted multi-pronged approach from industrystrategy to refined management, positively expanding external cooperation of PV industry, increasing production and sales share ofhigh value-added products, continuously improving production efficiency and reducing costs,. Although the fact that some capacityhad come off line resulted by the technical upgrade of polysilicon and polysilicon wafer had a certain impact on income, the solar

energy sector as a whole achieved a turnaround. In the first half year of 2019, the solar energy industry achieved operating income ofRMB 775 million, and net profit of RMB 23 million, reducing losses by RMB 67 million.Electronic glass and display industry:

In the first half year of 2019, the electronic glass and display industry continued to grow with the upgrading of product technologyand the steady development of the market and achieved operating income of RMB 510 million, and net profit of RMB 105 million,with a year-on-year increase of RMB 47 million and growth rate of 82%. In January 2019, the high-alumina electronic glassproduction base of Xianning Photovoltaic officially entered commercial operation. Through continuous R&D investment andtechnological innovation, the product quality has gradually improved and the products have entered the domestic famous brandmarket. The construction of Qingyuan CSG Phase II, ultra white electronic glass project, is going on smoothly. When the project iscompleted, the industry influence of CSG electronic glass will be further enhanced. Yichang Display seized the opportunity ofvehicle touch control market, speeded up equipment expansion and transformation projects, fully released production capacity, andgreatly increased the shipment volume of yellow light and TP modules. The AG glass production line mainly oriented to theautomotive central control panel market is now in the trial production stage and expected to be officially transferred to commercialoperation in the second half of the year, which will become a new profit contributor for CSG's display industry.II. Main business analysisOverviewWhether it is the same as the “Overview” disclosed in “Performance Discussion and Analysis”

√Yes □ No

Year-on-year changes of main financial data

Unit: RMB

The report periodThe corresponding period of last yearIncrease /decrease year-on-year(%)Reasons of change
Operating revenue4,888,237,5785,471,169,598-10.65%Mainly due to the technical upgrade of polysilicon and polysilicon wafer.
Operating costs3,671,376,8254,099,496,754-10.44%Mainly due to the technical upgrade of polysilicon and polysilicon wafer.
Sales expenses172,503,399172,217,2540.17%
Administration expenses292,862,355374,512,817-21.80%Mainly due to the decrease in amortization of restricted stock expenses.
Financial expenses159,066,859185,877,426-14.42%Mainly due to the decrease in interest expenses.
Income tax expenses76,458,74061,371,10424.58%Mainly due to the increase in income tax expenses of some subsidiaries.
R&D investment174,276,136166,041,1854.96%
Net cash flow arising from operating activities767,982,465764,564,0880.45%
Net cash flow arising from investment-291,273,292-320,027,457-8.98%Mainly due to the increase in other cash related to investment activities received.
activities
Net cash flow arising from financing activities-957,535,892454,077,150-310.88%Mainly due to the decrease in new borrowings.
Net increase of cash and cash equivalent-480,886,047898,500,181-153.52%Mainly due to the decrease in net cash flow arising from financing activities.

Major changes on profit composition or profit resources in the report period

□Applicable √Not applicable

There were no major changes on profit composition or profit resources in the report period.Composition of main business

Unit: RMB

Operating revenueOperating costGross profit ratioIncrease/decrease of operating revenue y-o-yIncrease/decrease of operating cost y-o-yIncrease/decrease of gross profit ratio y-o-y
According to industry
Glass industry3,634,841,1472,722,183,60125.11%0.05%6.43%-4.49%
Electronic glass and display device industry508,366,455367,535,91827.70%17.24%26.11%-5.09%
Solar energy industry756,976,466624,139,62717.55%-46.27%-51.32%8.55%
According to product
Glass product3,634,841,1472,722,183,60125.11%0.05%6.43%-4.49%
Electronic glass and display device product508,366,455367,535,91827.70%17.24%26.11%-5.09%
Solar energy product756,976,466624,139,62717.55%-46.27%-51.32%8.55%
According to region
Mainland China4,117,370,2463,119,904,84224.23%-11.40%-10.33%-0.90%
Asia (excluding Mainland China and H.K.)516,968,408393,348,38423.91%-3.96%-10.18%5.27%

III. Non - core business analysis

√Applicable □ Not applicable

Unit: RMB

AmountPercentage to total profitsExplanation of the reasonWhether sustainable or not
Other income107,755,41323.26%Mainly due to government subsidies, etc.No
Impairment of assets-3,765,670-0.81%Mainly due to bad debt lossNo
Non-operating income3,666,3150.79%Mainly due to indemnity for trademark infringementNo
Non-operating expenses6,293,2271.36%Mainly due to compensation and donation expenses, etc.No

IV. Assets and liabilities

1. Significant changes in assets composition

Unit: RMB

End of the report periodEnd of the same period of last yearIncrease or decrease in proportionExplanation of significant changes
AmountPercentage to total assetsAmountPercentage to total assets
Monetary funds1,895,457,29010.28%2,226,447,72011.65%-1.37%Mainly due to the reduction of strategic capital reserves and debt restructuring.
Accounts receivable780,075,7974.23%592,233,3123.10%1.13%Mainly due to the increase in accounts receivable of some subsidiaries.
Prepayments111,724,1910.61%91,176,6750.48%0.13%Mainly due to the increase in prepayment for materials.
Inventory733,850,9283.98%600,139,7503.14%0.84%Mainly due to the increase in inventory of some subsidiaries.
Assets held for sale45,983,5200.24%-0.24%Mainly due to the disposal of assets held for sale.
Other current assets136,195,9740.74%445,327,4492.33%-1.59%Mainly due to the recovery of entrusted loans.
Fixed assets10,301,649,82555.84%9,930,843,77551.96%3.88%
Construction in progress1,940,864,95510.52%2,559,179,44213.39%-2.87%Mainly due to the transfer of construction in progress to fixed assets.
Short-term borrowing2,665,570,34814.45%2,922,679,59015.29%-0.84%
Bills payable280,009,2741.52%105,150,0000.55%0.97%Mainly due to the increase in bills payable of some companies.
Employee benefits payable185,107,4111.00%266,459,1511.39%-0.39%Mainly because the year-end bonus accrued in the previous year was paid in the current period.
Other payables356,979,8121.94%552,751,1872.89%-0.95%Mainly due to the repurchase of restricted stocks.
Long-term borrowing2,292,462,50012.43%2,315,700,00012.12%0.31%
Long-term accounts payable291,363,1521.58%529,910,7962.77%-1.19%Mainly due to the repayment of financing leases in the current period.
Deferred income31,806,0650.17%22,118,8400.12%0.05%
tax liabilities
Capital reserve723,817,7633.92%1,095,339,4215.73%-1.81%Mainly due to the transfer of capital reserve into share capital and the repurchase of restricted stocks.
Treasury stock137,277,5630.74%277,180,9831.45%-0.71%Mainly due to the repurchase of restricted stocks.
Special reserve8,235,2510.04%6,068,6000.03%0.01%Mainly due to increased investment in safety production.

2. Assets and liabilities at fair value

□Applicable √Not applicable

3. Limited asset rights as of the end of the report period

ItemClosing book valueLimited reason
Monetary funds151,216,424Limited margin circulation.
Fixed assets1,999,256,317Limited financing lease.
Total2,150,472,741

V. Investment analysis

1. Overall situation

√Applicable □ Not applicable

Investment in the report period (RMB)Investment in the same period of last year ( RMB)Change range
327,952,063327,218,8700.22%

2. The major equity investment obtained in the report period

□Applicable √Not applicable

3. The major ongoing non-equity investment in the report period

√Applicable □ Not applicable

Unit: RMB 0,000

ProjectWay of investmentFixed asset investment or notIndustry involvedAmount invested in the report periodAccumulative amount actually invested by the end of the report periodSource of fundsProgress of project (ongoing projects)Expected returnAccumulative revenue achieved by the end of the report periodReasons for not achieving the planned progress and the expected returnDate of disclosure (if applicable)Index of disclosure (if applicable)
PV power plant investmentSelf-builtYesManufacturing industry26,214Own funds and loans from financial institutionsCSG plans to construct PV power plants within two years from 2016 to 2017. Its wholly-owned subsidiary, Shenzhen CSG PV Energy Co., Ltd. will self-build 200MW and the remaining 140MW will be constructed by CSG with Qibin Group. During 2016 to first half of 2019, Shenzhen CSG PV developed and built a total of 82MW of photovoltaic power stations, including 62MW of distributed photovoltaic power plants and 20MW of centralized photovoltaic power plants.4,3443,789Part of the project has been completed.January 22, 2016Notice number: 2016-006
Yichang CSG Polysilicon wafer capacity technology upgradeSelf-builtYesManufacturing industry2,0472,642Own funds and loans from financial institutionsIt is planned to fully implement the diamond wire cutting technology in the production of silicon wafers, introduce the casting single crystal technology and the wet black silicon technology,12,5990The project has been transferred to commercial operation in July 2019. No revenue had beenJuly 28, 2018Notice number: 2018-040
projectand upgrade the production capacity of the 1.3 GW polysilicon wafers in the early stage of the company to form an annual output of about 1.2 GW of cast single wafer. And annual production capacity of about 0.8GW wet black silicon wafer.achieved by the end of the report period.
Qingyuan CSG Ultra-clean electronic glass and ultra-white special glass production line construction projectSelf-builtYesManufacturing industry1,6541,688Own funds and loans from financial institutionsThe company plans to adopt an advanced design concept of one kiln and two lines to build a kiln two-line (80+620T/D) ultra-white electronic and ultra-white special glass production line with a daily melting capacity of 700 tons in Qingyuan CSG. The first line plan is 80T/ D design, will produce 0.33-1.1mm, and consider 2mm production capacity, mainly produces electronic display tempered protective glass for mobile phones. The second-line plan is designed according to 620T/D, with two series of 3-4mm and 15-22mm, 5-12mm as the transition, mainly producing AG anti-glare, "exposure glass" for scanning and copying machine, TCO and battery for thin film battery. Ultra-white special glass such as front plate and back plate.16,4200No income as the project is in the construction period.December 22, 2018Notice number:2018-072
Hebei PanelSelf-builtYesManufac1,266Own fundsPlan to establish a production line for0The project has noOctoberNotice
Glass project of medium-alumina ultra-thin electronic glassturing industrymedium-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.income at present29, 2014number: 2014-030
Dongguan PV-tech PERC Battery Technology Upgrade ProjectSelf-builtYesManufacturing industry1,4711,471Own funds and loans from financial institutionsUpgrading PERC battery technology on the basis of existing A and B battery production equipment of Dongguan PV-tech will make full use of and improve the function and efficiency of existing equipment. When the project is completed, Dongguan PV-tech will have an 850MW high-efficiency PERC battery production line. The conversion efficiency of mono-crystalline and polycrystalline solar cells will increase from the current 20.2% and 18.85% to 21.5% and 20.1% respectively.1,611No income as the project is in the construction period.February 26, 2019Notice number: 2019-014
Yichang CSG 700MW crystalline silicon solar cell projectSelf-builtYesManufacturing industry0--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.0The project was suspended.December 25, 2010Notice number: 2010-046
Expanding 500MW solar module project in DongguanSelf-builtYesManufacturing industry0--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.0The project was suspended.January 19, 2011Notice number: 2011-003
Relocation and equipment upgrading of the solar module production line in DongguanSelf-builtYesManufacturing industry0--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 workshop will be 300MW and, afterwards, it will be expanded to 500MW as required upon the market conditions.0The project was suspended.April 16, 2016Notice number: 2016-018
Solar online self-cleaning coated glass project of Dongguan CSGSelf-builtYesManufacturing industry0--The Company plans to construct an online self-cleaning coated glass line in Dongguan.0The project was suspended.April 16, 2016Notice number: 2016-018
Malaysia-invested architectural glass plantSelf-builtYesManufacturing industry0--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.0The project was suspended.April 16, 2016Notice number: 2016-018
Total5,17233,281----34,9743,789

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.VI. Sale of major assets and equity

1. Sale of major assets

□ Applicable √ Not applicable

There was no sale of major assets in the report period.

2. Sale of major equity

□ Applicable √ Not applicable

VII. Analysis of main subsidiaries and joint-stock companies

√Applicable □ Not applicable

Particular about main subsidiaries and joint -stock companies which have influence on the Company's net profit by over 10%

Unit: RMB

Name of companyTypeMain businessRegistered capitalTotal assetsNet assetsOperating revenueOperating profitNet profit
Xianning CSG Glass Co., Ltd.SubsidiaryDevelopment and manufacture and sales of various special glass235 million771,184,784492,486,524355,608,75832,260,50626,580,392
Hebei CSG Glass Co., Ltd.SubsidiaryManufacture and sales of various special glassUSD 48.06 million937,900,150523,547,260410,242,18448,562,37141,569,145
Wujiang CSG Glass Co., Ltd.SubsidiaryManufacture and sales of various special glass565.04 million2,045,420,287962,775,879746,938,63861,078,52850,525,396
Dongguan CSG Architectural Glass Co., Ltd.SubsidiaryDeep processing of glass240 million940,869,957405,282,844468,923,37559,084,13850,306,116
Wujiang CSG East China Architectural Glass Co., Ltd.SubsidiaryDeep processing of glass320 million730,294,829514,056,944387,495,27850,257,53042,748,847
Qingyuan CSG New Energy-Saving Materials Co., Ltd.SubsidiaryDevelopment, producing and sales of ultra-thin electronic glass300 million760,052,502368,940,97190,355,77169,288,80359,411,434
Tianjin CSG Energy Conservation Glass Co., LtdSubsidiaryDevelopment, producing and sales of energy-saving special glass336 million759,868,401521,907,463373,465,59849,960,96541,801,063
Dongguan CSG Solar Glass Co., Ltd.SubsidiaryManufacture and sales of Solar-Energy Glass products480 million1,231,187,340727,297,167531,925,17050,683,62143,182,229
Yichang CSG Polysilicon Co., Ltd.SubsidiaryManufacture and sales of high purity silicon material products1,467.98 million3,655,944,0761,130,492,171314,957,600-15,871,329-14,023,411
Shenzhen Nanbo Display Technology Co., Ltd.SubsidiaryManufacture and sales of display device products143 million1,582,767,422870,473,449276,594,46426,471,73522,096,117
CSG (Hongkong) Investment Co., Ltd.SubsidiaryInvestment and tradingHKD 1 million97,962,30965,726,768182,699,3997,958,7526,440,736

Particular about subsidiaries obtained or disposed in report period

□ Applicable √ Not applicable

VIII. Structured main bodies controlled by the Company

□ Applicable √ Not applicable

IX. Prediction of business performance from January to September 2019

Alert of loss or significant change in accumulative net profit from the beginning of year to the end of the next report period orcompared with the same period of last year, and statement of causations.

□ Applicable √ Not applicable

X. Risks the Company faces and countermeasuresIn 2019, in the face of “New Normal” of domestic economic development and the task of building “A Hundred Years CSG”, theCompany will face the following risks and challenges:

① The Company still faces the risk of insufficient reserves of senior talents for the long-term development of the Company. To copewith aforesaid risks, the Company will take the following measures:

A. Insist on open, equal, fair and enterprising corporate culture, and reinforce internal core cohesion of employees;B. Continuously improve remuneration incentive system which related to performance and employee incentive mechanism;C. Strengthen internal employee training, introduce external high-quality talent, and rapidly establish a high-quality talent team;D. Establish sustainable talent recruitment, cultivation, utilization, retaining, and development management system; create afuture-oriented system of human resource production, development and supply.

②The glass industry continue to face the pressure of horizontal competition and rising raw material costs, the solar energy and PVindustry will face the risk of industrial integration and price fluctuation, the electronic glass and display industry will encounter therisk of accelerated technical upgrading and volatile demand on electronic product. To cope with aforesaid risks, the Company willtake the following measures:

A. In the flat glass industry, the Company will accelerate the technical upgrading and reform of existing production lines to realizedifferential operation, expand industrial scale and strengthen industrial competitiveness through industrial M&A;B. In the architectural glass industry, the Company will strengthen the development of high-end market and overseas market, activelydevelop traditional residence market, and at the same time, maintain the industrial advantageous position of the Company throughmarket-oriented extension of industry chain;C. In the solar photovoltaic industry, the Company will continue to improve product quality, speed up the introduction and R&D ofnew technologies, improve production efficiency and reduce unit costs.D. In the electronic glass and display industry, the Company will strengthen research and development of new technology, newproduct, maintain its technical leading advantage in the industry, develop downstream application fields and further improve theproduct quality of ultra-thin electronic glass, so as to rapidly develop terminal market and further improve its industrial profitability.

③ Since 2019, the market price of glass and solar energy PV industrial has fluctuated greatly. At the same time, certain fluctuationin the price of upstream energy and raw materials and rising labor costs have brought risks to the Company's operation.To cope with risk, the Company will take the following measures:

A. Vigorously exploit potential and increase efficiency, and effectively implement energy saving and consumption reduction;B. Focus on the market change, and lock the price of bulk commodity at proper time;C. Utilize bulk purchase advantage to reduce purchase cost;D. Improve automatic production level, raise labor productivity.

④ Risk of fluctuation of foreign exchange rate: At present, nearly 15.11% of the sales revenue of the Company is from overseas, inthe future, the Company will further develop overseas business, and therefore, the fluctuation of exchange rate will bring certain riskto the operation of the Company. To cope with such risk, the Company will settle exchange in time and use safe and effective riskevading instrument and product to relatively lock exchange rate and reduce the risk caused by fluctuation of exchange rate.

Section V. Important EventsI. Particulars about annual general meeting and extraordinary general meeting held in thereport period

1. Particulars about Shareholders' General Meeting in the report period

Meeting sessionType of meetingInvestor participation ratioDate of the meetingDisclosure dateDisclosure index
The First Extraordinary Shareholders’ General Meeting of 2019Extraordinary general meeting27.20%February 27, 2019February 28, 2019Juchao website(www.cninfo.com.cn) Notice number: 2019-016
The Second Extraordinary Shareholders’ General Meeting of 2019Extraordinary general meeting27.19%April 10, 2019April 11, 2019Juchao website(www.cninfo.com.cn) Notice number: 2019-025
Annual Shareholders’ General Meeting of 2018Annual general meeting27.53%May 9, 2019May 10, 2019Juchao website(www.cninfo.com.cn) Notice number: 2019-035

2. Extraordinary general meeting which is requested to convene by the preferred shareholders who haveresumed the voting right

□ Applicable √Not applicable

II. Profit distribution and capitalization of capital reserve in the report period

□ Applicable √Not applicable

The Company has no plans of cash dividend distribution, bonus shares being sent or converting capital reserve into share capital.III. Commitments completed by the actual controllers, the shareholders, the related parties,the purchasers and the Company during the report period and those that hadn’t beencompleted execution by the end of the report period

√Applicable □ Not applicable

CommitmentsPromiseeType of commitmentsContent of commitmentsCommit-ment dateCommit- ment termImplement- ation
Commitments for Share MergerThe original non-tradable shareholderCommitment of share reductionThe Company has implemented share merger reform in May 2006. Till June 2009, the share of the original2006-5-22N/ABy the end of the report period, the
ReformShenzhen International Holdings (SZ) Limited and Xin Tong Chan Industrial Development (Shenzhen) Co., Ltd.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.above shareholders of the Company had strictly carried out their promises.
Commitments in report of acquisition or equity changeForesea Life Insurance Co., Ltd., Shenzhen Jushenghua Co., Ltd. and Chengtai Group Co., Ltd.Commitment of horizontal competition, affiliate Transaction and capital occupationForesea 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 remained the largest shareholder of CSG. Meanwhile, they made commitment on regularizing related transaction and avoiding industry competition.2015-6-29During the period when Foresea Life remains the largest shareholder of the CompanyBy the end of the report period, the above shareholders of the Company had strictly carried out their promises.
Commitments in assets reorganizationNot applicable
Commitments in initial public offering orNot applicable
re-financing
Equity incentive commitmentThe listed companyCSG 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.2017-10-10During the implementation of the equity incentive planThe commitment is in normal performance.
Other commitments for medium and small shareholdersNot applicable
Completed on time(Y/N)Yes
If the commitments is not fulfilled on time, explain the reasons and the next work planNot applicable

IV. Engaging and dismissing of CPA

Whether the semi-annual report has been audited or not

□ Yes √ No

The semi-annual report of the Company has not been audited.

V. Explanation from Board of Directors and Supervisory Committee for “Non-standard auditreport” of the period that issued by CPA

□ Applicable √ Not applicable

VI. Explanation from Board of Directors for “Non-standard audit report” of the previousyear

□ Applicable √ Not applicable

VII. Issues related to bankruptcy and reorganization

□ Applicable √ Not applicable

VIII. LawsuitsSignificant lawsuits and arbitrations

□ Applicable √ Not applicable

There were no significant lawsuits or arbitrations in the report period.Other lawsuits

□ Applicable √ Not applicable

IX. Penalty and rectification

□ Applicable √ Not applicable

No penalty or rectification for the Company in the report period.X. Integrity of the Company and its controlling shareholders and actual controllers

□ Applicable √ Not applicable

XI. Implementation of the Company’s stock incentive plan, employee stock ownership plan orother employee incentives

√Applicable □ Not applicable

On October 10, 2017, the 3

rdMeeting of the Eighth Board of Directors of the Company deliberated and approved 2017 Restricted A-shares Incentive Plan of CSG Holding Co., Ltd (Draft ) and its summary, the Management Method of the Implementation andReview of 2017 A-share Restricted Stock Incentive Plan of CSG Holding Co., Ltd and the Proposal on Applying the GeneralMeeting of Shareholders to Authorize the Board of Directors to Deal With the Related Matters on the Company’s 2017 RestrictedA-shares Incentive Plan. The above contents are detailed in the Announcement of the Resolution on the 3

rdMeeting of the EighthBoard of Directors published on www.cninfo.com.cn on October 11, 2017 (Announcement No.: 2017-063). The Company’sindependent directors issued independent opinions on the issues involved with 2017 Restricted A-shares Incentive Plan.On October 26, 2017, the Company convened the 5th Extraordinary General Meeting in 2017, which deliberated and approved theabove three proposals. The Proposal on Adjusting the Object and Quantity Granted of 2017 A-share Restricted Stock Incentive Planand the Proposal on Firstly Granted Restricted Shares to the Object of 2017 Restricted A-share were deliberated and approved on theinterim meeting of the Eighth Board of Directors which was convened on December 11, 2017. It determined December 11, 2017 asthe grant date, to grant 97,511,654 restricted shares to 454 objects at the grant price of RMB 4.28 yuan/share, with 17,046,869 sharesof reserved restricted shares.The granting of shares was completed on December 25, 2017 and the specific content was detailed in the Announcement onCompleting the First Granting of 2017 Restricted Shares disclosed on www.cninfo.com.cn on December 22, 2017 (AnnouncementNo.:2017-079).On July 20, 2018, the Company held an interim meeting of the Eighth Board of Directors and an interim meeting of the the EighthBoard of Supervisors, and reviewed and approved the Proposal on Repurchase and Cancellation of Part of Restricted Stocks ofRestricted Stock Incentive Plan, and agreed to repurchase and cancel the total of 3,319,057 shares of all restricted stocks held by 15unqualified original incentives. The independent directors of the Company issued a consent opinion. And on August 6, 2018, the 2ndExtraordinary General Meeting in 2018 approved the proposal. As of September 10, 2018, the Company had completed thecancellation procedures for the above-mentioned restricted stocks in Shenzhen Branch of China Securities Depository and ClearingCorporation Limited. The total number of shares of the Company was changed from 2,856,769,678 shares to 2,853,450,621 shares.On September 13, 2018, the Company held an interim meeting of the Eighth Board of Directors and an interim meeting of the Eighth

Board of Supervisors, and reviewed and approved the Proposal on Granting Reserved Restricted Stocks of 2017 Restricted StockIncentive Plan for Incentive Objects, which determined September 13, 2018 as the grant date, to grant 9,826,580 restricted shares to75 objects at the grant price of RMB 3.68 yuan/share. The independent directors issued independent opinions on the above proposal,and the Company's board of supervisors re-checked the list of incentive objects on the grant date. The shares granted had beenregistered in Shenzhen Branch of China Securities Depository and Clearing Corporation Limited and listed on September 28, 2018.The total number of shares of the Company was changed from 2,853,450,621 shares to 2,863,277,201 shares.On December 12, 2018, the Company held an interim meeting of the Eighth Board of Directors and an interim meeting of the EighthBoard of Supervisors, and reviewed and approved the Proposal on Repurchase and Cancellation of Part of Restricted Stocks ofRestricted Stock Incentive Plan, and agreed to repurchase and cancel the total of 436,719 shares of all restricted stocks held by 8unqualified original incentive objects. The proposal was approved by the 3rd Extraordinary General Meeting in 2018 on December28, 2018. As of June 18, 2019, the Company had completed the cancellation procedures for the above-mentioned restricted stocks inShenzhen Branch of China Securities Depository and Clearing Corporation Limited and the specific content was detailed in theAnnouncement on the Completion of Repurchasing Part of Restricted Stocks disclosed on www.cninfo.com.cn on June 19, 2019(Announcement No.: 2019-040).On December 12, 2018, the Company held an interim meeting of the Eighth Board of Directors and an interim meeting of the EighthBoard of Supervisors, and reviewed and approved the Proposal on the First Achievement of Lifting the Restriction Conditions for theFirst Granted Shares of the Company's 2017 A-share Restricted Stock Incentive Plan in the First Unlock Period. In addition to thefact that the eight incentive objects did not have the conditions to unlock restricted stocks due to their resignation, the total number ofincentive objects who reached the conditions for unlocking restricted stocks was 431 persons, and the number of restricted stocks thatcould be unlocked was 43,353,050 shares, accounting for 1.51% of the current total share capital of the Company. The board ofsupervisors, independent directors, and law firms separately issued clear consent opinions. The unlock date of the restricted stocks,which was the date of listing, was December 21, 2018.On April 16, 2019, the Company held the 8th Meeting of the Eighth Board of Directors and the 8th Meeting of the Eighth Board ofSupervisors, which reviewed and approved the Proposal on Repurchase and Cancellation of Part of Restricted Stocks of RestrictedStock Incentive Plan and the Proposal on Repurchase and Cancellation of Restricted Stocks that Had Not Reached the UnlockingCondition of the Second Unlock Period, and agreed to repurchase and cancel the total of 3,473,329 shares of all restricted stocks heldby 14 unqualified original incentives, as well as the total of 33,734,276 shares of 483 incentive objects that did not meet theunlocking conditions of the second unlock period. The independent directors of the Company issued a consent opinion. And on May9, 2019, the proposals were approved by the 2018 Annual General Meeting of Shareholders. As of June 18, 2019, the Company hadcompleted the cancellation procedures for the above-mentioned restricted stocks in Shenzhen Branch of China Securities Depositoryand Clearing Corporation Limited and the specific content was detailed in the Announcement on the Completion of RepurchasingPart of Restricted Stock disclosed on www.cninfo.com.cn on June 19, 2019 (Announcement No.: 2019-040).According to the relevant provisions of the "Accounting Standards for Business Enterprises", the implementation of the Company'srestricted stocks will have certain impact on the Company's financial status and operating results in the next few years. The resultsare subject to the annual audit report issued by the accounting firm.

XII.Major related transaction

1. Related transaction with routine operation concerned

□ Applicable √ Not applicable

In the report period, the Company did not have related transaction with routine operation concerned.

2. Related transaction with acquisition of assets or equity, sales of assets or equity concerned

□ Applicable √ Not applicable

In the report period, the Company did not have related transaction with acquisition of assets or equity, sales of assets or equityconcerned.

3. Related transaction with jointly external investment concerned

□ Applicable √ Not applicable

In the report period, the Company did not have related transaction with jointly external investment concerned.

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.XIII.Particulars about non-operating fund of listed company occupied by controllingshareholder and its affiliated enterprises

□Applicable √Not applicable

It did not exist that non-operating fund of the listed company was occupied by controlling shareholder or its affiliated enterprises inthe report period.

XIV. Significant contracts and their implementation

1. Trusteeship, contract and leasing

(1) Trusteeship

□ Applicable √ Not applicable

No trusteeship for the Company in the report period.

