CSG HOLDING CO., LTD.
ANNUAL REPORT 2021
Chairman of the Board:
CHEN LIN
April 2022
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Section I. Important Notice, Content and ParaphraseBoard of Directors and the Supervisory Committee of CSG Holding Co., Ltd. (hereinafter referred toas the Company) and its directors, supervisors and senior executives hereby confirm that there are noany fictitious statements, misleading statements, or important omissions carried in this report, andshall take individual and joint legal responsibilities for the facticity, accuracy and completeness ofthe whole contents.Ms. Chen Lin, Chairman of the Board, Mr. Wang Jian, responsible person in charge of accountingand Ms. Wang Wenxin, principal of the financial department (accounting officer) confirm that theFinancial Report enclosed in this Annual Report 2021 is true, accurate and complete.All directors were present at the meeting of the Board for deliberating the annual report of theCompany in person.The future plans, development strategies and other forward-looking statements mentioned in thisreport do not constitute a material commitment of the Company to investors. Investors and relevantparties should pay attention to investment risks, and understand the differences between plans,forecasts and commitments.The Company has described the risk factors and countermeasures of the Company's futuredevelopment in detail in this report. Please refer to Section III. Management Discussion and Analysis.The Company shall comply with the disclosure requirements of "Shenzhen Stock Exchange IndustryInformation Disclosure Guidelines No. 13 - Listed Companies Engaged in Non-Metal BuildingMaterials Related Business".The deliberated and approved plan of profit distribution in the Board Meeting is distributing cashdividend of RMB 2 yuan (tax included) for every 10 shares to all shareholders based on 3,070,692,107shares of the total current share capital. The actual amount of the cash dividend distributed will bedetermined according to the total share capital on the registration date of the Company'simplementation of the profit distribution plan.This report is prepared both in Chinese and English. Should there be any inconsistency between theChinese and English versions, the Chinese version shall prevail.
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Content
Section I. Important Notice, Content and Paraphrase .................................................................................. - 1 -Section II. Company Profile& Financial Highlights ......................................................................................... - 5 -Section III. Management Discussion and Analysis ......................................................................................... - 9 -Section IV. Corporate Governance ............................................................................................................. - 43 -Section V. Environment and social responsibility ....................................................................................... - 60 -Section VI. Important Events ....................................................................................................................... - 64 -Section VII. Changes in Shares and Particulars about Shareholders ........................................................... - 75 -Section VIII. Preferred shares ...................................................................................................................... - 81 -Section IX. Bonds ......................................................................................................................................... - 82 -Section X. Financial Report .......................................................................................................................... - 86 -
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Documents Available for Reference
I. Text of the financial report carrying the signatures and seals of the legal representative, responsible person in charge ofaccounting and person in charge of financial institution;
II. Original of the Auditors’ Report carrying the seal of accounting firm and the signatures and seals of the certified publicaccountants;
III. All texts of the Company’s documents and original public notices disclosed in the website and papers appointed byCSRC in the report period.
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Paraphrase
| Items | Refers to | Contents |
| Company, the Company, CSG or the Group | Refers to | CSG Holding Co., Ltd. |
| Foresea Life | Refers to | Foresea Life Insurance Co., Ltd. |
| Flat glass | Refers to | Including float glass, photovoltaic glass |
| Ultra-thin electronic glass | Refers to | The electronic glass with thickness between 0.1~1.1mm |
| Second-generation energy-saving glass | Refers to | Double silver coated glass |
| Third-generation energy-saving glass | Refers to | Triple silver coated glass |
| AG glass | Refers to | Anti-glare glass |
| AF glass | Refers to | Anti-fingerprint glass |
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Section II. Company Profile& Financial Highlights
I. Company information
| Code for A-share | 000012 | Code for B-share | 200012 |
| Short form for A-share | Southern Glass A | Short form for B-share | Southern Glass B |
| Listing stock exchange | Shenzhen Stock Exchange | ||
| Legal Chinese name of the Company | 中国南玻集团股份有限公司 | ||
| Abbr. of legal Chinese name of the Company | 南玻集团 | ||
| Legal English name of the Company | CSG Holding Co., Ltd. | ||
| Abbr. of legal English name of the Company | CSG | ||
| Legal Representative | Chen Lin | ||
| Registered Add. | CSG Building, No.1, the 6th Industrial Road, Shekou, Shenzhen, P. R.C. | ||
| Post Code | 518067 | ||
| Office Add. | CSG Building, No.1, the 6th Industrial Road, Shekou, Shenzhen, P. R.C. | ||
| Post Code | 518067 | ||
| Internet website | www.csgholding.com | ||
| securities@csgholding.com | |||
II. Person/Way to contact
| Secretary of the Board | Representative of security affairs | |
| Name | Yang Xinyu | Chen Chunyan |
| Contacts add. | CSG Building, No.1 of the 6th Industrial Road, Shekou, Shenzhen, P. R.C. | CSG Building, No.1 of the 6th Industrial Road, Shekou, Shenzhen, P. R.C. |
| Tel. | (86)755-26860666 | (86)755-26860666 |
| Fax. | (86)755-26860685 | (86)755-26860685 |
| securities@csgholding.com | securities@csgholding.com |
III. Information disclosure and preparation place
| The website of the stock exchange where the company discloses the annual report | www.szse.cn |
| The name and website of the media where the company discloses the annual report | Securities Times, China Securities Journal, Shanghai Securities News, Securities Daily and Hong Kong Commercial Daily, Juchao Website (www.cninfo.com.cn) |
| The place for preparation of the annual report | Office of the Board of Directors of the Company |
IV. Registration changes of the Company
| Organization code | Unified social credit code: 914403006188385775 |
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| Changes of main business since listing (if applicable) | No changes |
| Previous changes for controlling shareholders (if applicable) | No changes |
V. Other relevant informationCPA firm engaged by the Company
| Name of CPA firm | Asia Pacific (Group) CPAs (special general partnership) |
| Offices add. for CPA firm | 2001, 20th Floor, Building 3, No. 16, Lize Road, Fengtai District, Beijing |
| Signing Accountants | Zhou Xianhong, Wu Yiluo |
Sponsor institute engaged by the Company for performing continuous supervision duties in the report period
□ Applicable √ Not applicable
Financial consultant engaged by the Company for performing continuous supervision duties in the report period
□ Applicable √ Not applicable
VI. Main accounting data and financial indexesWhether it has retroactive adjustment or re-statement on previous accounting data
□Yes √No
| 2021 | 2020 | Changes over the previous year | 2019 | |
| Operating income (RMB) | 13,629,033,650 | 10,671,253,445 | 27.72% | 10,472,028,099 |
| Net profit attributable to shareholders of the listed company (RMB) | 1,529,329,304 | 779,325,592 | 96.24% | 536,430,818 |
| Net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses (RMB) | 1,439,540,257 | 539,976,457 | 166.59% | 374,386,216 |
| Net cash flow arising from operating activities (RMB) | 3,902,084,385 | 2,730,619,636 | 42.90% | 2,379,036,320 |
| Basic earnings per share (RMB/Share) | 0.50 | 0.25 | 100% | 0.17 |
| Diluted earnings per share (RMB/Share) | 0.50 | 0.25 | 100% | 0.17 |
| Weighted average ROE (%) | 14.13% | 7.91% | 6.22% | 5.77% |
| As at 31 Dec. 2021 | As at 31 Dec. 2020 | Changes over the end of the previous year | As at 31 Dec. 2019 | |
| Total assets (RMB) | 19,939,364,510 | 17,882,914,898 | 11.50% | 18,201,235,959 |
| Net assets attributable to shareholders of the listed company (RMB) | 11,429,661,046 | 10,212,989,847 | 11.91% | 9,495,588,878 |
The lower of the Company’s net profit before and after the deduction of non-recurring gains and losses in the last threefiscal years is negative, and the auditor's report of the previous year shows that the Company’s going concern ability isuncertain
□ Yes √ No
The lower of the net profit before and after the deduction of the non-recurring gains and losses is negative
□ Yes √ No
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VII. Accounting Data Differences under Chinese Accounting Standards (CAS) andInternational Financial Reporting Standards (IFRS) and Foreign Accounting Standards
1. Net Income and Equity Differences under CAS and IFRS
□ Applicable √ Not applicable
No such differences for the Report Period.
2. Net Income and Equity Differences under CAS and Foreign Accounting Standards
□ Applicable √ Not applicable
No such differences for the Report Period.
VIII. Main financial indexes by quarter
Unit: RMB
| Q1 | Q2 | Q3 | Q4 | |
| Operating income | 3,006,832,539 | 3,607,969,999 | 3,632,036,581 | 3,382,194,531 |
| Net profit attributable to shareholders of the listed company | 573,268,793 | 779,248,672 | 157,313,336 | 19,498,503 |
| Net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses | 572,808,470 | 757,006,058 | 135,934,112 | -26,208,383 |
| Net cash flow arising from operating activities | 341,291,798 | 1,356,953,577 | 937,245,178 | 1,266,593,832 |
Whether there are significant differences between the above-mentioned financial index or its total number and the relevantfinancial index disclosed in the Company’s quarterly report and semi-annual report or not
□Yes √ No
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IX. Items and amounts of non-recurring gains and losses
√Applicable □ Not applicable
Unit: RMB
| Item | 2021 | 2020 | 2019 | Note |
| Gains/losses from the disposal of non-current asset (including the write-off that accrued for impairment of assets) | -1,493,248 | -1,158,984 | -909,968 | |
| 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) | 104,507,242 | 99,660,400 | 184,131,420 | |
| Profit and loss from debt restructuring | -285,025 | |||
| In addition to the effective hedging business related to the normal business of the company, the profit and loss from changes in fair value arising from holding trading financial assets and trading financial liabilities, as well as the investment income obtained from the disposal of trading financial assets, trading financial liabilities and available for sale financial assets | 17,132,672 | 2,654,504 | ||
| Reversal of provision for impairment of receivables that have been individually tested for impairment | 1,429,653 | |||
| Loss and profit from external entrusted loan | 5,546,384 | 11,894,654 |
Profits and losses arising from changes in the fair valueof investment real estate that are subsequentlymeasured using the fair value model
| 179,911,200 | ||||
| Other non-operating income and expenditure except for the aforementioned items | -13,526,210 | -6,284,556 | -1,612,253 | |
| Less: Impact on income tax | 14,201,899 | 38,334,180 | 25,951,263 | |
| Impact on minority shareholders’ equity (post-tax) | 3,774,138 | 2,645,633 | 5,507,988 | |
| Total | 89,789,047 | 239,349,135 | 162,044,602 | -- |
Particulars about other gains and losses that meet the definition of non-recurring gains and losses:
□ Applicable √ Not applicable
It did not exist that other profit and loss items met the definition of non-recurring gains and losses.
Explanation of the non-recurring gains and losses listed in the Explanatory Announcement No.1 on InformationDisclosure for Companies Offering their Securities to the Public - Non-recurring Gains and Losses as recurring gains andlosses
□ Applicable √ Not applicable
It did not exist that non-recurring profit and loss items listed in the "Explanatory Announcement No. 1 on InformationDisclosure of Companies Offering Securities to the Public - Non-recurring Profit and Loss" were defined as recurringprofit and loss items in the report period.
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Section III. Management Discussion and AnalysisI. Particulars about the industry the Company engages in during the report period
Flat glass industryIn the float glass industry, under the background of national supply-side reform and other policies in recent years, themanagement of capacity replacement has been strictly implemented, outdated production capacity and zombie productioncapacity have been gradually eliminated, and the overcapacity status of the industry has been effectively improved.According to the statistics of third-party industry information institutions, by the end of 2021, there were 264 float glassproduction lines in production in China, with a total daily melting capacity of about 175,000 tons. With theimplementation of the "Implementation Measures for Capacity Replacement in the Cement Glass Industry" on August 1,2021, the production capacity of float glass will continue to be controlled, the market supply and demand will be in arelatively balanced state, and the cyclical characteristics of the industry will be weakened. The traditional applicationdirection of float glass is mainly building materials, and its market demand change is positively related to infrastructureinvestment and the prosperity of the real estate industry. At the same time, with the continuous improvement of theproportion of green buildings, building safety requirements and the improvement of social consumption level in recentyears, the market demand of float glass has also undergone structural changes: according to the national guidelines suchas the "Action Plan for Carbon Peaking Before 2030" and the "Comprehensive Work Plan for Energy Conservation andEmission Reduction in the 14th Five-Year Plan", by 2025, 100% of new urban buildings are required to meet the greenbuilding standards (approximately50% in 2020).Due to the significant contribution of energy-saving glass to energysaving in the process of building use, it can be expected that the deep processing rate of flat glass in the building materialsfield will further increase during the "14th Five-Year Plan" period, which will drive the structural demand for deep-processing high-end float products to increase. With the continuous improvement of people's living standards, the demandfor work and life improvement such as automobiles, home furnishing, and intelligence has grown rapidly, driving therapid increase in the demand for high-quality float glass in related application scenarios. The above-mentioned continuousincrease in demand for high-quality glass is beneficial to leading companies in the high-end market in the industry.Photovoltaic glass products are mainly ultra-white rolled glass, which is an indispensable packaging material forphotovoltaic modules due to its high weather resistance, high transmittance and high strength after processing. In recentyears, the photovoltaic glass industry as a whole has developed rapidly with the development of technology and scale ofphotovoltaic new energy industry. Photovoltaic power generation is one of the main forms of renewable energy. With thecontinuous decline of photovoltaic power generation costs, it has achieved "grid parity". Photovoltaic new energy hasbecome the first choice for the development of renewable energy in countries around the world due to its wide adaptabilityand low cost. It is expected that in the future market development will maintain a state of rapid growth. According to theforecast of the China Photovoltaic Industry Association, the global photovoltaic installed capacity will exceed 300GW in2025, with a compound annual growth rate of more than 20%. The continuous and rapid growth of photovoltaic installedcapacity and the increase in the penetration rate of dual-glass modules and large-scale modules will continue to drive thegrowth in demand for photovoltaic glass.The rapid growth of new photovoltaic energy has stimulated the development of the photovoltaic glass industry.According to the industry investment in recent years, the investment of new photovoltaic glass production capacity in2021 and 2022 is relatively concentrated. According to the statistics of third-party industry information institutions, bythe end of 2021, there were 67 photovoltaic glass kilns in production in China, with a total daily melting capacity of morethan 40,000 tons, an increase of nearly 40% year-on-year. The domestic photovoltaic glass output exceeded 10 milliontons for the first time in 2021.The "Implementation Measures for Capacity Replacement in the Cement Glass Industry"
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clarifies that "the capacity replacement measure is not applied in the photovoltaic rolled glass project". In the future, thenew capacity of photovoltaic glass will be adjusted and controlled through the overall control of local energy consumptionand the conclusion of feasibility seminar by industry experts to demonstrate. According to the capacity construction plandisclosed by enterprises in the industry, it is expected that the new production capacity of photovoltaic glass will maintaina relatively high growth rate in 2022.In addition, environmental protection is the lifeline for the survival and development of flat glass companies, and it is aconcentrated expression of corporate social responsibility in high-energy-consuming industries. As early as more than tenyears ago, CSG took the lead in realizing the use of clean energy natural gas in all melting furnace production lines.Compared with other fuels, its combustion calorific value is stable, its carbon emission is relatively low, it is purer, andit does not contain sulphur and other hazardous substances. Using natural gas as heat source for production is moreenvironmentally friendly and helps to improve product quality. At the same time, CSG takes the lead in the industry torealize comprehensive utilization of energy by means of waste heat power generation and distributed photovoltaic powergeneration. Through comprehensive exhaust gas treatment such as desulfurization, denitrification and dust removal, itachieves ultra-low emission, which is far lower than the national standard pollutant emission permission value. A numberof the Group's flat glass subsidiaries have reached the industry energy efficiency benchmark level. In 2021, the Ministryof Industry and Information Technology popularized the practice of Wujiang CSG as the "Energy Efficiency Leader" tothe whole flat glass industry. In the era of carbon peaking and carbon neutrality, energy saving and emission reduction,relatively low energy consumption and high energy efficiency will bring higher competitiveness and greater living spaceto enterprises.
Architectural glass industryThe architectural glass business is to further process the original float glass sheet to manufacture energy-saving buildingglass products with both safety and aesthetic effects in order to improve the energy-saving and safety performance ofbuildings, as well as the visual aesthetic effects. Building energy-saving glass has made a significant contribution toenergy saving in the process of building use. The penetration rate in developed countries in Europe and the United Stateshas already exceeded 80%, but the overall penetration rate in China is still low. The total number of buildings in China ishuge and continues to grow every year. In order to cope with the pressure of global warming, to achieve the goals of"Carbon Peaking in 2030 and Carbon Neutrality in 2060", and to reduce building energy consumption and carbonemissions, it is imperative to reduce the energy consumption and carbon emissions of buildings, to vigorously developgreen buildings, and to carry out energy-saving renovation of existing buildings. According to the "Action Plan forPromoting the Establishment of Green Buildings" issued by the Ministry of Housing and Urban-Rural Development andthe Ministry of Industry and Information Technology, as well as the national "Action Plan for Carbon Peaking Before2030", "Comprehensive Work Plan for Energy Conservation and Emission Reduction during the 14th Five-Year Plan"and other guidance documents, 70% of the newly-built urban building should reach green building standards in 2022, and100% reach the standard in 2025 (about 50% in 2020). It is expected that the architectural glass business will gainsignificant development opportunities during the "14th Five-Year Plan" period. In addition, with the gradual improvementof domestic social consumption level in recent years, building energy conservation, safety standards and qualityrequirements have been continuously improved. In practice, the bad practice of winning the bid by the lowest price forconstruction projects has been initially reversed, and the quality and influence of "Made in China" have been increasinglyrecognized around the world, which will bring broader development space to advantageous enterprises that attachimportance to product quality and technological innovation, as well as stable industrial chain and supply chain.
Electronic glass and display industryElectronic glass
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Electronic glass, with its unique performance advantages such as high transmittance, high strength in ultra-thin state,reliable and stable weather resistance, and processing convenience, is an indispensable material for cover glass and touchcontrol plate of intelligent display interactive application terminals such as smartphones, tablets, and computers. And itis developing rapidly with the intelligent interactive display industry. With the popularization of information andcommunication technologies such as 5G and the development of the mobile Internet, the production and lifestyle of humansociety are gradually developing into a new form of high integration of people, machines, things, and information, inwhich everything is interconnected, driving the demand for intelligent equipment to increase rapidly and significantly .Inrecent years, in addition to the rapid popularization of mobile Internet terminals such as smartphones, tablets, andcomputers, the vigorous development of smart homes, smart cars, smart factories, smart business displays, advancededucation, medical care, conferences, self-service and other industries has brought about the incremental demand forhuman-computer interaction equipment, which provides a broader market prospect and market space for the electronicglass industry, and also provides a market opportunity for leapfrogging development to upstream material manufacturerswith leading technological innovation capability and benign operation.
DisplayCSG has become a brand supplier of electronic application materials in the display touch industry, which can providecustomers with all-round one-stop touch screen material solutions. In the future, the Company will continue to optimizethe layout in the vehicle field, to further build the high-end manufacturing industry chain of vehicle touch display, aimingat becoming a high-quality component supplier in the field of automotive electronics. With the continuous deepening ofthe trend of vehicle electrification, intelligence and interconnection, it will promote the iterative upgrade of traditionaldisplays and entertainment systems, and the demand for vehicle displays will be strong. According to statistics fromrelevant market research institutions, the global automotive display screen output in 2020 was 127 million pieces. Themarket research institution said that the global automotive display market will continue to grow in the future, with acompound annual growth rate, from 2021 to 2027, reaching 13%.The Company continues to be optimistic about thedevelopment prospect of the intelligent vehicle industry. At present, CSG have mastered the production technology ofcore products such as on-board AG glass, on-board multi-functional 3A cover plate and on-board touch sensor supportingthe vehicle central control screen. It has become a high-quality on-board product material supplier in the field ofautomotive electronics and will have broad market prospects in the future.
Solar energy industryAt present, the new development ideology centred on "Green Development" has gradually become the consensus of allcountries in the world. Major economies in the world have successively proposed "carbon neutrality" timetables. Chinahas also made a solemn commitment of "Carbon Peaking in 2030 and Carbon Neutrality in 2060"to the world. Thetransformation of the global energy structure has begun to accelerate, and photovoltaic energy has become an importantengine to undertake energy transformation with its significant advantages such as cleanliness, safety, and economy.Driven by favorable factors such as the continuous decline in the cost of photovoltaic power generation and the globalgreen recovery, the new installed capacity of photovoltaics around the world will continue to grow rapidly, and the solarphotovoltaic industry will have huge development potential and industry prospects in the future.According to the national "Carbon Peaking Action Plan before 2030",the proportion of China's non-fossil energyconsumption will reach the target of about 20% by 2025 and about 25% by 2030,corresponding to the domestic averageannual new installed capacity demand may exceed 75GW.According to the association's forecast, it is expected that duringthe "14th Five-Year Plan" period, the average annual installed capacity of photovoltaics in the world will exceed 220GW,and in 2025the new installed capacity of photovoltaics in the world will exceed 300GW, with a compound annual growthrate of more than 20%.The huge incremental market demand will stimulate and drive the sustained and rapid growth of
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all links of the photovoltaic industry. At present, most of the production capacity at the manufacturing end of the globalphotovoltaic industry chain is controlled by Chinese enterprises.At present, the solar energy industry has fully entered the era of "grid parity" on the power generation side, and theelectricity market continues to force the cost of the photovoltaic industry to decrease. With the rapid development oftechnology in the photovoltaic industry, equipment and products are constantly upgraded, and the latecomer advantage isobvious and the market competition is fierce. In recent years, the concentration of various links in the industrial chain hasaccelerated, and capital has been concentrated in enterprises with resource advantages or technological advantages. Inorder to strengthen the ability to resist risks, leading enterprises have extended their industrial chains upstream anddownstream, or formed alliances with enterprises in other links of the industrial chain.II. Main business of the company during the report periodCSG is a leading domestic brand of energy-saving glass and a renowned brand of solar PV products and display devices.Its products and technologies are very popular at home and abroad. Its main business covers R&D, manufacturing andsales of high quality float glass and architectural glass, photovoltaic glass, silicon material, renewable energy productssuch as PV battery and modules, and new materials and information display products such as ultra-thin electronic glassand display devices. It also provides one-stop services such as project development, construction, operation andmaintenance of solar photovoltaic power plants.
Flat glass businessThe flat glass business of CSG includes float glass and photovoltaic glass. The production mode, business strategy,technical requirements and development direction of the two businesses have similarities and considerable differencesdue to the difference of industrial chain environment, industry development stage and policy environment.In the field of float glass, CSG has 10 advanced float glass production lines in Dongguan, Chengdu, Langfang, Wujiangand Xianning, and has quartz sand raw material processing and production bases in Jiangyou, Sichuan and Qingyuan,Guangdong. The annual output of various types of high-grade float glass is about 2.47 million tons, covering high-qualityfloat glass and ultra-white float glass with various thicknesses and specifications of 1.3-25mm. The performanceindicators of the products have reached the leading domestic level. CSG float glass products are all high-end productsthat can be directly used for downstream deep processing, and the proportion of differentiated glass products with specialspecifications and special application scenarios such as ultra-white, ultra-thin, and ultra-thick is large, which are widelyused in high-end building curtain walls, decoration and furniture, mirrors, car windshields, scanners and copiers, homeappliance panels, display protection and other applications that require high glass quality. CSG has established long-termand stable business cooperation with many well-known processing enterprises.The profit level of the float glass business is generally positively correlated with the level of real estate completion data,and is also affected by multiple factors such as current energy, raw material prices, product structure, and enterprisemanagement level. Differentiated glass products have relatively high added value due to specific application scenarios,high production process difficulties, stable demand, and relatively proactive pricing by manufacturers. The Companyfocuses on improving management efficiency, improving the level of lean production of conventional products, firmlyimplementing the differentiated competition strategy, carefully cultivating and developing differentiated product markets,and continuously increasing the proportion of differentiated product sales, so as to continuously consolidate and enhancethe industry competitiveness of the Company's float glass business.In the first half of 2021, the completion level of the real estate industry accelerated compared to the same period in recentyears, the market demand was strong, the supply was tight, and the overall price of float glass was higher than the sameperiod of last year. From the third quarter, the liquidity of real estate enterprises was under pressure, the completion level
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dropped, the supply-demand relationship of float glass fell back to a relatively balanced level, while the prices of sodaash and other raw materials rose sharply month on month and year on year, so that the price and profit level of float glassfell. It is expected that the market demand for float glass in 2022 will decline compared with that in 2021. However, underthe general atmosphere of "Steady Growth" of the national economy, the supply and demand of the glass market may bein a relatively loose and balanced state, and the demand for high-quality differentiated products will remain stable.In the field of photovoltaic glass, CSG has taken the lead in entering the field of photovoltaic glass manufacturing inChina since 2005. Based on independent research and development, the Company has formed a full closed-loopproduction capacity from photovoltaic glass original sheet production to deep processing. By the end of 2021, it has twophotovoltaic rolled glass original sheet production lines and complementary photovoltaic glass deep processingproduction lines in Dongguan and Wujiang, with an annual output of about 430,000 tons of photovoltaic rolled glassoriginal sheets and a photovoltaic glass deep processing capacity of 72 million square meters per year, and its productscover deep-processing products with a variety of thicknesses of 2-4mm.The accumulation of more than ten years ofphotovoltaic glass production experience has enabled CSG to accumulate a solid foundation in key equipment andtechnologies such as kilns, calendering, and deep processing. These accumulated technologies and experience have beenreleased in this round of the Company's photovoltaic glass production capacity enhancement.The Company is firmly optimistic about the long-term development of the photovoltaic new energy industry, seizes thegolden opportunity of industrial development, aims at the first echelon of the industry, and makes up for the shortcomingsof the Group's photovoltaic glass business production capacity and large-scale layout. The Company is building fourphotovoltaic glass production lines and complementary processing lines with a daily melting capacity of 1,200 tons inFengyang and one photovoltaic glass production line and complementary processing line with a daily melting capacity of1,200 tons in Xianning. At present, the construction of the above projects is progressing in an orderly manner as plannedand is expected to be ignited and put into operation in batches from the second quarter of 2022.After all the projects areput into production, the industry status will jump significantly. In addition, with the approval of the Board of Directors,the Company plans to build two photovoltaic glass production lines and complementary processing lines with a dailymelting capacity of 1,200 tons in Beihai City, Guangxi. Currently, the preparatory work for the project is being carriedout in an orderly manner. At the same time, the Company is still actively seeking to further expand the production capacityof photovoltaic glass in other regions with resource support and industrial chain support. Under the background of carbonpeaking and carbon neutrality, the photovoltaic glass business will become the new champion business of CSG.In 2021, affected by the overseas epidemic and the high price of materials in the upstream of the photovoltaic industrychain, the installed capacity demand was suppressed to a certain extent, and the growth rate was not as expected. Evenso, according to relevant statistics, the new global installed capacity in 2021 still reached about 170GW, with a year-on-year increase of more than 30%. It is estimated that in 2022, driven by policies such as the promotion of domesticdistributed photovoltaics throughout the county, large-scale wind power photovoltaic bases, and guaranteed photovoltaicgrid-connection, as well as the carbon neutrality plans disclosed by countries around the world, the global installedcapacity may still maintain a relatively high growth rate. Although the concentrated deployment of photovoltaic glassproduction capacity in the past two years may lead to a phased mismatch between supply and demand in the market,causing market price fluctuations. With the incremental demand brought about by the continuous increase in globalinstalled capacity and the natural elimination of outdated production capacity by the market, the industry will still returnto the track of healthy development. In 2022, the Company will make every effort to promote the project construction,accelerate the technological transformation and upgrading of production lines, improve the production capacity of ultra-thin photovoltaic glass for 1.6-2.5mm double-glass modules and photovoltaic glazed back glass, and consolidate theCompany's competitive advantage in the field of ultra-thin photovoltaic glass; and strengthen long-term strategiccooperation with industry-leading companies to further enhance the market competitiveness of CSG's flat glass.