(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 guaranteedRelated Announcement disclosure dateGuarantee limitActual date of happening (Date of signing agreement)Actual guarantee limitGuarantee typeGuarantee termComplete implementation or notGuarantee for related party (Yes or no)
Guarantee of the Company for the subsidiaries
Name of the Company guaranteedRelated Announcement disclosure dateGuarantee limitActual date of happening (Date of signing agreement)Actual guarantee limitGuarantee typeGuarantee termComplete implementation or notGuarantee for related party (Yes or no)
Zhanjiang CSG New Energy Co., Ltd.2017-7-319,0002017-9-266,694Joint liability guarantee3 yearsNoNo
Xianning CSG Photovoltaic Glass Co., Ltd.2016-8-1230,0002017-1-317,733Joint liability guarantee3 yearsNoNo
Xianning CSG Photovoltaic Glass Co., Ltd.2017-7-3120,0002017-9-78,200Joint liability guarantee3 yearsNoNo
Yichang Nanbo Photoelectric Glass Co., Ltd.2017-5-225,4722017-5-265,400Joint liability guarantee3 yearsYesNo
Yichang Nanbo Photoelectric Glass Co., Ltd.2017-5-2210,0322017-5-313,938Joint liability guarantee3 yearsNoNo
Yichang CSG Polysilicon Co., Ltd.2017-5-2220,0002017-6-229,928Joint liability guarantee3 yearsYesNo
Dongguan CSG PV-tech Co., Ltd.2017-11-2720,0002017-12-2010,393Joint liability guarantee3 yearsNoNo
Wujiang CSG Glass Co., Ltd.2017-8-2830,0002017-9-1315,000Joint liability guarantee3 yearsNoNo
Xianning CSG Glass Co., Ltd.2017-8-2825,0002017-9-1810,417Joint liability guarantee3 yearsNoNo
Dongguan CSG Solar Glass Co., Ltd.2017-8-720,0002017-9-2213,500Joint liability guarantee3 yearsNoNo
Yichang CSG Polysilicon Co., Ltd.2017-6-2320,0002017-6-2811,214Joint liability guarantee3 yearsYesNo
Sichuan CSG Energy Conservation Glass Co., Ltd.2017-9-2515,0002017-9-306,250Joint liability guarantee3 yearsNoNo
Hebei CSG Glass Co., Ltd.2017-10-1020,0002017-10-3010,393Joint liability guarantee3 yearsNoNo
Chengdu CSG Glass Co.,Ltd.2017-9-2520,0002017-9-289,616Joint liability guarantee3 yearsNoNo
Chengdu CSG Glass Co.,Ltd.2017-5-225,0002018-4-24,500Joint liability guarantee1 yearYesNo
Sichuan CSG Energy Conservation Glass Co., Ltd.2017-5-25,0002018-4-82,700Joint liability guarantee1 yearYesNo
Chengdu CSG Glass Co.,Ltd.2018-7-216,5002018-8-104,500Joint liability guarantee1 yearYesNo
Wujiang CSG Glass Co., Ltd.2018-3-910,0002018-6-283,500Joint liability guarantee1 yearYesNo
Wujiang CSG Glass Co., Ltd.2018-8-1110,0002018-9-115,000Joint liability guarantee1 yearNoNo
Wujiang CSG Glass Co., Ltd.2018-8-115,0002018-11-302,551Joint liability guarantee1 yearYesNo
Dongguan CSG Solar Glass Co., Ltd.2017-11-273,2002018-6-143,000Joint liability guarantee1 yearYesNo
Tianjin CSG Energy-Saving Glass Co., Ltd.2018-4-95,0002018-6-222,000Joint liability guarantee1 yearYesNo
Dongguan CSG Architectural Glass2018-7-2111,2002018-8-104,000Joint liability guarantee1 yearNoNo
Co., Ltd.
Dongguan CSG Architectural Glass Co., Ltd.2018-8-1118,0002018-10-3018,000Joint liability guarantee1 yearNoNo
Dongguan CSG Architectural Glass Co., Ltd.2018-7-2111,2002018-8-102,145Joint liability guarantee1 yearYesNo
Xianning CSG Glass Co., Ltd.2018-7-215,0002018-8-103,000Joint liability guarantee1 yearYesNo
Hebei Panel Glass Co., Ltd.2018-7-211,5002018-8-10637Joint liability guarantee1 yearYesNo
China Southern Glass (Hong Kong) Limited2018-6-196,5722018-8-106572Joint liability guarantee1 yearYesNo
Sichuan CSG Energy Conservation Glass Co., Ltd.2018-7-216,5002018-8-102000Joint liability guarantee1 yearYesNo
Sichuan CSG Energy Conservation Glass Co., Ltd.2018-7-216,5002018-8-101932Joint liability guarantee1 yearYesNo
Wujiang CSG East China Architectural Glass Co., Ltd.2018-8-1110,0002018-9-116,000Joint liability guarantee1 yearYesNo
Dongguan CSG Solar Glass Co., Ltd.2018-7-2115,0002018-8-103,200Joint liability guarantee1 yearYesNo
Dongguan CSG Solar Glass Co., Ltd.2018-7-2115,0002018-8-10693Joint liability guarantee1 yearYesNo
Tianjin CSG Energy-Saving Glass Co., Ltd.2018-7-212,0002018-8-102,000Joint liability guarantee1 yearYesNo
Dongguan CSG PV-tech Co., Ltd.2018-7-320,0002018-8-215,527Joint liability guarantee1 yearNoNo
Qingyuan CSG New Energy-Saving2018-8-114,3302018-10-23500Joint liability guarantee1 yearNoNo
Materials Co.,Ltd.
Yichang Nanbo Photoelectric Glass Co., Ltd.2018-7-211,5202018-9-26100Joint liability guarantee1 yearNoNo
Xianning CSG Energy-Saving Glass Co., Ltd.2018-7-215,0002018-8-103,000Joint liability guarantee1 yearNoNo
Chengdu CSG Glass Co.,Ltd.2018-7-216,5002018-8-102,800Joint liability guarantee1 yearNoNo
Wujiang CSG Glass Co., Ltd.2018-8-115,0002018-11-30852Joint liability guarantee1 yearNoNo
Dongguan CSG Architectural Glass Co., Ltd.2018-7-2111,2002018-8-102144Joint liability guarantee1 yearYesNo
Hebei Panel Glass Co., Ltd.2018-7-211,5002018-8-10698Joint liability guarantee1 yearNoNo
Sichuan CSG Energy Conservation Glass Co., Ltd.2018-7-216,5002018-8-102000Joint liability guarantee1 yearNoNo
Dongguan CSG Solar Glass Co., Ltd.2018-7-2115,0002018-8-102,300Joint liability guarantee1 yearNoNo
Dongguan CSG Solar Glass Co., Ltd.2019-2-205,0002019-6-28439Joint liability guarantee1 yearNoNo
Tianjin CSG Energy-Saving Glass Co., Ltd.2018-7-212,0002018-8-102,000Joint liability guarantee1 yearNoNo
Wujiang CSG East China Architectural Glass Co., Ltd.2018-10-910,0002019-3-282,000Joint liability guarantee1 yearNoNo
Chengdu CSG Glass Co.,Ltd.2019-2-268,0002019-5-24500Joint liability guarantee1 yearNoNo
Wujiang CSG Glass Co., Ltd.2019-2-268,0002019-5-31500Joint liability guarantee1 yearNoNo
Dongguan CSG Solar Glass Co., Ltd.2019-2-268,0002019-5-29500Joint liability guarantee1 yearNoNo
Dongguan CSG Solar Glass Co., Ltd.2019-2-125,0002019-5-29500Joint liability guarantee1 yearNoNo
Yichang Nanbo Photoelectric Glass Co., Ltd.2019-1-221,2162019-6-25100Joint liability guarantee1 yearNoNo
Xianning CSG Glass Co., Ltd.2019-2-265,0002019-6-6100Joint liability guarantee1 yearNoNo
Wujiang CSG Glass Co., Ltd.2018-8-115,0002018-11-302,551Joint liability guarantee1 yearYesNo
Dongguan CSG Solar Glass Co., Ltd.2019-3-193,2002019-6-27500Joint liability guarantee1 yearNoNo
Yichang Nanbo Display Co., Ltd.2019-2-262,4322019-6-25100Joint liability guarantee1 yearNoNo
Sichuan CSG Energy Conservation Glass Co., Ltd.2018-7-216,5002018-8-102,481Joint liability guarantee1 yearNoNo
Xianning CSG Energy-Saving Glass Co., Ltd.2019-2-265,0002019-6-10100Joint liability guarantee1 yearNoNo
Xianning CSG Energy-Saving Glass Co., Ltd.2018-7-215,0002018-8-10361Joint liability guarantee1 yearNoNo
China Southern Glass (Hong Kong) Limited2018-6-196,5972018-8-106597Joint liability guarantee1 yearNoNo
Qingyuan CSG New Energy-Saving Materials Co.,Ltd.2018-8-1120,0002018-10-2318,453Joint liability guarantee3 yearsNoNo
Total amount of approving guarantee for subsidiaries in report period (B1)118,240Total amount of actual occurred guarantee for subsidiaries in report period (B2)274,309
Total amount of approved guarantee for subsidiaries at the end of report period (B3)424,527Total balance of actual guarantee for subsidiaries at the end of report period (B4)192,142
Total amount of guarantee of the Company (total of three abovementioned guarantee)
Total amount of approving guarantee in report period (A1+B1+C1)118,240Total amount of actual occurred guarantee in report period (A2+B2+C2)274,309
Total amount of approved guarantee at the end of report period (A3+B3+C3)424,527Total balance of actual guarantee at the end of report period (A4+B4+C4)192,142
The proportion of the total amount of actual guarantee in the net assets of the Company (that is A4+ B4+C4)20.54%
Including:
Amount of guarantee for shareholders, actual controller and its related parties(D)
The debts guarantee amount provided for the guaranteed parties whose assets-liability ratio exceed 70% directly or indirectly(E)
Proportion of total amount of guarantee in net assets of the Company exceed 50%(F)
Total amount of the aforesaid three guarantees(D+E+F)
Explanations on possibly bearing joint and several liquidating responsibilities for undue guarantees (if any)
Explanations on external guarantee against regulated procedures(if any)
Explanations on Guarantee of the Company for the subsidiariesDuring the report period, the total amount of guarantee approved by the Company was RMB 1,182.40 million; the Company and its wholly-owned subsidiary, Yichang CSG Polysilicon Co., Ltd., jointly guaranteed Dongguan CSG PV-tech Co., Ltd. The Company carried out RMB 400 million of Bill Pool business, and The Company and its holding subsidiaries can use Maximum Amount Pledge, General Pledge, Deposit Pledge, Bill pledge, Guarantee Pledge and other guarantee methods for the establishment and use of Bill Pool.

(2) Illegal external guarantee

□ Applicable √ Not applicable

No illegal external guarantee in the report period.

3. Other material contracts

□ Applicable √ Not applicable

No other material contracts for the Company in the report period.

XV. Social responsibilities

1. Significant environmental situation

Whether the listed company and its subsidiaries belong to the key pollutant discharge units announced by the environmentalprotection departmentYes

Name of Company or subsidiaryName of major pollutants and characteristic contaminantsWay of emissionNumber of Exhaust ventExhaust vent distributionEmission concentrationImplementation of pollutant emission standardsTotal emissionApproved total emissionExcessive emissions
Xianning CSG Glass Co., Ltd.Dust\Soot\ SO2\ Nitrogen oxideDischarge after the treatment of denitrification and dust removal16Chimney, Exhaust ventDust≤30mg/m?; Soot≤40 mg/m?; SO2≤300 mg/m? ; NOx≤350 mg/m?《Emission standard of air pollutants for flat glass industry》(GB26453-2011)Particulates: 12t; SO2: 88t; NOx: 114tParticulates:96t/a ; SO2:636t/a; NOx: 1113t/aReach the discharge standard
Chengdu CSG Glass Co., Ltd.Dust\Soot\ SO2\ Nitrogen oxideDischarged after denitrification, desulfurization and dust removal15Chimney, Exhaust ventDust≤30mg/m?; Soot≤30 mg/m?; SO2≤300 mg/m? ; NOx≤490 mg/m?《Emission standard of air pollutants for flat glass industry》(GB26453-2011)Particulates: 26t; SO2: 197t; NOx: 324tParticulates: 129t/a ; SO2: 1035t/a; NOx: 1811t/aReach the discharge standard
Hebei CSG Glass Co., Ltd.Dust\ Soot\ SO2\ Nitrogen oxideDischarge after the treatment of denitrification and dust removal10Chimney, Exhaust gas outletParticulates≤20 mg/m? SO2≤100 mg/m?; NOx≤350 mg/m?《Emission Standard for Air Pollutants in Electronic Glass Industry》(DB13/2168-2015)Hebei Local StandardParticulates: 2t; SO2: 29t; NOx: 116tParticulates: 59t/a; SO2: 498t/a; NOx: 982t/aReach the discharge standard
Qingyuan CSG New Energy-Saving MaterialsSO2\ Nitrogen oxideDischarge after the treatment of denitrification and dust4Chimney, Exhaust gas outletSO2≤20 mg/m?; NOx≤400 mg/m?《Emission standard of air pollutants for flat glass industry》SO2: 1t; NOx :15tSO2:15t/a;NOx :110t/aReach the discharge standard
Co.,Ltd.removal(GB26453-2011)
Yichang CSG Polysilicon Co., Ltd.PH\COD\ Ammonia nitrogen/fluorideDischarged to the sewage treatment plant after being treated by the Company's sewage treatment station.3Discharge outlets of waste waterPH:6-9; COD≤500mg/L; Fluoride≤10 mg/L《Comprehensive Sewage Discharge Standard》Grade 3rd standard (GB8978-1996), implement grade 1st standard for fluorideCOD: 12t; Ammonia nitrogen: 0tCOD: 198t/a; Ammonia nitrogen: 2t/aReach the discharge standard
Wujiang CSG Glass Co., Ltd.Particulates\ SO2\ Nitrogen oxideDischarged after denitrification, desulfurization and dust removal39Chimney, Exhaust gas outletParticulates≤40mg/m?; SO2≤250 mg/m?; NOx≤300 mg/m?《Emission standard of air pollutants for flat glass industry》 (GB26453-2011)Particulates: 24t; SO2: 121t; NOx: 92tParticulates: 76t/a; SO2:238t/a; NOx:818t/aReach the discharge standard
Dongguan CSG Solar Glass Co., Ltd.Dust\ Soot\ SO2\ Nitrogen oxideDischarge after the treatment of denitrification and dust removal22Chimney, Exhaust gas outletDust≤5mg/m?; soot≤10mg/m?; SO2≤400 mg/m?; NOx≤650 mg/m?《Emission standard of air pollutants for flat glass industry》 (GB26453-2011)Particulates: 2t; SO2: 101t; NOx: 106tParticulates: 34t/a; SO2: 300t/a; NOx:535t/aReach the discharge standard
Dongguan CSG Architectural Glass Co., Ltd.PH\COD\ Ammonia nitrogenDischarged to the sewage treatment plant after being treated by the company's sewage treatment station.1Discharge outlets of waste waterPH:6~9; COD≤13 mg/L; Ammonia nitrogen≤0 mg/LDischarge Limits of Water Pollutants in Guangdong (DB44/26-2001), the second period, the first grade standardCOD: 0t; Ammonia nitrogen: 0tCOD: 5t/a; Ammonia nitrogen: 0t/aReach the discharge standard
Dongguan CSGWaste water: FluorideThe waste water is20Discharge outlets ofCOD≤70 mg/L;Discharge Limits ofWaste water: COD: 7t;Waste water: COD: 14t/a;Reach the discharge
PV-tech Co., Ltd.\COD\ Ammonia nitrogen Exhaust gas: HF\ NOxdischarged after the treatment by the company's sewage station, and the exhaust gas is discharged after treatment by the company's exhaust gas treatment tower.waste water and exhaust gasAmmonia nitrogen≤10mg/L; Fluoride≤8mg/L; Exhaust gas: NOx≤30mg/m3; HF≤3 mg/m3Water Pollutants in Guangdong (DB44/26-2001), the second period, the first grade standard; Discharge Standard of Pollutants in Battery Industry(GB30484-2013)Ammonia nitrogen: 0t; Fluoride: 0t Exhaust gas Nitrogen oxide: 10t; Fluoride: 0tAmmonia nitrogen: 1t/a; Fluoride: 1t/a Exhaust gas: NOx: 20t/a; Fluoride: 1t/astandard
Hebei Panel Glass Co. Ltd.Dust\ Soot\ SO2\ Nitrogen oxideDischarge after the treatment of denitrification and dust removal5Chimney, Exhaust gas outletDust≤30mg/m?; Soot≤20 mg/m?; SO2≤30 mg/m?; NOx≤300mg/m?《Emission standard for air pollutants in electronic glass industry》(GB29495-2013)Particulates: 1t; SO2: 0t; NOx : 4tParticulates: 8t/a; SO2: 22t/a; NOx:39t/aReach the discharge standard
Jiangyou CSG Mining Development Co. Ltd.Particulates\CODDischarge after bag dedusting treatment; Discharge of sewage treatment equipment after treatment5Discharge outlets of waste water and exhaust gasParticulates:≤20mg/m?;COD≤500mg/m?《Integrated Emission Standard of Air Pollutants》GB16297-1996 Second Level Standard;《Integrated Wastewater Discharge Standard》GB8978-1996 First Level StandardParticulates:0t; COD:0tParticulates:12t/a; COD:0t/aReach the discharge standard
Yichang NanboCOD\Ammonia nitrogen \The waste water is2Discharge outlets ofCOD≤500mg/;《Comprehensive SewageCOD:6t; NOx:0tCOD: 99t/a; NOx: 22t/aReach the discharge
Display Co., Ltd.Nitrogen oxidedischarged after the treatment by the company's sewage station, and the exhaust gas is discharged after treatment by the company's exhaust gas treatment tower.waste water and exhaust gasNOX<240mg/m?Discharge Standard》Grade 3rd standard (GB8978-1996); 《Integrated Emission Standard of Air Pollutants》(GB16297-1996)standard
Xianning CSG Photoelectric Glass Co., Ltd.Dust\ Soot\ SO2\ Nitrogen oxideDischarge after the treatment of denitrification and dust removal6Chimney, Exhaust gas outletDust≤15mg/m?; Soot≤15 mg/m?; SO2≤10 mg/m?; NOx≤350 mg/m?《Emission standard for air pollutants in electronic glass industry》GB29495-2013Particulates:0t; NOx :19tParticulates:17t/a; SO2:65t/a; NOx: 163t/aReach the discharge standard

Construction and operation of pollution prevention and control facilitiesThe Company has built flue gas dust removal and denitrification system on production lines. The system runs normally, and theemission of exhaust gas meets regulations.

The environmental impact assessment of construction projects and other environmental protection licenseEnvironmental impact assessment of the newly built jade glass plate project of Dongguan CSG Jingyu New Material Co., Ltd. hadbeen carried out and approved in 2018. The project had basically completed construction and entered the production commissioningphase. Environmental impact assessment of 120 million cells AG&AF glass plate project of Yichang Nanbo Display Co., Ltd. hadbeen carried out and approved in 2018, and the project is under construction at present. Environmental impact assessment ofEasy-clean Glass Coating Production Line Project of Xianning CSG Energy-Saving Glass Co., Ltd. had been carried out andapproved in 2018. Other administrative approval procedures of the project will be completed in 2019, and the project is underconstruction at present. Environmental impact assessment of Special Glass Expansion Project with 200,000-ton annual capacity ofQingyuan CSG New Energy-Saving Materials Co.,Ltd. was carried out and approved in 2019. The project is in the preparatory stage.Other new projects of subsidiaries that did not involve changes in production capacity also carried out the “Three Simultaneous”procedures of environmental protection for construction projects, and were rewarded with the pollutant discharge license within thevalidity period. The subsidiaries timely declared the pollutant discharge, carried out the monitoring and reporting of pollutantdischarge and paid the pollutant discharge fee according to the relevant regulations of the state.

Emergency response plan system of environment incidentIn accordance with the national requirements, all subsidiaries prepared emergency environmental response plan for environmentincident, organized and carried out expert evaluation and filed with the local environmental protection department as required,conducted the emergency drill against environmental incidents. And there were no major environmental incidents occurred in thefirst half of 2019.

Environmental self-monitoring schemeIn accordance with provisions of national laws and regulations and the requirements put forward in the assessment documents of theenvironment impact of construction project and reply, the subsidiaries built on-line monitoring equipment for waste water and wastegas which are put into operation normally. They compared and reviewed the effectiveness of the on-line monitoring facilities on aregular basis. Besides, they also entrusted the third party units to carry out the manual monitoring of the environment and fully monitorthe discharge of the pollutants.

Other environmental information to be disclosedThose subsidiaries which were on key monitoring list of the government above municipal level all disclosed their environmentalinformation through websites, local government environmental information platform, display pads, Group's website and other ways.In 2019, key enterprises have completed the annual environmental information publicity update.

Other information related to environment protectionCSG always attaches great importance to environmental protection work, actively fulfills its social responsibility, and adheres to thedevelopment road of energy saving, emission reduction, low-carbon and environmental protection. In order to further reducepollutant emissions, in 2018, a number of subsidiaries of the Group started the construction of desulfurization facilities and sparedenitration facilities. When completed and put into operation, sulfur dioxide emission concentration will be further reducedsignificantly on the basis of existing emission standards, and now many subsidiaries have achieved ultra-low emissions.

2. Performance of social responsibility for targeted poverty alleviation

No targeted poverty alleviation was carried out in the first half of the year, no follow-up plan for targeted poverty alleviation either.

XVI. Statement on other important matters

√Applicable □ Not applicable

1. Short-term Financing Bills

On Dec.14, 2016, the second extraordinary shareholders’ general meeting of 2016 of CSG deliberated and approved the proposal ofthe offering and registration of short-term financing bills, and agreed the Company’s registration and issuance of short-term financingbills with a total amount of RMB 2.7 billion, which could be issued by stages within period of validity of the registration according tothe Company’s actual demands for funds and the status of inter-bank funds. However, the term of each issue shall not be longer thanone year and the registered quota shall not exceed 40 percent of the Company’s net assets.

2. Ultra-short-term financing bills

On May 14, 2018, the Company’s 2017 annual shareholders’ meeting deliberated and approved the resolution on the application forregistration and issuance of ultra-short-term financing bills. It agreed that the Company should register and issue ultra-short-term

financing bills with a registered amount not exceeding RMB 4 billion yuan (not subject to the restriction that the amount ofultra-short-erm issued shall not exceed 40% of net assets). With the period of validity of the quota not longer than two years, suchultra-short-term financing bills will be issued by installments in accordance with the actual capital needs of the Company and thesituation of inter-bank market funds. On Sep. 17, 2018, the Chinese Association of Interbank Market Traders held its 63rdregistration meeting in 2018, and decided to approve the registration of the ultra-short-term financing bills with a total amount of 1.5billion yuan and a validity period of two years. The ultra-short-term financing bills are underwritten jointly by Minsheng Bank ofChina Limited and Industrial Bank Co., Ltd, and can be issued by installments within the validity period of registration.

3. Perpetual bonds

On April 15, 2016, the Shareholders’ General Meeting 2015 of CSG deliberated and approved the proposal of application forregistration and issuance of perpetual bonds, and agreed the Company to register and issue perpetual bonds with total amount ofRMB 3.1 billion which could be issued by stages within period of validity of the registration according to the Company’s actualdemand for funds and the capital status of inter-bank market.

4. Medium-term notes

On 10 December 2014, the First Extraordinary Shareholders’ General Meeting 2014 of CSG Holding Co., Ltd deliberated andapproved the proposal of application for registration and issuance of medium-term notes with total amount of RMB 1.2 billion atmost. On 21 May 2015, National Association of Financial Market Institutional Investors (NAFMII) held the 32nd registrationmeeting of 2015, in which NAFMII decided to accept the registration of the Company’s medium-term notes, amounting to RMB 1.2billion and valid for two years. China Merchants Bank Co., Ltd. and Shanghai Pudong Development Bank Co., Ltd. were joint leadunderwriters of these medium term notes which could be issued by stages within period of validity of the registration on Jul.14, 2015,the Company issued the first batch of medium term notes with total amount of RMB 1.2 billion and valid term of 5 years at theissuance rate of 4.94%, which will be redeemed on 14 July 2020.On April 15, 2016, the Shareholders’ General Meeting of 2015 of CSG deliberated and approved the proposal of application forregistration and issuance of medium-term notes with total amount of RMB 0.8 billion, which could be issued by stages within periodof validity of the registration according to the Company’s actual demands for funds and the status of inter-bank funds. On 2 March2018, National Association of Financial Market Institutional Investors (NAFMII) held the 14

th

registration meeting of 2018, in whichNAFMII decided to accept the registration of the Company’s medium-term notes, amounting to RMB 0.8 billion and valid for twoyears. Shanghai Pudong Development Bank Co., Ltd. and China CITIC Bank Corporation Limited were joint lead underwriters ofthese medium-term notes which could be issued by stages within period of validity of the registration. On May 4, 2018, the companyissued the first medium-term notes with a total amount of 800 million yuan and a term of three years. The issue rate was 7%, and theredemption date was May 4, 2021.

On May 22, 2017, the Shareholders’ General Meeting of 2016 of CSG deliberated and approved the proposal of application forregistration and issuance of medium-term notes with total amount of RMB 1 billion, which could be issued by stages within period ofvalidity of the registration according to the Company’s actual demands for funds and the status of inter-bank funds.For details, please refer to www.chinabond.com.cn and www.chinamoney.com.cn.

5. Public issuance of corporate bonds

On March 2, 2017, the 2nd Extraordinary General Meeting of Shareholders in 2017 reviewed and approved “the Proposal on thePublic Issuance of Corporate Bonds for Qualified Investors". On February 27, 2019, the First Extraordinary General Meeting ofShareholders in 2019 The “Proposal on Extending the Validity Period of the Shareholders' Meeting for the Public Offering of

Corporate Bonds to Qualified Investors” agreed to issue corporate bonds with a total issue of no more than RMB 2 billion and a termof no more than 10 years.On July 22, 2019, the Company received the “Approval of Approving CSG Holding Co., Ltd. to Issue Corporate Bonds to QualifiedInvestors” issued by China Securities Regulatory Commission (CSRC [2019] No. 1140).

6. The holding of the bondholders' meeting during the report period

On January 8, 2019, the Company issued the announcement of "Conference on Holding the First Phase Mid-term Noteholders'Meeting of China CSG Holding Co., Ltd. in 2015” and “Announcement on Holding the Meeting of the First Phase Mid-term NotesHolders of China CSG Holding Co., Ltd. in 2018” due to the repurchase and cancellation of the restricted shares of the restrictedequity incentive plan. On On January 22, 2019, the Company's 2015 first-term medium-term noteholders meeting, 2018 first-phasemedium-term noteholders meeting was held off-site and voted. The 2015 first mid-term note holders meeting and the 2018 firstmid-term noteholders' meeting was not effective as the total voting rights held by the holders attending the meeting did not reachtwo-thirds of the total voting rights as required.On May 31, 2019, the Company issued the announcement of "Conference on Holding the First Phase Mid-term Noteholders' Meetingof China CSG Holding Co., Ltd. in 2015” and “Announcement on Holding the Meeting of the First Phase Mid-term Notes Holders ofChina CSG Holding Co., Ltd. in 2018” due to the repurchase and cancellation of the restricted shares of the restricted equityincentive plan. On June 18, 2019, the Company's 2015 first-term medium-term noteholders meeting, 2018 first-phase medium-termnoteholders meeting was held off-site and voted. The 2015 first mid-term note holders meeting and the 2018 first mid-termnoteholders' meeting was not effective as the total voting rights held by the holders attending the meeting did not reach two-thirdsof the total voting rights as required.

7. Payments and interests of other debenture and financial instruments during the report periodOn May 4, 2019, the Company completed the first payment of the first phase of the 2018 mid-term notes issued on May 4, 2018 witha total amount of RMB 800 million and an annual interest rate of 7%.

8. Bank credit status, usage and repayment of bank loans during the report period

During the report period, the Company obtained bank credit of RMB 10 billion, a quota of RMB 3.8 billion being used, and a quotaof RMB 6.2 billion available.

9. Overdue debts of the Company

The Company did not have any overdue debts.

10. Entrusted loans

The principal and income of entrusted loans had been recovered in accordance with the contract during the report period.

XVII. Significant events of subsidiaries of the Company

□ Applicable √ Not applicable

Section VI. Changes in Shares and Particulars about ShareholdersI. Changes in Share Capital

1. Changes in Share Capital

Unit: Share

Before the Change(Note)Increase/Decrease in the Change (+, -)After the Change
AmountProportion (%)New shares issuedBonus sharesCapitalization of public reserveOthersSubtotalAmountProportion (%)
I. Restricted shares77,578,5032.71%4,069,124-36,887,252-32,818,12844,760,3751.44%
1. State-owned shares
2. State-owned legal person’s shares
3. Other domestic shares77,578,5032.71%4,069,124-36,887,252-32,818,12844,760,3751.44%
Including: Domestic legal person’s shares
Domestic natural person’s shares77,578,5032.71%4,069,124-36,887,252-32,818,12844,760,3751.44%
4. Foreign shares
Including: Foreign legal person’s shares
Foreign natural person’s shares
II. Unrestricted shares2,785,698,69897.29%278,494,162-757,072277,737,0903,063,435,78898.56%
1. RMB Ordinary shares1,777,184,67662.07%177,642,678-757,899176,884,7791,954,069,45562.87%
2. Domestically listed foreign shares1,008,514,02235.22%100,851,484827100,852,3111,109,366,33335.69%
3. Overseas listed foreign shares
4. Others
III.Total shares2,863,277,201100%282,563,286-37,644,324244,918,9623,108,196,163100%

Note: The number of shares before the change in the report was adjusted compared with the ending amount in the 2018 AnnualReport, 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 2019.Reason for equity changes

√Applicable □Not applicable

1. The Company's total share capital increased by 282,563,286 shares due to the implementation of the 2018 annual profitdistribution and capital accumulation fund to increase share capital.

2. The Company's total shares decreased by 37,644,324 due to the repurchase and cancellation of part of restricted shares of equityincentive plan..

3. Due to the change of the Company's senior management and the lockup of their shareholding, Shenzhen Branch of China

Securities Depository and Clearing Corporation Limited adjusted 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 2018 annual profit distribution and capital accumulation fund to increase the share capital plan was approved bythe eighth meeting of the eighth board of directors held on April 16, 2019 and the 2018 Annual General Meeting of Shareholders heldon May 9, 2019.

2. The Company’s Proposal on Repurchase and Cancellation of Part of Restricted Stocks of Restricted Stock Incentive Plan wasdeliberated and approved by the interim meeting of the Eighth Board of Directors and the interim meeting of the Eighth Board ofSupervisors held on April 16, 2019, as well as the 8

th

meeting of the Eighth Board of Directors and the 8

thmeeting of the EighthBoard of Supervisors, and was deliberated and approved by the 2018 Annual General Meeting of Shareholders held on May 9, 2019.

Transfer of ownership for equity changes

√Applicable □Not applicable

1. The A-share registration date for 2018 annual profit distribution and the capitalization of capital reserve was June 25, 2019 and theex-dividend date was June 26, 2019. A-share bonus (or capitalized) were directly recorded in the stockholders’ A-share accounts onJune 26, 2019. The B-share registration date was June 28, 2019 and the ex-dividend date of was June 26, 2019. B-share bonus (orcapitalized) were directly recorded in shareholders’ B-share accounts on June 28, 2019.

2. The Company repurchased and cancelled all restricted stocks held by 8 unqualified original incentive objects. As of June 18, 2019,the Company had completed the cancellation procedures for the above-mentioned restricted stocks in Shenzhen Branch of ChinaSecurities Depository and Clearing Corporation Limited.

3. The Company repurchased and cancelled all restricted stocks held by 14 unqualified original incentive objects and the restrictedstocks held by 483 incentive objects that did not meet the unlocking conditions of the second unlock period. As of June 18, 2019, theCompany had completed the cancellation procedures for the above-mentioned restricted stocks in Shenzhen Branch of ChinaSecurities Depository and Clearing Corporation Limited.

4. For the change of senior management and lockup of their shareholdings, Shenzhen Branch of China Securities Depository andClearing Corporation Limited adjusted the Company’s restricted shares and unrestricted shares accordingly in accordance withrelevant regulations.

Implementation progress of share buyback

□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 to commonshareholders 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 stock changes.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’ nameNumber of shares restricted at the beginning of the Period(Note 1)Number of shares released in the PeriodNumber of shares repurchased in the PeriodNumber of new shares restricted in the PeriodNumber of shares restricted at the end of the PeriodReason for restrictionReleased date
Chen Lin2,766,58901,106,635165,9951,825,949Executive lockup stocks of 608,649 shares, equity incentive restricted stocks of 1,217,300 sharesUnlock period in accordance with the requirement of implementation of the Company's restricted stock equity incentive plan, once unlocked executive lockup will be implemented according to relevant policies.
Wang Jian2,300,0000690,000161,0001,771,000Equity incentive restricted stocks of 1,771,000 sharesUnlock period in accordance with the requirement of implementation of the Company's restricted stock equity incentive plan, once unlocked executive lockup will be implemented according to relevant policies.
Lu Wenhui2,074,9410829,976124,4961,369,461Executive lockup stocks of 456,486 shares, equity incentive restricted stocks of 912,975 sharesUnlock period in accordance with the requirement of implementation of the Company's restricted stock equity incentive plan, once unlocked executive lockup will be implemented according to relevant policies.
He Jin1,530,0000612,00091,8001,009,800Executive lockup stocks of 248,600 shares, equity incentive restricted stocksUnlock period in accordance with the requirement of implementation of the Company's restricted stock equity incentive plan, once
of 761,200 sharesunlocked executive lockup will be implemented according to relevant policies.
Yang Xinyu1,976,1340790,453118,5681,304,249Executive lockup stocks of 434,750 shares, equity incentive restricted stocks of 869,499 sharesUnlock period in accordance with the requirement of implementation of the Company's restricted stock equity incentive plan, once unlocked executive lockup will be implemented according to relevant policies.
Core Management Team43,827,183022,239,2482,158,78423,746,719Equity incentivesUnlock period in accordance with the requirement of implementation of the Company's restricted stock equity incentive plan.
Technology and Business Backbone19,006,75409,249,135975,77110,733,390Equity incentivesUnlock period in accordance with the requirement of implementation of the Company's restricted stock equity incentive plan.
Zhao Peng1,023,2060305,97070,814788,0502,727 shares locked due to supervisor resignation, equity incentive restricted stocks of 785,323 sharesUnlock period in accordance with the requirement of implementation of the Company's restricted stock equity incentive plan, once unlocked executive lockup will be implemented according to relevant policies.
Li Weinan2,273,69601,580,907902,9681,595,7571,595,757 shares locked due to executive resignationunlocked executive lockup will be implemented according to relevant policies
Li Cuixu(Note2)800,0000240,00056,000616,000Equity incentive restricted stocks of 616,000 sharesUnlock period in accordance with the requirement of implementation of the Company's restricted stock equity incentive plan.
Total77,578,50337,644,3244,826,19644,760,375

Note1: The number of shares restricted at the beginning of the period in the above table was adjusted compared with the endingamount in the 2018 Annual Report, which was due to the adjustment of the current restricted shares by China Securities Depositoryand Clearing Corporation Limited before the opening of the first trading day in 2019.

Note2: Mr. Li Cuixu resigned as Vice President of the Company on May 30, 2019, and his 616,000 shares of equity incentiverestricted stock will be repurchased and cancelled by the Company in due course.

II. Issuance and listing of Securities

□Applicable √ Not applicable

III.Amount of shareholders of the Company and particulars about shares holding

Unit: share

Total amount of shareholders at the end of the report period147,115Total amount of the preferred shareholders who have resumed the voting right at end of report period (if applicable)0
Shareholder with above 5% shares held or top ten shareholders
Full name of ShareholdersNature of shareholderProportion of shares held (%)Total shares held at the end of report periodChanges in report periodAmount of restricted shares heldAmount of un-restricted shares heldNumber of share pledged/frozen
Share statusAmount
Foresea Life Insurance Co., Ltd. – Haili NiannianDomestic non state-owned legal person15.01%466,386,87442,398,807466,386,874
Foresea Life Insurance Co., Ltd. – Universal Insurance ProductsDomestic non state-owned legal person3.81%118,425,00710,765,910118,425,007
Shenzhen Jushenghua Co., Ltd.Domestic non state-owned legal person2.79%86,633,4477,875,76886,633,447Pledged69,300,000
Foresea Life Insurance Co., Ltd. – Own FundDomestic non state-owned legal person2.08%64,765,1615,887,74264,765,161
Central Huijin Asset Management Ltd.State-owned legal person1.86%57,915,4885,265,04457,915,488
China Galaxy International Securities (Hong Kong) Co., LimitedForeign legal person1.32%41,044,3703,731,30641,044,370
UBS AGForeign legal person1.15%35,799,04935,780,83935,799,049
China Merchants Securities (HK) Co., LimitedState-owned legal person1.05%32,516,1553,437,66232,516,155
Shenzhen International Holdings (SZ) LimitedDomestic non state-owned0.94%29,095,0002,645,00029,095,000
legal person
VANGUARD EMERGING MARKETS STOCK INDEX FUNDForeign legal person0.62%19,320,2331,756,38519,320,233
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 shareholdersAmong shareholders as listed above, Foresea Life Insurance Co., Ltd.-Haili Niannian, 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’ nameAmount of un-restrict shares held at year-endType of shares
TypeAmount
Foresea Life Insurance Co., Ltd. – Haili Niannian466,386,874RMB ordinary shares466,386,874
Foresea Life Insurance Co., Ltd. – Universal Insurance Products118,425,007RMB ordinary shares118,425,007
Shenzhen Jushenghua Co., Ltd.86,633,447RMB ordinary shares86,633,447
Foresea Life Insurance Co., Ltd. – Own Fund64,765,161RMB ordinary shares64,765,161
Central Huijin Asset Management Ltd.57,915,488RMB ordinary shares57,915,488
China Galaxy International Securities (Hong Kong) Co., Limited41,044,370Domestically listed foreign shares41,044,370
UBS AG35,799,049RMB ordinary shares35,799,049
China Merchants Securities (HK) Co., Limited32,516,155Domestically listed foreign shares32,516,155
Shenzhen International Holdings (SZ) Limited29,095,000RMB ordinary shares29,095,000
VANGUARD EMERGING MARKETS STOCK INDEX FUND19,320,233Domestically listed foreign shares19,320,233
Statement on associated relationship or consistent action among the above shareholders:Among shareholders as listed above, Foresea Life Insurance Co., Ltd.-Haili Niannian, 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 top ten shareholders or top ten shareholders with un-restricted shares carried out buy back deals in the report period

□Yes √ No

IV. Changes of controlling shareholder or actual controllerChanges of controlling shareholders in the report period

□Applicable √ Not applicable

Changes of actual controller in the report period

□Applicable √ Not applicable

Section VII. Particulars about Directors, Supervisors, Senior

Executives and EmployeesI. Changes of shares held by directors, supervisors and senior executives

√ Applicable □ Not applicable

NameTitleWorking statusThe number of shares held at the beginning of the period (shares)The number of increase of holding in the current period (shares)The number of decrease of holding in the current period (shares)The number of shares held at the end of the period (shares)The number of restricted shares granted at the beginning of the period (shares)The number of restricted shares granted in the current period (shares)The number of restricted shares granted in the current period (shares)
Chen LinChairman of the BoardCurrently in office3,688,7852,840,3653,688,7852,840,365
Wang JianDeputy Chairman of the Board, CEOCurrently in office2,300,0001,771,0002,300,0001,771,000
Zhan WeizaiIndependent DirectorCurrently in office
Zhu GuilongIndependent DirectorCurrently in office
Zhu QianyuIndependent DirectorCurrently in office
Zhang JinshunDirectorCurrently in office
Ye WeiqingDirectorCurrently in office
Cheng XibaoDirectorCurrently in office
LijianghuaChairman of the Supervisory BoardCurrently in office
Li XinjunSupervisorCurrently in office
Gao ChangkunEmployee SupervisorCurrently in office
Lu WenhuiExecutive Vice PresidentCurrently in office2,766,5882,130,2732,766,5882,130,273
He JinVice presidentCurrently in office2,040,0001,570,8002,040,0001,570,800
Yang XinyuSecretary of the BoardCurrently in office2,634,8452,028,8312,634,8452,028,831
Jin QingjunIndependent DirectorPost leaving
Zhang WandongChairman of the Supervisory BoardPost leaving
Li WeinanVice presidentPost leaving3,031,5951,595,7572,634,8451,159,332
Li CuixuVice presidentPost leaving800,000616,000800,000616,000
Total----17,261,81312,553,02616,865,06312,116,601

II. Changes of directors, supervisors and senior executives

√ Applicable □ Not applicable

NameTitleTypeDateReason
Zhu QianyuIndependent DirectorBe employed2019-04-10Election by the independent director
Li JianghuaChairman of the supervisory board, employee supervisoryBe Elected2019-04-01 2019-03-27Election by the supervisory board Election by the employees meeting
Li WeinanVice presidentPost leaving2019-02-18Dismissed by the Company
Li CuixuVice presidentPost leaving2019-05-30Resigned
Zhang WandongChairman of the board of supervisorsPost leaving2019-03-27Resigned
Jin QingjunIndependent DirectorPost leaving2019-04-10Resigned

Section VIII. Financial Report

(I) Auditors’ Report

Whether the Semi-annual Report has been audited or not

□ Yes √ No

(II) Financial Statements

All figures in the Notes to the Financial Statements are in RMB.

1. Consolidated Balance Sheet

Prepared by CSG Holding Co., Ltd.

June 30, 2019

Unit: RMB

ItemEnding balanceBeginning balance
Current assets
Cash at bank and on hand1,895,457,2902,226,447,720
Notes receivable656,498,454719,375,448
Accounts receivable780,075,797592,233,312
Advances to suppliers111,724,19191,176,675
Other receivables204,039,125207,424,295
Inventories733,850,928600,139,750
Assets classified as held for sale45,983,520
Other current assets136,195,974445,327,449
Total current assets4,517,841,7594,928,108,169
Non-current assets
Fixed assets10,301,649,8259,930,843,775
Construction in progress1,940,864,9552,559,179,442
Intangible assets1,030,390,5751,035,731,324
Development expenditure70,573,42674,549,257
Goodwill376,720,156376,720,156
Long-term prepaid expenses11,821,82612,746,609
Deferred tax assets141,735,767139,529,518
Other non-current assets55,588,78156,825,934
Total non-current assets13,929,345,31114,186,126,015
TOTAL ASSETS18,447,187,07019,114,234,184
Current liabilities
Short-term borrowings2,665,570,3482,922,679,590
Notes payable280,009,274105,150,000
Accounts payable1,056,501,8041,209,859,263
Advances from customers228,877,586206,631,008
Employee benefits payable185,107,411266,459,151
Taxes payable96,414,967111,967,365
Other payables356,979,812552,751,187
Of which: interest payable73,933,81873,612,703
Dividend payable3,221,4962,846,362
Current portion of non-current liabilities714,186,697819,448,742
Other current liabilities300,000300,000
Total current liabilities5,583,947,8996,195,246,306
Non-current liabilities
Long-term borrowings2,292,462,5002,315,700,000
Long term payable291,363,152529,910,796
Deferred income536,895,424601,825,780
Deferred tax liabilities31,806,06522,118,840
Total non-current liabilities3,152,527,1413,469,555,416
Total liabilities8,736,475,0409,664,801,722
Shareholders’ equity
Share capital3,108,196,1632,863,277,201
Capital surplus723,817,7631,095,339,421
Less: Treasury shares137,277,563277,180,983
Other comprehensive income5,360,3955,080,234
Special reserve8,235,2516,068,600
Surplus reserve924,305,375924,305,375
Undistributed profits4,722,400,0894,486,264,723
Total equity attributable to shareholders of parent company9,355,037,4739,103,154,571
Minority shareholders' equity355,674,557346,277,891
Total shareholders' equity9,710,712,0309,449,432,462
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY18,447,187,07019,114,234,184

Legal Representative:Chen Lin Principal in charge of accounting:Wang Jian Principal of the financial department:Wang Wenxin

2. Balance Sheet of the Parent Company

Unit: RMB

ItemEnding balanceBeginning balance
Current assets
Cash at bank and on hand976,552,2241,700,726,151
Advances to suppliers661,266438,167
Other receivables3,720,204,4002,912,516,245
Other current assets77,586300,000,000
Total current assets4,697,495,4764,913,680,563
Non-current assets
Long-term receivables1,200,000,0001,200,000,000
Long-term equity investments4,983,474,6574,964,696,831
Fixed assets18,464,06820,926,071
Intangible assets778,321879,146
Other non-current assets2,755,138732,038
Total non-current assets6,205,472,1846,187,234,086
TOTAL ASSETS10,902,967,66011,100,914,649
Current liabilities
Short-term borrowings2,050,000,0002,000,000,000
Bills payable170,000,000
Accounts payable236,346261,024
Employee benefits payable23,480,38841,096,020
Taxes payable1,997,6691,099,231
Other payables1,097,014,4511,668,587,218
Of which: interest payable12,815,74741,572,125
Dividend payable3,221,4962,846,362
Total current liabilities3,342,728,8543,711,043,493
Non-current liabilities
Long-term borrowings2,000,000,0002,000,000,000
Deferred income183,567,304184,642,520
Total non-current liabilities2,183,567,3042,184,642,520
Total liabilities5,526,296,1585,895,686,013
Shareholders’ equity
Share capital3,108,196,1632,863,277,201
Capital surplus868,645,0771,240,166,735
Less:Treasury shares137,277,563277,180,983
Surplus reserve938,850,735938,850,735
Undistributed profits598,257,090440,114,948
Total shareholders' equity5,376,671,5025,205,228,636
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY10,902,967,66011,100,914,649

3. Consolidated Income Statement

Unit: RMB

ItemBalance of this periodBalance of last period
I. Total revenue4,888,237,5785,471,169,598
Incl. Business income4,888,237,5785,471,169,598
II. Total business cost4,526,773,5715,070,075,982
Incl: Business cost3,671,376,8254,099,496,754
Tax and surcharge56,687,99771,930,546
Sales expense172,503,399172,217,254
Administrative expenses292,862,355374,512,817
R & D expenses174,276,136166,041,185
Financial expenses159,066,859185,877,426
Of which: interest expense171,031,605203,531,507
Interest income14,923,37523,033,418
Plus: Other income107,755,41321,863,800
Asset impairment loss (“- “for loss)-3,765,670-3,653,609
Income on disposal assets (“- “for loss)370,969-567,830
III. Operational profit (“- “for loss)465,824,719418,735,977
Plus: non-operational income3,666,3152,595,795
Less: non-operational expenditure6,293,227878,551
IV. Total profit (“- “for loss)463,197,807420,453,221
Less: Income tax expenses76,458,74061,371,104
V. Net profit (“- “for net loss)386,739,067359,082,117
(I) Classification by business continuity
1. Net income from continuing operations (“-” for net loss)386,739,067359,082,117
(II) Classification by ownership
1.Attributable to shareholders of parent company377,342,401352,837,153
2.Minority shareholder gains and losses9,396,6666,244,964
VI. Other comprehensive income net after tax280,161692,018
Other comprehensive income net after tax attributable to shareholders of parent company280,161692,018
Other comprehensive income items which will be reclassified subsequently to profit or loss280,161692,018
Differences on translation of foreign currency financial statements280,161692,018
VII. Total comprehensive income387,019,228359,774,135
Total comprehensive income attributable to shareholders of parent company377,622,562353,529,171
Total comprehensive income attributable to minority shareholders9,396,6666,244,964
VIII. Earnings per share:
(I) Basic earnings per share0.120.12
(II) Diluted earnings per share0.120.11

Legal Representative:Chen Lin Principal in charge of accounting:Wang Jian Principal of the financial department:Wang Wenxin

4. Income Statement of the Parent Co.

Unit: RMB

ItemBalance of this periodBalance of last period
I. Revenue38,156,68530,709,068
Less: Business cost
Tax and surcharge484,868246,465
Sales expense
Administrative expense63,631,61897,258,248
R& D expenditure355,8384,923
Financial expenses64,544,83529,932,558
Of which: interest expense74,386,74748,681,431
Interest income12,738,08221,459,907
Plus: Other income1,466,247991,880
Asset impairment loss (“- “for loss)390,105,325231,537,606
Asset impairment loss (“- “for loss)94,31446,118
Income on disposal assets (“- “for loss)2,440
II. Operating profit300,805,412135,844,918
Add: Non-operating revenue2,403,225123,450
Less: Non-operating expenses3,859,460277
III. Total profit (“- “for loss)299,349,177135,968,091
Less: Income tax (expenses)/revenue
IV. Net profit (“- “for loss)299,349,177135,968,091
(I) Net profit for continuing operations(“- “for loss)299,349,177135,968,091
V. Total comprehensive income299,349,177135,968,091
VI. Earnings per share
(I) Basic earnings per share
(II) Diluted earnings per share

5. Consolidated Cash Flow Statement

Unit: RMB

ItemBalance of this periodBalance of last period
I. Cash flows from operating activities
Cash received from sales of goods or rendering of services5,267,136,3505,795,543,089
Refund of taxes and surcharges7,189,73514,619,913
Cash received relating to other operating activities69,328,68863,866,925
Sub-total of cash inflows5,343,654,7735,874,029,927
Cash paid for goods and services3,243,706,0523,670,547,749
Cash paid to and on behalf of employees706,947,717723,605,247
Payments of taxes and surcharges310,470,632404,939,607
Cash paid relating to other operating activities314,547,907310,373,236
Sub-total of cash outflows4,575,672,3085,109,465,839
Net cash flows from/(used in) operating activities767,982,465764,564,088
II. Cash flows from investing activities
Net cash received from disposal of fixed assets, intangible assets and other long-term assets355,7653,466,136
Cash received relating to other investing activities36,323,0063,725,277
Sub-total of cash inflows36,678,7717,191,413
Cash paid to acquire fixed assets, intangible assets and other long-term assets283,862,176268,526,891
Cash paid relating to other investing activities44,089,88758,691,979
Sub-total of cash outflows327,952,063327,218,870
Net cash flows (used in)/from investing activities-291,273,292-320,027,457
III. Cash flows from financing activities
Cash received from borrowings1,498,543,3082,870,654,472
Cash received relating to other financing activities500,154,37616,276,534
Sub-total of cash inflows1,998,697,6842,886,931,006
Cash repayments of borrowings1,833,149,5501,777,250,000
Cash payments for interest expenses and distribution of dividends or profits314,316,388293,602,183
Cash payments relating to other financing activities808,767,638362,001,673
Sub-total of cash outflows2,956,233,5762,432,853,856
Net cash flows (used in)/from financing activities-957,535,892454,077,150
4. Effect of foreign exchange rate changes on cash and cash equivalents-59,328-113,600
5. Net increase/(decrease) in cash and cash equivalents-480,886,047898,500,181
Add: Cash and cash equivalents at beginning of current period2,225,126,9132,459,753,165
6. Cash and cash equivalents at end of current period1,744,240,8663,358,253,346

6. Cash Flow Statement of the Parent Co.

Unit: RMB

ItemBalance of this periodBalance of last period
I. Cash flows from operating activities
Cash received relating to other operating activities22,806,17522,667,417
Sub-total of cash inflows22,806,17522,667,417
Cash paid to and on behalf of employees69,731,70663,635,591
Payments of taxes and surcharges2,061,3991,057,736
Cash paid relating to other operating activities14,959,67415,743,250
Sub-total of cash outflows86,752,77980,436,577
Net cash flows from/(used in) operating activities-63,946,604-57,769,160
II. Cash flows from investing activities
Net cash received from disposal of fixed assets, intangible assets and other long-term assets2,440
Sub-total of cash inflows2,440
Cash paid to acquire fixed assets, intangible assets and other long-term assets2,887,6264,544,893
Cash paid for investing activities10,000,00036,750,000
Other cash paid relating to investing activities
Sub-total of cash outflows12,887,62641,294,893
Net cash flows (used in)/from investing activities-12,887,626-41,292,453
III. Cash flows from financing activities
Cash received from borrowings1,300,000,0002,190,000,000
Cash received relating to other financing activities125,399,471
Sub-total of cash inflows1,300,000,0002,315,399,471
Cash repayments of borrowings1,250,000,0001,140,000,000
Cash payments for interest expenses and distribution of dividends or profits242,330,883164,279,306
Other cash paid relating to financing activities604,806,391
Sub-total of cash outflows2,097,137,2741,304,279,306
Net cash flows (used in)/from financing activities-797,137,2741,011,120,165
4. Effect of foreign exchange rate changes on cash and cash equivalents1,963-1,253,410
5. Net increase/(decrease) in cash and cash equivalents-873,969,541910,805,142
Add: Cash and cash equivalents at beginning of current period1,699,514,3341,680,672,390
6. Cash and cash equivalents at end of current period825,544,7932,591,477,532

7. Statement of Change in Owners’ Equity (Consolidated)

Amount of the current period

Unit: RMB

ItemThe Current Period
Owners’ Equity Attributable to the Parent CompanyMinority shareholders' equityTotal shareholders' equity
Share capitalCapital surplusLess: treasury shareOther comprehensive incomeSpecial reservesSurplus reserveUndistributed profitsSubtotal
I. Balance at the end of the previous year2,863,277,2011,095,339,421277,180,9835,080,2346,068,600924,305,3754,486,264,7239,103,154,571346,277,8919,449,432,462
Plus: change of accounting policy
Correction of errors in previous periods
II. Balance at the beginning of current year2,863,277,2011,095,339,421277,180,9835,080,2346,068,600924,305,3754,486,264,7239,103,154,571346,277,8919,449,432,462
III. Amount of change in current term(“- “for decrease)244,918,962-371,521,658-139,903,420280,1612,166,651236,135,366251,882,9029,396,666261,279,568
(I) Total amount of the comprehensive income280,161377,342,401377,622,5629,396,666387,019,228
(II) Capital paid in and reduced by owners-37,644,324-88,958,372-139,903,42013,300,72413,300,724
1. Common shares invested by the-37,644,324-88,958,372-139,903,42013,300,72413,300,724
shareholders
(III) Profit distribution-141,207,035-141,207,035-141,207,035
1. Appropriations to surplus reserves
2. Appropriations to owners (or shareholders)-141,207,035-141,207,035-141,207,035
(IV) Internal carry-forward of owners’ equity282,563,286-282,563,286
1.Capital reserve transferred to capital (or share capital)282,563,286-282,563,286
2.Surplus reserve transferred to capital (or share capital)
(V) Specific reserve2,166,6512,166,6512,166,651
1. Withdrawn for the period3,646,8823,646,8823,646,882
2. Used in the period1,480,2311,480,2311,480,231
IV. Balance at the end of this term3,108,196,163723,817,763137,277,5635,360,3958,235,251924,305,3754,722,400,0899,355,037,473355,674,5579,710,712,030

Amount of the previous period

Unit: RMB

ItemThe Previous Period
Owners’ Equity Attributable to the Parent CompanyMinority shareholders' equityTotal shareholders' equity
Share capitalCapital surplusLess: treasury shareOther comprehensive incomeSpecial reservesSurplus reserveUndistributed profitsSubtotal
I. Balance at the end of the previous year2,484,147,5471,306,381,765417,349,8791,948,9433,224,938920,592,3324,159,642,2278,458,587,873321,035,2388,779,623,111
Plus: change of accounting policy
Correction of errors in previous periods
II. Balance at the beginning of current year2,484,147,5471,306,381,765417,349,8791,948,9433,224,938920,592,3324,159,642,2278,458,587,873321,035,2388,779,623,111
III. Amount of change in current term(“- “for decrease)379,129,654-211,042,344-140,168,8963,131,2912,843,6623,713,043326,622,496644,566,69825,242,653669,809,351
(I) Total amount of the comprehensive income3,131,291452,965,935456,097,22619,242,653475,339,879
(II) Capital paid in and reduced by owners6,507,523161,579,787-140,168,896308,256,2066,000,000314,256,206
1. Common shares invested by the owner6,000,0006,000,000
2. Amounts of share-based payments recognized in owners’ equity6,507,523161,579,787-140,168,896308,256,206308,256,206
(III) Profit distribution3,713,043-126,343,439-122,630,396-122,630,396
1. Appropriations to surplus reserves3,713,043-3,713,043
2. Distribution to the owner (or shareholder)s-122,630,396-122,630,396-122,630,396
(IV) Internal carry-forward of owners’ equity372,622,131-372,622,131
1.Capital reserve transferred to capital (or share capital)372,622,131-372,622,131
(V) Specific reserve2,843,6622,843,6622,843,662
1. Withdrawn for the period8,319,8858,319,8858,319,885
2. Used in the period5,476,2235,476,2235,476,223
IV. Balance at the end of this term2,863,277,2011,095,339,421277,180,9835,080,2346,068,600924,305,3754,486,264,7239,103,154,571346,277,8919,449,432,462

8. Statement of Change in Owners’ Equity (Parent Co.)

Amount of the current period

Unit: RMB

ItemThe Current Period
Share capitalCapital surplusLess: treasury shareOther comprehensive incomeSpecial reservesSurplus reserveUndistributed profitsTotal shareholders' equity
I. Balance at the end of the previous year2,863,277,2011,240,166,735277,180,983938,850,735440,114,9485,205,228,636
Plus: change of accounting policy
Correction of errors in previous periods
II. Balance at the beginning of current year2,863,277,2011,240,166,735277,180,983938,850,735440,114,9485,205,228,636
III. Amount of change in current term(“- “for decrease)244,918,962-371,521,658-139,903,420158,142,142171,442,866
(I) Total amount of the comprehensive income299,349,177299,349,177
(II) Capital paid in and reduced by owners-37,644,324-88,958,372-139,903,42013,300,724
1. Amounts of share-based payments recognized in owners’ equity-37,644,324-88,958,372-139,903,42013,300,724
(III) Profit distribution-141,207,035-141,207,035
1. Appropriations to surplus reserves
2. Appropriations to owners (or shareholders)-141,207,035-141,207,035
(IV) Internal carry-forward of owners’ equity282,563,286-282,563,286
1.Capital reserve transferred to capital (or share capital)282,563,286-282,563,286
IV. Balance at the end of this term3,108,196,163868,645,077137,277,563938,850,735598,257,0905,376,671,502

Amount of the previous period

Unit: RMB

ItemThe Previous Period
Share capitalCapital surplusLess: treasury shareOther comprehensive incomeSpecial reservesSurplus reserveUndistributed profitsTotal shareholders' equity
I. Balance at the end of the previous year2,484,147,5471,451,209,079417,349,879935,137,692529,327,9544,982,472,393
Plus: change of accounting policy
Correction of errors in previous periods
II. Balance at the beginning of current year2,484,147,5471,451,209,079417,349,879935,137,692529,327,9544,982,472,393
III. Amount of change in current term(“- “for decrease)379,129,654-211,042,344-140,168,8963,713,043-89,213,006222,756,243
(I) Total amount of the comprehensive income37,130,43337,130,433
(II) Capital paid in and reduced by owners6,507,523161,579,787-140,168,896308,256,206
2. Others6,507,523161,579,787-140,168,896308,256,206
(III) Profit distribution3,713,043-126,343,439-122,630,396
1. Appropriations to surplus reserves3,713,043-3,713,043
2. Appropriations to owners (or shareholders)-122,630,396-122,630,396
(IV) Internal carry-forward of owners’ equity372,622,131-372,622,131
1.Capital reserve transferred to capital (or share capital)372,622,131-372,622,131
IV. Balance at the end of this term2,863,277,2011,240,166,735277,180,983938,850,735440,114,9485,205,228,636

III. Basic Information of the CompanyCSG Holding Co Ltd (the “Company”) was incorporated in September 1984, known as China South Glass Company, as a jointventure enterprise by Hong Kong China Merchants Shipping Co., LTD (香港招商局轮船股份有限公司), Shenzhen BuildingMaterials Industry Corporation (深圳建筑材料工业集团公司), China North Industries Corporation (中国北方工业深圳公司) andGuangdong International Trust and Investment Corporation (广东国际信托投资公司). The Company was registered in Shenzhen,Guangdong Province of the People's Republic of China and its headquarters is located in Shenzhen, Guangdong Province of thePeople's Republic of China. The Company issued RMB-denominated ordinary shares (“A-share”) and foreign shares (“B-share”)publicly in October 1991 and January 1992 respectively, and was listed on Shenzhen Stock Exchange on February 1992. As at June30, 2019, the registered capital was RMB 3,108,196,163, with nominal value of RMB 1 per share.