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Architectural glass business
CSG is one of the largest suppliers of high-grade engineering and architectural glass in China and it has formed quality,service and continuous research and development capabilities that match the brand. The Company has built six energy-saving glass processing bases in Tianjin, Dongguan, Xianning, Wujiang, Chengdu and Zhaoqing. Up to now, theCompany has formed an annual production capacity of over 20 million square meters for coated insulating glass and over45 million square meters for coated glass. In order to seize the key opportunities for the development of building energy-saving glass and satisfy the people's pursuit of a better life, CSG leverages its brand advantages to take the lead inimproving the business layout of architectural glass. At present, the production capacity of Zhaoqing Base and TianjinExpansion Project is gradually being released, which further strengthens the ability of CSG's architectural glass to meetthe needs of the construction of world-class mega-city clusters in the Beijing-Tianjin-Hebei, Yangtze River Delta, andGuangdong-Hong Kong-Macao Greater Bay Area. At the same time, in line with the trend of urban construction extendingfurther inland, the Group's Board of Directors approved the construction of Xi'an Architectural Glass Base, Hefei Energy-saving Glass Intelligent Manufacturing Industry Base and Xianning Architectural Production Line Reconstruction andExpansion Project in 2021. Based on the local market conditions, the Company will arrange first-level or second-levelarchitectural glass processing bases that are suitable for their scale and needs, and continuously improve and strengthenthe market competition and service capabilities of CSG’s architectural glass business. At present, Wujiang ArchitecturalGlass Smart Factory, Hefei Base and Xianning Architectural Production Line Reconstruction and Expansion Project arebeing implemented as planned. As the new projects are gradually completed and put into production, the productioncapacity of CSG's architectural glass will be gradually released, and the market share of the products will be furtherincreased. CSG's architectural glass business adheres to the customized business strategy of trinity of technical service,marketing, R&D and manufacturing, relying on its own manufacturing and R&D strength, as well as the marketing andservice network formed by more than 100 domestic and overseas offices, to meet the personalized needs of domestic andforeign customers and construction projects. In 2017, CSG's low-E coated glass was awarded the title of Single ChampionProduct by the Ministry of Industry and Information Technology, and it passed the review again in 2020, which fullyproves the leading position of CSG's architectural glass in the industry. The Company has the world's leading glass deepprocessing equipment and testing equipment, and its products cover all kinds of architectural and construction glass. TheCompany's R&D and application of glass coating technology keep space with the world and its technology of high-endproduct even leads the world. 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. All deep processing bases have the production and processing capabilities oftriple-silver high-performance energy-saving glass. After years of market testing, due to its high performance and stability,the Company has become a benchmark in the domestic triple-silver product market, and its high-quality energy-savingand environmentally friendly low-E insulating glass continues to lead the domestic high-end market share. The Companyhas always adhered to the intelligent transformation and digital transformation as the key increment of the developmentof architectural glass business. It has continuously invested and accumulated rich experience in the research of productionautomation, intellectualization, information technology and equipment, and the efficiency improvement of intelligentupgrading and transformation of traditional equipment. With technological progress and process optimization, theCompany has reduced production manpower consumption, material consumption and energy consumption, activelypromoting the Company's transformation and upgrading to achieve intensive manufacturing and high-qualitydevelopment.The Company’s quality management system for engineering and architectural glass has been respectively approved byorganizations of UK AOQC and Australia QAS. The product quality which meets the national standards of the US, theUK and Australia enables CSG has an advantage in the international tendering and bidding. Since 1988, CSG's engineersand technicians have been continuously participating in the formulation and compilation of various national standards
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and industry standards. All kinds of high-quality engineering architectural glass provided by the Company are widelyused in landmark buildings such as major city CBDs and transportation hubs at home and abroad, which are too numerousto mention. The 2022 Beijing Winter Olympics, which has attracted worldwide attention, has just accomplishedsuccessfully. The keynote of this Winter Olympics is "Green Winter Olympics". CSG’s Glass is honored to be selectedfor the construction of quite a few related venues for the Beijing Winter Olympics with its safety, energy saving and high-end quality, including National Speed Skating Hall, National Ski Jumping Center, Shougang Ski Jumping Platform,Beijing Olympic Village and many other representative projects. CSG’s products are once again stunningly displayed infront of the world, with the projects using CSG’s products appeared frequently in the past, such as Capital InternationalAirport, Daxing International Airport, National Convention Center, as well as the projects in Capital CBD Area, whichcontributed a unique and beautiful landscape to the wonderful and extraordinary Olympic Games.
Electronic glass and display businessElectronic glassAfter ten years of hard work, CSG’s electronic glass business has always focused on increasing investment in R&D,breaking through high-end market barriers with independent intellectual property rights and independent innovation, andfirmly following the development route of product upgrades and iterations to accelerate import substitution, and it hasbecome another champion business of CSG. In 2021, the Company's electronic glass business continues to develop. Itsfour subsidiaries, Hebei Panel, Yichang Photoelectric, Qingyuan New Energy-Saving Materials and XianningPhotoelectric continued to actively implement product upgrading and market upgrading in the application fields ofintelligent electronic terminals, touch components, vehicle mounted display, industrial control and commercial display,safe-guard facility and smart home, so that the market share and brand influence of the Company's medium-alumina andhigh-alumina electronic glass products could improve greatly. Rich product structure, reliable delivery guarantee andstrong technical innovation help the Company’s electronic glass business maintain its dominant position in the fiercemarket competition. In 2021, the Company's high-alumina second-generation (KK6) lithium-aluminosilicate electronicglass products are widely used by domestic high-end brand customers, which marks that CSG's electronic glass businesshas successfully opened up the domestic high-end customer market. At the same time, the Company continued to promotetechnological breakthroughs in product upgrading. During the year, the second-generation high-alumina upgraded productof Xianning Photoelectric, KK6-P, was successfully industrialized. The technical performance of the product such as lighttransmittance, anti-drop and scratch resistance after strengthening was further improved. The third generation of high-alumina products of the Company has been verified, and the sustainable iterative renewal ability of electronic glass hasbeen fully recognized by the market and customers. In addition, Qingyuan CSG Phase II "One Kiln and Two Lines"project, which was put into commercial operation at the end of 2020, is in good operation, effectively enhancing theoverall profitability of electronic glass, and further consolidating and strengthening CSG's competitive advantage in thefield of domestic electronic glass.In March 2021, in order to strengthen the Company's high-end market competitiveness in the field of ultra-thin electronicglass for touch applications, the Company's Board of Directors approved Hebei Panel to invest in a new ultra-thinelectronic glass production line and complementary R&D center with a daily melting capacity of 110 tons. In December2021, the Company's Board of Directors approved the upgrade and renovation project of Qingyuan CSG Phase I. Atpresent, the project construction is progressing smoothly as planned. After the completion of the above-mentioned projects,CSG Electronic Glass will achieve comprehensive coverage of electronic glass products from the third generation of high-alumina to medium-alumina, soda-calcium, and from high to middle and low-end electronic glass products, forming amore solid foundation for market competition. CSG has long been committed to becoming the industry's leadingelectronic glass material solution provider, and it will continue to develop glass-based protective materials with higherstrength and competitiveness in the field of touch display, develop human-computer interaction interface materials
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meeting the requirements of material interconnection in the fields of smart home, vehicle display and advanced medical,and develop revolutionary alternative materials in the fields of transportation and security.
DisplayIn the field of touch display, CSG has formed a complete touch industry chain from vacuum magnetron sputtering coating,fine pattern lithography processing, to touch display modules. Its main business includes ITO conductive glass, ITOconductive film, automotive TP-Sensor and automotive cover. Among them, ITO conductive glass and ITO conductivefilm, as the traditional business of the Company, are positioned at the middle and high-end customers at home and abroad,and in 2021 ITO glass market had adequate orders, and production and sales volume reached a record high. TheCompany's key products such as vehicle-mounted AG glass, vehicle-mounted multi-functional composite cover, vehicle-mounted TP-Sensor and other core products have successfully entered the market and become the Company's newperformance growth point.
Solar energy and other industriesCSG is one of enterprises which firstly enter the field of photovoltaic product manufacturing in China. After more thanten years of construction, operation and technological upgrading, CSG has built an industry chain in the field, coveringhigh-purity polycrystalline silicon materials, high-efficiency silicon wafer, silicon solar cell and modules, and the designand construction of solar photovoltaic power plants. The business structure of the whole industry chain enables theCompany to have a certain ability to resist risks, be sensitive to the industry, and be able to identify and respond to subtlechanges in the industry in a timely manner, but it also increases the Company's burden of product R&D, and equipmentand technology upgrading. Therefore, in recent years, the Company has reviewed and adjusted the solar business structureon the basis of objectively analyzing the advantages and disadvantages of its own industry, taking into account the marketenvironment, industry development trends and the Group's overall industrial development plan, actively eliminatingoutdated equipment and production capacity, and opening up cooperation and integrating resources of all parties topromote the overall breakthrough of the solar energy business. To this end, while eliminating the invalid assets of YichangCSG and Dongguan photovoltaic enterprises and reducing the burden of enterprise operation, the Company firmlypromoted the implementation of technical transformation and resumption of production of polysilicon production line,revitalized the effective assets, seized the favorable opportunity of insufficient structural supply of polysilicon in theindustry, and used its own advantages to consolidate and strengthen the strategic cooperation with downstream businesspartners of the industrial chain. Considering the practical needs of matching the development of the Group's photovoltaicglass business, driving the growth of the manufacturing end and the accumulation of the Group's own carbon emissionquota, the Company also plans to moderately increase investment in photovoltaic power station projects. The aboveadjustments have been gradually implemented. In 2021, the Group made a provision for asset impairment of about 700million yuan for assets of solar energy business. With the smooth resumption of polysilicon production in the first quarterof 2022, the Company's current solar business capacity is 10,000 tons/year of high-purity polysilicon, 2.2 GW/year ofsilicon wafer, 0.6 GW/year of battery wafer, 0.6GW/year of module and 132 MW of photovoltaic power station.
III. Core Competitiveness Analysis
CSG, one of the most competitive and influential large-scale enterprises in China's glass industry, is committed to thedevelopment of energy conservation renewable, and new material industry. After more than 30 years of development andaccumulation, the Company has gradually formed a comprehensive competitive advantage in terms of products andbrands, technology research and development, industrial chain and layout, talent team, and green development.
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1. Product and brand advantages
"CSG" is a famous brand of domestic energy-saving glass, ultra-thin electronic glass, display and solar photovoltaicproducts. Its products and technology are well-known at home and abroad. The trademarks "南玻" and "SG" held by theCompany are both "Famous Trademark of China". The Company has been listed in the "Top 50 Building MaterialsEnterprises in China", "Top 100 Industry Leaders in Shenzhen" and "Preferred Brand of Architectural Glass" in Door andWindow Curtain Wall Industry for many years. In 2018,"CSG" brand was recognized by the United Nations IndustrialDevelopment Organization as the fourth batch of "International Reputation Brand". CSG’s low-E coated glass and ultra-thin electronic glass were awarded the title of Single Champion Product by the Ministry of Industry and InformationTechnology, and it is the only manufacturer in the domestic glass industry that has two single champion products at thesame time.
2. Technology research and development advantage
The Company has always attached importance to technology research and development since its establishment, and hastaken independent R&D as its foundation by which leading the development of China's glass industry. As of December31, 2021, the Company has a total of 18 high-tech enterprises,2 national manufacturing single champion products, 1national engineering laboratory, 1 national enterprise technology center, 3 national intellectual property advantageenterprises,5 national-level specialized and sophisticated "Little Giant"enterprises,2 provincial-level academicianworkstations, 10 provincial-level enterprise technology centers, 5 provincial-level engineering technology researchcenters, 4 provincial-level intellectual property demonstration construction enterprises, 2 provincial-level specialized andsophisticated small and medium-sized enterprises, 5 provincial-level science and technology little giants; 1 Shenzhenengineering laboratory, 1 municipal post-doctoral innovation practice base, 7 government quality awards; 5 provincialscientific and technological progress awards, 2 provincial patent awards, and a number of association honorary awards.By the end of 2021, the Company had applied for a total of 2,242 patents, including 922 inventions, 1,313 utility modelpatents, and 7 designs. The Company had been accumulatively authorized 1,624, including 304 inventions, 1,313 utilitymodels, and 7 designs.
3. Industrial chain and layout advantages
The Company has three complete industrial chains of energy-saving glass, electronic glass and display, and solarphotovoltaic. With the continuous improvement of the technological level of each link of the industrial chain, theindustrial advantage is obvious. At the same time, the Company possesses a complete industry layout. The six majorproduction bases are located in the Yangtze River Delta in East China, the Pearl River Delta in South China, the Chengdu-Chongqing region in Southwest China, Beijing-Tianjin-Hebei region in North China, and the Hubei region in CentralChina.
4. Talent team advantage
The advantage of the Company’s talent team is mainly reflected in two aspects: On the one hand, the Company hasestablished a strong R&D team and R&D system. Through the construction of the core technical team, continuous R&Dinvestment, and abundant technical reserves, it has built up important technological innovation support for the Company’sstrategy. Meanwhile, it establishes Industry-University-Research cooperation, actively cooperating with domesticcolleges and universities which are in advantage in silicate materials industry, to accelerate the transformation of scientificresearch results, and to strengthen basic research; on the other hand, an excellent and stable management team is one ofthe most fundamental guarantees for the Company’s rapid and stable development. The Company has formed a goodechelon training mechanism for professional managers. At present, the Company's senior management team has
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comparative advantages in terms of academic background, professional qualities, knowledge reserves, managementconcepts and experience.
5. Green development advantage
The Company prospectively chooses the enterprise development path of environmental protection and green development.Environmental protection is the lifeline of the survival and development of glass enterprises and the concentratedembodiment of corporate social responsibility in high energy consuming industries. As early as more than ten years ago,CSG took the lead in the industry to use natural gas in all furnace production lines, and at the same time took the lead inthe industry to adopt waste heat power generation, distributed photovoltaic power generation and other methods to achievecomprehensive energy utilization, and adopt comprehensive exhaust gas treatment such as desulfurization, denitrationand dust removal to achieve ultra-low emission, which is far lower than the national standard pollutant emissionpermission value. Promoted by the goal of "Carbon Peaking and Carbon Neutrality" and the continuous tightening ofenvironmental protection policies, the Company, as a pioneer in the green development of the industry, has won a broaddevelopment space for itself.
IV. Main business analysis
1. Overview
In 2021, the global COVID-19 epidemic and its influence continued, the world economic recovery was underpowered,the commodity prices fluctuated, the external environment became more complex, severe and uncertain. Facing thecomplex and severe domestic and international situation as well as many risks and challenges, the Party and theGovernment coordinated the epidemic prevention and control, together with economic and social development. With thejoint efforts of the people of the whole country, the domestic production and living order has been rapidly restored, andthe economic recovery trend has continued to improve. The country has won the battle against poverty and built amoderately prosperous society in all respects as scheduled, and the "14th Five-Year Plan" has made a smooth start.According to the data released by the National Bureau of statistics, in 2021, China's national economy made steadyprogress. The GDP of the whole year was 114.37 trillion yuan, with a year-on-year increase of 8.1%, the investment infixed assets (excluding farmers) was 54.45 trillion yuan, with a year-on-year increase of 4.9%, the investment in realestate development was 14.76 trillion yuan, with a year-on-year increase of 4.4%, and the completed area of houses was
1.014 billion square meters, with a year-on-year increase of 11.2%.
"GLASS FOR WORLD, CSG FROM CHINA", facing the severe economic environment, competitive pressure and thechallenges of the epidemic, CSG, under the correct leadership of the Board of Directors, takes the world-class enterpriseas the goal, firmly takes the road of high-quality development, comprehensively improves the level of lean production,actively promotes project construction, improves industrial layout, tamps resource reserves, continuously promotesdifferentiated operation, improves the level of intelligent manufacturing, and strengthens its core competitiveness fromboth connotation and extension. The Group's annual operating performance has achieved a significant year-on-yearincrease. During the report period, the Company achieved operating revenue of 13.629 billion yuan, a year-on-yearincrease of 27.72%; based on the principle of prudent and stable operation, the Company accrued about RMB 1.136billion for asset impairment during the report period. After asset impairment, the Company still achieved a net profit ofRMB 1.561 billion in 2021, with a year-on-year increase of 92.28%; the net profit attributable to shareholders of listedcompanies was 1.529 billion yuan, a year-on-year increase of 96.24%.I. Operation of each industry of the Group
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In recent years, CSG has made a forward-looking layout, firmly promoted the adjustment of business structure in theprocess of development, strengthened the competitive advantage of traditional energy-saving building materials, andaccelerated the development of new energy and new material industries. In 2021, the Company's main business of fourtypes of glass achieved a total operating revenue of 12.745 billion yuan and a net profit of 2.554 billion yuan, of whichfloat glass business and electronic glass business both achieved the best performance in history, and the construction ofphotovoltaic glass and engineering glass projects was smoothly promoted. In the future, the effect of the Group's businessstructure adjustment will gradually appear.Float Glass focusing on the new demands brought about by the continuous improvement of building energy conservation,visual effects and safety, the Company lays out arrangements ahead of schedule and firmly follows the route of high-enddifferentiated products: sales of ultra-white glass further increase, and the high-end series of CSG ultra-white "BlueDiamond" are created and the brand become a leader in subdivision of the industry; the proportion of high value-addeddifferentiated products continues to increase, and the market share in the segment of high-grade float glass continues tolead; coordinates and organizes strategic reserve procurement of bulk raw materials to effectively hedge against risingprocurement costs; establishes a mineral resources management center to comprehensively implement the strategic taskof expanding mineral resources reserves; strengthens the lean control of the entire production process, and the yieldcontinues to rise steadily. In 2021, compared with the same period last year, the revenue of float glass business increasedby 47% and the net profit increased by 170%.Photovoltaic glass continues to lead the industry in production capacity, quality and comprehensive manufacturing yieldof ultra-thin photovoltaic glass products below 2mm.In 2021, due to factors such as the weaker-than-expected growth ofphotovoltaic installed capacity and the successive launch of new photovoltaic glass production capacity, the average priceof photovoltaic glass fell year-on-year. Compared with the same period last year, the revenue of photovoltaic glassbusiness was steady, and the net profit dropped by 38%.However, the Company is firmly optimistic about the long-termdevelopment of the photovoltaic new energy industry, and accelerates the construction of photovoltaic glass projects inFengyang and Xianning. It is expected to be put into operation in batches from the second quarter of 2022.At the sametime, it pays close attention to the transformation and upgrading of Dongguan photovoltaic glass production line to makeit adapt to the future industrial technology development and product competition. After all the projects under constructionare put into production, the Company's annual production capacity of photovoltaic glass will sharply increase, breakinginto the top tier.In order to adapt to changes in business scale, to integrate resources and improve efficiency, it establishesof a photovoltaic glass marketing center, which is responsible for the Group's photovoltaic glass marketing. Thephotovoltaic glass business is gradually developing into the new champion business of CSG.Architectural glass is the golden brand of CSG, and it has formed quality, service and continuous research anddevelopment capabilities that match the brand. Focusing on the Country's improvement of building energy-savingstandards and high-rise building safety standards, it strengthens brand building and adheres to the customized businessstrategy of trinity of technical service, marketing and R&D and manufacturing, to meet the personalized needs of domesticand foreign customers and construction projects. As the Company's architectural glass business mainly adopts acustomized business strategy, there is a certain time lag between the order and the actual production and delivery ofproducts, and there is a certain delay in the transmission of changes in procurement costs to the downstream due to theconstraints of the agreement. Therefore, the sudden sharp fluctuation of the price of the original float glass during theperiod will have a certain impact on the cost and profit of the actual delivery of existing orders. In the first half of 2021,the price of the original float glass sheet rose rapidly and remained high, while the acceleration of the completion ofdownstream enterprises exacerbated the tension of product delivery, and the profit of architectural glass decreasedsignificantly year-on-year. In the second half of the year, the original float glass sheet price fell, the newly signed orderswere started and implemented one after another, and the performance of architectural glass business gradually returnedto the normal level. By refining the market layout, strengthening risk control and continuously strengthening the signing
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of high-quality projects, the Company's architectural glass business revenue increased by 24% year-on-year. Affected bythe sharp year-on-year rise of comprehensive costs such as float glass in the report period and the commercial acceptancebills issued by Evergrande and its subsidiaries were expected to be difficult to be cashed in the near future for which theprovision was made for bad debts of about 103 million yuan, and the profit dropped by 76% year-on-year. At present,through continuous" Cost Reduction and Efficiency Increase" and sales policy adjustment, and taking advantage of theGroup's industrial chain to adopt a flexible raw material inventory reserve strategy, it is expected that the impact offluctuations in raw material prices will be further reduced in the future, and revenue and profit will maintain a steadygrowth trend. At the same time, the Company focuses on the future, seizes the historic opportunity of speeding up greenbuilding construction, accelerates the construction of new bases, improves the automation and informatization level ofproduction lines, continuously improves equipment production efficiency, and takes the lead in future industrycompetition. At present, Zhaoqing Base and Tianjin Expansion Project production capacity is gradually being released.Wujiang Architectural Glass Intelligent Factory, Hefei Energy-saving Glass Intelligent Manufacturing Industry Base andXianning Architectural Production Line Reconstruction and Expansion Project are being implemented as planned,expected to be basically completed in 2022, and the construction of Xi'an Base project is expected to start within this year.With the gradual completion and launch of new production capacity, the product service capability and market share willcontinue to increase, and the golden signboard of CSG architectural glass will become brighter and brighter.Electronic glass and display business focusing on increasing R&D investment, the Company breaks through high-endmarket barriers with independent intellectual property rights and independent innovation, and firmly takes thedevelopment route of product upgrading and iteration to accelerate import substitution. Electronic glass has becomeanother champion business of CSG. In 2021, the Company's high-alumina second-generation (KK6) lithium-aluminosilicate electronic glass products were widely used by domestic high-end brand customers, which marked thatCSG's electronic glass business had successfully opened up the domestic high-end customer market. At the same time,the Company continued to promote technological breakthroughs in product upgrading. During the year, the second-generation high-alumina upgraded product of Xianning Photoelectric, KK6-P, was successfully industrialized. Thetechnical performance of the product such as light transmittance, anti-drop and scratch resistance after strengthening wasfurther improved. The third generation of high-alumina products of the Company have been verified, and the sustainableiterative renewal ability of electronic glass has been fully recognized by the market and customers. In addition, QingyuanCSG Phase II "One Kiln and Two Lines" project, which was put into commercial operation at the end of 2020, is in goodoperation, effectively enhancing the overall profitability of electronic glass, and further consolidating and strengtheningCSG's competitive advantage in the field of domestic electronic glass.In March 2021, in order to strengthen the Company's high-end market competitiveness in the field of ultra-thin electronicglass for touch applications, the Company's Board of Directors approved Hebei Panel to invest in a new ultra-thinelectronic glass production line and supporting R&D center with a daily melting capacity of 110 tons. At present, theproject construction is progressing smoothly as planned. In December 2021, the Company's Board of Directors approvedthe upgrade and renovation project of Qingyuan CSG Phase I. After the completion of the above two projects, CSG'selectronic glass will achieve comprehensive coverage of electronic glass products from the third generation of high-alumina to medium-alumina, soda-calcium, and from high to middle and low-end electronic glass products, forming amore solid foundation for market competition.Relying on the smooth advancement of new product market development and the contribution of new production lines,Electronic Glass and Display Business has achieved rapid year-on-year growth in operating income and profit. Duringthe period of technical renovation of Qingyuan CSG Phase I, an impairment of 175 million yuan was accrued for theequipment and devices of the original production lines which could not meet the needs of new projects. In 2021, ElectronicGlass and Display Business realized an operating income of 1.898 billion yuan, a year-on-year increase of 75%, and aprofit of 236 million yuan after impairment was accrued, a year-on-year increase of 46%.
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Solar energy and other businessesIn recent years, the Company has reviewed and adjusted the solar business structure on the basis of objectively analyzingthe advantages and disadvantages of its own industry, taking into account the market environment, industry developmenttrends and the Group's overall industrial development plan, actively eliminating outdated equipment and productioncapacity, and opening up cooperation and integrating resources of all parties to promote the overall breakthrough of thesolar energy business. In order to implement the above adjustments, the Company carefully and steadily combed theassets of Yichang CSG and Dongguan Photovoltaic, took into account of the macro background of industry development,technological development trend and market changes, and made provision for impairment of assets eliminated bytechnological transformation, backward technology and high energy consumption, so as to reduce the burden of enterpriseoperation. At the same time, the Company firmly promoted the technological transformation and upgrading of YichangCSG's polysilicon production line which successfully resumed in the first quarter of 2022; promoted the construction of500MW high-power, large-scale module production line of Dongguan Photovoltaic, which is being implemented asplanned and is expected to be transferred to commercial operation in the second quarter of 2022.The Company's current solar business capacity includes 10,000 tons/year of high-purity polysilicon, 2.2 GW/year ofsilicon wafer, 0.6 GW/year of battery wafer, 0.6GW/year of module and 132 MW of photovoltaic power station. Duringthe report period, the total operating income of the Company's solar energy and other businesses was 1.079 billion yuan.The Company made a provision for impairment of nearly 700 million yuan in the current period. After the impairment,the net profit of solar energy and other businesses was -672 million yuan.