The Company and its subsidiaries (collectively referred to as the “Group”) are mainly engaged in the manufacture and sales of flatglass, specialized glass, engineering glass, energy saving glass, silicon related materials, polysilicon and solar components andelectronic-grade display device glass and the construction and operation of photovoltaic plant etc.

The financial statements were authorized for issue by the Board of Directors on August 21, 2019.

Details on the major subsidiaries included in the consolidated scope in current year were stated in the Note.IV. Basis of the preparation of financial statements

1. Basis of preparation

The financial statements are prepared in accordance with the Accounting Standards for Business Enterprises - Basic Standard, andthe specific accounting standards and other relevant regulations issued by the Ministry of Finance on 15 February 2006 and insubsequent periods (hereafter collectively referred to as “the Accounting Standard for Business Enterprises” or “CAS”), andInformation Disclosure Rule No. 15 for Companies with Public Traded Securities - Financial Reporting General Provision issued byChina Security Regulatory Commission.

2. Going concern

As at June 30, 2019, the Group current liabilities exceed current assets about RMB 1,066 million and committed capital expenditureof about RMB 595 million. The directors of the Company have made an assessment that the Group has been in continuous businessfor many years and expects to continue to generate sufficient cash flow from operating activities in the next 12 months. From Januaryto June 2019, the net cash inflow from operation activities is approximately RMB 768 million; and the Group has maintained goodrelationship with banks, so the Group has been able to successfully renew the bank facilities upon the expiry. As at June 30, 2019, theGroup had unutilised banking facilities of approximately RMB 6.2 billion, among which long-term banking facilities were aboutRMB 290 million. In addition, the shareholder of the Group or other appointed related parties are willing to provide the Group withRMB 2 billion interest-free loan. The Group also has other sources of financing, such as issuing short-term bonds, ultra-short-termfinancing bonds and medium-term notes. The directors of the Company believe that the above credit line and shareholder support aresufficient to meet the funding needs of the Group for repayment of debts and capital commitments. Therefore, the financialstatements for the report period will continue to be prepared on a going concern basis.

V. Significant accounting policies and accounting estimates

The Group determines its specific accounting policies and estimates according to manufacturing and operation feature. It mainlyreflected in provision for bad debts of receivables, inventory costing method, amortisation of property, plant and equipment andintangible assets, criteria for determining capitalised development expenditure, and timing for revenue recognition.

Please see the Note for the key judgements adopted by the Group in applying important accounting policies.

1. Statement of compliance with the Accounting Standards for Business EnterprisesThe financial statements of the Company for the first half year of 2019 truly and completely present the financial position as of June30, 2019 and the operating results, cash flows and other information for the first half year of 2019 of the Group and the Company incompliance with the Accounting Standards for Business Enterprises.

2. Accounting period

The Company’s accounting year starts on 1 January and ends on 31 December.

3. Operating cycle

The Company’s operating cycle starts on 1 January and ends on 31 December.

4. Recording currency

The recording currency is Renminbi (RMB). The economic environment of subsidiaries, Hong Kong Southern Glass Trading Limitedand China Southern Glass (Hong Kong) Limited, determines their recording currency is Hong Kong dollar. The recording currency inthis report is Renminbi (RMB).

5. Business combinations

(a)Business combinations involving entities under common controlThe consideration paid and net assets obtained by the absorbing party in a business combination are measured at book value. Thedifference between book value of the net assets obtained from the combination and book value of the consideration paid for thecombination is treated as an adjustment to capital surplus (share premium). If the capital surplus (share premium) is not sufficient toabsorb the difference, the remaining balance is adjusted against retained earnings. Costs directly attributable to the combination areincluded in profit or loss in the period in which they are incurred. Transaction costs associated with the issue of equity or debtsecurities for the business combination are included in the initially recognised amounts of the equity or debt securities.(b) Business combinations involving entities not under common controlThe cost of combination and identifiable net assets obtained by the acquirer in a business combination are measured at fair value atthe acquisition date. Where the cost of the combination exceeds the acquirer’s interest in the fair value of the acquiree’s identifiablenet assets, the difference is recognised as goodwill; where the cost of combination is lower than the acquirer’s interest in the fairvalue of the acquiree’s identifiable net assets, the difference is recognised in profit or loss for the current period. Costs directly

attributable to the combination are included in profit or loss in the period in which they are incurred. Transaction costs associatedwith the issue of equity or debt securities for the business combination are included in the initially recognised amounts of the equityor debt securities.

6. Preparation of consolidated financial statements

The consolidated financial statements comprise the financial statements of the Company and all of its subsidiaries.

Subsidiaries are consolidated from the date on which the Group obtains control and are de-consolidated from the date that suchcontrol ceases. For a subsidiary that is acquired in a business combination involving enterprises under common control, it is includedin the consolidated financial statements from the date when it, together with the Company, comes under common control of theultimate controlling party. The portion of the net profits realised before the combination date presented separately in the consolidatedincome statement.

In preparing the consolidated financial statements, where the accounting policies and the accounting periods of the Company andsubsidiaries are inconsistent, the financial statements of the subsidiaries are adjusted in accordance with the accounting policies andthe accounting period of the Company. For subsidiaries acquired from business combinations involving enterprises not undercommon control, the individual financial statements of the subsidiaries are adjusted based on the fair value of the identifiable netassets at the acquisition date.

All significant intra-group balances, transactions and unrealised profits are eliminated in the consolidated financial statements. Theportion of subsidiaries’ equity and the portion of a subsidiaries’ net profits and losses and comprehensive incomes for the period notattributable to Company are recognised as minority interests and presented separately in the consolidated financial statements underequity, net profits and total comprehensive income respectively. Unrealised profits and losses resulting from the sales of assets by theCompany to its subsidiaries are fully eliminated against net profit attributable to shareholders of the parent company. Unrealisedprofits and losses resulting from the sales of assets by a subsidiary to the Company are eliminated and allocated between net profitattributable to shareholders of the parent company and non-controlling interests in accordance with the allocation proportion of theparent company in the subsidiary. Unrealised profits and losses resulting from the sales of assets by one subsidiary to another areeliminated and allocated between net profit attributable to shareholders of the parent company and non-controlling interests inaccordance with the allocation proportion of the parent in the subsidiary.

After the control over the subsidiary has been gained, whole or partial minority equities of the subsidiary owned by minorityshareholders are acquired from the subsidiary’s minority shareholders. In the consolidated financial statements, the subsidiary's assetsand liabilities are reflected with amount based on continuous calculation starting from the acquisition date or consolidation date.Capital surplus is adjusted according to the difference between newly increased long-term equity investment arising from acquisitionof minority equity and the share of net assets calculated based on current shareholding ratio that the parent company is entitled to.The share is subject to continuous calculation starting from the acquisition date or consolidation date. If the capital surplus (capitalpremium or share capital premium) is not sufficient to absorb the difference, the remaining balance is adjusted against retainedearnings.

If the accounting treatment of a transaction which considers the Group as an accounting entity is different from that considers theCompany or its subsidiaries as an accounting entity, it is adjusted from the perspective of the Group.

7. Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, deposits that can be readily drawn on demand, and short-term and highly liquidinvestments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

8. Translating of foreign currency operations and foreign currency report form(a) Foreign currency transaction

Foreign currency transactions are translated into RMB using the exchange rates prevailing at the dates of the transactions.

At the balance sheet date, monetary items denominated in foreign currencies are translated into RMB using the spot exchange rateson the balance sheet date. Exchange differences arising from these translations are recognised in profit or loss for the current period,except for those attributable to foreign currency borrowings that have been taken out specifically for the acquisition or constructionof qualifying assets, which are capitalised as part of the cost of those assets. Non-monetary items denominated in foreign currenciesthat are measured at historical costs are translated at the balance sheet date using the spot exchange rates at the date of thetransactions. The effect of exchange rate changes on cash is presented separately in the cash flow statement.

(b) Translation of foreign currency financial statements

The asset and liability items in the balance sheets for overseas operations are translated at the spot exchange rates on the balancesheet date. Among the shareholders’ equity items, the items other than “undistributed profits” are translated at the spot exchange ratesof the transaction dates. The income and expense items in the income statements of overseas operations are translated at the spotexchange rates of the transaction dates. The differences arising from the above translation are presented separately in theshareholders’ equity. The cash flows of overseas operations are translated at the spot exchange rates on the dates of the cash flows.The effect of exchange rate changes on cash is presented separately in the cash flow statement.

9. Financial instrument

A financial instrument is a contract that forms a financial asset of one party and forms a financial liability or equity instrument of theother party.

(a) Classification of financial assetsAccording to the business model of the financial assets under management and the characteristics of the contractual cash flow of thefinancial assets, the Company divides the financial assets into the following three categories:

1) Financial assets measured at amortized cost.

2) Financial assets measured at fair value through other comprehensive income.

3) Financial assets at fair value through profit or loss.

Financial liabilities are classified into the following two categories:

1) Financial liabilities at fair value through profit or loss.

2) Financial liabilities measured at amortized cost.

(b) Basis for confirmation of financial instruments

1) Financial assets measured at amortized cost

The financial assets of the Company that are subject to the following conditions are classified as financial assets measured atamortized cost:

①The business model for managing the financial assets is aimed at collecting contractual cash flows.

②The contractual terms of the financial assets stipulate that the cash flow generated on a specific date is only the payment of theprincipal and the interest based on the outstanding principal amount.

2) Financial assets measured at fair value through changes in other comprehensive income

The financial assets of the Company that meet the following conditions are classified into financial assets measured at fair value andwhose changes are included in other comprehensive income:

①The business model for managing the financial assets is aimed at both the collection of contractual cash flows and the sale of thefinancial assets.

②The contractual terms of the financial assets stipulate that the cash flow generated on a specific date is only the payment of theprincipal and the interest based on the outstanding principal amount.At initial recognition, the Company may designate non-tradable equity instrument investments as financial assets measured at fairvalue through other comprehensive income, presented as other equity instrument investment projects, and recognised dividendincome when the conditions are met ( Once the designation is made, it cannot be revoked).

3) Financial assets measured at fair value through profit or loss

The Company classifies financial assets other than financial assets measured at amortized cost and financial assets measured at fairvalue through changes in other comprehensive income as financial assets at fair value through profit or loss.If the contingent consideration of the Company in a business combination not under the same control constitutes financial assets, thefinancial assets are classified as financial assets measured at fair value through profit or loss.At the time of initial recognition, if the accounting mismatch can be eliminated or significantly reduced, the Company can designatethe financial assets as financial assets measured at fair value through profit or loss (the designation cannot be revoked once it ismade).

4) Financial liabilities measured at fair value through profit or loss

This category includes transactional financial liabilities (including derivatives that are financial liabilities) and financial liabilitiesthat are designated at fair value through profit or loss.If the contingent consideration of the Company in a business combination not under the same control constitutes financial liabilities,the financial liabilities are accounted for at fair value through profit or loss.In the initial recognition, in order to provide more relevant accounting information, the Company classifies financial liabilities thatmeet one of the following conditions as financial liabilities measured at fair value through profit or loss (the designation cannot berevoked once it is made):

①can eliminate or significantly reduce accounting mismatches.

②According to the enterprise risk management or investment strategy specified in the official written documents, manage andevaluate the financial liability portfolio or financial assets and financial liabilities based on fair value, and report to key managementpersonnel on the basis of this. .

5) Financial liabilities measured at amortized cost

Except for the following items, the Company classifies financial liabilities as financial liabilities measured at amortized cost:

①Financial liabilities measured at fair value through profit or loss.

②Financial assets transfer does not meet the conditions for derecognition or financial liabilities arising from the transfer oftransferred financial assets.

③Financial guarantee contracts that do not fall into ① and ② categories, and loan commitments that are not subject to the market

interest rate for loans that are not in ① category of this article.

(c) Measurement methods for financial instruments

1) Financial assets measured at amortized cost

The initial measurement is carried out at fair value, and the related transaction expense is included in the initial recognition amount;the interest calculated using the effective interest method during the holding period is included in the current profit and loss. Whenrecovering or disposing, the difference between the price obtained and the book value of the financial asset is included in the currentprofit and loss.

2) Financial assets measured at fair value through changes in other comprehensive income

The initial measurement is carried out at fair value, and the related transaction costs are included in the current profit and loss.Subsequent measurement measured at fair value. The discount or premium is amortized using the effective interest method andrecognised as interest income or expense. Except for impairment loss or gains and exchange gains and losses recognized as currentgains and losses, changes in fair value of such financial assets are recognised in other comprehensive income until the financial assetsare derecognised, the accumulated gain or loss is transferred to profit or loss.

3) Financial assets measured at fair value through profit or loss

The initial measurement is carried out at fair value, and the related transaction costs are included in the current profit and loss. Thefinancial assets are subsequently measured at fair value, and changes in fair value are recognised in profit or loss. When theconfirmation is terminated, the difference between the fair value and the initially recorded amount is recognized as investmentincome, and the gains and losses from changes in fair value are adjusted at the same time.

4) Financial liabilities measured at fair value through profit or loss

The initial measurement is carried out at fair value, and the related transaction costs are included in the current profit and loss. Thefinancial liabilities are subsequently measured at fair value, and changes in fair value are recognised in profit or loss.When theconfirmation is terminated, the difference between the fair value and the initial entry amount is recognized as investment income, andthe gains and losses from changes in fair value are adjusted at the same time.

5) Financial liabilities measured at amortized cost

The initial measurement is based on fair value, and the related transaction costs are included in the initial recognition amount. Interestcalculated by the effective interest method during the period of holding is included in the current profit and loss. When theconfirmation is terminated, the difference between the consideration paid and the book value of the financial liability is recognised inprofit or loss.

(d) Confirmation basis and measurement method for transfer of financial assetsIn the event of a financial asset transfer, the Company assesses the extent to which it retains the risks and rewards of ownership offinancial assets and treats them separately as follows:

1) If almost all risks and rewards of ownership of financial assets are transferred, the financial assets are derecognised and the rightsand obligations arising or retained in the transfer are separately recognized as assets or liabilities.

2) If almost all risks and rewards in the ownership of financial assets are retained, the financial assets shall continue to be recognized.

3) If there is neither transfer nor retention of almost all risks and rewards of ownership of financial assets (that is, other cases inaddition to (1) and (2) of this article), then according to whether they retain control over financial assets, they are dealt with asfollows:

①If the control over the financial assets is not retained, the financial assets are derecognised and the rights and obligations arising orretained in the transfer are separately recognized as assets or liabilities.

②If the control over the financial assets is retained, the relevant financial assets shall continue to be recognized according to the

extent to which they continue to be involved in the transferred financial assets, and the related liabilities are recognized accordingly.When judging whether the transfer of financial assets satisfies the conditions for derecognition of the above-mentioned financialassets, the principle of substance over form is adopted. The Company divides the transfer of financial assets into the overall transferand partial transfer of financial assets:

1) If the overall transfer of financial assets meets the conditions for derecognition, the difference between the following two amountsis included in the current profit and loss:

① The book value of the transferred financial assets on the date of termination confirmation.

② The sum of the consideration received due to the transfer and the accumulated gains from changes in fair value that wereoriginally included in other comprehensive income.

2) If the financial assets are partially transferred and the transferred part as a whole meets the conditions for derecognition, theoverall book value of the financial assets before the transfer will be apportioned between the derecognition portion and thecontinuation confirmation portion according to their respective fair values on the transfer date. And the difference between thefollowing two amounts is included in the current profit and loss:

① The book value of the derecognition part on the date of termination confirmation.

② The sum of the amount of the derecognised portion of the derecognised portion and the amount of the derecognised portion of thecumulative amount of the fair value that is directly recognised in other comprehensive income originally (financial assets involvingtransfers are classified as financial assets measured at fair value through other comprehensive income).If the transfer of financial assets does not meet the conditions for derecognition, the financial assets continue to be recognized and theconsideration received is recognized as a financial liability.

(e) Method for determining the fair value of financial assets and financial liabilitiesFair value refers to the price at which a market participant can receive by selling an asset or paid for transferring a liability in anorderly transaction on the measurement day.

1) Financial assets or financial liabilities in an active market, the fair value of which is determined by quoted prices in active markets;quotes in active markets include the quotes of related assets or liabilities which can be easily and regularly obtained from exchanges,traders, brokers, industry groups, pricing agencies or regulators, and can represent market transactions that actually and frequentlyoccur on the basis of fair trade.

2) Financial assets or financial liabilities that do not exist in an active market adopt valuation techniques to determine their fair value.At the time of valuation, the Company adopts valuation techniques with adequate availability of data and other information support,as well as applicable in the current circumstances, select an input value that is consistent with the characteristics of the asset orliability considered by the market participant in the transaction of the relevant asset or liability, and use the relevant observable inputvalues as much as possible. When the relevant observable input value cannot be obtained or is not feasible, the unobservable inputvalue is used.

(f) Provision for impairment of financial assets

1) The Company confirms loss provision based on expected credit losses for financial assets measured at amortized cost, debtinstrument investments at fair value through other comprehensive income and financial guarantee contracts. The expected credit lossrefers to the weighted average of credit losses of financial instruments that are weighted by the risk of default. Credit loss refers tothe difference between all contractual cash flows receivable from the contract and all cash flows expected to be received by theCompany at the original actual interest rate, and the present value of all cash shortages.Among them, financial assets purchased ororiginated by the Company that have suffered credit impairment should be discounted according to the actual interest rate of thefinancial assets adjusted by credit.

On each balance sheet day, the Company measures the expected credit losses of financial instruments at different stages. If the creditrisk has not increased significantly since the initial recognition, the financial instrument is at the first stage, and the Companymeasures the provision for the loss according to the expected credit loss within the next 12 months; if the credit risk has increasedsignificantly since the initial confirmation but impairment of the credit has not yet occurred, the financial instrument is at the secondstage, the Company measures the provision for the loss according to the expected credit loss of the financial instrument for the entireduration; if the credit impairment has taken place since the initial recognition, the financial instrument is at the third stage and theCompany provides reserve for the expected credit loss of the financial instrument for the entire duration. For financial instrumentswith lower credit risk on the balance sheet day, the Company assumes that its credit risk has not increased significantly since theinitial recognition, and measures the provision for the loss according to the expected credit losses in the next 12 months.For the financial instrument at the first stage or the second stage or with lower credit risk, the Company calculates the interest incomebased on the book balance without deduction of the provision for the impairment and the actual interest rate. For the financialinstrument at the third stage, the Company calculates the interest income according to the book balance less the amortized cost afterprovision for the impairment and the actual interest rate.

2. Confirmation methods for credit losses of various types of financial assets:

(1) Notes receivable and accounts receivable:

Regardless of whether there exists a significant financing component, the Company considers all reasonable and evidence-basedinformation, including forward-looking information, to estimate the expected credit losses of the aforesaid receivables in a single orcombined manner and to adopt the simplified model of the expected credit losses, always measures provision for loss based onexpected credit losses for the entire duration. Provision method is as follows:

(a) At the end of the reporting period, the Company conducts separate impairment testing on the receivables if there is objectiveevidence proving that such receivables have experienced impairment. Loss for impairment is recognized and provision for bad debt ismade based on the difference of the present value of the estimated future cash flows lower than their carrying amount.(b) When the information of the expected credit loss of a single financing asset cannot be assessed with reasonable cost, theCompany divides the receivables portfolio according to the credit risk characteristics and calculates the expected credit losses on aportfolio basis. For receivables classified as risk portfolios, the Company calculates the expected credit losses with reference to thehistorical experience of credit loss with consideration of the present situation and the prediction of the future economic condition byusing the impairment provision model. The Company counts the provision for loss made or reversed to the current profit and loss

(2) Other receivables:

(a) For other receivables whose credit risk has not increased significantly since the initial recognition, the Company measures theprovision for the loss according to the expected credit loss within the next 12 months.(b) For other receivables whose credit risk has increased significantly since the initial recognition, the Company measures the losspreparation according to the amount of expected credit loss corresponding to the entire duration of the financial instrument;(c) Purchase or source of other receivables in which credit has been impaired, the Company measures loss provision based on theamount of expected credit loss for the entire duration of the life.For other receivables, the Company is unable to obtain sufficient evidence of a significant increase in credit risk at a reasonable costat the individual instrument level, and it is feasible to assess whether the credit risk is significantly increased on a portfolio basis, sothe Company classifies other receivables according to the type of financial instruments, credit risk rating, initial confirmation date,and remaining contract period as common risk characteristics, and considers whether the credit risk is significantly increased on aportfolio basis,(i) Other receivables formed by non-operating low-risk businesses are assessed for credit losses individually based on the nature ofthe business. After the credit loss assessment is performed individually, if the credit loss is not recognized, it will perform a creditloss assessment again including in a portfolio with similar credit risk characteristics.(ii) The expected credit losses are measured on a portfolio basis. The accrual method determined by the combination of credit riskcharacteristics is consistent with the accounts receivable.(iii) For other receivables with mortgage collateral guarantee, the original value is deducted from the recoverable value of thecollateral as the expected credit loss of the risk exposure.

(g) Offset of financial assets and financial liabilitiesFinancial assets and financial liabilities are presented separately in the balance sheet and are not offset. However, if the followingconditions are met, the net amount offset by each other is listed in the balance sheet:

1) The Company has a statutory right to offset the confirmed amount, and such legal right is currently enforceable;

2) The Company plans to settle on a net basis or realize the financial assets and pay off the financial liabilities at the same time.

10. Receivables

Receivables include notes receivable, accounts receivable and other receivables. The Group's accounts receivable from the sale ofgoods or the provision of labor services shall be deemed as the initial recognition amount based on the fair value of the contract oragreement receivable from the purchaser or the labor acceptor.For the impairment of notes receivable and accounts receivable, refer to the above-mentioned financial instruments for therecognition of impairment of financial assets, and estimate the expected credit losses individually or on a portfolio basis. For theimpairment of other receivables, refer to the financial instrument's provisions on impairment.

(a) Accounts receivable with significant individual amounts and separate provision for bad debtsFor accounts receivable with significant individual amount, the impairment test is carried out separately. When there is objectiveevidence that the Group will not be able to recover the amount based on the original terms of the accounts receivable, the provisionfor bad debts is made based on the difference between the present value of the estimated future cash flows of the accounts receivableand its book value.

The criterion for determining the individual amount is: the individual amount exceeds RMB 20 million.

(b) Accounts receivable that are not significant but have individual provision for bad debtsWhen there is objective evidence that the Group will not be able to recover the amount in accordance with the original terms of theaccounts receivable, provision for bad debts is made based on the difference between the present value of the estimated future cashflows of the accounts receivable and its book value.

(c) Accounts receivable prepared for bad debts on a portfolio basis

Accounts receivable that are not separately withdrawn for impairment are classified into several portfolios based on credit riskcharacteristics. Determine the provision for bad debts that should be accrued based on the current situation. Based on the actual lossrate of the accounts receivable portfolio with similar credit risk characteristics in previous years, the provision for bad debts accruedis determined according to the current situation.

The basis for determining the portfolio is as follows:

Portfolio 1All receivables from non-related parties that are not individually withdrawn for impairment
Portfolio 2Associated party portfolio

In the portfolio, the percentage of provision for bad debts using the percentage of balance method is as follows:

Percentage of provision for accounts receivable (%)
Portfolio 12%
Portfolio 22%

If the Group transfers the accounts receivable to the financial institution without recourse, the difference between book value oftransferred accounts receivable by transaction amount and the related taxes and fees is charged to the current profit and loss.

11. Inventories

(a) ClassificationInventories refer to manufacturing sector, including raw materials, work in progress, finished goods and turnover materials, and aremeasured at the lower of cost and net realisable value.

(b)Inventory costing methodCost is determined using the weighted average method. The cost of finished goods and work in progress comprise raw materials,direct labour and systematically allocated production overhead based on the normal production capacity.

(c)Amortisation methods of low value consumables and packaging materialsTurnover materials include low value consumables and packaging materials, which are expensed when issued.

(d)The determination of net realisable value and the method of provision for impairment of inventoriesProvision for decline in the value of inventories is determined at the excess amount of the carrying amounts of the inventories overtheir net realisable value. Net realisable value is determined based on the estimated selling price in the ordinary course of business,less the estimated costs to completion and estimated costs necessary to make the sale and related taxes.

(e)The Group adopts the perpetual inventory system.

12. Assets classified as held for sale

A non-current asset or a disposal group is classified as held for sale when all of the following conditions are satisfied: (1) the non-currentasset or the disposal group is available for immediate sale in its present condition subject only to terms that are usual and customary forsales of such non-current asset or disposal group; (2) the group has signed with other parties legally binding sale agreement and approvalhas been obtained, is expected to the sale will be completed within one year.

Non-current assets (except for financial assets and deferred tax assets) that meet the recognition criteria for held for sale are recognised atthe amount equal to the lower of the fair value less costs to sell and the carrying amount. The difference between fair value less costs tosell and the carrying amount should be presented as impairment loss.

Such non-current assets and assets included in disposal groups as classified as held for sale are accounted for as current assets; whileliabilities included in disposal groups classified as held for sale are accounted for as current liabilities, which are presented separately inthe balance sheet.

A discontinued operation is a component of the Group that either has been disposed of or is classified as held for sale, and is separately

identifiable operationally and for financial reporting purposes, and satisfies one of the following conditions: (1) represents a separatemajor line of business or geographical area of operations; (2) is part of a single coordinated plan to dispose of a separate major line ofbusiness or geographical area of operations; and (3) is a subsidiary acquired exclusively with a view to resale.

Earnings from discontinued operations stated in the income statement include operating profit and loss and disposal gains and losses.

13. Long-term equity investments

Long-term equity investments comprise the Company’s long-term equity investments in its subsidiaries, and the Group’s long-termequity investments in its associates.

Subsidiaries are the investees over which the Company is able to exercise control. Associates are the investees that the Group hassignificant influence on their financial and operating policies.

Investments in subsidiaries are measured using the cost method in the Company’s financial statements, and adjusted by using theequity method when preparing the consolidated financial statements. Investments in associates are accounted for using the equitymethod.

(a) Initial recognition

For long-term equity investments formed in business combination: when obtained from business combinations involving entitiesunder common control, the long-term equity investment is stated at carrying amount of equity for the combined parties at the timeof merger; when the long-term equity investment obtained from business combinations involving entities not under commoncontrol, the investment is measured at combination cost.

For long-term equity investments not formed in business combination: the one paid by cash is initially measured at actual purchaseprice; the long-term investment obtained by issuing equity securities is stated at fair value of equity securities as initial investmentcost.

(b) Subsequent measurement and recognition method of profit or loss

Long-term equity investments accounted for using the cost method are measured at initial investment cost. Cash dividend or profitdistribution declared by the investees is recognised as investment income in profit or loss.

For long-term equity investments accounted for using the equity method, where the initial investment cost exceeds the Group’sshare of the fair value of the investee’s identifiable net assets at the time of acquisition, the investment is initially measured at cost.Where the initial investment cost is less than the Group’s share of the fair value of the investee’s identifiable net assets at the timeof acquisition, the difference is included in profit or loss for the current period and the cost of the long-term equity investment isadjusted upwards accordingly.

For long-term equity investments accounted for using the equity method, the Group recognises the investment income according toits share of net profit or loss of the investee. The Group discontinues recognising its share of the net losses of an investee after the

carrying amounts of the long-term equity investment together with any long-term interests that in substance form part of theinvestor’s net investment in the investee are reduced to zero. However, if the Group has obligations for additional losses and thecriteria with respect to recognition of provisions under the accounting standards on contingencies are satisfied, the Group continuesrecognising the investment losses and the provisions. For changes in owners’ equity of the investee other than those arising from itsnet profit or loss, its proportionate share is directly recorded into capital surplus, provided that the proportion of shareholding of theGroup in the investee remains unchanged. The carrying amount of the investment is reduced by the Group’s share of the profitdistribution or cash dividends declared by an investee. The unrealised profits or losses arising from the transactions between theGroup and its investees are eliminated in proportion to the Group’s equity interest in the investees, based on which the investmentgain or losses are recognised. Any losses resulting from transactions between the Group and its investees attributable to assetimpairment losses are not eliminated.

(c) Definition of control, joint control and significant influence over the investees

The term "control" refers to the power in the investees, to obtain variable returns by participating in the related business activitiesof the investees, and the ability to affect the returns by exercising its power over the investees.

The term "significant influence" refers to the power to participate in the formulation of financial and operating policies of anenterprise, but not the power to control, or jointly control, the formulation of such policies with other parties.

(d) Impairment of long-term equity investments

The carrying amount of long-term equity investments in subsidiaries and associates is reduced to the recoverable amount when therecoverable amount is less than the carrying amount.

14. Fixed assets

(a) Recognition and initial measurementFixed assets comprise buildings, machinery and equipment, motor vehicles and others.

Fixed assets are recognised when it is probable that the related economic benefits will flow to the Group and the costs can be reliablymeasured. Fixed assets purchased or constructed by the Group are initially measured at cost at the time of acquisition.

Subsequent expenditures incurred for a fixed asset are included in the cost of the fixed asset when it is probable that the associatedeconomic benefits will flow to the Group and the related cost can be reliably measured. The carrying amount of the replaced part isderecognised. All the other subsequent expenditures are recognised in profit or loss in the period in which they are incurred.

(b) Depreciation methods

Fixed assets are depreciated using the straight-line method to allocate the cost of the assets to their estimated residual values overtheir estimated useful lives. For the fixed assets that have been provided for impairment loss, the related depreciation charge isprospectively determined based upon the adjusted carrying amounts over their remaining useful lives.

The estimated useful lives, the estimated net residual values expressed as a percentage of cost and the annual depreciation rates offixed assets are as follows:

CategoriesDepreciation methodsPeriod of depreciationEstimated net residual valueAnnual depreciation rate
Buildingsstraight-line method20 to 35 years5%2.71%~4.75%
Machinery and equipmentstraight-line method8 to 20 years5%4.75%~11.88%
Motor vehicles and othersstraight-line method5 to 8 years0%12.50%~20.00%

The estimated useful life, the estimated net residual value of a fixed asset and the depreciation method applied to the asset arereviewed, and adjusted as appropriate at each year-end.

(c)Book value of a fixed asset is reduced to the recoverable amount when the recoverable amount is below book value (Note 2 (18)).

(d) Disposal

A fixed asset is derecognized on disposal or when no future economic benefits are expected from its use or disposal. The amount ofproceeds from disposals on sale, transfer, retirement or damage of a fixed asset net of its carrying amount and related taxes andexpenses is recognized in profit or loss for the current period.

15. Construction in progress

Construction in progress is recorded at actual cost. Actual cost comprises construction cost, installation cost, borrowing costs eligiblefor capitalised condition and necessary expenditures incurred for its intended use. Actual cost also includes net of trial productioncost and trial production income before construction in progress is put into production.

Construction in progress is transferred to fixed assets when the assets are ready for their intended use, and depreciation begins fromthe following month.

Book value of construction in progress is reduced to the recoverable amount when the recoverable amount is below book value.

16. Borrowing costs

The borrowing costs that are directly attributable to the acquisition and construction of an asset that needs a substantially long periodof time for its intended use commence to be capitalised and recorded as part of the cost of the asset when expenditures for the assetand borrowing costs have been incurred, and the activities relating to the acquisition and construction that are necessary to preparethe asset for its intended use have commenced. The capitalisation of borrowing costs ceases when the asset under acquisition orconstruction becomes ready for its intended use and the borrowing costs incurred thereafter are recognised in profit or loss for thecurrent period. Capitalisation of borrowing costs is suspended during periods in which the acquisition or construction of a fixed assetis interrupted abnormally and the interruption lasts for more than 3 months, until the acquisition or construction is resumed.

For the specific borrowings obtained for the acquisition or construction of an asset qualifying for capitalisation, the amount of

borrowing costs eligible for capitalisation is determined by deducting any interest income earned from depositing the unused specificborrowings in the banks or any investment income arising on the temporary investment of those borrowings during the capitalisationperiod.

For the general borrowings obtained for the acquisition or construction of an asset qualifying for capitalisation, the amount ofborrowing costs eligible for capitalisation is determined by applying the weighted average effective interest rate of generalborrowings, to the weighted average of the excess amount of cumulative expenditures on the asset over the amount of specificborrowings. The effective interest rate is the rate at which the estimated future cash flows during the period of expected duration ofthe borrowings or applicable shorter period are discounted to the initial amount of the borrowings.

17. Intangible assets

(1) Valuation method, service life and impairment test

Intangible assets, mainly including land use rights, patents and proprietary technologies, exploitation rights and others, are measuredat cost.

(a) Land use rights

Land use rights are amortised on the straight-line basis over their approved use period of 30 to 70 years. If the acquisition costs of theland use rights and the buildings located thereon cannot be reasonably allocated between the land use rights and the buildings, all ofthe acquisition costs are recognised as fixed assets.

(b) Patents and proprietary technologies

Patents are amortised on a straight-line basis over the estimated use life.

(c) Exploitation rights

Exploitation rights are amortised on a straight-line basis over permitted exploitation periods on the exploitation certificate.

(d) Periodical review of useful life and amortisation method

For an intangible asset with a finite useful life, review of its useful life and amortisation method is performed at each year-end, withadjustment made as appropriate.

(e) Impairment of intangible assetsBook value of intangible assets is reduced to the recoverable amount when the recoverable amount is below book value.

(2) Internal research and development expenditure accounting policy

The expenditure on an internal research and development project is classified into expenditure on the research phase and expenditureon the development phase based on its nature and whether there is material uncertainty that the research and development activitiescan form an intangible asset at end of the project.

Expenditure on the research phase related to planned survey, evaluation and selection for research on manufacturing technique isrecognised in profit or loss in the period in which it is incurred. Prior to mass production, expenditure on the development phaserelated to the design and testing phase in regards to the final application of manufacturing technique is capitalised only if all of thefollowing conditions are satisfied:

? The development of manufacturing technique has been fully demonstrated by technical team;? The 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 capableof marketing;? There is sufficient technical and capital to support the development of manufacturing technique and subsequent massproduction; and the expenditure on manufacturing technique development can be reliably gathered.

Other development expenditures that do not meet the conditions above are recognised in profit or loss in the period in which they areincurred. Development costs previously recognised as expenses are not recognised as an asset in a subsequent period. Capitalisedexpenditure on the development phase is presented as development costs in the balance sheet and transferred to intangible assets atthe date that the asset is ready for its intended use.

18. Impairment of long-term assets

Fixed assets, construction in progress, intangible assets with finite useful lives and long-term equity investments in joint ventures andassociates are tested for impairment if there is any indication that the assets may be impaired at the balance sheet date; intangibleassets not ready for their intended use are tested at least annually for impairment, irrespective of whether there is any indication thatthey may be impaired. If the result of the impairment test indicates that the recoverable amount of an asset is less than its carryingamount, a provision for impairment and an impairment loss are recognised for the amount by which the asset’s carrying amountexceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and the present valueof the future cash flows expected to be derived from the asset. Provision for asset impairment is determined and recognised on theindividual asset basis. If it is not possible to estimate the recoverable amount of an individual asset, the recoverable amount of agroup of assets to which the asset belongs is determined. A group of assets is the smallest group of assets that is able to generateindependent cash inflows.

Goodwill that is separately presented in the financial statements is tested at least annually for impairment, irrespective of whetherthere is any indication that it may be impaired. In conducting the test, book value of goodwill is allocated to the related asset groupsor groups of asset groups which are expected to benefit from the synergies of the business combination. If the result of the testindicates that the recoverable amount of an asset group or group of asset groups, including the allocated goodwill, is lower than itscarrying amount, the corresponding impairment loss is recognised. The impairment loss is first deducted from book value of goodwillthat is allocated to the asset group or group of asset groups, and then deducted from book values of other assets within the assetgroups or groups of asset groups in proportion to book values of assets other than goodwill.

Once the above asset impairment loss is recognised, it will not be reversed for the value recovered in the subsequent periods.

19. Long-term prepaid expenses

Long-term prepaid expenses include the expenditures that have been incurred but should be recognised as expenses over more than

one year in the current and subsequent periods. Long-term prepaid expenses are amortised on the straight-line basis over the expectedbeneficial period and are presented at actual expenditure net of accumulated amortisation.

20. Employee benefits

(1) Short-term employee benefits accounting method

Short-term employee benefits include wages or salaries, bonuses, allowances and subsidies, staff welfare, medical care, work injuryinsurance, maternity insurance, housing funds, labour union funds, employee education funds and paid short-term leave, etc. Theemployee benefit liabilities are recognised in the accounting period in which the service is rendered by the employees, with acorresponding charge to the profit or loss for the current period or the cost of relevant assets. Employee benefits which arenon-monetary benefits shall be measured at fair value.

(2) Post-employment benefits accounting method

The Group classifies post-employment benefit plans as either defined contribution plans or defined benefit plans. Definedcontribution plans are post-employment benefit plans under which the Group pays fixed contributions into a separate fund and willhave no obligation to pay further contributions; and defined benefit plans are post-employment benefit plans other than definedcontribution plans. During the reporting period, the Group's post-employment benefits mainly include basic pensions andunemployment insurance, both of which belong to the defined contribution plans.

(3) Basic pensions

The Group’s employees participate in the basic pension plan set up and administered by local authorities of Ministry of HumanResource and Social Security. Monthly payments of premiums on the basic pensions are calculated according to prescribed bases andpercentage by the relevant local authorities. When employees retire, local labour and social security institutions have a duty to paythe basic pension insurance to them. The amounts based on the above calculations are recognised as liabilities in the accountingperiod in which the service has been rendered by the employees, with a corresponding charge to the profit or loss for the currentperiod or the cost of relevant assets.

(4) Termination benefits accounting method

The Group provides compensation for terminating the employment relationship with employees before the end of the employmentcontracts or as an offer to encourage employees to accept voluntary redundancy before the end of the employment contracts. TheGroup recognises a liability arising from compensation for termination of the employment relationship with employees, with acorresponding charge to profit or loss at the earlier of the following dates: 1) when the Group cannot unilaterally withdraw the offerof termination benefits because of an employment termination plan or a curtailment proposal; 2) when the Group recognises costs orexpenses related to the restructuring that involves the payment of termination benefits.

The termination benefits expected to be paid within one year since the balance sheet date are classified as current liabilities.

21. Provisions

Business restructuring, provisions for product warranties, loss contracts etc. are recognised when the Group has a present obligation,it is probable that an outflow of economic benefits will be required to settle the obligation, and the amount of the obligation can bemeasured reliably.

A provision is initially measured at the best estimate of the expenditure required to settle the related present obligation. Factors

surrounding a contingency, such as the risks, uncertainties and the time value of money, are taken into account as a whole in reachingthe best estimate of a provision. Where the effect of the time value of money is material, the best estimate is determined bydiscounting the related future cash outflows. The increase in the discounted amount of the provision arising from passage of time isrecognised as interest expense.

Book value of provision is reviewed at each balance sheet date and adjusted to reflect the current best estimate.

The provisions expected to be paid within one year since the balance sheet date are classified as current liabilities.

22. Share-based payments

Share-based payments are divided into equity-settled and cash-settled payments. The term "equity-settled share-based payment"refers to a transaction in which an enterprise grants shares or other equity instruments as a consideration in return for services.

Equity-settled share-based payment The Group’s stock option plan is the equity-settled share-based payment in exchange ofemployees' services and is measured at the fair value of the equity instruments at grant date. The equity instruments are exercisableafter services in vesting period are completed or specified performance conditions are met. In the vesting period, the servicesobtained in current period are included in relevant cost and expenses at the fair value of the equity instruments at grant date based onthe best estimate of the number of exercisable equity instruments, and capital surplus is increased accordingly. If the subsequentinformation indicates the number of exercisable equity instruments differs from the previous estimate, an adjustment is made and, onthe exercise date, the estimate is revised to equal the number of actual vested equity instruments. The Group determines the fair valueof stock options using option pricing model, which is Black-Scholes option pricing model (B-S model).

In the period at which performance conditions and term of service are met, the relevant cost and expenses of equity-settled paymentshould be recognized, and capital surplus is increased accordingly. Before the exercise date, the accruing amounts of equity-settledpayments on balance sheet date reflect the part of expired waiting period and optimal estimation for the number of the Company finalvested equity instruments.

If the non-market conditions and term of service are not met so that share-based payment fail to exercise, the costs and expenses onthis portion should not be recognized. If the share-based payment agreement sets out the market conditions and term of non-vesting,as long as performance conditions and term of service are met, it is should be regard as exercisable right, no matter the marketconditions and non-vesting conditions are meet or not.

If the terms of equity-settled payment are modified, at least the service is confirmed in accordance with the unmodified terms. Inaddition, the increase of the fair value of the authorized equity instruments, or the beneficial changes to the employees on themodification date, the increase of service is confirmed.

If the equity-settled payment is cancelled, the cancellation date shall be deemed as an expedited exercise, and the unconfirmedamount shall be confirmed immediately. If the employee or other party is able to choose to meet the non-vesting conditions but not

satisfied in the waiting period, equity-settled payment should be cancelled. But if a new equity instrument is granted, and the new

equity instrument is confirm to replace the old equity instrument which is canceled in the authorization date of the new equityinstrument, the new equity instrument should be disposed by using the same conditions and terms of the old equity instrument for

modifications.

23. Revenue

The amount of revenue is determined in accordance with the fair value of the consideration received or receivable for the sales ofgoods and services in the ordinary course of the Group’s activities. Revenue is shown net of discounts, rebates and returns.

Revenue is recognised when the economic benefits associated with the transaction will probably flow to the Group, the relatedrevenue can be reliably measured, and the specific revenue recognition criteria have been met for each type of the Group’s activitiesas described below:

(a) Sales of goodsThe Group mainly sells flat and engineering glass, products related to solar energy, and electronic glass and displays. For domesticsales, the Group delivers the products to a certain place specified in the contract. When the buyer takes over the goods, the Grouprecognises revenue. For export sales, the Group recognises the revenue when it finished clearing goods for export and deliver thegoods on board the vessel, or when the goods are delivered to a certain place specified in the contract. For above sales, when thebuyer takes over the goods, the buyer has the right to sell the products, and should bear the risk of price fluctuation or goods damage.

(b) Rendering of servicesRevenue is recognised for the rendering of service by the Group to external parties upon the completion of related service.

(c) Transfer of asset use rightsInterest income is recognised on a time-proportion basis using the effective interest method.

24. Government grants

Government grants are transfers of monetary or non-monetary assets from the government to the Group at nil consideration,including tax refund and financial subsidies, etc.

A government grant is recognized when there is a reasonable assurance that the grants will be received and the Group will complywith all attached conditions. Monetary government grants are measured at the amounts received or receivable. Non-monetarygovernment grant are measured at fair 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 used for purchase and construction oflong-term assets or formation of long-term asset in other ways. The government grants related to income refer to grants other thanthose related to assets.

For government grants related to income, where the grant is a compensation for related expenses or losses to be incurred by theGroup in the subsequent periods, the grant is recognized as deferred income, and included in profit or loss over the periods in whichthe related costs are recognized; where the grant is a compensation for related expenses or losses already incurred by the Group, thegrant is recognized immediately in profit or loss for the current period. The company uses the same method of presentation forsimilar government grants.

The ordinary activity government grants should be counted into operating profits; the government grants which not belong toordinary activities should be counted into non-operating income.

25. Deferred tax assets and deferred tax liabilities

Deferred tax assets and deferred tax liabilities are calculated and recognized based on the differences arising between the tax bases ofassets and liabilities and their carrying amounts (temporary differences). Deferred tax asset is recognized for the deductible lossesthat can be carried forward to subsequent years for deduction of the taxable profit in accordance with the tax laws. No deferred taxliability is recognized for a temporary difference arising from the initial recognition of goodwill. No deferred tax asset or deferred taxliability is recognized for the temporary differences resulting from the initial recognition of assets or liabilities due to a transactionother than a business combination, which affects neither accounting profit nor taxable profit (or deductible loss). At the balance sheetdate, deferred tax assets and deferred tax liabilities are measured at the tax rates that are expected to apply to the period when theasset is realized or the liability is settled.

Deferred tax assets are only recognized for deductible temporary differences, deductible losses and tax credits to the extent that it isprobable that taxable profit will be available in the future against which the deductible temporary differences, deductible losses andtax credits can be utilized.

Deferred tax liabilities are recognized for temporary differences arising from investments in subsidiaries and associates, except wherethe Group is able to control the timing of reversal of the temporary difference, and it is probable that the temporary difference willnot reverse in the foreseeable future. When it is probable that the temporary differences arising from investments in subsidiaries andassociates will be reversed in the foreseeable future and that the taxable profit will be available in the future against which thetemporary differences can be utilized, the corresponding deferred tax assets are recognized.

Deferred tax assets and liabilities are offset when:

? The deferred taxes are related to the same tax payer within the Group and the same taxation authority;? That tax payer within the Group has a legally enforceable right to offset current tax assets against current tax liabilities.

26. Leases

(1) Accounting method of operating lease

Lease payments under an operating lease are recognised on a straight-line basis over the period of the lease, and are either capitalisedas part of the cost of related assets, or charged as an expense for the current period.Lease income under an operating lease is recognised as revenue on a straight-line basis over the period of the lease.

(2) Accounting method of financing lease

A lease that transfers substantially all the risks and rewards incidental to ownership of an asset is a finance lease. An operating leaseis a lease other than a finance lease.

27. Other important accounting policies and accounting estimates

The Group continually Estimates the critical accounting estimates and key assumptions applied based on historical experience and

other factors, including expectations of future events that are believed to be reasonable.

The critical accounting estimates and key assumptions that have a significant risk of possibly causing a material adjustment to bookvalues of assets and liabilities within the next accounting year are outlined below:

(a) Income taxThe Group is subject to Income tax in numerous jurisdictions. There are some transactions and events for which the ultimate taxdetermination is uncertain during the ordinary course of business. Significant judgement is required from the Group in determiningthe provision for Income tax in each of these jurisdictions. Where the final identified outcome of these tax matters is different fromthe initially-recorded amount, such difference will impact the income tax expenses and deferred income tax in the period in whichsuch determination is finally made.

(b) Deferred income taxEstimates on deferred tax assets are based on estimates on amount of taxable income and applicable tax rate for every year.Realisation of deferred income tax is subject to sufficient taxable income that is possible to be obtained by the Group in the future.Change of the future tax rate as well as the reversed time of temporary difference might have effects on tax expense (income) and thebalance of deferred tax assets or liabilities. Those estimates may also cause significant adjustment on deferred tax.

(c) Impairment of long-term assets (excluding goodwill)

Long-term assets at the balance sheet date should be subject to impairment testing if there are any indications of impairment.Management determines whether the long-term assets impaired or not by evaluating and analysing following aspects: (1) whether theevent affecting assets impairment occurs; (2) whether the expected obtainable present value of future cash flows is lower than theasset’s carrying amount by continually using the assets or disposal; and (3) whether the assumptions used in expected obtainablepresent value of future cash flows are appropriate.

Various assumptions, including the discount rate and growth rate applied in the method of present value of future cash flow, arerequired in evaluating the recoverable amount of assets. If these assumptions cannot be conformed, the recoverable amount should bemodified, and the long-term assets may be impaired accordingly.

(d) The useful life of fixed assetsManagement estimates the useful life of fixed assets, based on historical experiences on using fixed assets that have similarproperties and functions. When there are differences between actually useful life and previously estimation, management will adjustestimation to useful life of fixed assets. The fixed assets would be written off or written down when fixed assets been disposed orbecame redundant. Thus, the estimated result based on existing experience may be different from the actual result of the nextaccounting period, which may cause major adjustment to book value of fixed assets on balance sheet.

(e) Goodwill impairment

Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate a potentialimpairment. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of thecash-generating units (“CGUs”), or groups of CGUs, and future cash flow from each CGU or CGUs is forcasted and discounted withappropriate discount rate.

28. Significant accounting policies and changes in accounting estimates

(1) Important accounting policy changes

√ Applicable □Not applicable

Details can be found on the Company's announcement of accounting policy changes.

(2) Changes in important accounting estimates

□Applicable √ Not applicable

(3) Adjustment of items related to the first implementation of the financial statements at the beginning ofthe year for the first time implementation of the new financial instruments guidelines, new incomestandards, new lease standards

□Applicable √ Not applicable

(4) Explanation of comparative data before retrospective adjustment for the first time implementation ofthe new financial instrument guidelines, new lease criteria

□Applicable √ Not applicable

29. Others

(1) Safety production costs

According to relevant regulations of the Ministry of Finance and National Administration of Work Safety, a subsidiary of the Groupwhich is engaged in producing and selling polysilicon appropriates safety production costs on following basis:

(a) 4% for revenue below RMB10 million (inclusive) of the year;(b) 2% for the revenue between RMB10 million to RMB100 million (inclusive) of the year;(c) 0.5% for the revenue between RMB100 million to RMB1 billion (inclusive) of the year;(d) 0.2% for the revenue above RMB1 billion of the year.

The safety production costs are mainly used for the overhaul, renewal and maintenance of safety facilities. The safety productioncosts are charged to costs of related products or profit or loss when appropriated, and safety production costs in equity account arecredited correspondingly. When using the 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, when projects are completed andtransferred to fixed assets, the special reserve should be offset against the cost of fixed assets, and a corresponding accumulateddepreciation are recognized. The fixed assets are no longer be depreciated in future.

(2) Segment information

The Group identifies operating segments based on the internal organization structure, management requirements and internal

reporting system, and discloses segment information of reportable segments 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) the component is able to earnrevenue and incur expenses from its ordinary activities; (2) whose operating results are regularly reviewed by the Group’smanagement to make decisions about resources to be allocated to the segment and to assess its performance, and (3) for which theinformation on financial position, operating results and cash flows is available to the Group. If two or more operating segments havesimilar economic characteristics and satisfy certain conditions, they are aggregated into one single operating segment.VI. Taxation

1. The main categories and rates of taxes applicable to the Group are set out below:

Tax itemTax basisTax rate
Value-added tax (“VAT”)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)6%-16%
City maintenance and construction taxVAT paid1%-7%
Educational surchargeVAT paid3%-5%
Enterprise income taxTaxable income0%-25%

2. Tax incentives

The main tax incentives the Group is entitled to are as follows:

Tianjin CSG Energy Conservation Glass Co., Ltd. (“Tianjin Energy Conservation”) passed review on a high and new tech enterprisein 2018 and obtained the Certificate of High and New Tech Enterprise, the period of validity is three years. It applies to 15% tax ratefor three years since 2018.

Dongguan CSG Architectural Glass Co., Ltd. (“Dongguan CSG”) passed review on a high and new tech enterprise in 2016 andobtained the Certificate of High and New Tech Enterprise, the period of validity is three years. It applies to 15% tax rate for threeyears since 2016. For the review of its high and new tech enterprise status was under processing, the income tax rate of 15% wasprovisionally applied during the report period.

Wujiang CSG East China Architectural Glass Co., Ltd. (“Wujiang CSG Engineering”) passed review on a high and new techenterprise in 2017 and obtained the Certificate of High and New Tech Enterprise, the period of validity is three years. It applies to15% tax rate for three years since 2017.

Dongguan CSG Solar Glass Co., Ltd. (“Dongguan CSG Solar”) passed review on a high and new tech enterprise in 2017 andobtained the Certificate of High and New Tech Enterprise, the period of validity is three years. It applies to 15% tax rate for threeyears since 2017.

Yichang CSG polysilicon Co., Ltd. (“Yichang CSG polysilicon”) passed review on a high and new tech enterprise in 2017 and

obtained the Certificate of High and New Tech Enterprise, the period of validity is three years. It applies to 15% tax rate for threeyears since 2017.

Dongguan CSG PV-tech Co., Ltd. (“Dongguan CSG PV-tech”) passed review on a high and new tech enterprise in 2016 and obtainedthe Certificate of High and New Tech Enterprise, the period of validity is three years. It applies to 15% tax rate for three years since2016. For the review of its high and new tech enterprise status was under processing, the income tax rate of 15% was provisionallyapplied during the report period.

Hebei Panel Glass Co., Ltd. (“Hebei Panel”) passed review on a high and new tech enterprise in 2016 and obtained the Certificate ofHigh and New Tech Enterprise, the period of validity is three years. It applies to 15% tax rate for three years since 2016. For thereview of its high and new tech enterprise status was under processing, the income tax rate of 15% was provisionally applied duringthe report period.

Wujiang CSG Glass Co., Ltd. (“Wujiang CSG”) was recognised as a high and new tech enterprise in 2017, and obtained theCertificate of High and New Tech Enterprise, and the period of validity was three years. It applies to 15% tax rate for three yearssince 2017.

Xianning CSG Glass Co Ltd. (“Xianning CSG”) was recognised as a high and new tech enterprise in 2017, and obtained theCertificate of High and New Tech Enterprise, and the period of validity was three years. It applies to 15% tax rate for three yearssince 2017.

Xianning CSG Energy-Saving Glass Co., Ltd. (“Xianning CSG Energy-Saving”) was recognised as a high and new tech enterprise in2018, and obtained the Certificate of High and New Tech Enterprise, and the period of validity was three years. It applies to 15% taxrate for three years since 2018.

Yichang CSG Photoelectric Glass Co., Ltd. (“Yichang CSG Photoelectric”) 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 three years. It applies to 15% tax ratefor three years since 2018.

Yichang CSG Display Co., Ltd (“Yichang CSG Display”) was recognised as a high and new tech enterprise in 2018, and obtained theCertificate of High and New Tech Enterprise, and the period of validity was three years. It applies to 15% tax rate for three yearssince 2018.

Qingyuan CSG New Energy-Saving Materials Co., Ltd. (“Qingyuan CSG Energy-Saving”) was recognised as a high and new techenterprise in 2016, and obtained the Certificate of High and New Tech Enterprise, and the period of validity was three years. Itapplies to 15% tax rate for three years since 2016. For the review of its high and new tech enterprise status was under processing, theincome tax rate of 15% was provisionally applied during the report period.

Hebei CSG Glass Co Ltd. (“Hebei CSG”) was recognised as a high and new tech enterprise in 2018, and obtained the Certificate ofHigh and New Tech Enterprise, and the period of validity was three years. It applies to 15% tax rate for three years since 2018.