II. Other management workNew stage, new starting point, new mission and new journey, 2021 was the landing year for the Company tocomprehensively promote strategic development, and a "New CSG" was being built from two aspects, the scale expansionand the industrial upgrading. In order to ensure the rapid and healthy development of the industries of the Group, theCompany made every effort to ensure epidemic prevention and control, as well as production safety, continued to promotedifferentiated operation, continuously improved the level of intelligent manufacturing, seized market opportunities andtook multiple measures, mainly as follows:
1. Under the dual cycle of "Internal Improvement and External Expansion", the Company improved the system,consolidated the foundation, effectively supported the operation, strengthened management and improved efficiency;strengthened mutual cooperation among teams to improve the efficiency of service, supervision and decision-making;continued to promote basic standardized management and built five-star factories; strengthened the recognition andrectification of potential safety and environmental protection hazards; continuously publicized and implemented theinternal audit standards and monitored the risk prevention of investment projects.
2. The Company paid full attention to the development opportunities and challenges brought about by digitaltransformation, built an information construction platform, made use of a large number of data resources accumulated invarious links of production and operation such as procurement, R&D, production, sales and service, gave full play to thedata value, promoted the integration of manufacturing industry with digitization and intelligence to realize leanmanagement, intelligent production and differentiated services for the enterprise.
3. The iterative ability of technology, technology and product R&D is the key guarantee for sustainable and healthydevelopment of enterprises, and the core element of CSG for forming high value-added business line barriers, keepingthe industry leading status continuously, and realizing the core element of "we have while others don't; when they have,ours are better, even if theirs are better, ours are much stronger". In 2021, the Company adhered to the innovation of R&Dsystem, paid attention to the breakthrough and industrialization of key technologies, and solidly promoted the formulationand implementation of the Company's innovation roadmap based on the principle of "unifying independent innovation
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and open innovation, combining centralized research and collaborative development, and achieving both developmentspeed and development quality". After summarizing the development experience over the years and gathering the opinionsof all parties, the Company made a comprehensive layout from six levels: the organizational structure of R&D system,intellectual property rights, product top-level design, high-level R&D platform, senior talent echelon and talent resourcesupporting demand, and formulated the Group's R&D strategic plan to provide strategic direction for the Company'stechnological innovation and sustainable development of product R&D.At the same time for integrating resources, the Company actively cooperated with The Chinese University of Hong Kong,South China University of Technology, Beijing University of Technology, Wuhan University of Technology, YanshanUniversity, Pengcheng Laboratory, Shenzhen University, Guangdong New Materials Research Institute and otherdomestic advantageous institutions and enterprises to establish in-depth cooperation among industry, university andresearch, accelerated the transformation of scientific research achievements, and further improved the enthusiasm ofindependent research and development and the technological innovation ability of the enterprise. In 2021, the number ofpatent applications and authorizations of the Company continued to reach a record high, with a total of 344 patentapplications submitted (a year-on-year increase of 1.2%), including 159 invention patents (a year-on-year increase of
8.9%); 230 new patents were granted, of which new 47 invention patents were authorized (3 PCT patents) (a year-on-year increase of 56.67%), and the contribution of research and development to the operating efficiency of the enterprisecontinued to improve.
4. Environmental protection is the lifeline for the survival and development of glass companies, and it is a concentratedexpression of corporate social responsibility in high-energy-consuming industries. The Company's energy consumptioncontrol and emission control have always been at the leading level in the industry. CSG takes the lead in the industry torealize comprehensive utilization of energy by means of waste heat power generation and distributed photovoltaic powergeneration. Through comprehensive exhaust gas treatment such as desulfurization, denitrification and dust removal, itachieves ultra-low emission, which is far lower than the national pollutant emission permission value. Under the conditionof the same tonnage and the same kiln age, the control of energy consumption and the control of emission per unit ofproduction capacity have always been at the leading level in the industry. Five subsidiaries of CSG, including XianningCSG Energy-Saving Glass Co., Ltd., Xianning CSG Photoelectric Glass Co., Ltd., Wujiang CSG Glass Co., Ltd., TianjinCSG Energy-Saving Glass Co., Ltd. and Xianning CSG Glass Co., Ltd., were successively shortlisted as "Green Factory"announced by the Ministry of Industry and Information Technology. In 2021, the Ministry of Industry and InformationTechnology promoted practice of Wujiang CSG as the "Energy Efficiency Leader" to the whole flat glass industry.
5. Further improved the organizational system to ensure the implementation of strategic projects. Firstly, setting up amineral resources management center; the Company set up a special institution organizing a professional team to putspecial efforts on acquiring relevant raw mineral resources, and consolidating strategic resource reserves and supply chainguarantees. Secondly, setting up a photovoltaic glass marketing center; with the intensive release of the photovoltaic glassproduction capacity of CSG in recent years, the Group laid out in advance, set up a professional, efficient and centralizedorganization responsible for the photovoltaic glass marketing business, so as to provide a strong guarantee for thepromotion of photovoltaic glass business.
2. Revenue and cost
(1) Constitution of operation revenue
Unit: RMB
| 2021 | 2020 | Increase/decrease y-o-y | |||
| Amount | Ratio in operation revenue | Amount | Ratio in operation revenue | ||
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| Total of operating income | 13,629,033,650 | 100% | 10,671,253,445 | 100% | 27.72% |
| According to industry | |||||
| Glass industry | 11,069,964,819 | 81.23% | 8,709,771,261 | 81.62% | 27.10% |
| Electronic glass & Display industry | 1,898,164,504 | 13.93% | 1,087,361,814 | 10.19% | 74.57% |
| Solar energy and other industries | 1,078,577,264 | 7.91% | 988,782,926 | 9.27% | 9.08% |
| Undistributed | 294,865,012 | 2.16% | 217,971,560 | 2.04% | 35.28% |
| Amount of unutilized | -712,537,949 | -5.23% | -332,634,116 | -3.12% | 114.21% |
| According to product | |||||
| Glass products | 11,069,964,819 | 81.23% | 8,709,771,261 | 81.62% | 27.10% |
| Electronic glass & Display products | 1,898,164,504 | 13.93% | 1,087,361,814 | 10.19% | 74.57% |
| Solar energy and other products | 1,078,577,264 | 7.91% | 988,782,926 | 9.27% | 9.08% |
| Undistributed | 294,865,012 | 2.16% | 217,971,560 | 2.04% | 35.28% |
| Amount of unutilized | -712,537,949 | -5.23% | -332,634,116 | -3.12% | 114.21% |
| According to region | |||||
| Mainland China | 12,355,492,022 | 90.66% | 9,538,506,225 | 89.39% | 29.53% |
| Overseas | 1,273,541,628 | 9.34% | 1,132,747,220 | 10.61% | 12.43% |
| According to sales model | |||||
| Direct sales | 13,629,033,650 | 100% | 10,671,253,445 | 100% | 27.72% |
(2) List of the industries, products, regions or sales model exceed 10% of the operating income or operatingprofits of the Company
√Applicable □ Not applicable
Unit: RMB
| Operating revenue | Operating cost | Gross profit ratio | Increase/decrease of operating revenue y-o-y | Increase/decrease of operating cost y-o-y | Increase/decrease of gross profit ratio y-o-y | |
| According to industry | ||||||
| Glass industry | 11,069,964,819 | 7,068,343,647 | 36.15% | 27.10% | 18.24% | 4.78% |
| Electronic glass & Display industry | 1,898,164,504 | 1,232,365,490 | 35.08% | 74.57% | 63.09% | 4.57% |
| Solar energy and other industries | 1,078,577,264 | 966,752,454 | 10.37% | 9.08% | 16.27% | -5.54% |
| According to product | ||||||
| Glass products | 11,069,964,819 | 7,068,343,647 | 36.15% | 27.10% | 18.24% | 4.78% |
| Electronic glass & Display products | 1,898,164,504 | 1,232,365,490 | 35.08% | 74.57% | 63.09% | 4.57% |
| Solar energy and other products | 1,078,577,264 | 966,752,454 | 10.37% | 9.08% | 16.27% | -5.54% |
| According to region | ||||||
| Mainland China | 12,355,492,022 | 7,913,435,191 | 35.95% | 29.53% | 18.98% | 5.68% |
| According to sales model | ||||||
| Direct sales | 13,629,033,650 | 8,849,488,093 | 35.07% | 27.72% | 18.87% | 4.83% |
- 24 -
Under the circumstances that the statistical standards for the Company’s main business data adjusted in the report period,the Company's main business data in the recent year is calculated based on adjusted statistical standards at the end of thereport period
□ Applicable √ Not applicable
(3) Whether the Company’s goods selling revenue higher than the service revenueWhether the Company’s goods selling revenue higher than the service revenue
√Yes □ No
| Industry | Item | Unit | 2021 | 2020 | Increase/decrease y-o-y (%) |
| Flat glass | Sales volume | 10,000-ton | 295 | 299 | -1.34% |
| Output | 10,000-ton | 299 | 296 | 1.01% | |
| Inventory | 10,000-ton | 11 | 6 | 83.33% | |
| Architectural glass | Sales volume | 10,000-M2 | 3,950 | 3,441 | 14.79% |
| Output | 10,000-M2 | 3,946 | 3,445 | 14.54% | |
| Inventory | 10,000-M2 | 114 | 118 | -3.39% | |
| Electronic glass | Sales volume | ton | 273,195 | 57,651 | 373.88% |
| Output | ton | 271,871 | 49,405 | 450.29% | |
| Inventory | ton | 18,166 | 9,232 | 96.77% | |
| Silicon wafer | Sales volume | 10,000-piece | 24,712 | 15,497 | 59.46% |
| Output | 10,000-piece | 24,316 | 15,353 | 58.38% | |
| Inventory | 10,000-piece | 424 | 386 | 9.84% | |
| Solar cell | Sales volume | MW | 422 | 457 | -7.66% |
| Output | MW | 457 | 429 | 6.53% | |
| Inventory | MW | 15 | 6 | 150.00% |
Reasons for y-o-y relevant data with over 30% changes
√Applicable □ Not applicable
1. Flat glass: The increase in inventory was mainly due to changes in the pace of production and sales.
2. Electronic glass: The increase in output, sales volume and inventory was mainly due to the increase in productioncapacity.
3. Silicon wafer: The increase in output and sales volume was mainly due to the increase in business volume based onchanges in market demand.
4. Solar cell: The increase in inventory was mainly due to changes in the pace of production and sales.
(4)Fulfillment of significant sales contracts, procurement contracts signed by the company up to the reportperiod
√Applicable □ Not applicable
Fulfillment of significant sales contract ssigned by the company up to the report period
√Applicable □ Not applicable
Unit: RMB 0,000
| Subject matter | Name of the other party | Total contract amount | Total amount fulfilled | Amount performed during the report period | Amount to be performed | Normally performed or not | Description of the contract not being performed normally |
- 25 -
| Photovoltaic glass | LONGi Solar Technology Ltd., Zhejiang LONGi Solar Technology Ltd., Taizhou LONGi Solar Technology Ltd., Yinchuan LONGi Solar Technology Ltd., Chuzhou LONGi Solar Technology Ltd., Datong LONGi Solar Technology Ltd., LONGi (H.K.) Trading Limited, LONGi (KUCHING) SDN. BHD., Xianyang LONGi Solar Technology Ltd., Jiangsu LONGi Solar Technology Ltd., Jiaxing LONGi Solar Technology Ltd.,Xi'an LONGi Green Building Technology Ltd. | RMB 6,500 million (tax included) | 45,089 | 29,906 | 604,911 | Yes | Not applicable |
Fulfillment of significant sales contracts, procurement contracts signed by the company up to the report period
□Applicable √ Not applicable
(5) Constitution of operation cost
Industry and product classification
Unit: RMB
| Industry | Item | 2021 | 2020 | Increase/decrease y-o-y | ||
| Amount | Ratio in operating costs | Amount | Ratio in operating costs | |||
| Glass industry | Materials, Labor wages, Costs | 7,068,343,647 | 79.87% | 5,977,946,913 | 80.30% | 18.24% |
| Electronic glass & Display industry | Materials, Labor wages, Costs | 1,232,365,490 | 13.93% | 755,633,963 | 10.15% | 63.09% |
| Solar energy and other industries | Materials, Labor wages, Costs | 966,752,454 | 10.92% | 831,458,581 | 11.17% | 16.27% |
| undistributed | Materials, Labor wages, Costs | 294,564,450 | 3.33% | 212,060,390 | 2.85% | 38.91% |
| Inter-segment elimination | Materials, Labor wages, Costs | -712,537,949 | -8.05% | -332,634,116 | -4.47% | 114.21% |
Unit: RMB
| Industry | Item | 2021 | 2020 | Increase/decrease y-o-y | ||
| Amount | Ratio in operating costs | Amount | Ratio in operating costs | |||
| Glass products | Materials, Labor wages, Costs | 7,068,343,647 | 79.87% | 5,977,946,913 | 80.30% | 18.24% |
| Electronic glass & Display industry | Materials, Labor wages, Costs | 1,232,365,490 | 13.93% | 755,633,963 | 10.15% | 63.09% |
| Solar energy and other industries | Materials, Labor wages, Costs | 966,752,454 | 10.92% | 831,458,581 | 11.17% | 16.27% |
- 26 -
| undistributed | Materials, Labor wages, Costs | 294,564,450 | 3.33% | 212,060,390 | 2.85% | 38.91% |
| Inter-segment elimination | Materials, Labor wages, Costs | -712,537,949 | -8.05% | -332,634,116 | -4.47% | 114.21% |
Note: The main components of operating costs include materials, labor, depreciation, etc. In order to avoid the disclosureof business secrets and damage the interests of the listed company and investors, the operating costs are only separatedand disclosed according to the business sector and product classification of the Company.
(6) Whether the consolidated scope changed during the report period
√ Yes □No
On 19 April 2021, the Group set up a subsidiary, Xi'an CSG Energy Saving Glass Technology Co., Ltd. (referred to as"Xi'an Energy Saving Company").As of 31 December 2021, the Group had invested RMB 1,000,000.The Group owns100% of its equity.
On 25 June 2021, the Group set up a subsidiary, Anhui CSG Silicon Valley Mingdu Mining Development Co., Ltd.(referred to as "Anhui Silicon Valley Mingdu Mining Company").As of 31 December 2021, the Group had investedRMB 3,000,000. The Group owns 60% of its equity.
On 9 October 2021, the Group set up a subsidiary, Guangxi CSG New Energy Materials Technology Co., Ltd. (referredto as "Guangxi New Energy Materials Company").As of 31 December 2021, the Group had invested RMB 31,000,000.The Group owns 100% of its equity.
On 4 November 2021, the Group set up a subsidiary, Qinghai CSG Sunrise New Energy Technology Co., Ltd. (referredto as "Qinghai CSG New Energy").As of 31 December 2021, the Group had not invested yet. The Group owns 100% ofits equity.
On 8 December 2021, the Group set up a subsidiary, Hefei CSG Energy Saving Material Intelligent Manufacturing Co.,Ltd. (referred to as "Hefei Energy Saving Company").As of 31 December 2021, the Group had not invested yet. TheGroup owns 100% of its equity.
On 9 December 2021, the Group set up a subsidiary, Shenzhen CSG New Energy Industry Development Co., Ltd.(referred to as "Shenzhen CSG New Energy").As of 31 December 2021, the Group had not invested yet. The Group owns100% of its equity.
On 13 December 2021, the Group set up a subsidiary, Zhaoqing CSG New Energy Technology Co., Ltd. (referred to as"Zhaoqing CSG New Energy"). As of 31 December 2021, the Group had not invested yet. The Group owns 100% of itsequity.
(7) Major changes or adjustment in business, product or service of the Company in the report period
□ Applicable √ Not applicable
- 27 -
(8) Major customers and major suppliers
Major customers of the Company
| Total sales to the top five customers (RMB) | 1,190,228,183 |
| Proportion in total annual sales volume for top five customers | 8.73% |
| Proportion of related party sales in total annual sales volume for top five customers | 0.00% |
Information of the top five customers of the Company
| Serial | Name of customer | Sales volume (RMB) | Proportion in total annual sales |
| 1 | Customer A | 343,603,866 | 2.52% |
| 2 | Customer B | 271,432,779 | 1.99% |
| 3 | Customer C | 250,345,033 | 1.84% |
| 4 | Customer D | 186,722,964 | 1.37% |
| 5 | Customer E | 138,123,541 | 1.01% |
| Total | 1,190,228,183 | 8.73% |
Other statement of main customers
□ Applicable √ Not applicable
Major suppliers of the Company
| Total purchase amount from the top five suppliers (RMB) | 1,922,448,668 |
| Proportion in total annual purchase amount from the top five suppliers | 19.17% |
| Proportion of related party sales in total purchase amount from the top five suppliers | 0.00% |
Information of the top five suppliers of the Company
| Serial | Name of supplier | Purchase amount (RMB) | Proportion in total annual purchase |
| 1 | Supplier A | 529,470,817 | 5.28% |
| 2 | Supplier B | 459,475,449 | 4.58% |
| 3 | Supplier C | 408,976,617 | 4.08% |
| 4 | Supplier D | 272,345,182 | 2.72% |
| 5 | Supplier E | 252,180,603 | 2.51% |
| Total | 1,922,448,668 | 19.17% |
Other statement of major suppliers
□ Applicable √ Not applicable
3. Expenses
Unit: RMB
| 2021 | 2020 | Increase/decrease y-o-y | Note of major changes | |
| Sales expense | 270,695,433 | 233,918,938 | 15.72% | |
| Management expense | 752,605,507 | 666,976,561 | 12.84% | |
| Financial expense | 151,182,191 | 224,011,920 | -32.51% | Mainly due to the reduction of interest costs. |
| R&D expenses | 511,738,848 | 404,842,498 | 26.40% |
4. R&D expenses
√Applicable □ Not applicable
| Name of main R&D project | Purpose | Progress | Expected target | Expected impact on the future development of the company |
- 28 -
| Upgrading and industrialization of high-alumina second generation electronic glass (KK6-P) | On the basis of KK6 products, further optimize product performance and processing performance to provide better quality CSG electronic glass in the market | The formulation design, performance testing and industrialization promotion of KK6-P have been completed | The developed KK6-P product has higher strength and drop height of the whole machine, meeting the requirements of 3D bending, AG etching and other processing technologies. | Through independent research and development, carry out product iteration, continuously improve the performance of the Company's electronic glass products, respond to market demand and improve product competitiveness. |
| BIPV architectural glass products and processing technology research and development | In response to the national strategic guidelines for dual carbon goals, strive to achieve the double carbon goal of construction as soon as possible with the supply of high-performance building energy-saving materials. Taking BIPV building photovoltaic curtain wall as a breakthrough, realize the transformation of buildings from passive energy saving to active energy generation. | Relevant exploration has been carried out on the application of the combination of BIPV photovoltaic curtain wall and traditional energy-saving glass, research through the composite application of photovoltaic products and energy-saving films to further reduce the comprehensive energy consumption of buildings in a variety of technical ways. | Provide the market with green photovoltaic power generation curtain wall glass products that meet architectural aesthetics and energy-saving design specifications | Through the development of BIPV project, improve the combination of the Company's two industrial chains of energy-saving glass and photovoltaic products, actively promote the development of green building materials, and form BIPV building glass products with CSG characteristics |
R&D staff of the Company
| 2021 | 2020 | Ratio of change | |
| Number of R&D staff (person) | 173 | 170 | 1.76% |
| The proportion of the number of R&D staff | 1.45% | 1.61% | -0.16% |
| Educational structure of R&D staff | —— | —— | —— |
| Below undergraduate | 14 | 12 | 16.67% |
| Undergraduate | 115 | 117 | -1.71% |
| Master | 39 | 38 | 2.63% |
| Doctor | 5 | 3 | 66.67% |
| Age composition of R&D staff | —— | —— | —— |
| Under 30years old | 30 | 13 | 130.77% |
| 30~40years old | 104 | 104 | 0.00% |
| Over 40years old | 39 | 53 | -26.42% |
R&D investment of the Company
| 2021 | 2020 | Ratio of change | |
| Amount of R&D investment (RMB) | 551,196,983 | 434,641,497 | 26.82% |
| Ratio of the R&D investment to the operating income | 4.04% | 4.07% | -0.03% |
| Amount of the capitalized R&D investment (RMB) | 39,458,135 | 29,798,999 | 32.41% |
| Ratio of the capitalized R&D investment to the R&D investment | 7.16% | 6.86% | 0.30% |
Reasons and effects of major changes in the composition of the company's R&D staff
□ Applicable √ Not applicable
Reason of remarkable changes over the previous year of the ratio of the total R&D investment amount to the operatingincome
□ Applicable √ Not applicable
Reason of substantial change of the ratio of the R&D investment capitalization and its reasonable explanation
□ Applicable √ Not applicable
- 29 -
5. Cash flow
Unit: RMB
| Item | 2021 | 2020 | Increase/decrease y-o-y |
| Subtotal of cash inflow from operating activities(1) | 15,442,136,045 | 11,975,699,992 | 28.95% |
| Subtotal of cash outflow from operating activities(2) | 11,540,051,660 | 9,245,080,356 | 24.82% |
| Net cash flow from operating activities | 3,902,084,385 | 2,730,619,636 | 42.90% |
| Subtotal of cash inflow from investment activities(3) | 4,526,023,816 | 439,718,884 | 929.30% |
| Subtotal of cash outflow from investment activities(4) | 7,431,099,910 | 1,229,511,710 | 504.39% |
| Net cash flow from investment activity | -2,905,076,094 | -789,792,826 | |
| Subtotal of cash inflow from financing activity(5) | 1,839,354,868 | 4,422,844,911 | -58.41% |
| Subtotal of cash outflow from financing activity(6) | 2,202,107,070 | 6,067,431,947 | -63.71% |
| Net cash flow from financing activity | -362,752,202 | -1,644,587,036 | |
| Net increased amount of cash and cash equivalent | 632,449,376 | 292,193,166 | 116.45% |
Relevant data year-on-year major changes in the main influencing factors
√Applicable □ Not applicable
(1)Cash inflow from operating activities was mainly due to the increase in cash received from sales of goods and provisionof labor services.
(2)Cash outflow from operating activities was mainly due to the increase in cash paid for purchasing goods and acceptinglabor services.
(3)Cash inflow from investing activities was mainly due to cash recovery from the redemption of structured deposits.
(4)Cash outflow from investing activities was mainly due to the increase in cash paid for purchasing structured depositsand purchasing and constructing fixed assets, intangible assets and other long-term assets.
(5)The cash inflow from financing activities was mainly due to the increase in cash received from the issuance of bondsin the previous year.