Shenzhen CSG Applied Technology Co Ltd. (“Shenzhen Technology”) 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 three years. It applies to 15% tax rate forthree years since 2018.

Sichuan CSG Energy Conservation Glass Co., Ltd. (“Sichuan CSG Energy Conservation”) obtains enterprise income tax preferentialtreatment for Western Development, and temporarily calculates enterprise income tax at a tax rate of 15% for current year.

Chengdu CSG Glass Co., Ltd. (“Chengdu CSG”) obtains enterprise income tax preferential treatment for Western Development, andtemporarily calculates enterprise income tax at a tax rate of 15% for current year.

Qingyuan CSG New Energy Co., Ltd. (“Qingyuan CSG New Energy”), Suzhou CSG PV Energy Co., Ltd. (“Suzhou CSG PVEnergy”), Jiangsu Wujiang CSG New Energy Co., Ltd. (“Wujiang CSG New Energy”), and Yichang CSG New Energy Co., Ltd.(“Yichang CSG New Energy”), Zhangzhou CSG Kibing PV Energy Co., Ltd. (“Zhangzhou CSG”), Heyuan CSG Kibing PV EnergyCo., Ltd. (“Heyuan CSG”), Shaoxing CSG Kibing PV Energy Co., Ltd. (“Shaoxing CSG”) Xinning CSG PV Energy Co.,Ltd.(“Xianning CSG PV Energy”) and Zhanjiang CSG New Energy Co., Ltd. (“Zhanjiang CSG PV Energy””),are publicinfrastructure project specially supported by the state in accordance with the Article 87 in Implementing Regulations of the Law of thePeople's Republic of China on Enterprise Income Tax, and can enjoy the tax preferential policy of “three-year exemptions andthree-year halves”, that is, starting from the tax year when the first revenue from production and operation occurs, the enterpriseincome tax is exempted from the first to the third year, while half of the enterprise income tax is collected for the following threeyears.

Qingyuan CSG New Energy, Suzhou CSG PV Energy and Wujiang CSG New Energy started to carry out operations in 2015; Theapplicable enterprise income tax rate for them is 12.5% for the current year. Yichang CSG New Energy started operation in 2016,Zhangzhou CSG, Heyuan CSG and Shaoxing CSG started operation in 2017. Zhanjiang CSG PV Energy、Xianning CSG PV Energystarted operation in 2018.The applicable enterprise income tax rate for them is 0% for the current year.

3. Others

Some subsidiaries of the Group have used the “exempt, credit, refund” method on goods exported and the refund rate is 5%-16%.VII. Notes to the consolidated financial statements

1. Cash at bank and on hand

Unit: RMB

ItemBalance at the end of the periodBalance at the beginning of the period
Cash on hand5,6699,731
Cash at bank1,744,235,1972,225,117,182
Other cash balances151,216,4241,320,807
Total1,895,457,2902,226,447,720
Including: Total overseas deposits40,034,09537,790,337

Other cash balances include margin deposits for the issuance of bills and letter of credit from the bank, amounting to RMB151,216,424 (Dec. 31, 2018: RMB 1,320,807), which is restricted cash.

2. Notes receivable

(1) Notes receivable listed by classification

Unit: RMB

ItemBalance at the end of the periodBalance at the beginning of the period
Bank acceptance notes372,915,741304,180,556
Trade acceptance notes283,582,713415,194,892
Total656,498,454719,375,448

(2)Notes receivable which have been endorsed or discounted at the end of the term by the Group but arenot yet due are as follows:

Unit: RMB

ItemAmount of recognition termination at the period-endAmount of not terminated recognition at the period-end
Bank acceptance notes2,187,233,792
Trade acceptance notes102,493,282
Total2,187,233,792102,493,282

3. Accounts receivable

(1) Accounts receivable disclosed by category

Unit: RMB

CategoryEnd of termBeginning of term
Carrying amountProvision for bad debtsBook valueCarrying amountProvision for bad debtsBook value
AmountProportionAmountProportionAmountProportionAmountProportion
Accounts receivable withdrawn bad debt provision according to credit risks characteristics790,538,60598%15,808,1112%774,730,494598,852,70398%11,976,1692%586,876,534
With amounts that are not individually significant but13,017,8182%7,672,51559%5,345,30313,046,5062%7,689,72859%5,356,778
that the related provision for bad debts is provided on the individual basis
Total803,556,423100%23,480,6263%780,075,797611,899,209100%19,665,8973%592,233,312

Provision for bad debts on the individual basis:

Unit: RMB

NameClosing balance
Carrying amountProvision for bad debtsProportionReason
With amounts that are not individually significant but that the related provision for bad debts is provided on the individual basis13,017,8187,672,51559%
Total13,017,8187,672,515----

Provision for bad debts by portfolio

Unit: RMB

NameClosing balance
Carrying amountProvision for bad debtsProportion
Portfolio 1790,538,60515,808,1112%
Total790,538,60515,808,111--

Disclosure by the ageing of accounts receivable

Unit: RMB

AgeingClosing balance
Within 1 year (including 1 year)775,310,227
1 to 2 years16,330,013
2 to 3 years4,054,655
Over 3 years7,861,528
Total803,556,423

(2) Accounts receivable withdraw, reversed or collected during the reporting period

Unit: RMB

CategoryOpening balanceIncreased this yearDecreased this yearClosing balance
ProvisionOthersCollect or reversal
Accounts receivable bad debt provision19,665,8977,865,1654,050,43623,480,626
Total19,665,8977,865,1654,050,43623,480,626

(3) Top 5 of the closing balance of the accounts receivable collected according to the arrears party

Unit: RMB

BalanceProvision for bad debtsPercentage in total accounts receivable balance
Total balances for the five largest accounts receivable151,652,2923,033,04619%

4. Advances to suppliers

(1) Listed by aging analysis

Unit: RMB

AgeingClosing balanceOpening balance
AmountProportionAmountProportion
within 1 year94,635,43785%76,372,80584%
1 to 2 years3,198,0063%2,034,1962%
2 to 3 years1,121,0741%
over 3 years12,769,67411%12,769,67414%
Total111,724,191--91,176,675--

As at June 30, 2019, advances to suppliers over 1 year with a carrying amount of RMB 17,088,754 were mainly advances paid fornatural gas and materials, which were not fully settled since the materials had not been received.

(2) Top 5 of the closing balance of the advances to suppliers collected according to the target

BalancePercentage in total advances to suppliers balance
Total balances for the five largest advances to suppliers49,112,46344%

5. Other receivables

Unit: RMB

ItemClosing balanceOpening balance
Other receivables204,039,125207,424,295
Total204,039,125207,424,295

(1) Other receivables

1) Other receivables classified by the nature of accounts

Unit: RMB

NatureClosing book balanceOpening book balance
Receivables from special fund for talent171,000,000171,000,000
Refundable deposits13,240,00621,351,937
Payments made on behalf of other parties20,017,09015,036,194
Petty cash1,160,280489,912
Export tax rebates receivable137,744
Others3,104,9063,962,723
Total208,522,282211,978,510

2)Withdrawal of bad debt provision

Unit: RMB

Bad debt provisionPhase IPhase IIPhase IIITotal
Expected credit losses in the next 12 monthsExpected credit loss for the entire duration (no credit impairment occurred)Expected credit loss for the entire duration (credit impairment occurred)
Balance on 1 January 20194,231,310322,9054,554,215
Balance on 1 January 2019 in current period————————
--Transferred to the Phase II
--Transferred to the Phase III
-- Transferred back to the Phase II
-- Transferred back to the Phase I
Withdrawal215,709215,709
Recovery264,768264,768
Write-off
Verification21,99921,999
Other changes
Balance on 30 June 20194,160,252322,9054,483,157

3) Significant changes in book balance of loss reserve during the current period

□ Applicable √ Not applicable

Disclosure by the ageing of other receivables

Unit: RMB

AgeingClosing balance
Within 1 year (including 1 year)14,843,865
1 to 2 years8,101,678
2 to 3 years465,488
3 to 4 years548,379
4 to 5 years11,110,006
Over 5 years173,452,866
Total208,522,282

4) Provision for bad debts withdrawn, recovered or reversed during the reporting period

Provision for bad debts:

Unit: RMB

CategoryOpening balanceChange amount of the periodClosing balance
WithdrawalCollect or RecoveryVerification
Other receivables bad debt provision4,554,215215,709264,76821,9994,483,157
Total4,554,215215,709264,76821,9994,483,157

5) Top 5 of the closing balance of the other accounts receivable collated according to the arrears party

Unit: RMB

Name of CompanyNature of businessClosing balanceAgeingProportion of the total year end balance of the accounts receivableClosing balance of bad debt provision
Company AIndependent third party171,000,000Over 5 years82%3,420,000
Governmental department BIndependent third party11,067,7544 to5Years5%221,355
Company CIndependent third party6,700,0001 to 2 years3%134,000
Company DIndependent third party2,227,000Within 1 year1%44,540
Company EIndependent third party1,800,000Within 1 year1%36,000
Total--192,794,754--92%3,855,895

6. Inventories

(1) Categories of inventories

Unit: RMB

ItemClosing balanceOpening balance
Carrying amountReserve for depreciation of inventory or impairment of contract performance costBook valueCarrying amountReserve for depreciation of inventory or impairment of contract performance costBook value
Raw materials201,515,3041,438,235200,077,069224,107,7561,438,767222,668,989
Products in process26,315,60026,315,60025,088,90325,088,903
Products in stock463,731,42097,443463,633,977309,132,138566,246308,565,892
Material in circulation43,824,28243,824,28243,815,96643,815,966
Total735,386,6061,535,678733,850,928602,144,7632,005,013600,139,750

(2) Provision for decline in the value of inventories

Unit: RMB

CategoryOpening balanceIncreased in this termDecreased in this termClosing balance
Raw materials1,438,7675321,438,235
Products in stock566,246468,80397,443
Total2,005,013469,3351,535,678

7. Assets classified as held for sale

ItemClosing balanceOpening balance
Intangible assets15,048,314
Construction in progress30,935,206
Total45,983,520

The subsidiary of the Group, Dongguan CSG PV-tech signed a grant contract of land use right with third party Dongguan ChaoyinTextile Co., LTD. (Dongguan Chaoyin Company) on 17 June 2016. Dongguan CSG PV-tech sold its land use right along with thebuildings on the land to Dongguan Chaoyin Company. Therefore, the construction in progress and intangible assets of DongguanCSG PV-tech were transferred to assets held for sale. The transfer of property rights of the above assets held for sale had beencompleted in the first half year of 2019.

8. Other current assets

New revenue guidelines have been implemented or not

□ Yes √ No

Unit: RMB

ItemClosing balanceOpening balance
VAT to be offset113,460,645115,329,834
Enterprise income tax prepaid18,185,11221,277,486
VAT input to be recognized4,550,2178,720,129
Entrusted loan(i)300,000,000
Total136,195,974445,327,449

(i)On December 21, 2018, reviewed and approved by the Group's Eighth Session of the Board of Directors , The Group issuedTengchong Yuezhou Water Investment Development Co., Ltd. entrusted Loans RMB 0.3 billion via China Everbright Bankshenzhen(Nanshan) branch . The period of entrusted loan was 3 months with annual interest rate 8.5%.

9. Fixed assets

Unit: RMB

ItemClosing balanceOpening balance
Fixed assets10,301,649,8259,930,843,775
Total10,301,649,8259,930,843,775

(1) Particulars of fixed assets

Unit: RMB

ItemBuildingsMachinery and equipmentMotor vehiclesTotal
I. Original book value:
1. Opening balance3,849,892,38210,885,811,188217,262,29714,952,965,867
2. Increased amount of the period
(1) Acquisition1,247,25820,117,3562,608,27423,972,888
(2) Transfers from construction in progress47,523,844782,090,7593,125,278832,739,881
(3) Others6,289,93610,216,791996,91717,503,644
3. Decreased amount of the period
(1) Disposal or retirement20,129,68224,070,9842,951,42747,152,093
(2) Others19,379,6238,087,4334,716,26632,183,322
4. Closing balance3,865,444,11511,666,077,677216,325,07315,747,846,865
II. Accumulative depreciation
1. Opening balance815,842,7663,891,110,695203,490,6624,910,444,123
2. Increased amount of the period
(1) Provision59,093,953376,020,15610,153,909445,268,018
3. Decreased amount of the period
(1) Disposal or retirement4,315,24315,229,1892,852,13722,396,569
(2) Others251,4437,415,680791,9158,459,038
4. Closing balance870,370,0334,244,485,982210,000,5195,324,856,534
III. Depreciation reserves
1. Opening balance21,851,71689,826,253111,677,969
2. Increased amount of the period
(1) Provision
(2) Others25,475,00425,475,004
3. Decreased amount of the period
(1) Disposal or retirement10,580,8615,231,60615,812,467
4. Closing balance11,270,855110,069,651121,340,506
IV. Book value
1. Closing book value2,983,803,2277,311,522,0446,324,55410,301,649,825
2. Opening book value3,012,197,9006,904,874,24013,771,6359,930,843,775

(2) Fixed assets under finance leasing

Unit: RMB

ItemOriginal book valueAccumulated depreciationProvision for impairment lossBook value
Machinery and equipment2,732,521,187733,264,8701,999,256,317

(3) Fixed assets with pending certificates of ownership

Unit: RMB

ItemCarrying amountReasons for not yet obtaining certificates of title
Buildings853,899,225Have submitted the required documents and are in the process of application, or the related land use right certificate pending

10. Construction in process

Unit: RMB

ItemClosing balanceOpening balance
Construction in process1,940,864,9552,559,179,442
Total1,940,864,9552,559,179,442

(1)Particulars of construction in process

Unit: RMB

ItemClosing balanceOpening balance
Book balanceProvision for impairment lossBook valueBook balanceProvision for impairment lossBook value
Yichang CSG polysilicon tech-innovation project1,485,694,938253,983,8761,231,711,0621,465,710,819253,983,8761,211,726,943
Yichang display device company flat panel display project367,355,05314,160,474353,194,579354,190,98814,160,474340,030,514
Dongguan Solar Glass Phase I and II improvement project78,970,99540,248,01838,722,97778,970,99540,248,01838,722,977
Yichang 1GW silicon slice project69,344,76569,344,76548,859,61348,859,613
LED Sapphire Substrate Project32,420,41232,420,41232,420,41232,420,412-
Chengdu float Environmental reforming project21,002,68821,002,68816,989,20316,989,203
Dongguan Jingyu Jadeglass Project20,879,57520,879,57514,273,35814,273,358
Hebei CSG Environmental reforming project19,012,50019,012,50019,012,50019,012,500
Qingyuan CSG Ultra-white electronic glass and ultra-white special glass production line project16,877,13016,877,130338,679338,679
Qingyuan quartz material processing production line15,036,05215,036,0521,976,9721,976,972
Dongguan PV Tech Block A 300MW PERC battery technology upgrade14,709,95314,709,953--
Wujiang float Environmental reforming project9,239,7409,239,74016,494,53816,494,538
Dongguan Solar New PV Tech Glass Processing Project4,984,7164,984,71641,074,00341,074,003
Yichang CSG polysilicon Wafer production capacity and tech-upgrade project707,199,47725,475,004681,724,473
Others126,555,201405,983126,149,218128,361,652405,983127,955,669
Total2,282,083,718341,218,7631,940,864,9552,925,873,209366,693,7672,559,179,442

(2) Movement of significant project

Unit: RMB

ProjectsBudgetOpening balanceIncreased this termTransfer to fixed assets in this termClosing balanceProportion between engineering input and budgetProgressAccumulate of interest capitalizedIncluding: interest capitalized this termCapitalizing rate of interest this termFund recourse
Yichang CSG polysilicon tech-innovation project49,520,0001,465,710,81919,984,1191,485,694,93860%60%Internal fund and bank loan
Yichang display device company flat panel display project1,970,000,000354,190,98814,632,5701,468,505367,355,05389%91%10,287,6371,743,8855.00%Internal fund and bank loan
Dongguan Solar Glass Phase I and II improvement project396,410,00078,970,99578,970,99580%81%Internal fund
Yichang 1GW silicon slice project1,073,209,60048,859,61320,485,15269,344,76586%86%13,375,0501,661,1055.33%Internal fund and bank loan
LED Sapphire Substrate Project35,000,00032,420,41232,420,41293%93%4,650,543Internal fund and bank loan
Chengdu float Environmental reforming project25,000,00016,989,2034,013,48521,002,68884%95%Internal fund
Dongguan Jingyu Jadeglass Project30,000,00014,273,3586,606,21720,879,57570%100%Internal fund
Hebei CSG Environmental reforming project25,700,00019,012,50019,012,50074%100%Internal fund
Qingyuan CSG Ultra-white electronic glass and ultra-white special glass production line project785,000,000338,67916,538,45116,877,1302%5%102,536102,5365.23%Internal fund and bank loan
Qingyuan quartz material processing production line22,800,0001,976,97213,059,08015,036,05238%45%Internal fund and bank loan
Dongguan PV Tech Block A 300MWPERC battery technology upgrade67,180,00014,709,95314,709,95320%30%120,083120,0835.65%Internal fund and bank loan
Wujiang float Environmental reforming project50,300,00016,494,53811,137,29618,392,0949,239,74056%98%Internal fund
Dongguan Solar New PV Tech Glass Processing Project60,000,00041,074,00366,35136,155,6384,984,71695%99%Internal fund
Yichang CSG polysilicon Wafer production capacity and tech-upgrade project144,570,000707,199,47720,467,511727,666,98822%100%399,703369,5655.33%Internal fund and bank loan
Dongguan PV Tech 100MW PERC battery line technology upgrade24,220,00024,207,13724,207,137100%100%185,803185,8035.65%Internal fund and bank loan
Others956,601,183128,361,65223,043,06824,849,519126,555,20132,539,87526,289Internal fund and bank loan
Total5,715,510,7832,925,873,209188,950,390832,739,8812,282,083,71861,661,2304,209,266--

11. Intangible assets

(1) Particulars of intangible assets

Unit: RMB

ItemLand use rightsPatentsExploitation rightsOthersTotal
I. Original book value:
1. Opening balance1,026,603,700283,187,8334,456,53638,007,4161,352,255,485
2. Increased amount of this period
(1) Acquisition998,651998,651
(2) Internal R&D19,782,07619,782,076
3. Decreased amount of the period
(1)Disposal
4. Closing balance1,026,603,700302,969,9094,456,53639,006,0671,373,036,212
II. Accumulated amortisation
1. Opening balance170,241,89697,385,7544,107,36531,578,666303,313,681
2. Increased amount of this period
(1) Provision10,193,26912,688,367200,3213,039,51926,121,476
3. Decreased amount of the period
(1) Disposal
4. Closing balance180,435,165110,074,1214,307,68634,618,185329,435,157
III. Impairment provision
1. Opening balance13,201,3479,13313,210,480
2. Increased amount of this period
(1) Provision
3. Decreased amount of this period
(1) Disposal
4. Closing balance13,201,3479,13313,210,480
IV. Book value
1. Closing book value846,168,535179,694,441148,8504,378,7491,030,390,575
2. Opening book value856,361,804172,600,732349,1716,419,6171,035,731,324

At the end of the period, the intangible assets arising from internal research and development accounted for 15.44% of total ofintangible assets.

(2) Land use rights not licensed yet

Unit: RMB

ItemBook valueReason for not yet obtaining certificates of title
Land5,106,319

As at June 30, 2019, ownership certificates of land use right (“Land ownership Certificates”) for certain land use rights of the Groupwith carrying amounts of approximately RMB 5,106,319 (cost: RMB 6,586,712) had not yet been obtained by the Group (as atDecember 31, 2018, carrying amount: RMB 5,228,694, cost: RMB 6,586,712). The Company’s management is of the view that there isno legal restriction for the Group to apply for and obtain the Land Ownership Certificates and has no adverse effect on the Group’sbusiness operation.

12. Development expenditure

Unit: RMB

ItemOpening balanceThe increased amount in the periodThe decrease amount in the periodClosing balance
Internal development expenditureRecognised as intangible assetsTransfer to current profit and loss
Development expenditure74,549,25715,806,24519,782,076070,573,426
Total74,549,25715,806,24519,782,076070,573,426

During Jan.-Jun. 2019, the total amount of research and development expenditures of the Group was RMB 190,082,381 (Jan.-Jun.2018: RMB 185,844,867), including RMB 174,276,136 (Jan.-Jun. 2018: RMB 166,041,185) recorded in income statement forcurrent period and the research and development expenditure with the amount of RMB 19,782,076 recognised as intangible assets forthe current period (Jan.-Jun. 2018: 9,191,305). At June 30, 2019, the intangible assets arising from internal research and developmentaccounted for 15.44% of total of intangible assets (31 December 2018: 14.21%).

13. Goodwill

(1) Book value of goodwill

Unit: RMB

Name of the companies or goodwill itemOpening balanceIncreased this termDecreased this termClosing balance
Tianjin CSG Architectural Glass Co., Ltd.3,039,9463,039,946
Xianning CSG Photoelectric4,857,4064,857,406
Shenzhen CSG Display389,494,804389,494,804
Total397,392,156397,392,156

(2) Goodwill impairment provision

Unit: RMB

Name of the companies or goodwill itemOpening balanceIncreased this termDecreased this termClosing balance
ProvisionDisposal
Shenzhen CSG Display20,672,00020,672,000
Total20,672,00020,672,000

The goodwill allocated to the asset groups and groups of asset groups from Tianjin CSG Architectural was summarized by operatingsegments as Architectural Glass segment. The goodwill allocated to the asset groups and groups of asset groups from Shenzhen CSGDisplay and Xianning CSG Photoelectric are summarized by operating segments as Electronic Glass and Display segment.

The recoverable amount of asset groups is determined by net present value of estimated future cash flows which is determinedaccording to the five-year budget approved by management. The cash flow exceed five years is forecasted by using growth rates notexceeding similar long-term average growth rates of each asset group’s industry. The discount rates used are the pre-tax interest ratesthat are able to reflect the risks specific to the related asset groups.

14. Long-term prepaid expenses

Unit: RMB

ItemOpening balanceIncreased this termAmortized this termOther reduction amountClosing balance
Expenses to be amortized12,746,609881,54643,23711,821,826
Total12,746,609881,54643,23711,821,826

15. Deferred income tax assets/deferred income tax liabilities

(1) Deferred income tax assets had not been off-set

Unit: RMB

ItemClosing balanceOpening balance
Deductible temporary differenceDeferred income tax assetsDeductible temporary differenceDeferred income tax assets?
Provision for asset impairments388,962,99266,086,098394,331,59168,458,375
Deductible loss428,205,35576,822,319407,739,41572,421,592
Government grants199,110,08732,741,260256,949,96541,523,325
Accrued expenses32,292,7084,843,90642,393,4566,359,019
Depreciation of fixed assets28,350,1804,477,98027,973,5744,311,723
Share payment25,154,6723,983,57416,366,0612,597,038
Total1,102,075,994188,955,1371,145,754,062195,671,072

(2) Deferred tax liabilities before offsetting

Unit: RMB

ItemClosing balanceOpening balance
Deductible temporary differenceDeferred income tax liabilitiesDeductible temporary differenceDeferred income tax liabilities
Depreciation of fixed assets481,202,38879,025,435474,157,81378,260,394
Total481,202,38879,025,435474,157,81378,260,394

(3) The net balances of deferred tax assets or liabilities

Unit: RMB

ItemOff-set amount of deferred income tax assets and liabilities at the period-endClosing balance of deferred income tax assetsor liabilities after off-setOff-set amount of deferred income tax assets and liabilities at the period-beginningOpening balance of deferred income tax assetsor liabilities after off-set
Deferred tax assets47,219,370141,735,76756,141,554139,529,518
Deferred tax liabilities47,219,37031,806,06556,141,55422,118,840

(4) Details of unrecognised deferred income tax assets

Unit: RMB

ItemClosing balanceOpening balance
Deductible losses604,072,642517,898,158
Total604,072,642517,898,158

(5) Deductible losses of unrecognized deferred income tax assets will due the following years

Unit: RMB

YearClosing balanceOpening balanceNote
201982,300,00082,300,000
202094,430,19794,430,197
2021111,625,585111,625,585
202283,303,53983,303,539
2023146,238,837146,238,837
202486,174,484
Total604,072,642517,898,158--

16. Other non-current assets

New revenue guidelines have been implemented or not

□ Yes √ No

Unit: RMB

ItemClosing balanceOpening balance
Book balanceImpairment provisionBook valueBook balanceImpairment provisionBook value
Prepayment of engineering equipment49,078,78149,078,78150,315,93450,315,934
Prepayment for lease of land use rights6,510,0006,510,0006,510,0006,510,000
Total55,588,78155,588,78156,825,93456,825,934

17. Short-term loans

(1) Categories of short-term loans

Unit: RMB

ItemClosing balanceOpening balance
Mortgage loan5,000,000
Guaranteed loan615,570,348909,679,590
Unsecured loan2,050,000,0002,008,000,000
Total2,665,570,3482,922,679,590

(i) On June 30, 2019, the Company provided guarantees for short-term loans of RMB 615,570,348 (31 December 2018: RMB909,679,590). There was no counter-guarantee provided by the minority shareholders of the subsidiary to the Company (31December 2018: Nil).

(ii) As at June 30, 2019, the interest of short-term borrowings varied from 2.95%-5.66% (31 December 2018: 2.95%-5.66%).

18. Notes payable

Unit: RMB

CategoryClosing balanceOpening balance
Bank acceptance notes280,009,274105,150,000
Total280,009,274105,150,000

The total amount of notes payable that has not been paid at the end of the period is RMB 0.

19. Accounts payable

(1) Particulars of accounts payable

Unit: RMB

ItemClosing balanceOpening balance
Materials payable679,095,407749,987,838
Equipment payable180,219,271230,997,567
Construction expenses payable93,786,288133,247,003
Freight payable65,446,57662,455,534
Utilities payable31,448,67327,099,683
Others6,505,5896,071,638
Total1,056,501,8041,209,859,263

(2) Significant accounts payable due for over one year

Unit: RMB

ItemClosing balanceUnpaid reason
Construction and equipments.147,128,769As the construction work had not passed the final acceptance test yet, the balance was not yet settled.
Total147,128,769--

20. Advances from customers

New revenue guidelines have been implemented or not

□ Yes √ No

(1) List of advances from customers

Unit: RMB

ItemClosing balanceOpening balance
Advances for goods from customers228,877,586206,631,008
Total228,877,586206,631,008

21. Employee benefits payable

(1) List of Employee benefits payable

Unit: RMB

ItemOpening balanceIncreased this termDecreased this termClosing balance
I. Short-term employee benefits payable262,906,600649,467,471727,357,752185,016,319
II. Welfare after departure- defined contribution plans54,31350,023,84649,987,06791,092
Termination benefits3,498,23811,859,87815,358,1160
Total266,459,151711,351,195792,702,935185,107,411

(2) List of short-term employee benefits

Unit: RMB

ItemOpening balanceIncreased this termDecreased this termClosing balance
1. Wages and salaries, bonuses, allowances and subsidies242,564,302587,179,294665,590,374164,153,222
2. Social security contributions24,68120,225,35720,204,91145,127
Including: Medical insurance21,30517,304,44017,284,92640,819
Work injury insurance2,3571,658,3481,658,1742,531
Maternity insurance1,0191,262,5691,261,8111,777
3. Housing funds2,613,58721,115,72621,591,7642,137,549
4.Labour union funds and employee education funds17,704,0307,571,7506,595,35918,680,421
5. Share payment (i)13,375,34413,375,344
Total262,906,600649,467,471727,357,752185,016,319

(3) List of defined contribution plans

Unit: RMB

ItemOpening balanceIncreased this termDecreased this termClosing balance
1. Basic pensions52,57348,313,25048,277,91187,912
2. Unemployment insurance1,7401,710,5961,709,1563,180
Total54,31350,023,84649,987,06791,092

(i) Pursuant to the resolution at the 8th session in the temporary conference of the board of directors of the Company on 11 December2017, to implemented equity incentive plans of restricted stock for the Company directors and senior management, core managementteam, backbones of technology and business. The Company first awarded 97,511,654 restricted shares to 454 incentive objects for thefirst time at RMB 4.28 per share. The total fair value of the equity instruments granted to the incentive object by the Company for thefirst time was RMB 289,519,900. The total value of such fair value as the total cost of the Company's equity incentive plan would beconfirmed in stages according to the ratio of unlocking/exercising in the implementation of the equity incentive plan, and it wasincluded in the cost in the term of "management fees and Construction in progress " and "capital reserves - other capital reserves".

Pursuant to the resolution at the 8th session in the temporary conference of the board of directors of the Company on 13 September2018, the grant date was confirmed on September 13, 2018. the Company awarded 9,826,580 restricted shares to 75 incentive objectsfor the first time at RMB 3.68 per share. The total fair value of the equity instruments granted to the incentive object by the Companywas RMB 8,256,000. The total value of such fair value as the total cost of the Company's equity incentive plan would be confirmedin stages according to the ratio of unlocking/exercising in the implementation of the equity incentive plan, and it is includedin the cost in the term of "management fees and Construction in progress " and "capital reserves - other capital reserves".

During Jan.-Jun. 2019, the cost associated with equity incentive plan was confirmed at RMB 13,375,344.

22. Tax payable

Unit: RMB

ItemClosing balanceOpening balance
Value-added-tax payable34,255,82054,091,751
Corporate income tax payable38,529,87936,008,341
Individual income tax payable3,435,8373,367,389
City maintenance and construction tax3,486,7943,246,775
Property tax8,128,7025,156,058
Education surcharge3,025,5582,586,657
Environmental protection tax2,406,1292,350,943
Others3,146,2485,159,451
Total96,414,967111,967,365

23. Other payables

Unit: RMB

ItemClosing balanceOpening balance
Interest payable73,933,81873,612,703
Dividend payable3,221,4962,846,362
Other payables279,824,498476,292,122
Total356,979,812552,751,187

(1) Interest payable

Unit: RMB

ItemClosing balanceOpening balance
Interest of long-term borrowings with periodic payments of interest and return of principal at maturity448,382754,878
Interest payable for short-term borrowings6,578,3277,590,517
Interest payable for medium term notes66,907,10965,267,308
Total73,933,81873,612,703

(2) Dividends payable

Unit: RMB

ItemClosing balanceOpening balance
Restricted shares dividend3,221,4962,846,362
Total3,221,4962,846,362

(3) Other payables

1) Listing other payables by nature of the payment

Unit: RMB

ItemClosing balanceOpening balance
Guarantee deposits received from construction contractors66,106,11963,181,510
Accrued cost of sales31,030,41037,407,112
Temporary collection of payment for land transfer56,106,781
Payable for contracted labour costs15,461,09816,030,100
Temporary receipts16,757,17513,581,459
Deposit for disabled5,699,4484,943,347
Restricted share repurchases obligation137,277,563275,748,309
Others7,492,6859,293,504
Total279,824,498476,292,122

2) Important other payables aged over one year

Unit: RMB

ItemClosing balanceRemarks
Restricted share repurchase obligation137,277,563Mainly for restricted stock repurchase obligation
Total137,277,563--

24. Current portion of non-current liabilities

Unit: RMB

ItemClosing balanceOpening balance
Current portion of long-term borrowings33,800,00087,800,000
Current portion of long-term payables680,386,697731,648,742
Total714,186,697819,448,742

25. Other current liabilities

Unit: RMB

ItemClosing balanceOpening balance
Others300,000300,000
Total300,000300,000

26. Long-term borrowings

(1) Categories of long-term loans

Unit: RMB

ItemClosing balanceOpening balance
Guaranteed292,462,500315,700,000
Medium term notes2,000,000,0002,000,000,000
Total2,292,462,5002,315,700,000

Approved by file No. [2015] MTN225 of Inter-bank Market Trading Association, the Company is entitled to issue medium termnotes with the limit of RMB 1,200,000,000, which expires on 28 May 2017.

On 14 July 2015, the Company issued the Phase I medium term notes of RMB 1,200,000,000 for 2015, with the maturity data of 14July 2020 and annual rate of 4.94%.

Approved by file No. [2018] MTN157 of Inter-bank Market Trading Association, the Company is entitled to issue medium termnotes with the limit of RMB 800,000,000, which expires on 20 March 2020.

On 4 May 2018, the Company issued the Phase I medium term notes of RMB 800,000,000 for 2018, with the maturity data of 4 May2021 and annual rate of 7%.

As at 30 June 2019, the interest of long-term borrowings varied from4.75%-7.0% (31 December 2018: 4.75%-7.0%).

27. Long-term account payable

Unit: RMB

ItemClosing balanceOpening balance
Long-term account payable291,363,152529,910,796
Total291,363,152529,910,796

(1) List of Long-term account payable by nature

Unit: RMB

ItemClosing balanceOpening balance
Financial lease291,363,152529,910,796

The sale and leaseback lease of the group in this phase is a mortgage loan with a lease term of 36 months. On June 30, 2019, the realinterest rate of financing lease loans is 4.49%-7.8%.

28. Deferred income

Unit: RMB

ItemOpening balanceIncrease in current perioddecrease in current periodClosing balanceReason
Government grants601,825,78011,800,00076,730,356536,895,424
Total601,825,78011,800,00076,730,356536,895,424--

Government grants are analysed below:

Unit: RMB

Item in debtOpening balanceIncrease in current periodIncluded in non-business incomeAccount to other income in this periodAmount of cost and expense written down in current periodOther changesClosing balanceRelated to assets or income
Tianjin CSG Golden Sun Project (i)50,342,2271,687,44648,654,781Assets related
Dongguan CSG Golden Sun Project (ii)40,577,2501,375,50039,201,750Assets related
Hebei CSG Golden Sun Project (iii)41,250,0001,375,00039,875,000Assets related
Xianning CSG Golden Sun Project (iv)44,952,4171,515,25043,437,167Assets related
Infrastructure compensation for Wujiang CSG Glass Co., Ltd (v)35,587,3602,020,76933,566,591Assets related
Qingyuan Energy-saving project (vi)18,319,1671,235,00017,084,167Assets related
Yichang Silicon products project (vii)18,984,3751,406,25017,578,125Assets related
Yichang CSG silicon slice auxiliary project (viii)9,614,011537,0459,076,966Assets related
Sichuan energy-saving glass project (ix)8,821,440827,0107,994,430Assets related
Group coating film experimental project (x)5,642,520941,8804,700,640Assets related
Yichang expert silicon project (xi)3,327,153151,5893,175,564Assets related
Yichang semiconductor silicon project (xii)3,133,333133,3333,000,000Assets related
Yichang CSG Display project (xiii)48,302,1261,267,24047,034,886Assets related
Xianning Photoelectric project (xiv)7,800,000260,0007,540,000Assets related
Group talent fund project (xv)171,000,000171,000,000Income related
Qingyuan CSG Energy-Saving Industry Co-construction support fund(xvi)(xvi)62,826,5448,830,00059,805,27211,851,272Income related
Others31,345,8572,970,0002,191,77232,124,085Assets and income related
Total601,825,78011,800,00076,730,356536,895,424——

(i) The allowance was granted by Tianjin Municipal Government. The allowance was used for establishing PV power station byTianjin CSG Architectural Glass Co., Ltd. The facilities belonged to Tianjin CSG upon completion. The allowance will be credited toincome statement in 20 years, the useful life of the PV power station.

(ii) The allowance was granted by Dongguan Municipal Government. The allowance was used for establishing PV power station byDongguan CSG Architectural Glass Co., Ltd. The facilities belonged to Dongguan CSG upon completion. The allowance will becredited to income statement in 20 years, the useful life of the PV power station.

(iii) The allowance was granted by Langfang Municipal Government. The allowance was used for establishing PV power station byHebei CSG Glass Co., Ltd. ("Hebei CSG"). When the facilities were set up, they belonged to Hebei CSG. The allowance will becredited to income statement in 20 years, the useful life of the PV power station.

(iv) The allowance was granted by Xianning Municipal Government. The allowance was used for establishing PV power station byXianning CSG Glass Co Ltd. The facilities belonged to Xianning CSG upon completion. The allowance will be credited to incomestatement in 20 years, the useful life of the PV power station.

(v) The allowance was infrastructure compensation granted by Wujiang municipal government, and will be credited to incomestatement in 15 years, the shortest operating period as committed by the Group.

(vi) The allowance was a pilot project for strategic emerging industry clusters development, which was used to establish highperformance ultra-thin electronic glass production lines by Qingyuan CSG. The allowance will be credited to income statement in 10years, the useful life of the production line.

(vii) The balance represented amounts granted to Yichang CSG polysilicon Co., Ltd. by Yichang City Dongshan DevelopmentCorporation under the provisions of the investment contract signed between the Group and the Municipal Government of Yi Chang.The proceeds were designed for the construction of electricity transformer and the pipelines. Yichang polysilicon is entitled to theownership of the facilities, which will be amortised by 16 years according to the useful life of the converting station.

(viii) It represented the government supporting fund obtained by Yichang polysilicon from the acquiring of the assets and liabilities ofCrucible project of Yichang Hejing Photoelectric Ceramic Co., Ltd. The proceeds would be amortised and credited to income statementby 16 years after related assets were put into use.

(ix) It represented the funds granted by Chengdu local government for energy glass project. It will be amortised and credited to incomestatement in 15 years, in accordance with the minimum operating period committed by the Group.

(x) The allowance was granted by Shenzhen City Development and Reform Commission for the development of Group Coating Filmexperimental project. The grant will be amortised and credited to income statement by 20 years in the estimated useful life of therelevant fixed assets.

(xi) It represented the funds granted by Hubei local government for import discount complement and international corporation specialsubsidy. The grant will be amortised and credited to income statement by 12 to 15 years.

(xii) It represented the special subsidy of Yichang National Regional Strategic Emerging Industry Development Pilot Project II, whichis used to complement Yichang CSG Polysilicon “Hubei semiconductor silicon preparative technique project laboratory”. The grantwill be amortised and credited to income statement by 15 years.

(xiii) It represented the funds granted by Yichang Municipal Government for Yichang CSG Display Company's flat projectconstruction support funds and construction of coil coating three-line project. The grant will be amortised and credited to incomestatement by 15 years.

(xiv) It represented the funds granted by Xianning Government of the Project supporting fund for photoconductive glass productionline, which is used to pay for Xianning CSG Glass Co. Ltd. constructing the project of photoelectric photoelectric optical glassproduction line. After the completion of the production line, the ownership belongs to Xianning photoelectric. The allowance will becredited to income statement in 8 years, the useful life of the production line.

(xv) The allowance was granted by Administrative Commission of Yichang High-tech Industrial Development Zone. For seniormanagement personnel, engineering technical personnel and senior professional technical team which is working at Yichang or plane tointroduction, RMB171 million fund was set up, as a special fund for talent introduction and housing resettlement.

(xvi) The allowance was granted by Fogang Municipal Government related 2018 province industry co-construction support fund. Theallowance was used for company development and operation by Qingyuan CSG New Energy-Saving Materials Co., Ltd.

29. Share Capital

Unit: RMB

Opening balanceChanged in the report period (+,-)Closing balance
New issuesBonus issueTransferred from reservesOthersSub-total
Total of capital shares2,863,277,201282,563,286-37,644,324244,918,9623,108,196,163

30. Capital surplus

Unit: RMB

ItemOpening balanceIncreased this termDecreased this termClosing balance
Capital premium (Share premium)1,123,780,211384,897,002738,883,209
Other capital surplus-28,440,79013,375,344-15,065,446
Total1,095,339,42113,375,344384,897,002723,817,763

(i) The Company passed the 2018 annual general meeting of shareholders held on May 9, 2019 and transferred 1 share to every 10shares for all shareholders. The total share capital before the distribution was 2,825,632,877 shares, and the total share capital afterthe dividend was increased to 3,108,196,163 shares. Capital reserve decreased by RMB 282,563,286.

(ii) On December 12, 2018, the Company held an interim meeting of the 8

thBoard of Directors and an interim meeting of the 8thBoard of Supervisors, and reviewed and approved the Proposal on Repurchase and Cancelling Some Restricted Stocks of RestrictedStock Incentive Plan, and agreed to repurchase and cancel the total of 436,719 shares of all restricted stocks held by 8 unqualifiedoriginal incentives. The proposal was approved by the 3

rdExtraordinary General Meeting in 2018 on December 28, 2018. As of June18, 2019, the Company has completed the cancellation procedures for the above-mentioned restricted stocks in Shenzhen Branch ofChina Securities Depository and Clearing Corporation Limited.On April 16, 2019, the Company held the 8th Meeting of the Eighth Board of Directors and the 8th Meeting of the Eighth Board ofSupervisors, which reviewed and approved the Proposal on Repurchase and Cancellation of Part of Restricted Stocks of RestrictedStock Incentive Plan and the Proposal on Repurchase and Cancellation of Restricted Stocks that Had Not Reached the UnlockingCondition of the Second Unlock Period, and agreed to repurchase and cancel the total of 3,473,329 shares of all restricted stocks heldby 14 unqualified original incentives, as well as the total of 33,734,276 shares of 483 incentive objects that did not meet theunlocking conditions of the second unlock period. The independent directors of the Company issued a consent opinion. And on May9, 2019, the proposals were approved by the 2018 Annual General Meeting of Shareholders. As of June 18, 2019, the Company hadcompleted the cancellation procedures for the above-mentioned restricted stocks in Shenzhen Branch of China Securities Depositoryand Clearing Corporation Limited.After the above restricted stock repurchase, the capital reserve decreased by RMB 102,333,716.

(iii) Due to the equity incentive plan, the share payment fee of RMB 13,375,344 was confirmed in the period.

31. Treasury shares

Unit: RMB

ItemOpening balanceIncreased this termDecreased this termClosing balance
Obligations of restricted share buybacks277,180,983139,903,420137,277,563
Total277,180,983139,903,420137,277,563

The Company calculated the amount determined based on the number of restricted shares issued and the corresponding repurchaseprice, and confirmed the liabilities and treasury shares. The decrease in treasury shares was mainly due to the repurchase of therestricted shares during the report period.

32. Other comprehensive income

Unit: RMB

ItemOpeningOccuring in current periodClosing
balanceAmount incurred before income taxLess: Amount transferred into profit and loss in the current period that recognized into other comprehensive income in prior periodLess: income tax expenseAfter-tax attribute to the parent companyAfter-tax attribute to minority shareholderbalance
I. Other comprehensive income items which can not be reclassified to profit or loss
II. Other comprehensive income items which will be reclassified to profit or loss5,080,234280,161280,1615,360,395
Differences on translation of foreign currency financial statements2,530,234280,161280,1612,810,395
Finance incentives for energy and technical transformation2,550,0002,550,000
Total of other comprehensive income5,080,234280,161280,1615,360,395

33. Special reserves

Unit: RMB

ItemOpening balanceIncreased this termDecreased this termClosing balance
Safety production cost6,068,6003,646,8821,480,2318,235,251
Total6,068,6003,646,8821,480,2318,235,251

34. Surplus reserves

Unit: RMB

ItemBeginning of termIncreased this termDecreased this termEnd of term
Statutory surplus reserve796,452,807796,452,807
Discretionary surplus reserve127,852,568127,852,568
Total924,305,375924,305,375

35. Undistributed profits

Unit: RMB

ItemsThe current periodThe same period of last year
Retained earnings at the end of the previous term before adjustment4,486,264,7234,159,642,227
Retained earnings at the beginning of this term after adjustment4,486,264,7234,159,642,227
Add: net profits belonging to equity holders of the Company377,342,401352,837,153
Less: Appropriations to statutory surplus reserve
common stock dividends payable141,207,035124,041,424
Retained earnings in the end4,722,400,0894,388,437,956

36. Revenue and cost of sales

Unit: RMB

ItemOccurred in current termOccurred in previous term
RevenueCostRevenueCost
Revenue from main operations4,850,355,6693,668,177,7685,427,330,6224,086,213,828
Revenue from other operations37,881,9093,199,05743,838,97613,282,926
Total4,888,237,5783,671,376,8255,471,169,5984,099,496,754

New revenue guidelines have been implemented or not

□ Yes √ No

37. Tax and surcharge

Unit: RMB

ItemOccurred in current termOccurred in previous term
City maintenance and construction tax15,651,94620,205,850
Educational surcharge13,026,84416,053,678
Housing property tax15,524,67115,231,539
Land use rights6,750,19010,028,066
Environmental protection tax4,518,5495,879,730
Others1,215,7974,531,683
Total56,687,99771,930,546

38. Selling Expenses

Unit: RMB

ItemOccurred in current termOccurred in previous term
Freight expenses76,898,15883,319,840
Employee benefits66,858,15356,534,666
Entertainment expenses7,648,7226,061,293
Business travel expenses5,382,0424,909,377
Vehicle use fee3,898,8443,839,779
Rental expenses3,374,9173,085,489
Compensation960,672765,215
General office expenses1,561,0771,492,596
Depreciation expenses446,163494,202
Others5,474,65111,714,797
Total172,503,399172,217,254

39. Administrative Expenses

Unit: RMB

ItemOccurred in current termOccurred in previous term
Employee benefits168,542,149237,887,025
Depreciation expenses32,466,94631,624,004
Amortisation of intangible assets26,121,47623,153,773
General office expenses9,380,06110,595,047
Labour union funds7,121,1287,756,982
Entertainment fees5,308,2667,056,600
Business travel expenses4,513,0365,348,267
Utility fees3,597,7144,734,267
Canteen costs3,517,2324,046,654
Vehicle use fee2,421,2333,268,588
Rental expenses2,486,8782,273,435
Consulting advisers15,564,25114,334,351
Others11,821,98522,433,824
Total292,862,355374,512,817

40. Research and development expenses

Unit: RMB

ItemOccurred in current termOccurred in previous term
Research and development expenses174,276,136166,041,185
Total174,276,136166,041,185

41. Finance Expenses

Unit: RMB

ItemOccurred in current termOccurred in previous term
Interest expenses171,031,605203,531,507
Less: Interest income14,923,37523,033,418
Exchange losses-1,574,396-1,568,225
Others4,533,0256,947,562
Total159,066,859185,877,426

42. Other income

Unit: RMB

Source of other gainsOccurred in current termOccurred in previous term
Government subsidy amortization76,730,35615,268,650
Industry support funds14,640,420236,000
Government incentive funds6,133,1014,239,400
Energy conservation and utilization support funds700,0007,000
Research grants3,859,6991,423,460
Tax refund4,480,53822,194
Others1,211,299667,096
Total107,755,41321,863,800

43. Asset impairment losses

New revenue guidelines have been implemented or not

□ Yes √ No

Unit: RMB

ItemOccurred in current termOccurred in previous term
Bad debt loss-3,765,670-3,653,609
Total-3,765,670-3,653,609

44. Asset disposal income

Unit: RMB

Source of income from assets disposalOccurred in current termOccurred in previous term
Gains on disposal of assets370,969-567,830

45. Non-operating income

Unit: RMB

ItemOccurred in current termOccurred in previous termAmount of non-recurring gain and loss included in the report period
Government subsidy150,000
Compensation income2,723,039837,3962,723,039
Amounts unable to pay353,473282,061353,473
Others589,8031,326,338589,803
Total3,666,3152,595,7953,666,315

46. Non-operating expenses

Unit: RMB

ItemOccurred in current termOccurred in previous termAmount of non-recurring gain and loss included in the report period
Donation1,565,0001,565,000
Compensation4,077,3044,077,304
Others650,923878,551650,923
Total6,293,227878,5516,293,227

47. Income tax expenses

(1) List of income tax expenses

Unit: RMB

ItemOccurred in current termOccurred in previous term
Current income tax68,977,76477,115,637
Deferred income tax7,480,976-15,744,533
Total76,458,74061,371,104

(2) Adjustment process of accounting profit and income tax expense

Unit: RMB

ItemOccurred in current term
Total profit463,197,807
Current income tax expense accounted by tax and relevant regulations63,521,405
Costs, expenses and losses not deductible for tax purposes656,832
Influence of deductible temporary difference or deductible losses of unrecognized deferred income tax assets21,543,621
Impact on the use of deductible loss of deferred income tax assets not recognized in previous period-980,510
Balance the previous year income tax adjustment-4,359,545
Impact of tax incentives-3,923,063
Income tax expenses76,458,740

48. Items of the cash flow statement

(1)Cash generated by other operating activities

Unit: RMB

ItemOccurred in current termOccurred in previous term
Interest income14,923,37523,033,418
Government grant42,825,0576,745,150
Others11,580,25634,088,357
Total69,328,68863,866,925

(2)Cash paid relating to other operating activities

Unit: RMB

ItemOccurred in current termOccurred in previous term
Freight expenses89,770,13688,366,623
Canteen costs16,876,58118,797,322
General office expenses16,108,81115,300,093
Business travel expenses12,052,63912,947,259
Entertainment fees13,964,60713,644,421
Vehicle use fee6,995,1437,827,828
Bank fees4,533,0256,947,562
Insurance9,534,1549,642,870
Research and development expenses16,850,01432,721,683
Maintenance fee14,530,54315,974,559
Rental expenses5,861,7955,358,924
Consulting fees10,062,5888,397,822
Others97,407,87174,446,270
Total314,547,907310,373,236

(3)Cash generated by other investing activities

Unit: RMB

ItemOccurred in current termOccurred in previous term
Government grants related to assets received2,680,000
Deposit5,471,303
Income from trial production of construction in progress30,851,7031,045,277
Total36,323,0063,725,277

(4)Cash paid relating to other investing activities

Unit: RMB

ItemOccurred in current termOccurred in previous term
Trial production expenditure in construction44,089,88754,018,834
Payment for deposit and margin4,673,145
Total44,089,88758,691,979

(5) Cash

generated by other financing activities

Unit: RMB

ItemOccurred in current termOccurred in previous term
Income from financing leases200,000,000
Collect entrusted loan300,000,000
Collection of income tax of dividends of A-share & B-share154,3761,276,534
Collect industrial production scheduling fund15,000,000
Total500,154,37616,276,534

(6) Cash

paid relating to other financing activities

Unit: RMB

ItemOccurred in current termOccurred in previous term
Repay financing leases515,199,702347,964,797
Equity incentive repurchase payment139,978,039
Payment for deposit and margin147,843,71912,116,876
Payment for margin and fees of loans and bills5,746,1781,920,000
Total808,767,638362,001,673

49. Supplement information to the cash flow statement

(1) Supplement information to the cash flow statement

Unit: RMB

Supplementary Info.Amount of this termAmount of last term
1. Reconciliation from net profit to cash flows from operating activities----
Net profit386,739,067359,082,117
Add: Provisions for assets impairment3,765,6703,653,609
Depreciation of fixed assets, gas and petrol depreciation, production goods depreciation445,268,018497,530,356
Amortisation of intangible assets26,121,47623,153,773
Amortisation of long-term prepaid expenses881,546794,984
Losses on disposal of fixed assets intangible assets and other long-term assets (“- “for gains)-370,969567,830
Finance expenses (“- “for gains)171,031,605203,531,507
Decrease in deferred tax assets (“- “for increase)-2,206,249-19,247,637
Increase of deferred income tax liability (“- “for decrease)9,687,2253,503,104
Decrease of inventory (“- “for increase)-133,241,843-27,723,994
Decrease of operational receivable items (“- “for increase)-157,088,345-288,368,392
Increase of operational payable items (“- “for decrease)1,853,269-88,311,767
Others15,541,99596,398,598
Net cash flow generated by business operation767,982,465764,564,088
2. Significant investment and financing activities that do not involve cash receipts and payments:----
3. Net change of cash and cash equivalents----
Balance of cash at period end1,744,240,8663,358,253,346
Less: Initial balance of cash2,225,126,9132,459,753,165
Net increasing of cash and cash equivalents-480,886,047898,500,181

(2) Formation of cash and cash equivalents

Unit: RMB

ItemClosing balanceOpening balance
I. Cash1,744,240,8662,225,126,913
Incl: Cash on hand5,6699,731
Bank deposits that can be readily drawn on demand1,744,235,1972,225,117,182
III. Balance of cash and cash equivalents at the end of the period1,744,240,8662,225,126,913

50. Assets with restricted ownership or use rights

Unit: RMB

ItemEnding book valueReason for restriction
Monetary assets151,216,424Restricted deposit flow
Fixed assets1,999,256,317Limited finance lease
Total2,150,472,741--

51. Foreign currency monetary items

(1) Foreign currency monetary items

Unit: RMB

ItemClosing balance of foreign currencyExchange rateClosing balance convert to RMB
Cash at bank and on hand----90,753,974
Incl: USD12,816,1406.874788,107,118
EUR52,4337.8170409,869
HKD1,837,4640.87971,616,417
JPY9,648,6050.0638615,581
AUD1,0364.81564,989
Accounts receivable----139,825,244
Incl: USD18,085,6976.8747124,333,741
EUR1,702,7107.817013,310,084
HKD2,479,7310.87972,181,419
Short-term borrowings----65,977,500
Incl: HKD75,000,0000.879765,977,500
Accounts payable----51,777,069
Incl: USD5,702,7776.874739,204,881
EUR1,376,1197.817010,757,122
HKD3070.8797270
JPY28,445,0780.06381,814,796

52. Government subsidy

(1) Basic situation of government subsidies

Unit: RMB

TypeAmountPresentation projectAmount included in current profit and loss
Government subsidy amortization76,730,356Other income76,730,356
Other government subsidies31,025,057Other income31,025,057

VIII. The changes of consolidation scope

1. Changes in scope of consolidation for other reasons

On March 21, 2019, the Group set up a subsidiary, Zhuhai CSG Commercial Factoring Co., Ltd.. As of June 30, 2019, theGroup has invested RMB 10,000,000. The Group owns 100% of its equity.

On May 14, 2019, the Group set up a subsidiary, Zhuhai Hengqin New District CSG Glass Industry Co., Ltd.. As of June30, 2019, the Group owns 100% of its equity.

On June 11, 2019, the Group set up a subsidiary, Shenzhen CSG Supply Chain Management Service Co., Ltd.. As ofJune 30, 2019, the Group owns 100% of its equity.IX. Interest in other entities

1. Interest in subsidiary

(1) Composition of the Group

Name of subsidiaryMajor business locationPlace of registrationScope of businessShareholding (%)Way of acquicition
DirectIndirect
Chengdu CSGChengdu, PRCChengdu, PRCDevelopment, production and sales of special glass75%25%Establishment
Sichuan CSG Energy ConservationChengdu, PRCChengdu, PRCDevelopment, production and sales of special glass and processing of glass75%25%Split-off
Tianjin Energy ConservationTianjin, PRCTianjin, PRCDevelopment, production and sales of special glass75%25%Establishment
Dongguan CSG EngineeringDongguan, PRCDongguan, PRCIntensive processing of glass75%25%Establishment
Dongguan CSG SolarDongguan, PRCDongguan, PRCProduction and sales of solar glass75%25%Establishment
Dongguan CSG PV-techDongguan, PRCDongguan, PRCProduction and sales of hi-tech green battery and components100%Establishment
Yichang CSG PolysiliconYichang, PRCYichang, PRCProduction and sales of high-purity silicon materials75%25%Establishment
Wujiang CSG EngineeringWujiang, PRCWujiang, PRCIntensive processing of glass75%25%Establishment
Hebei CSGYongqing, PRCYongqing, PRCProduction and sales of special glass75%25%Establishment
Wujiang CSGWujiang, PRCWujiang, PRCProduction and sales of special glass100%Establishment
China Southern Glass (Hong Kong) LimitedHong Kong, PRCHong Kong, PRCInvestment holding100%Establishment
Hebei ShichuangYongqing, PRCYongqing, PRCProduction and sales of ultra-thin electronic glass100%Establishment
Xianning CSGXianning, PRCXianning, PRCProduction and sales of special glass75%25%Establishment
Xianning CSG Energy-SavingXianning, PRCXianning, PRCIntensive processing of glass75%25%Split-off
Qingyuan CSG Energy-SavingQingyuan, PRCQingyuan, PRCProduction and sales of ultra-thin electronic glass100%Establishment
Shenzhen CSG Financial Leasing Co., Ltd.Shenzhen, PRCShenzhen, PRCFinance leasing, etc.75%25%Establishment
Jiangyou CSG Mining Development Co. Ltd.Jiangyou, PRCJiangyou, PRCProduction and sales of silica and its by-products100%Establishment
Shenzhen CSG PV Energy Co., Ltd.Shenzhen, PRCShenzhen, PRCInvestment management of photovoltaic plant100%Establishment
Qingyuan CSG New Energy Co., Ltd.Qingyuan, PRCQingyuan, PRCClean energy development, photovoltaic power generation100%Establishment
Suzhou CSG PV-tech Co., Ltd.Wujiang, PRCWujiang, PRCClean energy development, photovoltaic power generation100%Establishment
Wujiang CSG New Energy Co., Ltd.Wujiang, PRCWujiang, PRCClean energy development, photovoltaic power generation100%Establishment
Yichang CSG New Energy Co., LtdYichang, PRCYichang, PRCClean energy development, photovoltaic power generation100%Establishment
Shenzhen CSG Display:Shenzhen, PRCShenzhen, PRCProduction and sales of display component products60.8%Acquisition
Xianning CSG PhotoelectricXianning, PRCXianning, PRCPhotoelectric glass and high aluminium glass37.5%62.5%Acquisition

(2)The significant non-fully-owned subsidiaries of the Group

Unit: RMB

SubsidiariesShareholding of minority shareholdersTotal profit or loss attributable to minority shareholders for the year ended 30 June 2019Dividends distributed to minority interests for the year ended 30 June 2019Minority interest as at 30 June 2019
Shenzhen CSG Display39.20%8,661,678327,464,534

(3) The major financial information of the significant non-fully-owned subsidiaries of the Group

Unit: RMB

Name of SubsidiaryClosing balance
Current assetsNon-current assetsTotal assetsCurrent liabilitiesNon-current liabilitiesTotal liabilities
Shenzhen CSG Display168,441,6601,414,325,7621,582,767,422582,370,921129,923,052712,293,973
Opening balance
Current assetsNon-current assetsTotal assetsCurrent liabilitiesNon-current liabilitiesTotal liabilities
220,538,4171,418,945,1951,639,483,612620,430,756171,541,290791,972,046

Unit: RMB

Name of SubsidiaryOccurred in current termOccurred in previous term
RevenueNet profitTotal comprehensive incomeCash flows from operating activitiesRevenueNet profitTotal comprehensive incomeCash flows from operating activities
Shenzhen CSG Display276,594,46422,096,11722,096,11747,005,530240,861,52511,154,55311,154,55330,440,528

X. Risk related to financial instrument

The Group's activities expose it to a variety of financial risks: market risk (primarily currency risk and interest rate risk), credit risk andliquidity risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks tominimise potential adverse effects on the Group's financial performance.