(6) The cash outflow from financing activities was mainly due to the decrease in cash paid for debt repayment this year.Notes to the reason of the significant differences between the net cash flow from the operating activities and the net profitsof the year during the report periodApplicable √ Not applicable
V. Non-main business analysis
√Applicable □ Not applicable
Unit: RMB
| Amount | Ratio in total profit | Note for the reason | Sustainable or not | |
| Investment income | 16,847,647 | 0.88% | Income from structured deposits, etc. | No |
| Asset impairment | 981,665,546 | 51.20% | Mainly due to impairment loss of long-term assets | No |
| Non-operating income | 12,604,534 | 0.66% | Mainly due to claim income and the payments unable to pay, etc. | No |
| Non-operating expenses | 26,130,744 | 1.36% | Mainly for the refund of financial subsidies and others | No |
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VI. Asset and Liability Analysis
1. Significant changes in asset composition
Unit: RMB
| The end of 2021 | The beginning of 2021 | Change of proportion | Notes of major changes | |||
| Amount | Proportion in total assets | Amount | Proportion in total assets | |||
| Monetary funds | 2,765,925,906 | 13.87% | 2,125,788,903 | 11.89% | 1.98% | Mainly due to the increase in cash received from the sale of goods |
| Tradable financial assets | 999,600,000 | 5.01% | 5.01% | Mainly due to the purchase of structural deposits | ||
| Notes receivable | 19,220,984 | 0.10% | 207,966,892 | 1.16% | -1.06% | Mainly due to the change of collection method of some subsidiaries and some converted to accounts receivable due to non-performance by the drawer |
| Accounts receivable | 730,525,687 | 3.66% | 681,467,133 | 3.81% | -0.15% | |
| Inventory | 1,093,805,525 | 5.49% | 815,156,318 | 4.56% | 0.93% | Mainly due to the increase in raw material stocking and finished product inventory |
| Investment real estate | 383,084,500 | 1.92% | 383,084,500 | 2.14% | -0.22% | |
| Fix assets | 8,566,515,026 | 42.96% | 9,145,644,569 | 51.14% | -8.18% | |
| Construction in process | 2,461,088,650 | 12.34% | 1,893,380,611 | 10.59% | 1.75% | Mainly due to the increase in project investment of some subsidiaries |
| Right-of-use asset | 9,911,935 | 0.05% | 11,538,741 | 0.06% | -0.01% | Mainly due to the reclassification of long-term deferred expenses to right-of-use assets for the implementation of the new leased standards |
| Development expenditure | 72,019,362 | 0.36% | 49,153,407 | 0.27% | 0.09% | Mainly due to the increase in R&D investment |
| Goodwill | 130,147,859 | 0.65% | 233,375,693 | 1.31% | -0.66% | Mainly due to the provision for impairment of goodwill |
| Long-term deferred expenses | 3,013,721 | 0.02% | 741,179 | 0% | 0.02% | Mainly due to the increase in long-term deferred expenses of some subsidiaries |
| Deferred tax assets | 255,185,923 | 1.28% | 194,979,414 | 1.09% | 0.19% | Mainly due to the increase in deferred income tax assets from the provision for asset impairment |
| Other non-current assets | 584,162,622 | 2.93% | 193,359,445 | 1.08% | 1.85% | Mainly due to the increase in prepayment for engineering equipment by some subsidiaries |
| Short-term loans | 180,770,000 | 0.91% | 352,895,571 | 1.97% | -1.06% | Mainly due to the repayment of part of the loan |
| Notes payable | 400,662,713 | 2.01% | 144,851,192 | 0.81% | 1.20% | Mainly due to the increase in newly-issued bills of some subsidiaries |
| Contract liabilities | 335,188,642 | 1.68% | 296,776,624 | 1.66% | 0.02% | |
| Non-current liabilities due within one year | 503,820,548 | 2.53% | 928,352,462 | 5.19% | -2.66% | Mainly due to repayment of medium-term notes |
- 31 -
| Long-term loans | 1,469,059,824 | 7.37% | 853,253,983 | 4.77% | 2.60% | Mainly due to the increase in loans for the projects |
| Lease liabilities | 220,138 | 1,077,230 | 0.01% | -0.01% | Mainly due to the reclassification of lease contracts to non-current liabilities due within one year | |
| Long-term payables | 168,258,062 | 0.84% | 0.84% | Mainly due to the increase in financial lease payables |
The proportion of overseas assets was relatively high
□ Applicable √ Not applicable
2. Assets and liabilities measured at fair value
√Applicable □ Not applicable
Unit: RMB
| Item | Opening balance | Profit and loss from changes in fair value in the current period | Cumulative changes in fair value included in equity | Impairment accrued in the current period | Purchase amount for this period | Amount sold in this period | Other changes | Closing balance |
| 1. Trading financial assets (excluding derivative financial assets) | 5,423,600,000 | 4,424,000,000 | 999,600,000 | |||||
| 2. Investment real estate | 383,084,500 | 383,084,500 | ||||||
| 3. Receivables financing | 382,527,782 | -85,481,659 | 297,046,123 |
Other changes: nilDuring the report period, whether the company’s main asset measurement attributes changed significantly or not
□Yes √No
3. Limited asset rights as of the end of the report period
Unit: RMB
| Item | Limited amount | Limited reason |
| Monetary funds | 9,448,334 | Restricted deposit flow etc. |
| Fix assets | 165,095,479 | Limited finance lease |
| Total | 174,543,813 |
VII. Investment
1. Overall situation
√Applicable □ Not applicable
| Investment in the report period (RMB) | Investment in the same period of the previous year ( RMB) | Changes |
| 7,431,099,910 | 1,229,511,710 | 504.39% |
2. The major equity investment obtained in the report period
□ Applicable √ Not applicable
- 32 -
3. The major ongoing non-equity investment in the report period
√Applicable □ Not applicable
Unit: RMB 0,000
| Project | Way of investment | Fixed asset investment or not | Industry involved | Amount invested in the report period | Accumulative amount actually invested by the end of the report period | Source of funds | Progress of project (ongoing projects) | Expected return | Accumulative revenue achieved by the end of the report period | Reasons for not achieving the planned progress and the expected return | Date of disclosure (if applicable) | Index of disclosure (if applicable) |
| Zhaoqing CSG high-grade energy conservation glass production line project | Self-built | Yes | Manufacturing industry | 26,561 | 31,335 | CSG plans to invest in the construction of energy-saving glass production project in Zhaoqing from 2019 to 2021. After the production, the company will produce 2.5 million square meters of energy-saving insulating glass and 3.5 million square meters of coated energy-saving products. Part of the project is in production and part is under construction. | 6,988 | Part of the project had been completed, and the benefits had been reflected in the profits. | December 13, 2019 | Notice number: 2019-077 | ||
| Zhaoqing CSG high-grade automotive glass production line project | Self-built | Yes | Manufacturing industry | 2,454 | 2,794 | CSG plans to invest in the construction of high-end automotive glass production line in Zhaoqing from 2019 to 2021. The project is under construction. | 5,800 | No profit as the project is in the construction period. | December 13, 2019 | Notice number: 2019-077 | ||
| Anhui Fengyang quartz sand project | Self-built | Yes | Manufacturing industry | 5,488 | 5,666 | Own funds and loans from financial institutions | CSG plans to build a new production base of low iron (ultra-white) quartz sand with an annual output of 600,000 tons in Fengyang, Anhui Province, and obtain the raw | 8,238 | No profit as the project is in the construction period. | March 6, 2020 | Notice number: 2020-010 |
- 33 -
| ore right of quartz sand. The project is under construction. | ||||||||||||
| Anhui Fengyang Lightweight & high-permeability panel for solar energy equipment manufacturing base project | Self-built | Yes | Manufacturing industry | 75,013 | 76,517 | Own funds and loans from financial institutions | CSG plans to invest in Anhui Province for the project of lightweight &high-permeability panel for solar energy equipment manufacturing base in 2020-2022.The project is under construction. | 43,566 | No profit as the project is in the construction period. | March 6, 2020 | Notice number: 2020-010 | |
| Tianjin Energy-saving Coating Production Line Purchase and Upgrade Project | Self-built | Yes | Manufacturing industry | 9,523 | 9,523 | Own funds and loans from financial institutions | The project is under construction. | 1,640 | No profit as the project is in the construction period. | April 30, 2020 | 2020-023 | |
| Architectural Glass newly building intelligent manufacturing plant construction project | Self-built | Yes | Manufacturing industry | 5,101 | 5,177 | Own funds and loans from financial institutions | CSG plans to build a full-process flexible automated production line covering cutting, edging, tempering, insulating and other processes in Wujiang CSG East China Architectural Glass Co., Ltd., using the reserved industrial land in the factory area. The new factory building area is 31,968 square meters, and the new intelligent manufacturing production line has an annual output of 1.2 million square meters of Low-E energy- | 5,049 | No profit as the project is in the construction period. | June 24, 2020 | Notice number: 2020-051 |
- 34 -
| saving insulating glass. The project is under construction. | ||||||||||||
| Dongguan solar light and high-efficiency double-glass processing production line construction project | Self-built | Yes | Manufacturing industry | 5,165 | 5,689 | Own funds and loans from financial institutions | CSG plans to build a lightweight and high-efficiency double-glass processing production line in Dongguan Solar. After the production line is completed, it is expected to add 1 million square meters of double-glass production capacity per month, with an annual production capacity of 12 million square meters. The project was transferred into commercial operation in Nov. 2021. | 2,341 | The project was just put into production, and the profit would be illustrated in 2022. | August 24, 2020 | Notice number: 2020-061 | |
| Wujiang Float Lightweight and High-efficiency double-glass processing production line construction project | Self-built | Yes | Manufacturing industry | 3,683 | 4,040 | Own funds and loans from financial institutions | CSG plans to build two lightweight and high-efficiency double-glass processing production lines in Wujiang Float. After the production line is completed, it is expected to add 2 million square meters of double-glass production capacity per month, with an annual production capacity of 24 million square meters. After the project is completed, it will give full play to Wujiang Float’s technical advantages of double-glass, enhance market competitiveness, and expand the scale of the Company's benefits. The project is under construction. | 4,785 | No profit as the project is in the construction period. | August 24, 2020 | 2020-061 | |
| Xi'an CSG Energy-saving | Self-built | Yes | Manufacturing industry | 34 | 34 | Own funds and loans from | CSG Group plans to invest in Xi'an, Shanxi Province for building a high-end energy- | 4,222 | No profit as the project is | November 7, 2020 | Notice number: 2020-070 |
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| glass production line project | financial institutions | saving glass production line with an annual output of 2.1 million square meters of insulating energy-saving glass, and a 3.5 million square meter energy-saving glass production line with coated energy-saving products. The project is under construction. | in the preparation period. | |||||||||
| Hebei Panel Glass ultra-thin electronic glass Line II construction project | Self-built | Yes | Manufacturing industry | 1,484 | 2,441 | Own funds and loans from financial institutions | CSG plans to build an ultra-thin electronic glass production line with a daily melting capacity of 110 tons and a complementary R&D center in Hebei Panel Glass. The project is under construction. | 4,671 | No profit as the project is in the construction period. | March 27, 2021 | Notice number:2021-008 | |
| Xianning CSG 1200T/D Photovoltaic Packaging Material Production Line Project | Self-built | Yes | Manufacturing industry | 6,645 | 6,645 | Own funds and loans from financial institutions | CSG plans to build a photovoltaic kiln with a daily melting capacity of 1,200 tons and complementary deep processing lines in Xianning CSG. The project is under construction. | 12,835 | No profit as the project is in the construction period. | March 27, 2021 | Notice number:2021-008 | |
| Dongguan CSG Solar Double-Glass Calendering Line Technical Transformation and Upgrade Project | Self-built | Yes | Manufacturing industry | 239 | 239 | Own funds and loans from financial institutions | CSG plans to carry out cold repair and technical transformation of the 650T/D line ultra-white solar kiln in Dongguan Solar Phase III, and start the technical transformation and upgrade project of double-glass calendering line. After the project is completed, it will ensure that the product quality, output efficiency, energy consumption level and cost advantage are at the leading domestic level. The project is under construction. | 6,067 | No profit as the project is in the construction period. | June 8, 2021 | Notice number: 2021-025 |
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| CSG East China headquarters building | Self-built | Yes | Manufacturing industry | Own funds and loans from financial institutions | CSG Group plans to invest in the construction of CSG East China Headquarters Building in Wujiang District, Suzhou City, Jiangsu Province, as the R&D, marketing, exhibition, office and cooperation center of upstream and downstream enterprises in the industry chain in East China, so as to meet the needs of CSG's expanding business scale and increasing personnel in East China in the future. | No profit as the project is in the construction period. | August 27, 2021 | Notice number: 2021-039 | ||||
| CSG Guangxi Beihai Photovoltaic Green Energy Industrial Park Project (Phase I) | Self-built | Yes | Manufacturing industry | 38 | 38 | Own funds and loans from financial institutions | CSG plans to invest in the construction of CSG Guangxi Beihai Photovoltaic Green Energy Industrial Park project in Beihai Tieshangang Industrial Park, Longgang New District, Guangxi Zhuang Autonomous Region. Phase I of the project includes two 1,200t/d One-kiln & Five-line photovoltaic rolled glass production lines and complementary photovoltaic glass processing production line, as well as complementary R&D center, 2.5GW photovoltaic module production line, one 700 t/d one-kiln two-line production line for electronic glass and photoelectric glass, complementary quartz sand mine and purification processing line. The project is under construction. | 55,764 | No profit as the project is in the construction period. | September 10, 2021 | Notice number: 2021-041 |
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| Hefei CSG Energy-saving Glass Intelligent Manufacturing Industry Base Project | Self-built | Yes | Manufacturing industry | Own funds and loans from financial institutions | CSG plans to invest in the construction of a CSG energy-saving glass intelligent manufacturing industrial base in Hefei City, Anhui Province, using a new generation of intelligent manufacturing technologies and processes to build an energy-saving glass processing center, and to further expand the market layout of CSG in central China, thereby to better serve the market and customers, and serve the national "Carbon Peaking and Carbon Neutrality goals". | 4,666 | No profit as the project is in the construction period. | October 15, 2021 | Notice number: 2021-043 | |||
| Xianning CSG Energy-saving Glass Co., Ltd. Production Line Reconstruction and Expansion Construction Project | Self-built | Yes | Manufacturing industry | 15 | 15 | Own funds and loans from financial institutions | CSG plans to use the surplus land in the park to implement the production line reconstruction and expansion project in Xianning CSG Energy-Saving Glass Co., Ltd., to carry out technical renovation and upgrade of the existing coating equipment, expand the workshop and supplement the complementary processing equipment, and simultaneously implement the full intelligent connection. After the completion of the project, it is expected that the company's annual production capacity of insulating glass will increase by 1.2 million square meters, and the annual production capacity of coated glass will increase by 2.42 million | 2,713 | No profit as the project is in the construction period. | December 3, 2021 | Notice number: 2021-051 |
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| square meters. The project is under construction. | ||||||||||||
| Qingyuan CSG Energy-saving New Materials Co., Ltd. Phase I Upgrading and Technical Transformation Project | Self-built | Yes | Manufacturing industry | 842 | 1,562 | Own funds and loans from financial institutions | CSG plans to carry out technical transformation of phase I production line of Qingyuan CSG Energy-saving New Material Co., Ltd., and achieves furnace and hardware upgrades through technological innovation to meet the technological requirements of the Group's newly developed third-generation high-alumina products (KK8). This technical upgrade will further promote the technological innovation of CSG in the field of electronic glass, open up the technological generation gap with domestic business partners, seize the market share of imported products, and speed up the process of import substitution. The project is under construction. | 6,021 | No profit as the project is in the construction period. | December 25, 2021 | Notice number: 2021-053 | |
| Total | -- | -- | -- | 142,285 | 151,715 | -- | -- | 175,366 | -- | -- | -- |
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4. Financial assets investment
(1) Securities investment
□ Applicable √ Not applicable
There was no securities investment during the report period.
(2) Derivative investment
□ Applicable √ Not applicable
There was no derivative investment during the report period.
5. Use of raised fund
□ Applicable √ Not applicable
There was no use of raised fund during the report period.
VIII. Sales of major assets and equity
1. Sales of major assets
□ Applicable √ Not applicable
2. Sales of major equity
□ Applicable √ Not applicable
IX. Analysis of main holding companies and joint -stock companies
√Applicable □ Not applicable
Particular about main subsidiaries and joint -stock companies which have influence on the Company's net profit by over10%
Unit: RMB
| Name of company | Type | Main business | Registered capital | Total assets | Net Assets | Operating revenue | Operating profit | Net profit |
| Chengdu CSG Glass Co., Ltd. | Subsidiary | Development, manufacture and sales of various special glass | 260 million | 1,291,889,709 | 1,061,849,777 | 1,745,037,970 | 765,486,507 | 654,328,348 |
| Hebei CSG Glass Co., Ltd. | Subsidiary | Manufacture and sales of various special glass | 48.06million | 1,087,977,824 | 851,769,374 | 1,344,835,356 | 490,793,371 | 425,191,657 |
| Xianning CSG Glass Co., Ltd. | Subsidiary | Development and manufacture and sales of various special glass | 235 million | 1,340,334,129 | 941,500,971 | 1,158,725,622 | 428,989,160 | 370,069,838 |
| Wujiang CSG Glass Co., Ltd. | Subsidiary | Manufacture and sales of | 565.04 million | 1,772,739,593 | 1,515,940,005 | 2,133,590,715 | 614,194,495 | 531,749,201 |
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| various special glass | ||||||||
| Dongguan CSG Solar Glass Co., Ltd. | Subsidiary | Manufacture and sales of Solar-Energy Glass products | 480 million | 1,475,320,905 | 1,197,618,751 | 1,477,806,414 | 310,810,639 | 270,624,711 |
| Yichang CSG Polysilicon Co., Ltd. | Subsidiary | Production and sales of high-purity silicon material products | 1,467.98million | 1,747,485,123 | -237,507,777 | 528,222,453 | -295,211,587 | -296,809,561 |
| Dongguan CSG PV-tech Co., Ltd. | Subsidiary | Production and sales of high-tech green battery products | 516 million | 710,178,359 | -61,429,727 | 405,025,214 | -444,256,417 | -431,273,692 |
Particulars about subsidiaries obtained or disposed in report period
□ Applicable √ Not applicable
Description of the main holding and shareholding companies:
In 2021, affected by the rising price of float glass, the performance of five subsidiaries including Chengdu CSG GlassCo., Ltd., Hebei CSG Glass Co., Ltd., Xianning CSG Glass Co., Ltd., Wujiang CSG Glass Co., Ltd. and Dongguan CSGSolar Glass Co., Ltd. increased significantly year-on-year. At the same time, based on the principle of prudence, the Groupmade provision for impairment of some assets with outdated processes and high energy consumption in Yichang CSGPolysilicon Co., Ltd. and Dongguan CSG PV-tech Co., Ltd.X. Structured main bodies controlled by the Company
□ Applicable √ Not applicable
XI. Outlook of the Company’s future development
1. Tendency of development of the industries the Company engages
Please refer to the relevant content of "I. Particulars about the industry the Company engages in during the report period".
2. The Company's development strategy
2022 is the 30th anniversary of CSG's listing. The Company will follow the development path of "Polishing three typesof glass (float glass, photovoltaic glass, electronic glass) and forging a brand (architectural glass)", firmly expand andstrengthen the main glass business, persist in high-quality development, adhere to the purpose of "Business First",continue to enhance the Company's core competitiveness, occupy the commanding heights of the industry, strengthen theadvantage of raw material resources, improve technology and R&D strength, expand market share and market influence,integrate industrial resources, comprehensively improve the credibility and influence of the CSG brand, plan the layoutof the CSG industry from a global and macro perspective, accelerate the development of new industries and enhance theCompany's ability to resist cyclical risks, and build the CSG into a transnational enterprise group with internationalinfluence related to the upstream and downstream of the glass industry.
3. Business plan of the Company in 2022
① Continue to follow up local epidemic prevention policies, build a new management model under the normalization ofthe epidemic, work together to fight the epidemic and operate safely; ensure that the projects under construction are putinto operation smoothly on schedule as planned, and form production capacity and benefit contribution as soon as possible;
②Accelerate the R&D and iteration related to new products and new businesses, and build an Industry-University-Research platform;
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③Strengthen the ability of group operation and management, realize co-ordinated management, promote supply chainmanagement, lean management and other measures, and focus on tapping potential and increasing efficiency activities toensure the completion of the Company's operation and construction objectives of 2022;
④Strengthen talent management, establish remuneration incentive system related to the performance, improve companyincentive mechanism, strengthen employee training, Select and train reserve cadres and introduce high-quality talents;
⑤ Rationally plan asset-liability ratio level and ensure financial risk under control;
⑥Improve information level of the Company, and create the world first-class information management platform topromote the development of internal production and processing technology from tradition to automation, information andintelligent manufacturing.
4. Fund demand, use plan and fund source
In 2022, the Company's expected capital expenditure is about RMB 5.228 billion, which is mainly used for projects suchas light-weight and high-transparency panel projects for solar energy equipment, construction of electronic glassproduction lines, technology upgrades in the solar energy industry, engineering glass workshop automation and capacityexpansion projects. The main sources of funds are self-owned funds and loans from financial institutions.
5. Risk factors and countermeasures
In 2022, in the face of “New Normal” of domestic economic development and the task of building a “Century CSG”, theCompany will face the following risks and challenges:
①The epidemic situation at home and abroad and the international political environment are still facing manyuncertainties.Affected by the repeated outbreaks of the epidemic and the complicated international political environment, the domesticeconomy still faces many challenges and uncertainties. In 2022, the Company will continue to normalize epidemicprevention and control, strengthen its attention to the market, timely adjust the strategy according to market changes, andstrive to achieve the annual core work objectives through steady operation.
②The glass industry is facing fierce competition among similar products and pressure from rising raw materials and fuels;the electronic glass and display industry faces the risk of accelerating material technology upgrades due to the continuousrapid iterative upgrade of technology requirements in downstream application scenarios; the solar energy industry facesthe challenge of an imbalance in the supply chain which leads to rapid price increases in some links. To cope withaforesaid risks, the Company will take the following measures:
A. In the flat glass industry, the Company will enhance the competitiveness of the industry through continuous leanmanagement, differentiated management and product structure optimization, and expand the scale of the industry byinvesting in new production lines and enhance the competitiveness of the industry;B. In the architectural glass industry, the Company will strengthen the development of high-end market and overseasmarket, actively develop traditional residence market, and at the same time, maintain the industrial advantageous positionof the Company through market-oriented extension of industrial chain;C. In the solar energy industry, the Company will strengthen the integration of resources across the industry chain,increase R&D investment, strengthen operation management, and maintain corporate competitiveness in marketsegmentation; pay close attention to market changes, vigorously carry out cost reduction and efficiency enhancementactivities, implement energy-saving and consumption-reducing measures, and timely upgrade and replace the equipment,to improve production efficiency and ensure the Company's benefits;D. In electronic glass and display industry, the Company will strengthen research and development of new technology aswell as new product, maintain its technical leading advantage in the industry, and rapidly develop terminal market andimprove industrial profitability. In the display industry, the Company will strengthen the research and development ofnew technologies and products, maintain the leading edge of industry technology, further strengthen the development ofterminal market and improve the profitability of the industry.
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③ The market price of solar glass and PV industry has fluctuated greatly. At the same time, the prices of upstream rawmaterials have fluctuated, and the current rising labor costs have brought risks to the Company's operations.To cope with risk, the Company will take the following measures:
A. Vigorously exploit potential and increase efficiency, and effectively implement energy saving and consumptionreduction to control production cost;B. Focus on the market change, lock the price of bulk commodity at proper time, and take advantage of bulk purchasesto reduce purchase costs;C. Improve automatic production level, raise labor productivity;D. Strengthen the development of new application market and disperse the risk of single market.
④Risk of fluctuation of foreign exchange rate: At present, nearly 9.44% of the sales revenue of the Company is fromoverseas, in the future, the Company will further develop overseas business, and therefore, the fluctuation of exchangerate will bring certain risk to the operation of the Company. To cope with such risk, the Company will settle exchange intime and use safe and effective risk evading instrument and product to relatively lock exchange rate and reduce the riskcaused by fluctuation of exchange rate.XII. Reception of research, communication and interview
1. Particulars about research, communication and interview in the report period
√Applicable □ Not applicable
| Reception time | Reception location | Reception method | Reception object type | Reception object | The main content of the discussion and the information provided | Index of the basic situation of the survey |
| April 15, 2021 | CSG Headquarters | Telephone communication | institution | Shenwan Hongyuan Research Institute, National Social Security Fund, Bank of Communications Wealth Management, Harvest Fund and other institutions | The Company communicated with investors on the Company's periodical reports, the Company's performance and the operation and development of businesses, etc.; no material was provided. | For details, please refer to the Record of Investor Relations Activities disclosed on Juchao website (www.cninfo.com.cn) on April 16, 2021. |
| July 6, 2021 | CSG Headquarters | Telephone communication | institution | Shenwan Hongyuan Research Institute, Changjiang Securities, China Asset Management, China Merchants Fund and other institutions | The Company communicated with investors on the Company's operation in the first half of the year, electronic glass, photovoltaic glass, etc.; no material was provided. | For details, please refer to the Record of Investor Relations Activities disclosed on Juchao website (www.cninfo.com.cn)on July 7, 2021. |
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Section IV. Corporate Governance
1. Basic Situation of Corporate Governance
In strict compliance with the requirements of the relevant laws and regulation including The Company Law, SecuritiesLaw and Rule of Governance for Listed Company, the Company has been putting efforts in improving the corporategovernance, strengthening management of information disclosure, regulating operation activities and establishing amodern corporate system. At present, the system for corporate governance of the Company is basically sound, operationis regulated, corporate governance is consummated, which accord with the requirements of relevant documents oncorporate governance of listed company issued by CSRC.According to the "Company Law" and other relevant laws and regulations and the "Articles of Association", the Companyhas established and improved a relatively standardized corporate governance structure, and formed a decision-makingand operation management system with the shareholders' meeting, the board of directors, the board of supervisors and theCompany's management as the main structure. The power organs, decision-making bodies, supervision bodies andmanagers have clear rights and responsibilities, perform their respective duties and effectively monitor and balance, andperform various duties stipulated in the "Company Law" and "Articles of Association" in accordance with the law.According to the "Articles of Association" and other relevant corporate governance regulations, the Company hasformulated the "Procedure Rules for Shareholders' Meeting", "Procedure Rules for the Board of Directors", "ProcedureRules for the Supervisory Committee", "General Manager's Work Rules" and other relevant systems, which provides aninstitutional guarantee for the standardized operation of the corporate governance structure of the Company.The Company's "Three Committees" (General Meeting of Shareholders, Board of Directors and Board of Supervisors)operate in a standardized manner, and the procedures for convening and convening meetings comply with relevantregulations. Directors, supervisors and senior management can perform relevant duties and obligations diligently andconscientiously. Independent directors can play an independent role in the company's decision-making, and their relevantsuggestions to the company have been adopted by the company, which has played an active role in safeguarding theinterests of the company and minority shareholders. At the same time, the company also provides sufficient guarantee forindependent directors and supervisors to perform their duties. The Board of Directors has established four specialcommittees, namely, the Strategy Committee, the Audit Committee, the Nomination Committee, and the Remunerationand Evaluation Committee, to assist the Board of Directors in performing relevant functions and provide professionalsuggestions and opinions for the Board of Directors' decision-making. The Board of Directors and the Board ofSupervisors of the Company report to the General Meeting of Shareholders on the performance of their duties by directorsand supervisors, and the independent directors make a debriefing report to the General Meeting of Shareholders. Thesenior management personnel have a clear division of labor, clear responsibilities and authorities, and operate incompliance with laws and regulations. In strict accordance with the requirements of the Listing Rules of Shenzhen StockExchange and other relevant laws and regulations, the company earnestly performs the obligation of informationdisclosure to ensure the authenticity, accuracy, integrity and timeliness of information disclosure. The company earnestlyfulfills its information disclosure obligations in strict accordance with the requirements of the Shenzhen Stock ExchangeListing Rules and other relevant laws and regulations to ensure the truthfulness, accuracy, completeness and timelinessof information disclosure. Shanghai Securities News, Securities Daily, Hong Kong Commercial Daily and Juchao Website(www.cninfo.com.cn) are designated media for the Company's information disclosure to ensure that all shareholders ofthe Company have equal access to the Company's business information. The Company has established the InformationDisclosure Management System and promptly improved it in accordance with newly issued laws and regulations, clarifiedthe standards of insider information, and established inside information insider registration system and recordmanagement system. In order to further strengthen the Company's internal information disclosure control, enhance thedisclosure consciousness of relevant personnel, and improve the quality of corporate information disclosure, in 2016, theCompany set up information Disclosure Committee, and formulate Rules for the implementation of the informationdisclosure Committee. During the report period, the Company disclosed information with facticity, completeness,timeliness and fairness, strictly fulfilled the responsibilities and obligations of information disclosure of listed companiesto ensure that investors are able to keep abreast of the Company's operation and development strategies. There was noregulatory punishment caused by information disclosure in the report period. Meanwhile, the Company delivered theInside Information Insider Table to Shenzhen Stock Exchange when submitting periodic reports. It didn’t exist thatinsiders used the inside information to trade the Company’s shares before the major sensitive information which couldaffect the Company’s share price was disclosed.The Company has seriously implemented the requirements of the relevant regulatory to cash dividends. The Companyformulated the Return plan for Shareholders of CSG Holding Co., Ltd. in the Next Three Years (2020-2022) according
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to relevant regulations of the Notice of Further Implementation of Cash Dividends of the Listed Companies (ZJF No.:
[2012] 37) and the Regulatory Guidelines of Listed Companies No. 3-Cash Dividends of Listed Companies (ZGZJHGGNo. [2013] 43) issued by China Securities Regulatory Commission, further improved the Company’s decision-makingand supervision mechanism for distribution of profits, and protected the interests of investors.During the report period, it did not exist that the Company provided the undisclosed information to the largest shareholder.And it did not exist that non-operating fund of listed Company was occupied by the largest shareholder and its affiliatedenterprises.Is there any difference between the actual condition of corporate governance and relevant regulations about corporategovernance for listed company from CSRC?
□Yes √ No
II. Independency of the Company relative to the largest shareholder in aspect of businesses,personnel, assets, organization and financeThe Company has been absolutely independent in business, personnel, assets, organization and finance from its largestshareholder ever since its establishment. The Company has an independent and complete business system and independentmanagement capability.
1. In terms of business: The Company owns independent purchase and supply system of the raw resources, completeproduction systems, independent sale system and customers. The Company is completely independent from the largestshareholder in business. The largest shareholder and its subsidiaries do not engage any identical business or similarbusiness as the Company.
2. In terms of personnel: The Company established integrated management system of labor, personnel, salaries and thesocial security, which were absolutely independent from its holding shareholder’s. Personnel of the managers, person incharge of the financial and other executive managers are obtained remuneration from the Company since on duty in theCompany, and never received remuneration or take part-time jobs in the largest shareholder’ company and otherenterprises controlled by the largest shareholder. The recruitment and dismissal of Directors are conducted through legalprocedure since the Company was listed and the manager has been appointed or dismissed by Board of Directors. TheBoard of Directors and the Shareholders’ General Meeting have not received any interference of decisions on personnelappointment and removal from the largest shareholder.
3. In terms of asset: the Company is able to operate business independently and enjoys full control over the productionsystem, auxiliary production system and facilities, land use right, industry property and non-patent technology owned orused by the Company. The investments to the Company from largest shareholder are monetary assets, and the largestshareholder has never occupied, damaged or intervened to operation on these assets.
4. In terms of organization: The Company possessed sound corporate governance structure, established Shareholders’General Meeting, Board of Directors, Supervisory Board, appointed general manager, and fixed related functiondepartments. The Company had been totally independent from its largest shareholder in organization structure. TheCompany has its own office and production sites that are different from those of the largest shareholder. The largestshareholder and its related parties didn’t deliver any operation plan and order to the Company, neither influence theindependence on management of the Company by any forms.
5. In terms of finance: The Company has set up independent financial department, established independent accountingcalculation system and financial management system (included management system of its subsidiaries). The financialpersonnel of the Company didn’t take part-time jobs in units of largest shareholder or its subordinate units. The Companyhad independent bank accounts, separated from the largest shareholder. The Company is independent taxpayer, paid taxesindependently according the laws and didn’t pay mixed taxes with the largest shareholder. The financial decision-makingof the Company was independent, and the use and management of funds were independent. The Company never offeredguarantee to their largest shareholder and its subordinate units and other related party. The largest shareholder and itsrelated have never occupied or disguisedly occupied the capital of the Company.
III. Horizontal competition
□ Applicable √ Not applicable
IV. Information on the annual general meeting and extraordinary general meeting held duringthe report period
1. The general meeting of shareholders during the report period
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| Session of meeting | Type | Ratio of investor participation | Convened date | Date of disclosure | Meeting resolution |
| The First Extraordinary General Shareholders’ Meeting of 2021 | Extraordinary General Shareholders’ Meeting | 29.26% | March 8, 2021 | March 9, 2021 | Announcement on Resolutions of the First Extraordinary General Shareholders’ Meeting of 2021（Announcement No.: 2021-006） |
| The Second Extraordinary General Shareholders’ Meeting of 2021 | Extraordinary General Shareholders’ Meeting | 28.84% | April 13, 2021 | April 14, 2021 | Announcement on Resolutions of the Second Extraordinary General Shareholders’ Meeting of 2021（Announcement No.: 2021-013） |
| Annual General Shareholders’ Meeting of 2020 | Annual General Shareholders’ Meeting | 28.48% | May 7, 2021 | May 8, 2021 | Announcement on Resolutions of Annual General Shareholders’ Meeting of 2020（Announcement No.: 2021-024） |
| The Third Extraordinary General Shareholders’ Meeting of 2021 | Extraordinary General Shareholders’ Meeting | 28.36% | August 25, 2021 | August 26, 2021 | Announcement on Resolutions of the Third Extraordinary General Shareholders’ Meeting of 2021（Announcement No.: 2021-038） |
| The Fourth Extraordinary General Shareholders’ Meeting of 2021 | Extraordinary General Shareholders’ Meeting | 29.91% | November 15, 2021 | November 16, 2021 | Announcement on Resolutions of the Fourth Extraordinary General Shareholders’ Meeting of 2021（Announcement No.: 2021-050） |
2. The preference shareholders whose voting rights have been restored request the convening of an extraordinarygeneral meeting
□ Applicable √ Not applicable
V. Directors, supervisors and senior executives
1. Basic information
| Name | Title | Working status | Sex | Age | Start dated of office term | End date of office term | Shares held at period-begin (Share) | Amount of shares increased in this period (Share) | Amount of shares decreased in this period (Share) | Other changes (share) | Shares held at period-end (Share) | Reason for increase or decrease of shares |
| Chen Lin | Chairman of the Board | Currently in office | Female | 50 | 2016-11-19 | 2023-05-21 | 1,623,065 | 1,623,065 | ||||
| Wang Jian | Director, CEO | Currently in office | Male | 58 | 2016-01-21 | 2023-05-21 | 1,012,000 | 1,012,000 | ||||
| Zhu Guilong | Independent Director | Currently in office | Male | 58 | 2017-05-02 | 2023-05-21 | ||||||
| Zhu Qianyu | Independent Director | Currently in office | Female | 47 | 2019-04-10 | 2023-05-21 | ||||||
| Xu Nianhang | Independent Director | Currently in office | Male | 44 | 2020-05-21 | 2023-05-21 | ||||||
| Zhang Jinshun | Director | Currently in office | Male | 57 | 2017-05-02 | 2023-05-21 | ||||||
| Cheng Xibao | Director | Currently in office | Female | 40 | 2016-01-21 | 2023-05-21 | ||||||
| Cheng Jinggang | Director | Currently in office | Male | 41 | 2020-05-21 | 2023-05-21 | ||||||
| Yao Zhuanghe | Director | Currently in office | Male | 63 | 2020-05-21 | 2023-05-21 |
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| Li Jianghua | Chairman of the Supervisory Board, Employee Supervisor | Currently in office | Male | 45 | 2019-03-27 | 2023-05-21 | ||||||
| Meng Lili | Supervisor | Currently in office | Female | 44 | 2020-05-21 | 2023-05-21 | ||||||
| Dai Pingsheng | Employee Supervisor | Currently in office | Male | 40 | 2021-07-08 | 2023-05-21 | ||||||
| He Jin | Secretary of the Party Committee,Vice president | Currently in office | Male | 50 | 2018-04-08 | 2023-05-21 | 897,600 | 897,600 | ||||
| Yang Xinyu | Secretary of the Board | Currently in office | Male | 42 | 2017-05-02 | 2023-05-21 | 1,159,332 | 1,159,332 | ||||
| Gao Changkun | Employee Supervisor | Post leaving | Male | 53 | 2018-08-30 | 2021-07-08 | 500 | 500 | Personal purchase | |||
| Lu Wenhui | Executive Vice President | Post leaving | Male | 59 | 2017-02-23 | 2021-07-07 | 1,217,298 | 1,217,298 | ||||
| Total | -- | -- | -- | -- | -- | -- | 5,909,295 | 500 | 5,909,795 |
During the reportperiod, whether there was any resignation of directors and supervisors and dismissal of senior executivesduring their term of office
√Yes □No
The Company received a written resignation report submitted by Employee Supervisor Mr. Gao Changkun in July 2021.Mr. Gao Changkun resigned from his position as employee supervisor of the Company due to work adjustment.
The Company received a written resignation report submitted by the Executive Vice President Mr. Lu Wenhui in July2021. Mr. Lu Wenhui resigned as the Company's executive vice president due to personal reasons.
Changes in directors, supervisors and senior executives of the company
√Applicable □ Not applicable
| Name | Position | Type | Date | Reason |
| Dai Pingsheng | Employee Supervisor | Be elected | July 8, 2021 | Election of Workers Congress |
| Gao Changkun | Employee Supervisor | Post leaving | July 8, 2021 | Voluntary turnover |
| Lu Wenhui | Executive Vice President | Dismissed | July 7, 2021 | Voluntary resignation |
2. Post-holding
Major professional background, working experience of directors, supervisors and senior executive and their majorresponsibility in the Company at present
Chen Lin: At present, she is Chairman of Board of Supervisors of Foresea Life Insurance Co., Ltd. and Chairman of theBoard of the Company.
Wang Jian: took posts of General Manager and Executive Director of China North Industries Tianjin Corporation,General Manager of China North Vehicle Co., Ltd., and Deputy Chairman and Chairman of Shanghai Nonferrous MetalsE-Commerce Co., Ltd., General Manager of Investment Management Department of China North Industries Corporation,Chairman of the Board of Chengdu Yinhe Dynasty Hotel Co., Ltd., Deputy Chairman of the Board of Shenzhen BaoyinElectricity Co., Ltd., Chairman of the Board of North Property Development Company Limited. At present, he is Directorand CEO of the Company.
Zhu Guilong: took posts of Researcher of the Institute of Forecasting and Development at Hefei University ofTechnology, Independent Director of Jiangsu Saifutian Steel Cable Co., Ltd., Independent Director of GuangzhouKingmed Diagnostics Group Co., Ltd., Director of Guangdong Yiji Network Co., Ltd., Director of Guangzhou NuochengBiological Products Co., Ltd. At present, he is a Professor and Doctoral Tutor of the School of Business Administration,South China University of Technology, Executive Director of Chinese Association For Science of Science and S&TPolicy, Vice Chairman of Guangdong Institute of Technical Economy and Management Modernization, Vice Chairmanof Guangdong Economic Society, Independent Director of GRG BANKING EQUIPMENT CO., Ltd., IndependentDirector of Guangzhou Bank Co., Ltd., Director of Jiangxi Jiufeng Energy Co., Ltd., , Director of CS Richland AssetCo., Ltd., Independent Director of Sirio Pharma Co., Ltd., and Independent Director of the Company.
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Zhu Qianyu: took posts of Lecturer and Associate Professor of School of Finance of South-Central Minzu University,postdoctor in Finance Department of Guanghua School of Management at Peking University, and researcher of PekingUniversity Finance and Securities Research Center, Independent Director of LandOcean Energy Services Co., Ltd. Atpresent, she is Associate Professor at Renmin University of China, Researcher of National Institute of Development andStrategy of Renmin University of China, Institute of Rural Economy and Finance of Renmin University of China, andDouble Carbon Research Institute of Renmin University of China, Independent Director of Kingfa SCI.&TECH. Co.,Ltd., and Independent Director of the Company.
Xu Nianhang:took posts ofPostdoctoral Researcher in the Department of finance of Guanghua School of Managementat Peking University, Lecturer and Associate Professor in the Business School of Renmin University of China,Independent Director of Danhua Chemical Technology Co., Ltd., and Independent Director of Leador Spatial InformationTechnology Corporation, Independent Director of Xinsteel Group Co., Ltd., Independent Director of Fujian NewchoicePipe Technology Co., Ltd., Independent Director of Inner Mongolia Dazhong Mining Co., Ltd. (unlisted company). Atpresent, he is Director, Professor and Doctoral Tutor of the Department of Finance and finance, Business School ofRenmin University of China, Independent Director of Chongqing Three Gorges Bank Co., Ltd. (unlisted company),Independent Director of Beijing iHandy Mobile Inc. (unlisted company), Independent Director of Anhui WantongTechnology Co., Ltd. and Independent Director of the Company.
Zhang Jinshun: At present, he is Director of the Company.
Cheng Xibao: took posts of Deputy Manager and Manager of Financial Department of Huizhou Olympic Garden Co.,Ltd., which is a subsidiary of China Sports Group Industry, Manager of Financial Department of Shenzhen XuanshengInvestment Co., Ltd., which is a subsidiary of Foxconn, and Manager, Vice President, Executive Vice President ofFinancial Department, President Assistant, Vice President of Shenzhen Baoneng Investment Group Co., Ltd., Director ofForesea Life Insurance Co., Ltd., Supervisor of Guizhou Baoneng Automobile Co., Ltd. At present, she is Senior VicePresident of Shenzhen Baoneng Investment Group Co., Ltd., Executive Vice President of Baoneng City Developmentand Construction Group Co., Ltd., the Supervisor of Xinjiang Qianhai United Property & Casualty Insurance Co., Ltd.,Director of Baoneng Automobile Co., Ltd., Director of Qoros Automobile Co., Ltd., Director of Shenzhen BaonengTravel Co., Ltd., and Director of the Company.
Cheng Jinggang: took posts of Credit Analyst of Dagong Global Credit Rating Co., Ltd., Senior Credit Analyst of theFixed Income Department of Funde Sino Life Insurance Co., Ltd., Senior Manager of the Credit Evaluation Departmentof Sino Life Asset Management Co., Ltd. At present, he is Deputy Director of the Asset Management Center of ForeseaLife Insurance Co., Ltd. and Director of the Company.
Yao Zhuanghe: took posts of Deputy Director of Food Engineering Department of South China University ofTechnology, Deputy General Manager and General Manager of Guangdong United Food Enterprise Center, Director ofGuangdong Yuehua International Trade Group, Deputy General Manager of Guangdong Guangye EconomicDevelopment Group, Director and General Manager of Guangdong Guangye Investment Consulting Co., Ltd., Directorand Deputy Party secretary of Guangdong Guangye Environmental Construction Group (former Guangdong GuangyeReal Estate Group). At present, he is Director of the Company.
Li Jianghua:took posts of Assistant of General Manager and Deputy General Manager of the Operation ServiceDepartment of the Information Management Center of Foresea Life Insurance, Deputy General Manager of IT Departmentof Xinjiang Qianhai United Property& Casualty Insurance Co., Ltd., General Manager of Integrated FinancialDevelopment Department of Foresea Life Insurance. At present, he is Director of the Information ManagementDepartment of the Company, Chairman of the Supervisory Board of the Company.
Meng Lili: At present, she is Deputy Director of Human Resources Center, General Manager of the Office of the Boardof Directors and Employee Supervisor of Foresea Life Insurance Co., Ltd., and Supervisor of the Company.
Dai Pingsheng: took posts of Financial Manager of Dongguan CSG Solar Glass Co., Ltd., Deputy Manager, AssistantDirector and Deputy Director of the Financial Management Department of CSG, and the Vice President of theArchitectural Glass Division of CSG. At present, he is the Director of the Investment Department and EmployeeSupervisor of the Company.
He Jin: took posts of General Manager of Shenzhen CSG Float Glass Co., Ltd., the Vice President of Float Glass Division,General Manager of Dongguan CSG Solar Glass Co., Ltd., General Manager of Chengdu CSG Glass Co., Ltd. and GeneralManager of Qingyuan CSG Energy Saving New Materials Co., Ltd., Assistant President of the Company and President
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of Flat Glass Division. At present, he is Secretary of the Party Committee, Vice President of the Company and Chairmanof Management Committee of the Company.
Yang Xinyu: took posts of Consultant of the Securities Department of Beijing KWM Law Firm, Risk Control Directorand Assistant of Chairman of the Board and Head of the Law Department of Honghua International Medical Holding Co.,Ltd., and the Director of the Audit and Supervision Department, the Director of the Stock Affairs Department of theCompany. At present, he is Secretary of the Board of Directors and Deputy Vice Director of the Company.
Post-holding in shareholder’s unit
√Applicable □ Not applicable
| Name | Name of shareholder’s unit | Position in shareholder’s unit | Start dated of office term | End date of office term | Received remuneration from shareholder’s unit or not |
| Chen Lin | Foresea Life Insurance Co., Ltd. | Chairman of Supervisory Board | Apr. 2012 | Yes | |
| Cheng Jinggang | Foresea Life Insurance Co., Ltd. | Deputy Director of the Asset Management Center | Apr. 2012 | Yes | |
| Meng Lili | Foresea Life Insurance Co., Ltd. | Deputy Director of Human Resources Center, General Manager of the Office of the Board of Directors, Employee Supervisor | June 2013 | Yes | |
| Note of post-holding in shareholder’s unit | N/A | ||||
Post-holding in other unit
√Applicable □Not applicable
| Name | Name of other units | other unit | Start dated of office term | End date of office term | Received remuneration from other unit or not |
| Zhu Guilong | South China University of Technology | Professor and Doctoral Tutor | Aug. 2000 | Yes | |
| GRG BANKING EQUIPMENT CO., Ltd. | Independent Director | Dec. 2020 | Yes | ||
| Guangzhou Bank Co., Ltd. | Independent Director | Apr. 2019 | Yes | ||
| Sirio Pharma Co., Ltd. | Independent Director | July 2021 | Yes | ||
| Jiangxi Jiufeng Energy Co., Ltd. | Director | Jan. 2019 | Yes | ||
| CS Richland Asset Co., Ltd. | Director | Jul.2019 | Yes | ||
| Zhu Qianyu | Renmin University of China | Associate Professor | Mar. 2010 | Yes | |
| Kingfa SCI.&TECH. Co., Ltd. | Independent Director | Jan.2021 | Yes | ||
| Xu Nianhang | Renmin University of China | Director, Professor and Doctoral Tutor | Sep.2014 | Yes | |
| Chongqing Three Gorges Bank Co., Ltd. | Independent Director | May 2019 | Yes | ||
| Beijing iHandy Mobile Inc. (unlisted company) | Independent Director | Oct.2018 | Yes | ||
| Anhui Wantong Technology Co., Ltd. | Independent Director | Feb. 2022 | Yes | ||
| Cheng Xibao | Shenzhen Baoneng Investment Group Co., Ltd. | Senior Vice President | Nov. 2020 | No |
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| Baoneng City Development and Construction Group Co., Ltd. | Executive Vice President | Oct. 2018 | Yes | ||
| Xinjiang Qianhai United Property & Casualty Insurance Co., Ltd. | Supervisor | Sep. 2016 | No | ||
| Baoneng Automobile Co., Ltd. | Director | Mar. 2017 | No | ||
| Qoros Automobile Co., Ltd. | Director | Dec. 2017 | No | ||
| Shenzhen Baoneng Travel Co., LTD. | Director | Sep. 2019 | No | ||
| Note of post-holding in other unit | N/A | ||||
Punishment of securities regulatory authority in the last three years to the Company’s current and retired directors,supervisors and senior management during the report period
□ Applicable √ Not applicable
3. Remuneration of directors, supervisors and senior executives
Decision-making procedures, recognition basis and payment for directors, supervisors and senior executives
1. Decision-making procedures: The allowances for independent directors, external directors from non-shareholder’s unitare planned and proposed by the Remuneration &Assessment Committee of the Board and approved by the Shareholders’General Meeting after deliberation of the Board. Remuneration for senior executives is proposed by the Remuneration&Assessment Committee of the Board and decided by the Board after discussion.
2. Confirmation basis of remuneration: The allowances for independent directors and external directors are confirmedbased on industry standards and real situation of the Company. The remuneration for senior executives implementsfloating reward mechanism with reference to basic salary and business performance. Bonus for performance rewards iswithdrawal by proportion quarterly according to return on equity and based on the total net profit after taxation.
3. Actual remuneration payment: The allowances for each of the Company’s independent directors, external director fromnon-shareholder’s unit are RMB 0.15 million per year, paid by actual month of service. The total remuneration fordirectors, supervisor and senior executives in the report period was RMB 26.3495 million.
Remuneration of directors, supervisors and senior executives of the company during the report period
Unit: RMB 0,000
| Name | Title | Sex | Age | Post-holding status | Total remuneration obtained from the Company before taxation | Received remuneration from related party of the Company or not |
| Chen Lin | Chairman of the Board | Female | 50 | Currently in office | Yes | |
| Wang Jian | Director, CEO | Male | 58 | Currently in office | 507.44 | No |
| Zhu Guilong | Independent Director | Male | 58 | Currently in office | 15 | No |
| Zhu Qianyu | Independent Director | Female | 47 | Currently in office | 15 | No |
| Xu Nianhang | Independent Director | Male | 44 | Currently in office | 15 | No |
| Zhang Jinshun | Director | Male | 57 | Currently in office | Yes | |
| Cheng Xibao | Director | Female | 40 | Currently in office | Yes | |
| Cheng Jinggang | Director | Male | 41 | Currently in office | Yes | |
| Yao Zhuanghe | Director | Male | 63 | Currently in office | 15 | No |
| Li Jianghua | Employee Supervisor | Male | 45 | Currently in office | 140.46 | No |
| Meng Lili | Supervisor | Female | 44 | Currently in office | Yes | |
| Dai Pingsheng | Employee Supervisor | Male | 40 | Currently in office | 102.19 | No |
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| He Jin | Secretary of the Party Committee, Vice president | Male | 50 | Currently in office | 730.18 | No |
| Yang Xinyu | Secretary of the Board | Male | 42 | Currently in office | 337.44 | No |
| Gao Changkun | Employee Supervisor | Male | 53 | Post leaving | 191.97 | No |
| Lu Wenhui | Executive Vice President | Male | 59 | Post leaving | 565.27 | No |
| Total | 2,634.95 |
VI. Directors' performance of duties during the report period
1. Board of directors in the report period
| Session | Meeting date | Date of disclosure | Resolution of the meeting |
| The Interim Meeting of the Ninth Board of Directors | January 7, 2021 | January 8, 2021 | For details, please refer to Juchao Website (www.cninfo.com.cn): "Announcement on Resolution of the Interim Meeting of the Ninth Board of Directors" (Announcement No.: 2021-001). |
| The Interim Meeting of the Ninth Board of Directors | February 18, 2021 | February 19, 2021 | For details, please refer to Juchao Website (www.cninfo.com.cn): "Announcement on Resolution of the Interim Meeting of the Ninth Board of Directors" (Announcement No.: 2021-003). |
| The Interim Meeting of the Ninth Board of Directors | March 26, 2021 | March 27, 2021 | For details, please refer to Juchao Website (www.cninfo.com.cn): "Announcement on Resolution of the Interim Meeting of the Ninth Board of Directors" (Announcement No.: 2021-008). |
| The Fourth Meeting of the Ninth Board of Directors | April 13, 2021 | April 15, 2021 | For details, please refer to Juchao Website (www.cninfo.com.cn): "Announcement on Resolution of the Fourth Meeting of the Ninth Board of Directors" (Announcement No.: 2021-014). |
| The Fifth Meeting of the Ninth Board of Directors | April 23, 2021 | -- | Reviewed and approved "The First Quarter Report 2021". |
| The Interim Meeting of the Ninth Board of Directors | June 7, 2021 | June 8, 2021 | For details, please refer to Juchao Website (www.cninfo.com.cn): "Announcement on Resolution of the Interim Meeting of the Ninth Board of Directors" (Announcement No.: 2021-025). |
| The Interim Meeting of the Ninth Board of Directors | June 28, 2021 | June 29, 2021 | For details, please refer to Juchao Website (www.cninfo.com.cn): "Announcement on Resolution of the Interim Meeting of the Ninth Board of Directors" (Announcement No.: 2021-028). |
| The Interim Meeting of the Ninth Board of Directors | August 9, 2021 | August 10, 2021 | For details, please refer to Juchao Website (www.cninfo.com.cn): "Announcement on Resolution of the Interim Meeting of the Ninth Board of Directors" (Announcement No.: 2021-035). |
| The Sixth Meeting of the Ninth Board of Directors | August 25, 2021 | August 27, 2021 | For details, please refer to Juchao Website (www.cninfo.com.cn): "Announcement on Resolution of the Sixth Meeting of the Ninth Board of Directors" (Announcement No.: 2021-039). |
| The Interim Meeting of the Ninth Board of Directors | September 9, 2021 | September 10, 2021 | For details, please refer to Juchao Website (www.cninfo.com.cn): "Announcement on Resolution of the Interim Meeting of the Ninth Board of Directors" (Announcement No.: 2021-041). |
| The Interim Meeting of the Ninth Board of Directors | October 14, 2021 | October 15, 2021 | For details, please refer to Juchao Website (www.cninfo.com.cn): "Announcement on Resolution of the Interim Meeting of the Ninth Board of Directors" (Announcement No.: 2021-043). |
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| The Seventh Meeting of the Ninth Board of Directors | October 29, 2021 | October 30, 2021 | For details, please refer to Juchao Website (www.cninfo.com.cn): "Announcement on Resolution of the Seventh Meeting of the Ninth Board of Directors" (Announcement No.: 2021-046). |
| The Interim Meeting of the Ninth Board of Directors | December 2, 2021 | December 3, 2021 | For details, please refer to Juchao Website (www.cninfo.com.cn): "Announcement on Resolution of the Interim Meeting of the Ninth Board of Directors" (Announcement No.: 2021-051). |
| The Interim Meeting of the Ninth Board of Directors | December 24, 2021 | December 25, 2021 | For details, please refer to Juchao Website (www.cninfo.com.cn): "Announcement on Resolution of the Interim Meeting of the Ninth Board of Directors" (Announcement No.: 2021-053). |
2. Attendance of directors at the board of directors and shareholders' meeting
| Attendance of directors at the board of directors and shareholders' meeting | |||||||
| Name of director | Number of board meetings that should be attended in this report period | Number of Spot Attendances | Number of Meetings Attended by Communication | Number of attendances of board meeting by proxy | Number of absence | Failure to personally attend board meetings successively twice | Number of attendance of General Meeting |
| Chen Lin | 14 | 2 | 12 | 0 | 0 | No | 4 |
| Wang Jian | 14 | 2 | 12 | 0 | 0 | No | 5 |
| Zhu Guilong | 14 | 1 | 13 | 0 | 0 | No | 5 |
| Zhu Qianyu | 14 | 1 | 13 | 0 | 0 | No | 4 |
| Xu Nianhang | 14 | 1 | 13 | 0 | 0 | No | 4 |
| Zhang Jinshun | 14 | 1 | 13 | 0 | 0 | No | 1 |
| Cheng Xibao | 14 | 0 | 14 | 0 | 0 | No | 2 |
| Cheng Jinggang | 14 | 2 | 12 | 0 | 0 | No | 5 |
| Yao Zhuanghe | 14 | 1 | 13 | 0 | 0 | No | 4 |
Note to failure to attend the board meeting successively twiceNot applicable
3. Objections raised by directors on matters related to the company
Whether the directors raised any objection to the relevant matters of the company
□ Yes √No
During the report period, the directors did not raise any objection to the relevant matters of the Company.
4. Other note to duty performance of directors
Whether the directors' suggestions on the company have been adopted
√Yes □ No
During the report period, the directors of the Company strictly followed the "Company Law", "Securities Law","Shenzhen Stock Exchange Listing Rules", "Guidelines for Self-discipline and Supervision of Listed Companies No. 1-Standardized Operation of Listed Companies on the Main Board", “Guidance on the establishment of independent directorsystem in Listed Companies” and other laws and regulations, as well as the “Articles of Association” and other relevantsystems, to attend the board meetings and shareholders' meetings of the Company, to conscientiously perform duties, andto provide constructive comments or suggestions on decision-making for the Company's development. Among them, theindependent directors carefully reviewed various proposals of the Company's Board of Directors, and expressedindependent opinions on the Company's major business management matters, profit distribution, employment of auditinstitutions, internal control construction and other related matters. It has played an active role in safeguarding the interestsof the Company and minority shareholders.