(1) Market risk

(a) Foreign exchange risk

The Group’s major operational activities are carried out in Mainland China and a majority of the transactions are denominated inRMB. However, some of the export business is settled in foreign currency. Besides, the Group is exposed to foreign exchange riskarising from the recognised assets and liabilities, and future transactions denominated in foreign currencies, primarily with respect toUS dollars and HKD. The Group monitors the scale of foreign currency transactions, foreign currency assets and liabilities, andadjusts settlement currency of export business, to furthest reduce the currency risk.

As at 30 June 2019 the carrying amounts in RMB equivalent of the Group’s assets and liabilities denominated in foreign currenciesare summarized below:

30 June 2019
USDHKDOthersTotal
Financial assets denominated in foreign currency-
Cash at bank and on hand88,107,1181,616,4171,030,43990,753,974
Receivables124,333,7412,181,41913,310,084139,825,244
Total212,440,8593,797,83614,340,523230,579,218
Financial liabilities denominated in foreign currency
Short-term borrowings65,977,50065,977,500
Payables39,204,88127012,571,91851,777,069
Total39,204,88165,977,77012,571,918117,754,569
31 December 2018
USDHKDOthersTotal
Financial assets denominated in foreign currency-
Cash at bank and on hand81,350,5251,383,5941,304,92584,039,044
Receivables118,697,7951,372,8727,429,706127,500,373
Total200,048,3202,756,4668,734,631211,539,417
Financial liabilities denominated in foreign currency
Short-term borrowings65,715,00065,715,000
Payables56,170,81726912,397,08068,568,166
Total56,170,81765,715,26912,397,080134,283,166

As at 30 June 2019, if the currency had strengthened/weakened by 10% against the USD while all other variables had been heldconstant, the Group’s net profit for the year would have been approximately RMB 14,725,058 lower/higher (31 December 2018:

approximately RMB 12,229,588 lower/higher) for various financial assets and liabilities denominated in USD.

As at 30 June 2019, if the currency had strengthened/weakened by 10% against the HKD while all other variables had been heldconstant, the Group’s net profit for the year would have been approximately RMB 5,285,294 higher/lower (31 December 2018:

approximately RMB 5,351,498 higher/lower ) for various financial assets and liabilities denominated in HKD.

Other changes in exchange rate had no significant influence on the Group's operating activities.

(b) Interest rate risk

The Group's interest rate risk arises from long-term interest bearing borrowings including long-term borrowings and bonds payable.Financial liabilities issued at floating rates expose the Group to cash flow interest rate risk. Financial liabilities issued at fixed ratesexpose the Group to fair value interest rate risk. The Group determines the relative proportions of its fixed rate and floating ratecontracts depending on the prevailing market conditions. As at 30 June 2019, the Group’s long-term interest-bearing debt at variablerates and fixed rates as illustrated below:

Type30 June 201931 December 2018
Debt at fixed rates2,244,650,0002,258,325,000
Debt at variable rates47,812,50057,375,000
Total2,292,462,5002,315,700,000

The Group continuously monitors the interest rate position of the Group. Increases in interest rates will increase the cost of newborrowing and the interest expenses with respect to the Group’s outstanding floating rate borrowings, and therefore could have amaterial adverse effect on the Group’s financial position. The Group makes adjustments timely with reference to the latest marketconditions, which includes increasing/decreasing long-term fixed rate debts at the anticipation of increasing/decreasing interest rate.

(2) Credit risk

Credit risk is managed on the grouping basis. Credit risk mainly arises from cash at bank, notes receivable, accounts receivable, otherreceivables.

The Group expects that there is no significant credit risk associated with cash at bank since they are mainly deposited at state-ownedbanks and other medium or large size listed banks. Management does not expect that there will be any significant losses fromnon-performance by these counterparties. Furthermore, as the Group’s bank acceptance notes receivable are generally accepted bythe state-owned banks and other large and medium listed banks, management believes the credit risk should be limited.

In addition, the Group has policies to limit the credit exposure on accounts receivable, other receivables and trade acceptance notesreceivable. The Group assesses the credit quality of and sets credit limits on its customers by taking into account their financialposition, the availability of guarantee from third parties, their credit history and other factors such as current market conditions. Thecredit history of the customers is regularly monitored by the Group. In respect of customers with a poor credit history, the Group willuse written payment reminders, or shorten or cancel credit periods, to ensure the overall credit risk of the Group is limited to acontrollable extent.

(3) Liquidity risk

Cash flow forecasting is performed by each subsidiary of the Group and aggregated by the Group’s finance department in itsheadquarters. The Group’s finance department at its headquarters monitors rolling forecasts of the Group's short-term and long-term

liquidity requirements to ensure it has sufficient cash reserve, while maintaining sufficient headroom on its undrawn committedborrowing facilities from major financial institutions so that the Group does not breach borrowing limits or covenants on any of itsborrowing facilities to meet the short-term and long-term liquidity requirements.

As at 30 June 2019, the Group had net current liabilities of approximately RMB 1,066 million and committed capital expenditures ofapproximately RMB 595 million. Management will implement the following measures to ensure the liquidation risk limited to acontrollable extent:

(a) The Group will have steady cash inflows from operating activities;(b) The Group will pay the debts that mature and finance the construction projects through the existing bank facilities;(c) The Group will closely monitor the payment of construction expenditure in terms of payment time and amount.

The financial liabilities of the Group at the balance sheet date are analysed by their maturity date below at their undiscountedcontractual cash as follows:

30 June 2019
Within 1 year1 to 2 years2 to 5 yearsOver 5 yearsTotal
Short-term borrowings2,726,856,1052,726,856,105
Notes payable280,009,274280,009,274
Accounts payable1,056,501,8041,056,501,804
Other payables356,979,812356,979,812
Other current liabilities300,000300,000
Non-current liabilities due within one year715,224,979715,224,979
Long-term payables238,356,65253,006,500291,363,152
Long-term borrowings133,056,5002,160,156,402197,242,6372,490,455,539
Total5,268,928,4742,398,513,054250,249,1377,917,690,665
31 December 2018
Within 1 year1 to 2 years2 to 5 yearsOver 5 yearsTotal
Short-term borrowings2,991,136,4782,991,136,478
Notes payable105,150,000105,150,000
Accounts payable1,209,859,2631,209,859,263
Other payables552,751,187552,751,187
Other current liabilities300,000300,000
Non-current liabilities due within one year821,135,376821,135,376
Long-term payables529,910,796529,910,796
Long-term borrowings134,337,1881,403,773,6981,044,119,2112,582,230,097
Total5,814,669,4921,933,684,4941,044,119,2118,792,473,197

XI. Disclosure of fair value

1. Fair value of financial assets and financial liabilities not measured at fair valueThe Group’s financial assets and financial liabilities measured at amortized cost mainly include: accounts receivable, short-termborrowings, accounts payable, long term borrowings, bonds payable , long-term payables, ect.

Except for financial liabilities listed below, book value of the other financial assets and liabilities not measured at fair value is areasonable approximation of their fair value.

30 June 201931 December 2018
Carrying amountFair valueCarrying amountFair value
Medium term notes2,000,000,0002,059,460,0002,000,000,0002,028,614,800
Total2,000,000,0002,059,460,0002,000,000,0002,028,614,800

The fair values of medium-term notes is the present value of the contractually determined stream of future cash flows at the rate ofinterest applied at that time by the market to instruments of comparable credit status and providing substantially the same cash flowson the same terms, and medium term notes belong to Level 2.XII. Related party and related Transaction

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 attached note.

3. Joint venture of the Company

Nil.

4. Other related parties

(1) Related transactions for the purchase and sale of goods, provision and receipt of servicesNil.

(2) Other related parties information

Nil.

5. Others

On 22 November 2016, the Company received a letter from its shareholder, Jushenghua, stating that to support the Group’s steadyoperation and development, Jushenghua, as the shareholder of the Company, would like to offer interest-free borrowings with thetotal amount of RMB 2 billion to the Company or through related parties designated by it. For any borrowing drawn, its repaymentdate is negotiated by the Company and Jushenghua upon withdrawal. When a borrowing is due, if an extension is needed, theCompany can apply to the actual lender based on the Company’s operation; where the actual lender agrees with the extensionapplication, the term of the borrowing is extended accordingly. The Company did not borrow from shareholders in the period.XIII. Share Payment

1. Overall situation of share payment

√ Applicable □ Not applicable

Unit: RMB

The total number of equity instruments granted by the company in the current period
Total amount of various equity instruments that the company exercises during the current period
The total number of various equity instruments that have repurchased in the current period37,644,324
The scope of the company’s outstanding share options and the remaining duration of the contract at the end of the period
The scope of the company's exercise price of other equity instruments at the end of the period and the remaining duration of the contract at the end of the period

On December 11, 2017, reviewed and approved by the Group's eighth session of the Board of Directors, the Group implemented the2017 A Share Restricted Stock Incentive Plan. The 454 incentive objects for the restricted shares granted under this plan included theCompany’s directors, senior management personnel,core management members, key technology members. The first grant date of thisrestricted stock was December 11, 2017. The Company granted 97,511,654 restricted shares for the first time to 454 incentive objects.The initial grant price was RMB 4.28 yuan per share. The number of reserved restricted stocks was 17,046,869 shares, and the grantprice had not been determined. The shares granted for the first time had been registered and listed.

This incentive plan is valid for 48 months from the date of grant of the restricted stock to the date of unlocking of all restricted stocksor the completion of repurchase and cancellation. During the unlocking/exercise period, if the unlocking/exercise condition specifiedin the incentive plan is reached, the restricted stock granted is unlocked in three phases after 12 months from the grant date.

The unlock period is shown in the following table:

Unlock ScheduleUnlock TimeUnlock Ratio
First unlockfrom 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 unlockfrom 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 date30%
Third unlock

By the 2th temporary meeting of shareholders held on 6th August 2018, the Company decided to repurchase and cancel thestill-restricted shares which had already been granted to and held by 15 recipients no longer qualified for “Incentive Plan” due toeither resignation or position adjustment. 3,319,057 shares were repurchased and cancelled. The Company had completed thecancellation procedures for the above-mentioned restricted shares by 10 September 2018.

The Company held a temporary meeting of the 8th Board of Directors on September 13, 2018, which reviewed and approvedSeptember 13, 2018 to be the shares granting date and 75 recipients to be granted 9,826,580 restricted shares in total.

On December 12, 2018, the Company held an interim meeting of the Eighth Board of Directors and an interim meeting of the EighthBoard of Supervisors, and reviewed and approved the Proposal on Repurchase and Cancellation of Part of Restricted Stocks ofRestricted Stock Incentive Plan, and agreed to repurchase and cancel the total of 436,719 shares of all restricted stocks held by 8unqualified original incentive objects. The proposal was approved by the 3rd Extraordinary General Meeting in 2018 on December28, 2018. As of June 18, 2019, the Company had completed the cancellation procedures for the above-mentioned restricted stocks inShenzhen Branch of China Securities Depository and Clearing Corporation Limited.

On April 16, 2019, the Company held the 8th Meeting of the Eighth Board of Directors and the 8th Meeting of the Eighth Board ofSupervisors, which reviewed and approved the Proposal on Repurchase and Cancellation of Part of Restricted Stocks of RestrictedStock Incentive Plan and the Proposal on Repurchase and Cancellation of Restricted Stocks that Had Not Reached the UnlockingCondition of the Second Unlock Period, and agreed to repurchase and cancel the total of 3,473,329 shares of all restricted stocks heldby 14 unqualified original incentives, as well as the total of 33,734,276 shares of 483 incentive objects that did not meet theunlocking conditions of the second unlock period. The independent directors of the Company issued a consent opinion. And on May9, 2019, the proposals were approved by the 2018 Annual General Meeting of Shareholders. As of June 18, 2019, the Company hadcompleted the cancellation procedures for the above-mentioned restricted stocks in Shenzhen Branch of China Securities Depositoryand Clearing Corporation Limited.

2. Equity-settled share payment

√ Applicable □ Not applicable

Unit: RMB

Method for Determining the Fair Value of Equity Instruments on the Grant DateBlack-Scholes Model
Determination of the number of vesting equity instrumentsBased 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 estimatesNot applicable
Cumulative amount of equity-settled share-based payment in capital reserves165,848,197
Total equity confirmed by equity-settled share-based payment in this period13,375,344

Other noteAccording to the relevant provisions of Accounting Standards for Business Enterprises No. 11 - Share Payment and EnterpriseAccounting Standard No. 22 - Recognition and Measurement of Financial Instruments, the Group uses the Black-Scholes model (BSmodel) as a pricing model, deducting incentive objects. The fair value of the restricted stock will be used after the lock-in costs that

are required to obtain the rational expected return from the sales restriction period are lifted in the future. The Group will, on eachbalance sheet date of the lock-in period, revise the number of restricted stocks that are expected to be unlikable based on the newlyobtained changes in the number of unlockable persons and performance indicators, and follow the fair value of the restricted stockgrant date. The services obtained during the current period are included in the relevant costs or expenses and capital reserves.

The Group actually granted restricted stocks of 97,511,654 shares in 2017, and the total fair value of the equity instruments grantedto the incentive target for the first day of grant was RMB 289,519,900, the total fair value as the total cost of the company's equityincentive plan will be confirmed in stages according to the unlocking/exercise ratio during the implementation of the equity incentiveplan, and will be included in the "management fees and Construction in progress " of each period accordingly.

By the 2th temporary meeting of shareholders held on 6th August 2018, the company decided to repurchase and cancel thestill-restricted shares which have already been granted to and held by 15 recipients no longer qualified for “incentive plan” due toeither resignation or position adjustment 3,319,057 shares were repurchased and cancelled, The company has finished abovecancellations of the restricted shares by 10 September 2018.

The Company held the 8th temporary meeting of Board member members on September 13, 2018, which reviewed and approvedSeptember 13, 2018 to be the shares granting date and 75 recipients to be 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 thereleasing conditions on the first- time expiring trading restrictions of the initial part of the incentive plan on restricted shares fromordinary A. A total of 431 recipients of the incentive plan were able to fulfill the conditions. The amount of 43,353,050 shares couldbe released from restrictions. The restricted shares was released and listed by company on December 21 2018.

In addition, according to the Group’s performance in 2018, the unlocking conditions for the second post lock-up period for therestricted shares incentive plan for 2017 and for the second post lock-up period for the restricted shares incentive plan for 2018 werenot met. Therefore, by December 31 2018, expenses for the second post lock-up period for the ordinary A restricted shares wasreduced by RMB 41,856,285.

On December 12, 2018, the Company held an interim meeting of the Eighth Board of Directors and an interim meeting of the EighthBoard of Supervisors, and reviewed and approved the Proposal on Repurchase and Cancellation of Part of Restricted Stocks ofRestricted Stock Incentive Plan, and agreed to repurchase and cancel the total of 436,719 shares of all restricted stocks held by 8unqualified original incentive objects. The proposal was approved by the 3rd Extraordinary General Meeting in 2018 on December28, 2018. As of June 18, 2019, the Company had completed the cancellation procedures for the above-mentioned restricted stocks inShenzhen Branch of China Securities Depository and Clearing Corporation Limited.

On April 16, 2019, the Company held the 8

th

Meeting of the 8

th

Board of Directors and the 8

th

Meeting of the 8th Board ofSupervisors, which reviewed and approved the Proposal on Repurchase and Cancelling of Part of Restricted Stocks of RestrictedStock Incentive Plan and the Proposal on Repurchase and Cancelling of Restricted Stocks that Had Not Reached the UnlockingCondition of the Second Unlock Period, and agreed to repurchase and cancel the total of 3,473,329 shares of all restricted stocks heldby 14 unqualified original incentives, as well as the total of 33,734,276 shares of 483 incentives that did not meet the unlockingconditions of the second unlock period. The independent directors of the Company issued a consent opinion. And on May 9, 2019,the proposals were approved by the 2018 Annual General Meeting of Shareholders. As of June 18, 2019, the Company hascompleted the cancellation procedures for the above-mentioned restricted stocks in Shenzhen Branch of China Securities Depositoryand Clearing Corporation Limited.

During Jan.- Jun. 2019, the relevant cost sharing amount of the incentive plan was recognized as RMB 13,375,344 by the Group.

3. Share payment in cash

□Applicable √ Not applicable

XIV. Commitments and contingencies

1. Significant commitments

(1) Important commitments on balance sheet date

Item30 June 201931 December 2018
Buildings, machinery and equipment594,876,141130,748,435

(2) Operating lease commitments

The future minimum lease payments due under the signed irrevocable operating leases contracts are summarized as follows:

30 June 201931 December 2018
Within 1 year4,442,18919,016,297
1 to 2 years1,914,94016,993,654
2 to 3 years1,224,84816,654,854
Over 3 years711,0271,093,859
Total8,293,00453,758,664

2. Segment information

(1) Definition foundation and accounting policy of segment

The Group's business activities are categorised by product and service as follows:

Glass segment, engaged in production and sales of float glass and engineering glass and other building energy - saving materials, thesilica for the production thereof, etc.Solar energy segment, engaged in manufacturing and sales of polysilicon and solar battery and applications, etc.Electronic glass and display segment is responsible for production and sales of display components and special ultra-thin glassproducts, etc.

The reportable segments of the Group are the business units that provide different products or service. Different businesses requiredifferent technologies and marketing strategies. The Group, therefore, separately manages the production and operation of eachreportable segment and Estimates their operating results respectively, in order to make decisions about resources to be allocated tothese segments and to assess their performance.

Inter-segment transfer prices are measured by reference to selling prices to third parties.

The assets are allocated based on the operations of the segment and the physical location of the asset. The liabilities are allocatedbased on the operations of the segment. Expenses indirectly attributable to each segment are allocated to the segments based on theproportion of each segment’s revenue.

(2)Financial information of segment

Unit: RMB

ItemGlass industryElectronic glass and displaysSolar energy industryOthersUnallocatedEliminationTotal
Revenue from external customers3,623,089,281508,608,850751,193,5355,345,9124,888,237,578
Inter-segment revenue47,261,1991,058,07723,947,56932,810,773-105,077,618
Interest income1,363,338620,805158,04829712,780,88714,923,375
Interest expenses61,861,00913,097,20220,846,39375,227,001171,031,605
Asset impairment losses2,601,211342,578916,195-94,3143,765,670
Depreciation and amortisation expenses312,682,62986,247,45470,464,84612,0782,864,033472,271,040
Total profit417,660,118116,699,85025,189,844-13,208-92,191,776-4,147,021463,197,807
Income tax expenses62,711,89811,407,8662,338,97676,458,740
Net profit354,948,220105,291,98422,850,868-13,208-92,191,776-4,147,021386,739,067
Total assets8,941,702,9983,159,708,5124,621,850,616628,1091,723,296,83518,447,187,070
Total liabilities2,542,399,877804,135,574678,868,5882,504,4004,708,566,6018,736,475,040
Increase in non-current assets other than long-term equity investments61,809,80935,067,05495,405,330-4,305,092187,977,101

(3) Other statement

The Group’s revenue from external customers domestically and in foreign countries or geographical areas, and the total non-currentassets other than financial assets and deferred tax assets located domestically and in foreign countries or geographical areas are asfollows:

Revenue from external customersJan.-Jun. 2019Jan.-Jun. 2018
Mainland4,155,252,1554,691,225,341
Hong Kong123,321,165152,221,834
Europe28,933,09637,480,049
Asia (other than Mainland and Hong Kong)516,968,408538,291,685
Australia29,263,84029,949,405
North America25,808,07218,072,258
Other regions8,690,8423,929,026
Total4,888,237,5785,471,169,598
Total non-current assets30 June 201931 December 2018
Mainland13,775,007,18214,033,948,714
Hong Kong12,602,36212,647,783
Total13,787,609,54414,046,596,497

The Group has a large number of customers, but no revenue from a single customer exceed 10% or more of the Group’s revenue.XV. Notes to Financial Statements of the Parent Company

1. Other receivables

(1) Other receivables

1) Other accounts receivable classified by the nature of accounts

Unit: RMB

Nature of accountsEnding book balanceBeginning book balance
Accounts receivable of related party3,551,759,0742,739,449,549
Others171,882,985176,598,669
Total3,723,642,0592,916,048,218

2) Withdrawal of bad debt provision

Unit: RMB

Bad debt provisionPhase IPhase IIPhase IIITotal
Expected credit losses in the next 12 monthsExpected credit loss for the entire duration (no credit impairment occurred)Expected credit loss for the entire duration (credit impairment occurred)
Balance on 1 January3,531,9733,531,973
2019
Balance on 1 January 2019 in current period————————
--Transferred to the Phase II
--Transferred to the Phase III
-- Transferred back to the Phase II
-- Transferred back to the Phase I
Withdrawal
Recovery94,31494,314
Write-off
Verification
Other changes
Balance on 30 June 20193,437,6593,437,659

3) Disclosure by ageing

Unit: RMB

AgeingClosing balance
Within 1 year (including 1 year)3,552,463,309
1 to 2 years19,703
2 to 3 years159,047
3 to 4 years
4 to 5 years
Over 5 years171,000,000
Total3,723,642,059

4) Accounts receivable withdraw, reversed or collected during the reporting period

Provision for bad debts:

Unit: RMB

CategoryOpening balanceAmount of change in the periodClosing balance
ProvisionReversed or collected
Portfolio 13,531,97394,3143,437,659
Total3,531,97394,3143,437,659

5) Top 5 of the closing balance of the other accounts receivable collated according to the arrears partyUnit: RMB

Name of the companyNature of accountsClosing balanceAgeingProportion of the total year end balance of the accounts receivable (%)Closing balance of bad debt provision
Yichang CSG PolysiliconSubsidiary1,892,619,307Within 1 year51%
Wujiang CSGSubsidiary448,490,216Within 1 year12%
Yichang CSG DisplaySubsidiary332,108,331Within 1 year9%
Yichang Hongtai Real Estate Co. LtdIndependent third party171,000,000Over 5 years5%3,420,000
Xianning CSG PhotoelectricSubsidiary162,241,720Within 1 year4%
Total--3,006,459,574--81%3,420,000

2. Long-term equity investment

Unit: RMB

ItemClosing balanceOpening balance
Book balanceImpairment provisionBook valueBook balanceImpairment provisionBook value
Investment in subsidiaries4,998,474,65715,000,0004,983,474,6574,979,696,83115,000,0004,964,696,831
Total4,998,474,65715,000,0004,983,474,6574,979,696,83115,000,0004,964,696,831

(1) Investment in subsidiaries

Unit: RMB

Invested companyOpening balanceIncrease in the termDecrease in the termClosing balanceProvision for impairment of the current periodClosing balance of impairment provision
Chengdu CSG Glass Co., Ltd.152,376,524469,806152,846,330
Sichuan CSG Energy Conservation120,053,814399,216120,453,030
Tianjin Energy Conservation Glass Co. Ltd248,548,885634,014249,182,899
Dongguan CSG Architectural Glass Co., Ltd.199,212,838477,402199,690,240
Dongguan CSG Solar Glass Co., Ltd.356,240,176591,366356,831,542
Yichang CSG Polysilicon Co., Ltd.642,412,100686,166643,098,266
Wujiang CSG North-east Architectural Glass Co., Ltd.255,041,613307,404255,349,017
Hebei CSG Glass Co., Ltd.267,053,514419,898267,473,412
China Southern Glass (Hong Kong) Limited86,932,629259,95087,192,579
Wujiang CSG Glass Co., Ltd.568,749,746557,910569,307,656
Hebei Panel Glass Co., Ltd.247,051,137331,926247,383,063
Jiangyou CSG Mining Development Co. Ltd.102,765,652168,264102,933,916
Xianning CSG Glass Co Ltd.181,910,111429,570182,339,681
Xianning CSG Energy Conservation Glass Co Ltd.166,299,193324,960166,624,153
Qingyuan CSG Energy Saving New Materials Co.,Ltd303,861,558331,620304,193,178
Shenzhen CSG Financial Leasing Co., Ltd.133,500,000133,500,000
Shenzhen CSG PV Energy Co., Ltd.100,362,54753,016100,415,563
Shenzhen Nanbo Display Technology Co., Ltd.552,517,298865,764553,383,062
Xianning CSG Photoelectric Glass Co., Ltd.90,471,501359,22690,830,727
Others(i) (ii)204,335,99511,110,348215,446,34315,000,000
Total4,979,696,83118,777,8264,998,474,65715,000,000

(2) Other notes

(i) As at June 30, 2019, long-term equity investment in subsidiaries contained the restricted stocks granted by the Company to the

Employees of subsidiaries of the company, and the Company did not charge any fees for the restricted stocks which was deemed asan increase of costs of Long-term equity investment for subsidiaries by RMB 220,069,346 (31 December 2018: RMB 211,291,520).

(ii) The subsidiaries which have made provision for impairment were basically closed down in the previous year, and the provision forimpairment for the long-term equity investment of them had been made by the Company according to the recoverable amount.

3. Operating income and operating costs

Unit: RMB

ItemOccurred in this termOccurred in previous term
IncomeCostsIncomeCosts
Other business38,156,68530,709,068
Total38,156,68530,709,068

New revenue guidelines have been implemented or not

□ Yes √ No

4. Investment income

Unit: RMB

ItemOccurred in this termOccurred in previous term
Long-term equity investment accounted by cost method390,105,325231,537,606
Total390,105,325231,537,606

XVI. Supplementary Information

1. Items and amounts of extraordinary profit (gains)/loss

√Applicable □ Not applicable

Unit: RMB

ItemAmountNote
Gains/losses from the disposal of asset (including the write-off that accrued for impairment of assets)370,969
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)107,755,413
Other non-operating income and expenditure except for the aforementioned items-2,626,912
Profits and losses from external entrusted loans5,345,912
Less: Impact on income tax15,155,936
Impact on minority shareholders’ equity (post-tax)2,286,489
Total93,402,957--

Explain reasons for the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure forCompanies Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/lossaccording to the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for CompaniesOffering Their Securities to the Public --- Extraordinary Profit/loss.

□Applicable √ Not applicable

2. Return on net assets and earnings per share

Profit in the report periodThe weighted average net assets ratioEarnings per share
Basic earnings per share (RMB/share)Diluted earnings per share (RMB/share)
Net profit attributable to ordinary shareholders of the Company4.09%0.120.12
Net profit attributable to ordinary shareholders of the Company after deducting non-recurring gains and losses3.08%0.090.09

3. Difference of accounting data under domestic and overseas accounting standards

(1) Differences of the net profit and net assets disclosed in financial report prepared under internationaland Chinese accounting standards

□ Applicable √ Not applicable

(2) Difference of the net profit and net assets disclosed in financial report prepared under overseas andChinese accounting standards

□ Applicable √ Not applicable

Section IX. Documents available for ReferenceI. Text of the Semi-annual Report carrying the legal representative’s signature;II. Text of the financial report carrying the signatures and seals of the legal representative,responsible person in charge of accounting and person in charge of financial institution;III. All texts of the Company’s documents and original public notices disclosed in the papersappointed by CSRC in the report period.

Board of Directors ofCSG Holding Co., Ltd.23 August 2019


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