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VII. Duty performance of Special Committees under the Board of Directors in the report period
| Name of Special Committee | About the members | Number of meetings held | Meeting date | Content of meetings | Important comments and suggestions made | Other duty performance | Specific objections (if any) |
| Strategy Committee | Chairman of the committee: Chen Lin Committee members: Wang Jian, Cheng Jinggang, Zhu Guilong, Zhu Qianyu | 12 | February 15, 2021 | Reviewed and approved "Matters Concerning Providing Guarantees for Subsidiaries". | During the report period, the members of the Strategy Committee conducted in-depth discussions and proposed valuable suggestions and opinions for major decisions which influence the development of the Company, and provided strong support for the scientific decision-making of the Board of Directors. | Nil | Nil |
| March 23, 2021 | Approved "Matters Concerning Xianning CSG's New 1200T/D Photovoltaic Packaging Material Production Line Project", "Matters Concerning the Second Line Construction Project of Hebei Panel Ultra-Thin Electronic Glass", "Matters Concerning the Carrying Out Bill Pool Business in 2021". | ||||||
| April 2, 2021 | Approved "Proposal on Withdrawing Provisions for Asset Impairment", "Proposal on Profit Distribution for 2020", "Proposal on Using Own Funds to Purchase Structured Deposits". | ||||||
| June 3, 2021 | Reviewed and approved the "Matters Concerning the Technical Transformation and Upgrading Project of Dongguan CSG Solar Double Glass Calendering Line", "Matters Concerning Termination of Some Investment Projects", "Matters Concerning Providing Guarantee for Subsidiaries", and "Matters Concerning Issuing Letters of Guarantee for Subsidiaries matters". |
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| June 24, 2021 | Reviewed and approved"Matters Concerning Providing Guarantees for Subsidiaries". |
| August 6, 2021 | Reviewed and approvedMatters Concerning Providing Guarantees for Subsidiaries. |
| August 13, 2021 | Reviewed and approved the "Proposal on Investing in the Construction of CSG East China Headquarters Building" |
| September 6, 2021 | Reviewed and approved the "Matters Concerning the Investment and Construction of CSG Guangxi Beihai Photovoltaic Green Energy Industrial Park (Phase I) Project". |
| October 11, 2021 | Reviewed and approved the "Matters Concerning Provision for Asset Impairment" and the "Matters Concerning the Investment and Construction of Hefei CSG Energy-saving Glass Intelligent Manufacturing Industry Base Project". |
| October 19, 2021 | Reviewed and approvedMatters Concerning Providing Guarantees for Subsidiaries. |
| November 29, 2021 | Reviewed and approved the "Matters Concerning the Reconstruction and Expansion of the Production Line of Xianning CSG Energy-saving Glass Co., Ltd." |
| December 24, 2021 | Reviewed and approved "Matters Concerning Qingyuan CSG Energy-saving New Materials Co., |
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| Ltd. Phase I Upgrading and Technical Transformation Project","Matters Concerning Providing Guarantees for Subsidiaries" | |||||||
| Audit Committee | Committee members: Zhu Guilong,Zhu Qianyu, Chen Lin, Cheng Xibao | 4 | April 2, 2021 | Reviewed and approved "Changes in Accounting Policies", "Financial Final Report2020", and "Internal Control Evaluation Report2020". | During the report period, the Audit Committee provided advice and suggestions on guiding the internal audit work, supervising and evaluating external audit institutions, as well as effective internal control mechanism establishing, and actively safeguarded the interests of the Company and all shareholders. | Nil | Nil |
| April 13, 2021 | Reviewed and approved "The First Quarter Report 2021". | Nil | Nil | ||||
| August 13, 2021 | Approved"The Semi-annual Report 2021". | Nil | Nil | ||||
| October 19, 2021 | Reviewed and approved "The Third Quarter 2021" and "Appointment of the Audit Institution for the Year 2021". | Nil | Nil | ||||
| Remuneration and Assessment Committee | Committee members: Xu Nianhang, Zhu Qianyu, Chen Lin, Cheng Jinggang | 1 | April 2, 2021 | approved the remuneration of directors, supervisors and senior executives of CSG in 2020 | During the report period, the Remuneration and Assessment Committee carefully examined and approved the remuneration of directors, supervisors and senior executives and earnestly performed relevant responsibilities. | Nil | Nil |
| Nomination Committee | Committee members: Zhu Guilong, Xu Nianhang, Chen Li, Wang Jian | 1 | April 2, 2021 | Evaluated the performance of the directors in 2020. | During the report period, the Nomination Committee effectively evaluated the performance of directors and earnestly performed relevant responsibilities. | Nil | Nil |
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VIII. Work Summary of the Supervisory CommitteeDid the Supervisory Committee find any risk involved in performing the supervision activities in the report period
□ Yes √ No
The Supervisory Committee had no objection to the supervision matters during the report period.
IX. Employees
1. Number, Professional Composition and Education Background of Employees
| Number of employees in the parent company (person) | 503（Note） |
| Number of employees in major subsidiaries of the Company (person) | 11,407 |
| Total number of employees (person) | 11,910 |
| Total number of employees received salaries in the period (person) | 11,910 |
| Number of retired employees whose costs borne by the parent company and its main subsidiaries (person) | 0 |
| Professional composition | |
| Category of profession composition | Number of profession composition (person) |
| Production personnel | 8,095 |
| Salesman | 734 |
| Technician | 1,973 |
| Financial personnel | 135 |
| Administrative personnel | 973 |
| Total | 11,910 |
| Education background | |
| Category of education background | Number (person) |
| Doctor | 9 |
| Master | 164 |
| Undergraduate | 2,707 |
| Junior college | 2,300 |
| Degree below junior college | 6,730 |
| Total | 11,910 |
Note: Among them, there are 321 employees sent by the headquarters to the subsidiary.
2. Staff remuneration policy
In 2021, the Company continue to emphasize the principle of "Performance Orientation" in compensation management,through strengthening the concept of organizational performance and strengthening the application of performance results,we advocate that salary incentives should be inclined to high-performing organizations and high-performing individuals,to improve the work enthusiasm of employees, and then improve the overall performance of the organization, to achievethe business objectives.
3. Staff training plan
The Company has always attached great importance to the talent team construction and staff training and development.Every year, the Company sets up a special fund for the employees' skills training, capacity development and qualityimprovement. The Company has established a comprehensive training and development system for all kinds of employees,and developed personalized training and development systems for senior, middle and grass-roots employees, so as tostimulate the drive of employees, enhance the competitiveness of the enterprise, and provide a strong guarantee for thedevelopment of CSG Group. Based on the strategy of sustainable development of human resources, the Company willcontinue to deepen the scientific and systematic operation of training and development, so as to energize, promotemanagement and increase benefits, and achieve a win-win situation for the growth of employees and the development ofthe enterprise.
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4. Labor outsourcing
□ Applicable √ Not applicable
X. Profit Distribution and Reserve CapitalizationPreparation, implementation or adjustment of the policy for profit distribution, especially the policy for cash dividenddistribution in the report period
√Applicable □ Not applicable
The profit distribution plan for 2020 was approved by Annual General Shareholders’ Meeting of 2020 held on 7 May2021 which distributed distributing cash dividend of RMB 1 (tax included) for every 10 shares to all shareholders. Noticeof the distribution was published on China Securities Journal, Securities Times, Shanghai Securities News and HongKong Commercial Daily on 9 June 2021, and the profit had been distributed.
| Special explanation on cash dividend policy | |
| Satisfy regulations of General Meeting or requirement of Article of Association (Yes/No) | Yes |
| Well-defined and clearly dividend standards and proportion (Yes/No) | Yes |
| Completed relevant decision-making process and mechanism (Yes/No) | Yes |
| Independent directors perform duties completely and play a proper role (Yes/No) | Yes |
| Minority shareholders have ample opportunities and their legitimate rights and interests are effectively protected (Yes/No) | Yes |
| Condition and procedures are compliance and transparent while the cash bonus policy adjusted or changed (Yes/No) | Yes |
The Company gains profits in the report period and the retained profit of parent company is positive but no plan of cashdividend proposed
□ Applicable √ Not applicable
Proposal of profit distribution preplan or share conversion from capital public reserve in the report period
√Applicable □ Not applicable
| Distributing bonus shares for every 10 shares (share) | 0 |
| Distributing cash dividend for every 10 shares (tax included) (RMB) | 2 |
| Shares added for every 10-share base (Share) | 0 |
| Equity base for distribution preplan (share) | 3,070,692,107 |
| Total amount distribution in cash (RMB) (tax included) | 614,138,421 |
| Cash dividend amount in other ways (such as repurchasing shares) (RMB) | 0 |
| Total cash dividends (including other methods) (RMB) | 614,138,421 |
| Profit available for distribution (RMB) | 1,765,173,270 |
| Cash distributing accounted for the proportion of the total amount of profit distribution (including other methods) | 100% |
| Particular about cash dividend in the period | |
| If the Company's development stage is not easy to distinguish but there are major capital expenditure arrangements, when the profit is distributed, the proportion of cash dividends in this profit distribution should be at least 20%. | |
| Details of proposal of profit distribution preplan or share conversion from capital public reserve | |
| Since cash dividend distribution bases on the distributable profit of parent company, the Company took 10% of the net profit as stationary surplus reserve which was RMB 107,939,088 based on the net profit RMB 1,079,390,875 of parent company statement 2021. The allocation for Shareholders in 2021was RMB 1,765,173,270. The deliberated and approved plan of profit distribution in the Board Meeting is distributing cash dividend of RMB 2 yuan (tax included) for every 10 shares to all shareholders based on 3,070,692,107 shares of the total currently share capital., and the total amount distribution is RMB 614,138,421 (including tax).The actual amount of the cash dividend distributed will be determined according to the total share capital on the registration date of the Company's implementation of the profit distribution plan. The profit distribution plan complies with the "Company Law", "Listed Company Supervision Guidelines No. 3-Cash Dividends for Listed Companies", the "Articles of Association" and the company's shareholder return plan, and other relevant regulations. It is in line with the company's actual situation and future development plans, as well as taking into account the interests of shareholders. The above profit distribution proposal must be submitted to the 2021 Annual General Meeting of shareholders. | |
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XI. Implementation of the Company's Equity Incentive Plan, Employee Stock Ownership Planor Other Employee Incentive Measures
□ Applicable √ Not applicable
During the report period, the Company had no equity incentive plan, employee stock ownership plan or other employeeincentive measures and the implementation.
XII. Construction and Implementation of the Internal Control System during the ReportingPeriod
1. Construction and Implementation of the Internal Control System
During the report period, the Company established a sound and complete internal control management system inaccordance with the requirements of the Company Law, the Securities Law, the Basic Norms for Enterprise InternalControl and other internal control regulatory rules, oriented by risk management, and operated it effectively. Itstrengthened and standardized its internal control which ensured the standardized operation of the Company and improvedthe management level and efficiency of the Company, promoting the sustainable development of the Company andprotecting the legitimate rights and interests of investors.
2. Particular case found involving material defects in the internal control during the reporting period
□Yes √No
XIII. Management and Control of the Subsidiaries during the Report Period
During the report period, by establishing an effective internal control mechanism and implementing the internal controlmanagement plan, the internal operation supervision of subsidiaries was strengthened; by establishing a sound internalcontrol system of subsidiaries, the implementation and continuous improvement was promoted; by carrying out processmonitoring and special evaluation, the process risk management of subsidiaries was strengthened; by organizing theinternal control publicity and training of subsidiaries, a good internal control environment was created; by supervisingthe key businesses of subsidiaries, the legal compliance, reliability of financial reports, asset safety and operationefficiency of subsidiaries was guaranteed.XIV. Internal Control Self-assessment Report or Internal Control Audit Report1. Particularsabout significant defects found in the internal control during the report period
1. Self-assessment Report of the Internal Control
| Disclosure date of full text of self-appraisal report of internal control | April 25, 2022 | |
| Disclosure index of full text of self-appraisal report of internal control | More details found in “Report of Internal Control of CSG for year of 2021” published on Juchao Website (www.cninfo.com.cn) | |
| The ratio of the total assets of the units included in the scope of evaluation to the total assets of the Company's consolidated financial statements | 93% | |
| The ratio of the operating income of the units included in the scope of evaluation to the operating income of the Company's consolidated financial statements | 98% | |
| Standards of Defects Evaluation | ||
| Category | Financial Reports | Non-financial Reports |
| Qualitative criteria | A. Fraud of directors, supervisors and senior management; B. Ineffective control environment; C. Invalid internal supervision; | A. Major decision-making mistakes caused by decision-making process of key business; |
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| E. Material misstatements are found by the external audit but haven’t been found in the process of internal control; F. Financial reports submitted during the reporting period completely cannot meet the needs and are severely punished by regulatory agencies; G. Other major defects that may affect the report users’ correct judgment. Significant defects: A. Defects or invalidation of important financial control procedures; B. Significant misstatements are found by the external audit but haven’t been found in the process of internal control; C. Financial reports submitted during the reporting period have mistakes frequently; D. Other significant defects that may affect the report users’ correct judgment. Common defects: Other control defects except for major defects and significant defects. | C. Serious brain drain of senior and middle management and or personnel at key technological posts; D. Major or significant defects found in the internal control evaluation have not been rectified and reformed; E. The company's major negative news frequently appears on media; Significant defects: A. Big deviation of execution caused by executive routine of key business; B. Regulatory authorities impose large amount of fines because the violation of laws and regulations; C. Defects or invalidation of important business’ internal control procedures; Common defects: Other control defects except for major defects and significant defects. | |
| Quantitative standard | A. Amount of net profit affected by misstatements (based on consolidated statements): amount affected by misstatements is equal to or greater than 3% of net profit and the absolute amount is no less than 30 million yuan; B. Amount of assets and liabilities affected by misstatements (based on consolidated statements): amount affected by misstatements is equal to or greater than 1% of total assets. Significant defects: A. Amount of net profit affected by misstatements (based on consolidated statements): not belong to major defects and amount affected by misstatements is equal to or greater than 2% of net profit and the absolute amount is no less than 20 million yuan; B. Amount of assets and liabilities affected by misstatements (based on consolidated statements): amount affected by misstatements is equal to or greater than 0.5% of total assets but less than 1% of total assets. Common defects: Defects except for major and significant defects. | A. Amount of direct property loss: the direct loss amount is equal to or greater than 30 million yuan; B. Group's reputation: major negative news spreads in numerous business areas or is widely reported by national media and causes significant damages to the corporate reputation which takes more than six months to be restored. Significant defects: A. Amount of direct property loss: the direct loss amount is equal to or greater than 20 million yuan but less than 30 million yuan; B. Group's reputation: negative news spreads inside the industry or is reported or focused by local media and causes certain damages to the corporate reputation which takes more than three months but less than six months to be restored. Common defects: A. Amount of direct property loss: defects except for major and significant defects. B. Group's reputation: negative news spreads within the group and causes minor damages to the corporate reputation which takes less than three months to be restored. |
| Amount of significant defects in financial reports | 0 | |
| Amount of significant defects in non-financial reports | 0 | |
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| Amount of important defects in financial reports | 0 |
| Amount of important defects in non-financial reports | 0 |
2. Audit report of internal control
√Applicable □ Not applicable
| Deliberations in Internal Control Audit Report | |
| According to Guidelines of Enterprise Internal Control Audit and the relevant requirements of CICPA auditing standards, Asia Pacific (Group) CPAs (special general partnership) (hereinafter referred to as AP) audited the effectiveness of internal control over financial statements of the Company up to 31 December 2021, issued AP Ya-Kuai- A-Zhuan-Zi （2022）01320008 Internal Control Audit Report and made the following opinions: AP thought that CSG Holding Co., Ltd. maintained effective internal control over financial statements in all major aspects according to the Fundamental Norms of Enterprise Internal Control and relevant rules on December 31, 2021. | |
| Disclosure of internal control audit report | Disclosure |
| Date of disclosing the internal control audit reports | 25 April 2022 |
| Disclosure index of internal control audit report | More details can be found in 2021 Internal Control Audit Report of CSG released on Juchao Website (www.cninfo.com.cn) |
| Type of the auditor’s opinion | Standard unqualified opinion |
| Whether there are major flaws in the non-financial report or not | No |
Whether the CPAs firm issued an Audit Report on Internal Control with non-standard opinion or not
□Yes √ No
Whether the Audit Report on Internal Control from the CPAs firm is in consistent with the Self-appraisal Report fromthe Board or not
√ Yes □ No
XV. Rectification of the Problems Found in the Self-inspection during the Special Campaign toImprove the Governance of Listed Companies
During the report period, in accordance with the spirit of the CSRC’s “Announcement on Launching Special Campaignto Improve the Governance of Listed Companies” (CSRC Announcement [2020] No. 69) and other documents, theCompany fully completed the special self-inspection work according to the special self-inspection list for governance oflisted companies. After internal self-examination, the Company had not found any major deficiencies and risks instandardized operation, and its corporate governance complied with the requirements specified in the "Company Law","Governance Guidelines for Listed Companies", "Guidelines on the Articles of Association of Listed Companies" andother laws and regulations with quite complete governance structure and law-compliance operation.
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Section V. Environment and social responsibility
I. Major environmental issues
The Company needs to comply with the disclosure requirements of non-metal building materials related industries in"Shenzhen Stock Exchange Listed Companies Self-discipline Supervision Guide No. 3 - Industry Information Disclosure"Environmental protection related policies and industry standardsThe Company implements the "Environmental Protection Law of the People's Republic of China", "the Law of thePeople's Republic of China on the Prevention and Control of Air Pollution", the "Law of the People's Republic of Chinaon the Prevention and Control of Water Pollution", the "Law of the People's Republic of China on the Prevention andControl of Noise Pollution", and the "Environmental Protection Tax Law of the People's Republic of China " and otherrelevant environmental protection laws and regulations, and implements the "Flat Glass Industry Air Pollutant EmissionStandard", "Electronic Glass Working Air Pollutant Emission Standard", "Air Pollutant Comprehensive EmissionStandard", "Sewage Comprehensive Emission Standard", "Environmental Noise Emission Standards at the Boundary ofIndustrial Enterprises" and other national, industry and local pollutant discharge standards.
Administrative license for environmental protectionThe construction projects of each subsidiary carried out environmental impact assessment work and obtain EIA approvalin strict accordance with the requirements of the "Environment Impact Assessment Law of the People's Republic ofChina" and the "Catalogue of Classified Management of Environmental Impact Assessment of Construction Projects".During the construction of the project, the construction of pollution prevention and control facilities shall be carried outin strict accordance with the requirements of the project "three simultaneous" and put into production and use at the sametime as the main project. During the trial production period, the inspection and acceptance shall be organized inaccordance with the relevant regulations on environmental protection acceptance of the completion of the constructionproject in order to ensure that the construction project completes the inspection and acceptance work before it is officiallyput into operation.All subsidiaries have obtained the pollutant discharge permit and are within the validity period, and regularly submit theimplementation report of pollutant discharge permit.
Industrial emission standards and specific conditions of pollutant emission involved in production and operationactivities
| Name of Company or subsidiary | Names of main pollutants and characteristic pollutants | Way of emission | vent | Exhaust vent distribution | Emission concentration | Implementation of pollutant emission standards | Total emission | Approved total emission | Excessive emissions |
| CSG Glass Co., Ltd. | Dust | Continuous/Intermittent | 16 | Production plant area | ≤30mg/m? | of air pollutants for flat glass industry》(GB26453-2011) | Particulates：22.78t | Particulates：96.82t/a | N/A |
| Soot | ≤25 mg/m? | ||||||||
| SO2 | ≤200 mg/m? | 224.15t | 636.5t/a | ||||||
| NOx | ≤350 mg/m? | 404.84t | 1113.89t/a | ||||||
| Glass Co., Ltd | Dust | Continuous/Intermittent | 15 | Production plant area | ≤20mg/m? | 《Emission standard | Particulates：28.68t | Particulates：142.114t/a | N/A |
| Soot | ≤20mg/m? |
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| SO2 | ≤200mg/m? | of air pollutants for flat glass industry》(GB26453-2011) | 274.3t | 1136.917t/a | |||||
| NOx | ≤350mg/m? | 513.53t | 1989.609t/a | ||||||
| Glass Co., Ltd. | Dust | Continuous/Intermittent | 16 | Production plant area | ≤10mg/m? | 《Ultra low emission standard of air pollutants for flat glass industry》(DB13/2168-2020) | Particulates：6.783t | Particulates：59.78t/a | N/A |
| Soot | ≤10mg/m? | ||||||||
| SO2 | ≤50mg/m? | 32.087t | 498.18t/a | ||||||
| NOx | ≤200mg/m? | 207.148t | 982.2t/a | ||||||
| Glass Co., Ltd | Dust | Continuous/Intermittent | 39 | Production plant area | ≤15mg/m? | 《Emission standard of air pollutants for flat glass industry》(GB26453-2011) | Particulates：23.19t | Particulates：76.91t/a | N/A |
| Soot | ≤15mg/m? | ||||||||
| SO2 | ≤50 mg/m? | 35.67t | 238.28t/a | ||||||
| NOx | ≤150 mg/m? | 363.7t | 818.04t/a | ||||||
| Solar Glass Co., Ltd. | Dust | Continuous/Intermittent | 22 | Production plant area | ≤20mg/m? | 《Emission standard of air pollutants for flat glass industry》（DB 44-2159-2019） | Particulates：12.86t | Particulates：34.85t/a | N/A |
| Soot | ≤20mg/m? | ||||||||
| SO2 | ≤400 mg/m? | 254.42t | 300.99t/a | ||||||
| NOx | ≤550 mg/m? | 380.91t | 535.67t/a | ||||||
| Architectural Glass Co., Ltd. | pH | Intermittent | 1 | Sewage vent | 6~9 | limit》（DB44/26- 2001） | / | / | N/A |
| COD | 5 mg/L | 0.149t | 5.4t/a | ||||||
| Ammonia nitrogen | 0.424mg/L | 0.013t | 0.6t/a | ||||||
| PV-tech Co., Ltd. | COD | Intermittent | 20 | Sewage vent，Production plant area | ≤70 mg/L | limit》（DB44/26- 2001） | 1.98t | 2.44t/a | N/A |
| NOx | ≤30mg/m3 | （GB30484-2013） | 10.21t | 33.15t/a | |||||
| VOCs | VOCs≤30mg/m? | 《VOC Emission Standard for Furniture Manufacturing Industry》（DB44/814-2010） | 0.78t | 1.93t/a | |||||
| Hebei Panel Glass Co., Ltd. | Dust | Continuous/Intermittent | 5 | Production plant area | ≤30mg/m?； | 《Pollutant emission standard for Electric Glass industry》 （GB29495-2013） | Particulates：0.149t | Particulates：8.2125t/a | N/A |
| Soot | ≤10 mg/m? | ||||||||
| SO2 | ≤50 mg/m? | 2.038t | 22t/a | ||||||
| NOx | ≤200mg/m? | 3.989t | 39.4t/a | ||||||
| Display Co., Ltd. | COD | Intermittent | 2 | Sewage vent；Production plant area | ≤500mg/L | 《Sewage Integrated Emission Standards》Level 3 Standard (GB8978- 1996) | 95.84t | 99.5t/a | N/A |
| NOx | <240mg/m? | （GB16297-1996） | 3.2t | 22.4t/a | |||||
| Photovoltaic Glass Co., Ltd | Dust | Continuous/Intermittent | 6 | Production plant area | ≤20mg/m? | Standards》(GB29495-2013) | Particulates：1.962t | Particulates：17.656t/a | N/A |
| Soot | ≤15 mg/m? | ||||||||
| SO2 | ≤10 mg/m? | 0.095t | 65.6t/a | ||||||
| NOx | ≤330 mg/m? | 59.814t | 163.81t/a |
Treatment of pollutants
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All subsidiaries have built pollution prevention and control facilities in accordance with the environmental impactassessment documents of construction projects and relevant specifications, and adopted air pollution control process suchas electrostatic precipitator + SCR denitrification + semi-dry desulfurization + bag dust removal, ceramic filter cartridgedesulfurization, denitrification and dust removal integration, bag dust removal and water treatment process such asneutralization + precipitation, fluidized bed, and biological oxidation, for which the technologies used are all in line withthe requirements of the "Guidelines for Feasible Technologies for Pollution Prevention and Control in GlassManufacturing Industry" and other documents. During 2021, the pollution control facilities were in good operation andthe pollutants were discharged stably up to the standard. The air pollutant emission concentrations of most of thesubsidiaries were lower than 50% of the emission standard and enjoyed the preferential policy of halving environmentaltax. The pollutant emissions of many subsidiaries reached and implemented local ultra-low emission standards.
Environmental self-monitoring schemeThe subsidiaries have built and operated on-line monitoring devices for waste water and exhaust gas in accordance withnational laws and regulations, environmental impact assessment documents of construction projects and the requirementsof their replies, regularly carried out comparison and review of the effectiveness of on-line monitoring facilities, andentrusted a third-party unit to carry out manual environmental monitoring to comprehensively monitor the pollutantdischarge. The monitoring frequency is implemented in accordance with relevant monitoring technical guidelines orpollutant discharge permits.
Emergency response plan system of environment incidentIn accordance with the national requirements, all subsidiaries prepared emergency environmental response plan forenvironment incident, organized and carried out expert evaluation and filed with the local environmental protectiondepartment as required, and conducted the emergency drill against environmental incidents as planned. And there wereno major environmental incidents occurred in 2021.
Investment in environmental governance and protection and payment of environmental protection taxCSG has always attached great importance to environmental protection work, actively fulfilled its social responsibilities,and adhered to the development path of energy conservation, emission reduction, low carbon and environmentalprotection. To reduce the generation of pollutants from the source, all glass kilns use natural gas as fuel, by which it isthe first enterprise in glass industry to use clean energy completely as fuel.The subsidiaries have constructed pollution prevention and control facilities in accordance with the environmental impactassessment documents of construction projects and relevant specifications, and put them into production and use at thesame time as the main works of the construction projects. In recent years, the Group has invested a lot of funds to improvethe level of environmental protection and pollution control. Since 2018, it has invested heavily in the construction ofdesulfurization facilities and backup denitrification facilities every year, by which, the concentration and total amount ofpollutant emissions have further dropped significantly, many subsidiaries have reached and implemented local ultra-lowemission standards (particulate matter≤10mg/m3, NOX≤200mg/m3, SO2≤50mg/m3), and other subsidiaries' pollutantemissions have been far lower than the national emission standards (particulate matter≤50mg/m3 , NOX≤700mg/m3,SO2≤400mg/m3).Enterprises involved in directly discharging pollutants into the environment have declared and paid environmental taxesto the local tax authorities in full and on time.
Measures taken to reduce carbon emissions during the report period and their effects
√ Applicable □Not applicable
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The Company has continuously strengthened the comprehensive utilization and management of resources and energy.The Group's Operation Department has specially established an energy management team to supervise the energyconsumption management of each subsidiary to ensure that the energy consumption per unit product of glass meltingfurnace of the same tonnage and the same kiln age is always at the leading level in the industry. CSG has always focusedon energy-saving technology, system construction, publicity and training to promote the participation of all staff in energyconservation and emission reduction, cost reduction and efficiency increase. In 2021, the energy consumption of the mainbusiness units of the Group further decreased. The Company has established waste heat power stations and photovoltaicpower stations in production bases according to local conditions. In 2021, the self-generating capacity of waste heat powergeneration and photovoltaic power generation of the Company has been close to 400 million kwh, equivalent to reducingcarbon dioxide emissions by more than 360,000 tons.
Administrative penalty imposed by environmental protection departmentNil
Other environmental information that should be disclosedNil
Environmental incidents in the listed companyNilII. Social Responsibility
2021 Annual Social Responsibilities Report of CSG is the 14th annual report released by the Company consecutively.The report focusing on the year of 2021, systemically formulated the Company concrete actions of how to positivelyperform the social responsibilities, and the efforts to implement the “Scientific Development Perspective”, building up aharmonious society, and advancing the sustainable development of economy and society. See the full report onwww.cninfo.com.cn.
III.Consolidate and expand the achievements of poverty alleviation and Rural Revitalization
During the report period, the Company and its subsidiaries actively carried out social welfare and poverty alleviationactivities. For details, see the 2021 Annual Social Responsibilities Report of CSG disclosed on www.cninfo.com.cn.
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Section VI. Important EventsI. Implementation of commitment
1. Commitments completed by the actual controllers, the shareholders, the related parties, the purchasers,the Company or the other related parties during the report period and those hadn’t been completed executionby the end of the report period
√Applicable □ Not applicable
| Commitments | Promisee | Type of commitments | Content of commitments | Commitment date | Commitment term | Implementation |
| Share Merger Reform | The original non-tradable shareholder Shenzhen International Holdings (SZ) Limited and Xin Tong Chan Industrial Development (Shenzhen) Co., Ltd. Note 1 | Commitment of share reduction | The Company has implemented share merger reform in May 2006. Till June 2009, the share of the original non-tradable shareholders which holding over 5% total shares of the Company had all released. Therein, the original non-tradable shareholder Shenzhen International Holdings (SZ) Limited and Xin Tong Chan Industrial Development (Shenzhen) Co., Ltd. both are wholly-funded subsidiaries to Shenzhen International Holdings Limited (hereinafter Shenzhen International for short) listed in Hong Kong united stock exchange main board. Shenzhen International made commitment that it would strictly carry out related regulations of Securities Law, Administration of the Takeover of Listed Companies Procedures and Guiding Opinions on the Listed Companies’ Transfer of Original Shares Released from Trading Restrictions issued by CSRC during implementing share decreasingly-held plan and take information disclosure responsibility timely. | 2006-5-22 | N/A |
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| Commitments in report of acquisition or equity change | Foresea Life Insurance Co., Ltd, Shenzhen Jushenghua Co., Ltd.Note 2 and Chengtai Group Co., Ltd. | capital occupation | Foresea Life Insurance Co., Ltd., Shenzhen Jushenghua Co., Ltd. and Chengtai Group Co., Ltd. issued detailed report of equity change on 29 June 2015, in which, they undertook to keep independent from CSG in aspects of personnel, assets, finance, organization set-up and business as long as Foresea Life Insurance remained the largest shareholder of CSG. Meanwhile, they made commitment on regularizing related transaction and avoiding industry competition. | 2015-6-29 | During the period when Foresea Life remains the largest shareholder of the Company | |
| Commitments in assets reorganization | Not applicable | |||||
| Commitments in initial public offering or re-financing | Not applicable | |||||
| Equity incentive commitment | Not applicable | |||||
| Other commitments for medium and small shareholders | Not applicable | |||||
| Completed on time(Yes/No) | Yes | |||||
| If the commitments is not fulfilled on time, explain the reasons and the next work plan | Not applicable | |||||
Note 1: Shenzhen International Holdings (SZ) Limited and Xin Tong Chan Industrial Development (Shenzhen) Co., Ltd.reduced their total holdings of 39.1732 million shares of the Company from June 15, 2021 to July 12, 2021, accountingfor more than 1% of the total share capital of the Company. After this reduction, the above shareholders no longer heldthe shares of the Company. In this reduction, the above shareholders complied with relevant regulations, timely fulfilledthe obligation of information disclosure and strictly fulfilled relevant commitments.Note 2: Shenzhen Jushenghua Co., Ltd. transferred its 86,633,447 unrestricted tradable A shares of CSG Group to itswholly-owned sub-subsidiary Zhongshan Runtian Investment Co., Ltd. through agreement transfer on March 16, 2020.Zhongshan Runtian Investment Co., Ltd. is obliged to continue to fulfill the commitments made by Shenzhen JushenghuaCo., Ltd. As of the end of the report period, the above-mentioned shareholders had strictly fulfilled the relevantcommitments.
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2. If there are assets or projects of the Company, which has profit forecast and the report period is still inforecasting period, the Company should explain reasons why they reach the original profit forecast
□ Applicable √ Not applicable
II. Particulars about non-operating fund of listed company which is occupied by controllingshareholder and its affiliated enterprises
□ Applicable √ Not applicable
III. Illegal external guarantee
□ Applicable √ Not applicable
The Company had no illegal external guarantee during the report period.IV. Explanation from the Board of Directors for the latest “Non-standard audit report”
□ Applicable √ Not applicable
V. Explanation from Board of Directors, Supervisory Committee and Independent Directors(if applicable) for “Non-standard audit report” of the period that issued by CPA
□ Applicable √ Not applicable
VI. Explanation of changes in accounting policies, accounting estimates or correction ofsignificant accounting errors compared with the financial report of the previous year
√Applicable □ Not applicable
| The content and reason of accounting policy change | Approval procedures |
| The Ministry of Finance issued the revised Accounting Standards for Business Enterprises No. 21 - Leases in December 2018 (hereinafter referred to as the "New Lease Standards"), which was implemented by the Group and the Company from January 1, 2021. For contracts existing before the first execution date, the Group and the Company chose not to reassess whether they were leases or including leases. The Group and the Company adjusted the amount of retained earnings and other relevant items in the financial statements at the beginning of the year of initial implementation according to the cumulative impact of initial implementation, and did not adjust the information of comparable periods. The implementation of the new lease standards was not expected to have a significant impact on the financial statements. | The 4th Meeting of the Ninth Board of Directors held on April 13, 2021deliberated and passed the Proposal on Accounting Policy Changes. |
VII. Description of changes in consolidation statement’s scope compared with the financialreport of last year
√Applicable □ Not applicable
On 19 April 2021, the Group set up a subsidiary, Xi'an CSG Energy Saving Glass Technology Co., Ltd. (referred to as"Xi'an Energy Saving Company").As of 31 December 2021, the Group had invested RMB 1,000,000.The Group owns100% of its equity.
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On 25 June 2021, the Group set up a subsidiary, Anhui CSG Silicon Valley Mingdu Mining Development Co., Ltd.(referred to as "Anhui Silicon Valley Mingdu Mining Company").As of 31 December 2021, the Group had investedRMB 3,000,000. The Group owns 60% of its equity.
On 9 October 2021, the Group set up a subsidiary, Guangxi CSG New Energy Materials Technology Co., Ltd. (referredto as "Guangxi New Energy Materials Company").As of 31 December 2021, the Group had invested RMB 31,000,000.The Group owns 100% of its equity.
On 4 November 2021, the Group set up a subsidiary, Qinghai CSG Sunrise New Energy Technology Co., Ltd. (referredto as "Qinghai CSG New Energy").As of 31 December 2021, the Group had not invested yet. The Group owns 100% ofits equity.
On 8 December 2021, the Group set up a subsidiary, Hefei CSG Energy Saving Material Intelligent Manufacturing Co.,Ltd. (referred to as "Hefei Energy Saving Company").As of 31 December 2021, the Group had not invested yet. TheGroup owns 100% of its equity.
On 9 December 2021, the Group set up a subsidiary, Shenzhen CSG New Energy Industry Development Co., Ltd.(referred to as "Shenzhen CSG New Energy").As of 31 December 2021, the Group had not invested yet. The Group owns100% of its equity.
On 13 December 2021, the Group set up a subsidiary, Zhaoqing CSG New Energy Technology Co., Ltd. (referred to as"Zhaoqing CSG New Energy"). As of 31 December 2021, the Group had not invested yet. The Group owns 100% of itsequity.VIII. Engaging and dismissing of CPA firm
CPA firm engaged
| Name of domestic CPA firm | Asia Pacific (Group) CPAs (special general partnership) |
| Remuneration for domestic CPA firm (RMB 0,000) | 300 |
| Continuous life of auditing service for domestic CPA firm | 4 |
| Name of domestic CPA | Zhou Xianhong, Wu Yiluo |
| Continuous life of auditing service for domestic CPA | Zhou Xianhong (4 years), Wu Yiluo (1 year) |
Whether changed accounting firms in this period or not
□ Yes √No
Appointment of internal control auditing accounting firm, financial consultant or sponsor
√Applicable □ Not applicable
Asia Pacific (Group) CPAs (special general partnership) was engaged as audit institute of internal control for the Companyin the report period, and contracted charges was RMB 0.30 million (cost of business trips and accommodation at its ownexpense).
IX. Delisting after the disclosure of the annual report
□ Applicable √ Not applicable
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X. Issues related to bankruptcy and reorganization
□ Applicable √ Not applicable
XI. Significant lawsuits and arbitrations
□ Applicable √ Not applicable
XII. Penalty and rectification
□ Applicable √ Not applicable
XIII. Integrity of the Company and its controlling shareholders and actual controllers
□ Applicable √ Not applicable
XIV. Major related transaction
1. Related transaction with routine operation concerned
□ Applicable √ Not applicable
2. Related transaction with acquisition of assets or equity, sales of assets or equity concerned
□ Applicable √ Not applicable
3. Related transaction with jointly external investment concerned
□ Applicable √ Not applicable
4. Credits and liabilities with related parties
□ Applicable √ Not applicable
5. Transactions with related financial companies
□ Applicable √ Not applicable
6. Transactions between financial companies controlled by the company and related parties
□ Applicable √ Not applicable
7. Other major related transaction
□ Applicable √ Not applicable
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XV. Significant contracts and their implementation
1. Trusteeship, contracting and leasing
(1) Trusteeship
□ Applicable √ Not applicable
(2) Contract
□ Applicable √ Not applicable
(3) Leasing
□ Applicable √ Not applicable
2. Major guarantees
√Applicable □ Not applicable
Unit: RMB 0,000
| External guarantee of the Company and its subsidiaries(barring the guarantee for subsidiaries) | ||||||||||
| Name of the Company guaranteed | Related Announcement disclosure date | Guarantee limit | Actual date of happening (Date of signing agreement) | Actual guarantee limit | Guarantee term | implementation or not | Guarantee for related party (Yes or no) | |||
| Total amount of approving external guarantee in report period (A1) | 0 | Total amount of actual occurred external guarantee in report period (A2) | 0 | |||||||
| Total amount of approved external guarantee at the end of report period (A3) | 0 | Total balance of actual external guarantee at the end of report period (A4) | 0 | |||||||
| Guarantee of the Company for the subsidiaries | ||||||||||
| Name of the Company guaranteed | Related Announcement disclosure date | Guarantee limit | Actual date of happening (Date of signing agreement) | Actual guarantee limit | Guarantee term | implementation or not | Guarantee for related party (Yes or no) | |||
| Xianning CSG Photovoltaic Glass Co., Ltd. | 2016/08/16 | 30,000 | 2017/01/03 | 7,630 | Joint liability guarantee | 5 years | Yes | No | ||
| Xianning CSG Photovoltaic Glass Co., Ltd. | 2020/12/05 | 3,000 | 2021/02/07 | 2,603 | Joint liability guarantee | 1 year | No | No | ||
| Xianning CSG Photovoltaic Glass Co., Ltd. | 2020/12/19 | 5,000 | 2021/03/22 | 4,500 | Joint liability guarantee | 1 year | No | No | ||
| Xianning CSG Energy-Saving Glass Co., Ltd. | 2020/04/30 | 3,000 | 2020/07/10 | 2,000 | Joint liability guarantee | 1 year | Yes | No | ||
| Xianning CSG Energy-Saving Glass Co., Ltd. | 2021/02/19 | 5,000 | 2021/09/24 | 1,500 | Joint liability guarantee | 1 year | No | No | ||
| Yichang Nanbo Photoelectric Glass Co., Ltd. | 2021/02/19 | 1,824 | 2021/03/19 | 1,200 | Joint liability guarantee | 1 year | No | No | ||
| Yichang Nanbo Photoelectric Glass Co., Ltd. | 2021/08/10 | 1,824 | 2021/12/17 | Joint liability guarantee | 1 year | No | No | |||
| Dongguan CSG PV-tech Co., Ltd. | 2021/08/10 | 3,000 | 2021/11/29 | Joint liability guarantee | 1 year | No | No | |||
| Dongguan CSG PV-tech Co., Ltd. | 2021/08/10 | 10,000 | 2021/08/13 | 4,077 | Joint liability guarantee | 1 year | No | No | ||
| Dongguan CSG PV-tech Co., Ltd. | 2020/03/06 | 5,500 | 2020/04/14 | 2,000 | Joint liability guarantee | 1 year | Yes | No | ||
| Hebei Panel Glass Co., Ltd. | 2021/02/19 | 3,000 | Joint liability guarantee | 1 year | No | No | ||||
| Hebei Panel Glass Co., Ltd. | 2021/10/30 | 16,500 | 2021/12/17 | 318 | Joint liability guarantee | 5 years | No | No | ||
| Hebei CSG Glass Co., Ltd. | 2021/02/19 | 5,000 | Joint liability guarantee | 1 year | No | No | ||||
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| Dongguan CSG Architectural Glass Co., Ltd. | 2021/06/29 | 5,000 | 2021/09/13 | Joint liability guarantee | 2 years | No | No | |
| Xianning CSG Glass Co., Ltd. | 2020/12/05 | 4,000 | 2021/02/08 | 2,000 | Joint liability guarantee | 1 year | No | No |
| Xianning CSG Glass Co., Ltd. | 2021/12/25 | 15,000 | Joint liability guarantee | 7 years | No | No | ||
| Xianning CSG Glass Co., Ltd. | 2021/12/25 | 50,000 | Joint liability guarantee | 7 years | No | No | ||
| Xianning CSG Glass Co., Ltd. | 2021/06/29 | 20,000 | 2021/07/07 | 20,000 | Joint liability guarantee | 5 years | No | No |
| Chengdu CSG Glass Co., Ltd. | 2020/08/24 | 5,000 | 2020/08/24 | 4,500 | Joint liability guarantee | 1 year | Yes | No |
| Chengdu CSG Glass Co., Ltd. | 2021/12/25 | 5,000 | Joint liability guarantee | 1 year | No | No | ||
| Chengdu CSG Glass Co., Ltd. | 2021/02/19 | 5,000 | 2021/03/08 | Joint liability guarantee | 1 year | No | No | |
| Sichuan CSG Energy Conservation Glass Co., Ltd. | 2020/08/24 | 5,000 | 2020/08/24 | 4,500 | Joint liability guarantee | 1 year | Yes | No |
| Sichuan CSG Energy Conservation Glass Co., Ltd. | 2021/12/25 | 8,000 | Joint liability guarantee | 1 year | No | No | ||
| Sichuan CSG Energy Conservation Glass Co., Ltd. | 2021/02/19 | 5,000 | 2021/03/09 | 5,000 | Joint liability guarantee | 1 year | No | No |
| Sichuan CSG Energy Conservation Glass Co., Ltd. | 2021/06/08 | 5,000 | 2021/08/24 | Joint liability guarantee | 1 year | No | No | |
| Wujiang CSG Glass Co., Ltd. | 2021/02/19 | 10,000 | 2021/03/12 | 4,372 | Joint liability guarantee | 4 years | No | No |
| Wujiang CSG Glass Co., Ltd. | 2021/02/19 | 10,000 | 2021/03/19 | 780 | Joint liability guarantee | 1 year | No | No |
| Wujiang CSG Glass Co., Ltd. | 2021/12/25 | 10,000 | 2022/02/17 | 747 | Joint liability guarantee | 1 year | No | No |
| Wujiang CSG Glass Co., Ltd. | 2021/02/19 | 5,000 | 2021/03/08 | Joint liability guarantee | 1 year | No | No | |
| Wujiang CSG Glass Co., Ltd. | 2021/06/08 | 5,000 | 2021/09/26 | Joint liability guarantee | 1 year | No | No | |
| Wujiang CSG Glass Co., Ltd. | 2021/02/19 | 10,000 | 2021/03/26 | Joint liability guarantee | 1 year | No | No | |
| Dongguan CSG Architectural Glass Co., Ltd. | 2020/06/24 | 6,000 | 2020/08/18 | 2,000 | Joint liability guarantee | 1 year | Yes | No |
| Dongguan CSG Architectural Glass Co., Ltd. | 2021/10/30 | 10,000 | 2021/05/18 | 1,631 | Joint liability guarantee | 1 year | No | No |
| Dongguan CSG Architectural Glass Co., Ltd. | 2021/02/19 | 10,000 | 2021/02/19 | 2,070 | Joint liability guarantee | 1 year | No | No |
| Wujiang CSG East China Architectural Glass Co., Ltd. | 2020/12/05 | 10,000 | 2020/12/09 | Joint liability guarantee | 1 year | No | No | |
| Wujiang CSG East China Architectural Glass Co., Ltd. | 2021/02/19 | 7,000 | 2021/03/01 | 2,000 | Joint liability guarantee | 1 year | No | No |
| Wujiang CSG East China Architectural Glass Co., Ltd. | 2021/02/19 | 12,400 | 2021/05/19 | 2,572 | Joint liability guarantee | 5 years | No | No |
| Wujiang CSG East China Architectural Glass Co., Ltd. | 2021/12/25 | 3,000 | Joint liability guarantee | 2 years | No | No | ||
| Dongguan CSG Solar Glass Co., Ltd. | 2021/08/10 | 10,000 | 2021/09/13 | 6,901 | Joint liability guarantee | 1 year | No | No |
| Dongguan CSG Solar Glass Co., Ltd. | 2021/02/19 | 5,000 | 2021/03/08 | Joint liability guarantee | 1 year | No | No | |
| Dongguan CSG Solar Glass Co., Ltd. | 2021/02/19 | 7,132 | 2021/03/01 | Joint liability guarantee | 1 year | No | No | |
| Dongguan CSG Solar Glass Co., Ltd. | 2020/09/22 | 4,500 | 2020/11/11 | 919 | Joint liability guarantee | 3 years | Yes | No |
| Dongguan CSG Solar Glass Co., Ltd. | 2021/10/30 | 20,000 | 2020/12/25 | 2,000 | Joint liability guarantee | 1 year | No | No |
| Dongguan CSG Solar Glass Co., Ltd. | 2021/06/08 | 6,460 | 2021/07/07 | Joint liability guarantee | 1 year | No | No | |
| Dongguan CSG Solar Glass Co., Ltd. | 2020/04/30 | 5,000 | 2020/05/18 | Joint liability guarantee | 1 year | No | No | |
| Qingyuan CSG New Energy-Saving Materials Co., Ltd. | 2021/06/08 | 4,330 | 2021/08/25 | 1,425 | Joint liability guarantee | 1 year | No | No |
| Qingyuan CSG New Energy-Saving Materials Co., Ltd. | 2021/08/10 | 4,500 | 2021/09/07 | Joint liability guarantee | 1 year | No | No | |
| Qingyuan CSG New Energy-Saving Materials Co., Ltd. | 2021/08/10 | 10,000 | 2021/08/31 | Joint liability guarantee | 1 year | No | No | |
| Qingyuan CSG New Energy-Saving Materials Co., Ltd. | 2021/12/25 | 5,000 | Joint liability guarantee | 1 year | No | No |
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| Qingyuan CSG New Energy-Saving Materials Co., Ltd. | 2019/12/10 | 50,000 | 2020/04/26 | 13,505 | Joint liability guarantee | 5 years | No | No | ||
| Qingyuan CSG New Energy-Saving Materials Co., Ltd. | 2019/12/10 | 5,000 | 2020/04/26 | Joint liability guarantee | 1 year | No | No | |||
| Yichang CSG Display Co., Ltd. | 2020/05/23 | 3,040 | 2020/06/22 | 2,800 | Joint liability guarantee | 1 year | Yes | No | ||
| Yichang CSG Display Co., Ltd. | 2021/10/30 | 3,000 | 2021/12/01 | Joint liability guarantee | 1 year | No | No | |||
| Yichang CSG Display Co., Ltd. | 2020/05/23 | 3,040 | 2020/05/29 | 3,000 | Joint liability guarantee | 1 year | Yes | No | ||
| Tianjin CSG Energy-Saving Glass Co., Ltd. | 2021/06/08 | 3,000 | 2021/07/14 | Joint liability guarantee | 1 year | No | No | |||
| Tianjin CSG Energy-Saving Glass Co., Ltd. | 2021/02/19 | 5,000 | 2021/03/30 | 3,987 | Joint liability guarantee | 1 year | No | No | ||
| Tianjin CSG Energy-Saving Glass Co., Ltd. | 2021/02/19 | 7,000 | 2021/03/23 | 6,464 | Joint liability guarantee | 4 years | No | No | ||
| Tianjin CSG Energy-Saving Glass Co., Ltd. | 2021/06/29 | 2,000 | 2021/11/26 | 82 | Joint liability guarantee | 1 year | No | No | ||
| Anhui CSG New Energy Material Technology Co., Ltd. | 2021/08/10 | 70,000 | 2021/10/19 | 8,319 | Joint liability guarantee | 6 years | No | No | ||
| Anhui CSG New Energy Material Technology Co., Ltd. | 2021/08/10 | 180,000 | 2021/08/28 | 25,800 | Joint liability guarantee | 7 years | No | No | ||
| Anhui CSG New Energy Material Technology Co., Ltd. | 2021/12/25 | 50,000 | Joint liability guarantee | 9 years | No | No | ||||
| Anhui CSG New Quartz Material Co., Ltd | 2021/06/29 | 9,000 | 2021/09/13 | 3,230 | Joint liability guarantee | 5 years | No | No | ||
| Zhaoqing CSG Energy-Saving Glass Co., Ltd. | 2020/09/22 | 34,000 | 2020/09/25 | 18,446 | Joint liability guarantee | 5 years | No | No | ||
| China Southern Glass (Hong Kong) Limited | 2020/02/25 | 48,000 | 2020/04/04 | 6,312 | Joint liability guarantee | 1 year | Yes | No | ||
| Dongguan CSG Architectural Glass Co., Ltd. | 2021/06/29 | 2021/07/01 | 656 | Joint liability guarantee | 1 year | No | No | |||
| Dongguan CSG Solar Glass Co., Ltd. | 2021/06/29 | 2021/07/01 | Joint liability guarantee | 1 year | No | No | ||||
| Dongguan CSG PV-tech Co., Ltd. | 2021/06/29 | 2021/07/01 | 661 | Joint liability guarantee | 1 year | No | No | |||
| Qingyuan CSG New Energy-Saving Materials Co., Ltd. | 2021/06/29 | 2021/07/01 | 291 | Joint liability guarantee | 1 year | No | No | |||
| Anhui CSG New Energy Material Technology Co., Ltd. | 2021/02/19 | 2021/04/12 | 19,371 | Joint liability guarantee | 1 year | No | No | |||
| Wujiang CSG Glass Co., Ltd. | 2021/02/19 | 2021/03/26 | 253 | Joint liability guarantee | 1 year | No | No | |||
| Chengdu CSG Glass Co., Ltd. | 2021/06/29 | 2021/07/01 | Joint liability guarantee | 1 year | No | No | ||||
| Sichuan CSG Energy Conservation Glass Co., Ltd. | 2021/06/29 | 2021/07/01 | 312 | Joint liability guarantee | 1 year | No | No | |||
| Xianning CSG Glass Co., Ltd. | 2021/06/09 | 2021/07/01 | Joint liability guarantee | 1 year | No | No | ||||
| Xianning CSG Energy-Saving Glass Co., Ltd. | 2021/06/09 | 2021/07/01 | 302 | Joint liability guarantee | 1 year | No | No | |||
| Wujiang CSG East China Architectural Glass Co., Ltd. | 2021/06/29 | 2021/07/01 | 539 | Joint liability guarantee | 1 year | No | No | |||
| Tianjin CSG Energy-Saving Glass Co., Ltd. | 2021/06/29 | 2021/07/01 | 950 | Joint liability guarantee | 1 year | No | No | |||
| Hebei Panel Glass Co., Ltd. | 2020/06/24 | Joint liability guarantee | 1 year | No | No | |||||
| Dongguan CSG Jingyu New Material Co., Ltd. | 2020/02/25 | Joint liability guarantee | 1 year | No | No | |||||
| Xianning CSG Photovoltaic Glass Co., Ltd. | 2020/02/25 | 2020/06/24 | 500 | Joint liability guarantee | 1 year | Yes | No | |||
| Zhaoqing CSG Energy-Saving Glass Co., Ltd. | 2021/06/29 | Joint liability guarantee | 1 year | No | No | |||||
| Total amount of approving guarantee for subsidiaries in report period (B1) | 705,970 | Total amount of actual occurred guarantee for subsidiaries in report period (B2) | 134,084 | |||||||
| Total amount of approved guarantee for subsidiaries at the end of reporting period (B3) | 801,970 | Total balance of actual guarantee for subsidiaries at the end of reporting period (B4) | 168,864 | |||||||
| Guarantee situation of subsidiaries to subsidiaries | ||||||||||
| Name of the Company guaranteed | Related Announcement disclosure date | Guarantee limit | Actual date of happening (Date of signing agreement) | Actual guarantee limit | Guarantee term | implementation or not | Guarantee for related party (Yes or no) | |||
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| Total amount of approving guarantee for subsidiaries in report period (C1) | 0 | Total amount of actual occurred guarantee for subsidiaries in report period (C2) | 0 |
| Total amount of approved guarantee for subsidiaries at the end of reporting period (C3) | 0 | Total balance of actual guarantee for subsidiaries at the end of reporting period (C4) | 0 |
| Total amount of guarantee of the Company( total of three abovementioned guarantee) | |||
| Total amount of approving guarantee in report period (A1+B1+C1) | 705,970 | Total amount of actual occurred guarantee in report period (A2+B2+C2) | 134,084 |
| Total amount of approved guarantee at the end of report period (A3+B3+C3) | 801,970 | Total balance of actual guarantee at the end of report period (A4+B4+C4) | 168,864 |
| The proportion of the total amount of actual guarantee in the net assets of the Company(that is A4+ B4+C4) | 14.77% | ||
| Including: | |||
| Amount of guarantee for shareholders, actual controller and its related parties(D) | 0 | ||
| The debts guarantee amount provided for the guaranteed parties whose assets-liability ratio exceed 70% directly or indirectly(E) | 0 | ||
| Proportion of total amount of guarantee in net assets of the Company exceed 50%(F) | 0 | ||
| Total amount of the aforesaid three guarantees(D+E+F) | 0 | ||
| For the guarantee contract not yet due, guarantee responsibility incurred in the reporting period or there is evidence showing the description of the possible related discharge duty (if any) | N/A | ||
| Explanations on external guarantee against regulated procedures(if any） | N/A | ||
Note: The Company carried out a "Bill Pool" business of 300 million yuan. The Company and its holding subsidiariescould adopt various guarantee methods such as maximum pledge, general pledge, deposit certificate pledge, bill pledge,and margin pledge for the establishment and use of the bill pool.The Company held an extraordinary meeting of the Ninth Board of Directors on August 9, 2021, and held the ThirdExtraordinary General Meeting of Shareholders in 2021 on August 25, 2021 to deliberate and approve the "Proposal onGuarantee Matters", by which it agreed to provide irrevocable joint liability guarantee for Anhui CSG New EnergyMaterials Technology Co., Ltd. to apply for comprehensive credit to business related parties (including but not limited tobanks and other financial institutions and other business partners), with an estimated guarantee amount not exceedingRMB 2.6 billion. As of December 31, 2021, the Company and China Merchants Bank Co., Ltd. Shenzhen Branch signedthe "Maximum Irrevocable Guarantee Letter" to provide the subsidiary Anhui CSG New Energy Materials TechnologyCo., Ltd. with a maximum amount not exceeding the equivalent of RMB 1.8 billion. The Company signed the "GuaranteeContract" with Bank of China Co., Ltd. Chuzhou Branch to provide the subsidiary Anhui CSG New Energy MaterialsTechnology Co., Ltd. with a maximum amount of financing credit guarantee not exceeding the equivalent of RMB 700million.Description of the guarantee with complex methodNil
3. Entrust others to manage cash assets
(1)Entrusted Financing
√ Applicable □ Not applicable
Overview of entrusted financing during the report period
Unit: RMB 0,000
| Type | Source of funds for entrusted financing | Amount of entrusted financing | Outstanding balance | Amount not collected after the due date | Amount of impairment accrued for overdue uncollected entrusted financing |
| Structured deposit | Own funds | 100,000 | 99,960 | 0 | 0 |
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| Total | 100,000 | 99,960 | 0 | 0 |
Details of high-risk entrusted financing with significant single amount or low security and poor liquidity
□Applicable √ Not applicable
Entrusted financing expected to be unable to recover the principal or other circumstances that may lead to impairment
□Applicable √ Not applicable
(2) Entrusted loans
□Applicable √ Not applicable
The Company had no entrusted loans in the report period.
4. Other material contracts
□ Applicable √ Not applicable
XVI. Statement on other important matters
√Applicable □ Not applicable
1. Ultra-short-term financing bills
On June 15, 2020, the Company the third extraordinary general meeting of shareholders 2020 deliberated and approvedthe proposal on application for registration and issuance of ultra-short-term financing bills and medium-term notes, whichagreed that the Company should register and issue ultra-short-term financing bills with a registered amount not exceeding
1.5 billion yuan (the limit is not subject to the limit of 40% of net assets).With the period of validity of the quota notlonger than two years, such ultra-short-term financing bills will be issued by installments in accordance with the actualcapital needs of the Company and the situation of inter-bank market funds. On September 4, 2020, the NAFMII held its102nd registration meeting in 2020 and decided to accept the registration of ultra-short-term financing bills with a totalof 1.5 billion yuan and a validity period of two years.
2. Medium-term notes
On April 15, 2016, the Shareholders’ General Meeting of 2015 of CSG deliberated and approved the proposal ofapplication for registration and issuance of medium-term notes with total amount of RMB 0.8 billion, which could beissued by stages within period of validity of the registration according to the Company’s actual demands for funds andthe status of inter-bank funds. On 2 March 2018, National Association of Financial Market Institutional Investors(NAFMII) held the 14th registration meeting of 2018, in which NAFMII decided to accept the registration of theCompany’s medium-term notes, amounting to RMB 0.8 billion and valid for two years. Shanghai Pudong DevelopmentBank Co., Ltd. and China CITIC Bank Corporation Limited were joint lead underwriters of these medium-term noteswhich could be issued by stages within period of validity of the registration. On May 4, 2018, the company issued thefirst medium-term notes with a total amount of 800 million yuan and a term of three years. The issue rate was 7%, andthe redemption date was May 4, 2021.On June 15, 2020, the Third Extraordinary Shareholders’ General Meeting 2020 of CSG deliberated and approved theproposal on application for registration and issuance of ultra-short-term financing bills and medium-term notes, whichagreed that the Company should register and issue medium-term notes with a registered amount not exceeding 1.5 billionyuan. With the period of validity of the quota not longer than two years, such ultra-short-term financing bills will beissued by installments in accordance with the actual capital needs of the Company and the situation of inter-bank market
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funds. On September 4, 2020, the NAFMII held the 102nd registration meeting in 2020 and decided to accept thecompany's registration of medium-term notes with a total of 1.5 billion yuan and a validity period of two years.3 .Public issuance of corporate bondsOn March 2, 2017, the 2nd Extraordinary General Meeting of Shareholders in 2017 reviewed and approved “the Proposalon the Public Issuance of Corporate Bonds for Qualified Investors". On February 27, 2019, the First Extraordinary GeneralMeeting of Shareholders in 2019 The “Proposal on Extending the Validity Period of the Shareholders' Meeting for thePublic Offering of Corporate Bonds to Qualified Investors” agreed to issue corporate bonds with a total issue of no morethan RMB 2 billion and a term of no more than 10 years. On June 26, 2019, the Company received the “Approval ofApproving CSG Holding Co., Ltd. to Issue Corporate Bonds to Qualified Investors” issued by China Securities RegulatoryCommission (ZJXK [2019] No. 1140). On March 24, 2020 and March 25, 2020, the Company issued the first batch ofcorporate bonds with total amount of RMB 2 billion and valid term of 3 years at the issuance rate of 6%, which will beredeemed on March 25, 2023 (for details, please refer to "Section IX Bonds").On March 12, 2020, the First Extraordinary General Meeting of Shareholders in 2020 reviewed and approved “theProposal on the Public Issuance of Corporate Bonds for Qualified Investors", agreed to issue corporate bonds with a totalissue of no more than RMB 1.8 billion and a term of no more than 10 years. On April 22, 2020, the Company receivedthe “Approval of Approving CSG Holding Co., Ltd. to Issue Corporate Bonds to Qualified Investors” issued by ChinaSecurities Regulatory Commission (ZJXK[2020] No. 784).
4. Non-public issuance of A shares
The interim meeting of the 8th board of directors of the Company held on March 5, 2020 deliberated and approved therelated proposals of non-public issuance of A shares, and agreed the Company to issue A shares privately. The proposalswere deliberated and approved by the 2nd Extraordinary General Meeting of Shareholders of 2020 which held on April16, 2020. In May 2020, the Company received the first feedback notice on the examination of administrative licensingprojects of China Securities Regulatory Commission (No. 200819) issued by the China Securities Regulatory Commission,and published “Announcement on Reply to the Feedback of Application Documents For Non-public Offering of A shares”and “Announcement on the Revised Reply to the Feedback of Application Documents For Non-public Offering of Ashares” on June 8, 2020 and June 29, 2020respectively. On June 5, 2020, the Company held an interim meeting of the 9thboard of directors, deliberated and approved the relevant proposals on adjusting the Company's non-public issuance of Ashares. On July 6, 2020, the Issuance Audit Committee of China Securities Regulatory Commission reviewed theCompany's application for non-public issuance of A shares. According to the audit results, the Company's application fornon-public issuance of A shares was approved. On July 22, 2020, the Company received the “Reply on the Approval ofNon-public Issuance of Shares of CSG” (ZJXK [2020] No. 1491) issued by China Securities Regulatory Commission.After obtaining the approval, the Company actively worked with intermediaries to promote various work concerning thenon-public issuance of A shares. However, in view of changes in many factors such as the capital market environment,industrial development, the Company’s market value performance and the timing of equity financing, the Company didnot implement this non-public issuance of A shares within the validity period of the approval document. The approval forthe non-public issuance of A shares expired automatically. For details, please refer to the "Announcement on theExpiration of the Approval for the Non-public Issuance of A Shares" (Announcement No.: 2021-034) disclosed by theCompany on July 15, 2021.For details, please refer to Juchao website (www.cninfo.com.cn).
XVII. Significant events of subsidiaries of the Company
□ Applicable √ Not applicable
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Section VII. Changes in Shares and Particulars about
Shareholders
I. Changes in Share Capital
1. Changes in Share Capital
Unit: Share
| Before the Change | Increase/Decrease in the Change (+, -) | After the Change | |||||||
| Amount | Proportion (%) | New shares issued | Bonus shares | Capitalization of public reserve | Others | Subtotal | Amount | Proportion (%) | |
| I. Restricted shares | 3,323,978 | 0.11% | 1,412,818 | 1,412,818 | 4,736,796 | 0.15% | |||
| 1. State-owned shares | |||||||||
| 2. State-owned legal person’s shares | |||||||||
| 3. Other domestic shares | 3,323,978 | 0.11% | 1,412,818 | 1,412,818 | 4,736,796 | 0.15% | |||
| Including: Domestic legal person’s shares | |||||||||
| Domestic natural person’s shares | 3,323,978 | 0.11% | 1,412,818 | 1,412,818 | 4,736,796 | 0.15% | |||
| 4. Foreign shares | |||||||||
| Including: Foreign legal person’s shares | |||||||||
| Foreign natural person’s shares | |||||||||
| II. Unrestricted shares | 3,067,368,129 | 99.89% | -1,412,818 | -1,412,818 | 3,065,955,311 | 99.85% | |||
| 1. RMB Ordinary shares | 1,957,999,069 | 63.76% | -1,412,818 | -1,412,818 | 1,956,586,251 | 63.72% | |||
| 2. Domestically listed foreign shares | 1,109,369,060 | 36.13% | 1,109,369,060 | 36.13% | |||||
| 3. Overseas listed foreign shares | |||||||||
| 4. Others | |||||||||
| III. Total shares | 3,070,692,107 | 100% | 3,070,692,107 | 100% | |||||
Reason for equity changes
√Applicable □Not applicable
During the report period, China Securities Depository and Clearing Corporation Limited adjusted the locked-up shares ofsenior management in accordance with regulations, and the Company’s restricted shares and unrestricted shares changedaccordingly.Approval on equity changes
□Applicable √Not applicable
Transfer of ownership of changes in shares
□Applicable √Not applicable
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Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable tocommon shareholders of Company in the latest year and period
□Applicable √Not applicable
Other information necessary to be disclosed or need to be disclosed under requirement from security regulators
□Applicable √ Not applicable
2. Changes of restricted shares
√Applicable □ Not applicable
Unit: Share
| Shareholders’ name | Number of restricted shares at the beginning of the period(Note 1) | Number of shares increased in the Period | Number of restricted shares released in the Period | Number of shares restricted at the end of the Period | Reason for restriction | Released date |
| Chen Lin | 912,974 | 304,325 | 1,217,299 | Executive lockup stocks of 1,217,299 shares | Releasing of executive lockup stocks will be implemented according to relevant policies. | |
| Wang Jian | 569,250 | 189,750 | 759,000 | Executive lockup stocks of 759,000 shares | Releasing of executive lockup stocks will be implemented according to relevant policies. | |
| He Jin | 504,900 | 168,300 | 673,200 | Executive lockup stocks of 673,200 shares | Releasing of executive lockup stocks will be implemented according to relevant policies. | |
| Yang Xinyu | 652,124 | 217,375 | 869,499 | Executive lockup stocks of 869,499 shares | Releasing of executive lockup stocks will be implemented according to relevant policies. | |
| Lu Wenhui | 684,730 | 532,568 | 1,217,298 | Lockup stocks of 1,217,298 shares for executive resignation | Releasing of executive lockup stocks will be implemented according to relevant policies. | |
| Gao Changkun | 0 | 500 | 500 | Lockup stocks of 500 shares for supervisor resignation | Releasing of executive lockup stocks will be implemented according to relevant policies. | |
| Total | 3,323,978 | 1,412,818 | 4, 736,796 | -- | -- |
Note: The change in restricted shares during the reporting period was caused by China Securities Depository and ClearingCorporation Limited's adjustment of the locked-up shares of senior executives in accordance with regulations.II. Issuance and listing of Securities
1. Security issued (excluding preferred stock) in the report period
□Applicable √Not applicable
2. Particulars about changes of total shares and shareholder structure as well as changes of assets and liabilitystructure
□ Applicable √ Not applicable
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3. Existing internal staff shares
□ Applicable √ Not applicable
III. Particulars about shareholder and actual controller of the Company
1. Amount of shareholders of the Company and particulars about shares holding
Unit: Share
| Total shareholders at the end of the report period | 149,796 | Total shareholders at the end of the month before this annual report disclosed | 157,188 | Total preference shareholders with voting rights recovered at end of report period (if applicable) | 0 | Total preference shareholders with voting rights recovered at end of the month before this annual report disclosed (if applicable) | 0 | ||||||||
| Shareholder with above 5% shares hold or top 10 shareholders | |||||||||||||||
| Full name of Shareholders | Nature of shareholder | Proportion of shares held (%) | Total shares held at the end of report period | Changes in report period | Amount of restricted shares held | Amount of un-restricted shares held | Number of share pledged, marked or frozen | ||||||||
| Share status | Amount | ||||||||||||||
| Foresea Life Insurance Co., Ltd. – HailiNiannian | Domestic non state-owned legal person | 15.19% | 466,386,874 | 466,386,874 | |||||||||||
| Foresea Life Insurance Co., Ltd. – Universal Insurance Products | Domestic non state-owned legal person | 3.86% | 118,425,007 | 118,425,007 | |||||||||||
| Zhongshan Runtian Investment Co., Ltd. | Domestic non state-owned legal person | 2.82% | 86,633,447 | 86,633,447 | Pledged | 86,630,000 | |||||||||
| Marked | 86,630,000 | ||||||||||||||
| Frozen | 3,447 | ||||||||||||||
| Bank of China Limited - China Merchants Ruiwen hybrid securities investment fund | Domestic non state-owned legal person | 2.72% | 83,514,806 | 83,514,806 | 83,514,806 | ||||||||||
| Foresea Life Insurance Co., Ltd. – Own Fund | Domestic non state-owned legal person | 2.11% | 64,765,161 | 64,765,161 | |||||||||||
| Hong Kong Securities Clearing Co., Ltd. | Foreign legal person | 1.85% | 56,676,295 | -27,616,352 | 56,676,295 | ||||||||||
| China Merchants Securities (HK) Co., Limited | State-owned legal person | 1.38% | 42,368,988 | 7,125,358 | 42,368,988 | ||||||||||
| China Galaxy International Securities (Hong Kong) Co., Limited | Foreign legal person | 1.34% | 41,219,778 | -130,000 | 41,219,778 | ||||||||||
| China Life Insurance Co., Ltd. - traditional - General insurance products - 005l-ct001 Shen | Domestic non state-owned legal person | 0.97% | 29,836,268 | 29,836,268 | 29,836,268 | ||||||||||
| MORGAN STANLEY & CO. INTERNATIONAL PLC | Foreign legal person | 0.85% | 25,979,236 | 25,979,236 | 25,979,236 | ||||||||||
| Strategic investors or general legal person becomes top 10 shareholders due to shares issued (if applicable) | N/A | ||||||||||||||
| Among shareholders as listed above, Foresea Life Insurance Co., Ltd.-HailiNiannian, Foresea Life Insurance Co., Ltd.-Universal Insurance Products, Foresea Life Insurance Co., Ltd.-Own Fund are all held by Foresea Life Insurance Co., Ltd. Shenzhen Jushenghua Co., Ltd. is a related legal person of Foresea Life Insurance Co., Ltd. and Chengtai Group Co., Ltd., another related legal person of Foresea Life Insurance Co., Ltd, which held 40,187,904 shares via China Galaxy International Securities (Hong Kong) Co., Limited. | |||||||||||||||
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| 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 of the above-mentioned shareholders involving entrusted/entrusted voting rights and abstention from voting right | |||||
| Special instructions on the existence of special repurchase account among the top 10 shareholders (if any) | N/A | ||||
| Particular about top ten shareholders with un-restrict shares held | |||||
| Shareholders’ name | Amount of un-restrict shares held at year-end | Type of shares | |||
| Type | Amount | ||||
| Foresea Life Insurance Co., Ltd. – HailiNiannian | 466,386,874 | RMB ordinary shares | 466,386,874 | ||
| Foresea Life Insurance Co., Ltd. – Universal Insurance Products | 118,425,007 | RMB ordinary shares | 118,425,007 | ||
| Zhongshan Runtian Investment Co., Ltd. | 86,633,447 | RMB ordinary shares | 86,633,447 | ||
| Bank of China Limited - China Merchants Ruiwen hybrid securities investment fund | 83,514,806 | RMB ordinary shares | 83,514,806 | ||
| Foresea Life Insurance Co., Ltd. – Own Fund | 64,765,161 | RMB ordinary shares | 64,765,161 | ||
| Hong Kong Securities Clearing Co., Ltd. | 56,676,295 | RMB ordinary shares | 56,676,295 | ||
| China Merchants Securities (HK) Co., Limited | 42,368,988 | Domestically listed foreign shares | 42,368,988 | ||
| China Galaxy International Securities (Hong Kong) Co., Limited | 41,219,778 | Domestically listed foreign shares | 41,219,778 | ||
| China Life Insurance Co., Ltd. - traditional - General insurance products - 005l-ct001 Shen | 29,836,268 | RMB ordinary shares | 29,836,268 | ||
| MORGAN STANLEY & CO. INTERNATIONAL PLC | 25,979,236 | Domestically listed foreign shares | 25,979,236 | ||
| Statement on associated relationship or consistent action among the above shareholders: | Except for the above-mentioned shareholders, it is unknown whether other shareholders belong to related party or have associated relationship regulated by the Management Regulation of Information Disclosure on Change of Shareholding for Listed Companies. | ||||
| Explanation on shareholders involving margin business (if applicable) | N/A | ||||
Whether the company’s top 10 common shareholders and the top 10 shareholders of ordinary shares subject to unlimitedsales have agreed to buy back transactions during the report period
□Yes √ No
2. Controlling shareholder of the Company
The nature of controlling shareholders: No holding bodyThe type of controlling shareholder: Not existExplanation on the Company without controlling shareholderCurrently the Company has no controlling shareholder. Foresea Life Insurance Co., Ltd.is the Company's largestshareholder that has totally held 657,577,954shares of the Company via Foresea Life Insurance Co., Ltd.–HailiNiannian,Foresea Life Insurance Co., Ltd.–universal insurance products, Foresea Life Insurance Co., Ltd.–own fund, Foresea LifeInsurance Co., Ltd.–a combination of its own funds together with Huatai till the end of the report period, which accountsfor 21.41% of the Company’s total shares; its person acting in concert Zhongshan Runtian Investment Co., Ltd. held86,633,447 shares, which accounts for 2.82% of the Company’s total shares; its person acting in concert Chengtai Group
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Co., Ltd. held 51,709,088 shares of B-share via China Galaxy International Securities (Hong Kong) Co., Ltd and GuosenSecurities (Hong Kong) Brokerage Co., Limited, which accounts for 1.68% of the Company’s total shares. Foresea LifeInsurance and its persons acting in concert totally held 25.92% of the Company’s total shares, which is less than 30%,meanwhile, the number of directors recommended by Foresea Life Insurance and its persons acting in concert was nomore than half of total number of the Company’s Board of Directors.Other shareholders of the Company hold less than 5% of the shares.Changes of controlling shareholders in the report period
□ Applicable √ Not applicable
3. Actual controller of the Company
The nature of actual controller: no actual controllerThe type of actual controller: Not existExplanation on the Company without actual controllerCurrently the Company has no controlling shareholder. Foresea Life Insurance Co., Ltd. is the Company's largestshareholder that has totally held 657,577,954shares of the Company via Foresea Life Insurance Co., Ltd.–HailiNiannian,Foresea Life Insurance Co., Ltd.–universal insurance products, Foresea Life Insurance Co., Ltd.–own fund, Foresea LifeInsurance Co., Ltd.–a combination of its own funds together with Huatai till the end of the report period, which accountsfor 21.41% of the Company’s total shares; its person acting in concert Zhongshan Runtian Investment Co., Ltd. held86,633,447 shares, which accounts for 2.82% of the Company’s total shares; its person acting in concert Chengtai GroupCo., Ltd. held 51,709,088 shares of B-share via China Galaxy International Securities (Hong Kong) Co., Ltd and GuosenSecurities (Hong Kong) Brokerage Co., Limited, which accounts for 1.68% of the Company’s total shares. Foresea LifeInsurance and its persons acting in concert totally held 25.92% of the Company’s total shares, which is less than 30%,meanwhile, the number of directors recommended by Foresea Life Insurance and its persons acting in concert was nomore than half of total number of the Company’s Board of Directors.Shareholders with over 10% shares held in ultimate controlling level
√Yes □No
Natural personShares held in ultimate controlling level
| Shareholders | Nationality | Whether to obtain the right of abode in other countries or regions |
| Yao Zhenhua | China | No |
| Major occupations and duties | Chairman of Shenzhen Baoneng Investment Group Co., Ltd. | |
| listed companies over the past 10 years | N/A | |
Changes of actual controller in the report period
□ Applicable √ Not applicable
Property right and controlling relationship between the largest shareholder and the Company is as follow:
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Actual controller controlling of the Company by entrust or other assets management
□Applicable √Not applicable
4. The company's controlling shareholder or the largest shareholder and its concerted action person'scumulative pledged shares account for 80% of the company's shares held by them
□ Applicable √ Not applicable
5. Particulars about other legal person shareholders holding over 10% of the company's shares
□ Applicable √ Not applicable
6. Limitation on share reduction of controlling shareholders, actual controllers, recombination party andother commitment subjects
□ Applicable √ Not applicable
IV. Specific implementation of share repurchase in the report periodImplementation progress of share repurchase
□ Applicable √ Not applicable
Implementation progress of reducing share repurchased by centralized bidding
□ Applicable √ Not applicable
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Section VIII. Preferred shares
□Applicable √ Not applicable
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Section IX. Bonds
√Applicable □ Not applicable
I. Enterprise bonds
□Applicable √ Not applicable
The Company had no enterprise bonds during the report period.II. Corporate bonds
√Applicable □ Not applicable
1. Basic information about corporate bonds
Unit: RMB
| Name | Short name | Bond code | Issue date | Value date | Maturity date | Bond balance | Interest rate | Way of repayment of principal and interest | Trading place |
| CSG’s Public Issuance of Corporate Bonds to Qualified Investors 2020 (Phase I) | 20 CSG 01 | 2020-3-24 to 2020-3-25 | 2020-3-25 | 2023-3-25 | 2,000,000,000 | 6.00% | Use simple interest to calculate the annual interest, excluding compound interest. Interest is paid once a year, principal is repaid once due, and the last installment of interest is paid together with the principal. | Shenzhen Stock Exchange | |
| Appropriate arrangements for investors | The corporate bonds shall be publicly issued to qualified institutional investors who have opened qualified A-share securities accounts in the Shenzhen branch of China securities registration and clearing Co., Ltd., in accordance with the provisions of the "Measures for the Administration of Corporate Bond Issuance and Trading". | ||||||||
| Applicable trading mechanism | Matching transaction, click transaction, inquiry transaction, bidding transaction and negotiation transaction. | ||||||||
| Whether there are risks (if any) of terminating listing transactions and countermeasures | No | ||||||||
Overdue bonds
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□Applicable √ Not applicable
2. Triggering and enforcement of issuer or investor option provisions, investor protection provisions
□Applicable √ Not applicable
3. Information on intermediaries
| Name of bond project | Name of intermediary | Office address | Name of signing accountant | Intermediary contact | Contact number |
| CSG’s Public Issuance of Corporate Bonds to Qualified Investors 2020 (Phase I) | Western Securities Co., Ltd. (lead underwriter and bond trustee) | Room 10000, building 8, No. 319, Dongxin Street, Xincheng District, Xi'an City, Shaanxi Province | - | Lv Yue | 010-68086722 |
| CSG’s Public Issuance of Corporate Bonds to Qualified Investors 2020 (Phase I) | Asia Pacific (Group) CPAs (special general partnership) | 20th floor, Jujie Financial Building, Lize Road, Fengtai District, Beijing | Zhang Yan, Pan Qian, Zhou Xianhong, Zhao Qingjun | Zhou Xianhong | 0551-62840302 |
| CSG’s Public Issuance of Corporate Bonds to Qualified Investors 2020 (Phase I) | Guohao Law Firm (Shenzhen) | 41st Floor, Special Economic Zone Newspaper Building, No. 6008 Shennan Avenue, Futian District, Shenzhen, Guangdong Province | - | Wang Caizhang | 0755-83515666 |
| CSG’s Public Issuance of Corporate Bonds to Qualified Investors 2020 (Phase I) | China Chengxin International Credit Rating Co | Building 5, Galaxy SOHO, No. 2, Nanzhugan Hutong, Chaoyangmennei Street, Dongcheng District, Beijing | - | Du Peishan | 010-66428877 |
Whether there was any change on the above institutions during the report period
□ Yes √No
4. Use of raised fund
Unit: RMB
| Name of bond project | Total amount of funds raised | Amount used | Unused amount | Operation of the special account for raised funds (if any) | Rectification of illegal use of raised funds (if any) | Whether it is consistent with the purpose, use plan and other agreements promised in the prospectus |
| CSG’s Public Issuance of Corporate Bonds to Qualified Investors 2020 (Phase I) | 2,000,000,000 | 2,000,000,000 | 0.00 | The special account for raised funds operates in strict accordance with the relevant provisions of the prospectus. | Nil | Yes |
Raised funds for construction projects
□Applicable √ Not applicable
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The company changed the purpose of the funds raised by the above bonds during the report period
□Applicable √ Not applicable
5. Adjustment of credit rating results during the report period
□Applicable √ Not applicable
6. The implementation and changes of guarantees, debt repayment plans and other debt repaymentguarantee measures during the reporting period and their impact on the rights and interests of bond investors
√Applicable □ Not applicable
During the report period, the guarantees, debt repayment plans and other debt repayment safeguards of "20 CSG 01"have not been changed which are the same as the relevant commitments of its prospectus. The basic situation is as follows:
1. Credit promotion measures
The bonds are unsecured.
2. Debt repayment plan
"20 CSG 01" will pay interest once a year during its duration, and the principal will be repaid once upon maturity. Theinterest of the last period will be paid together with the repayment of the principal. The payment date of "20 CSG 01" isMarch 25 of each year from 2021 to 2023, and the payment date is March 25, 2023 (in case of a statutory holiday or restday, it will be postponed to the first trading day thereafter).
3. Repayment safeguards
The debt repayment guarantee measures of "20 CSG 01" include designating a special department to be responsible forrepayment, strictly implementing the use of raised funds, giving full play to the role of bond trustee, formulatingbondholders' meeting rules, strictly fulfilling information disclosure obligations, etc., so as to fully and effectivelysafeguard the interests of bondholders.III. Debt financing instruments of non-financial enterprises
□Applicable √ Not applicable
During the report period, the Company did not have non-financial corporate debt financing instruments.IV. Convertible corporate bonds
□Applicable √ Not applicable
During the report period, the Company did not have convertible corporate bonds.V. The loss within the scope of consolidated statements in the report period exceeded 10% of the net assetsat the end of the previous year
□Applicable √ Not applicable
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VI. Overdue situation of interest-bearing debts other than bonds at the end of the report period
□Applicable √ Not applicable
VII. Whether there is any violation of rules and regulations during the reporting period
□ Yes √ No
VIII. Main accounting data and financial indicators of the company in recent two years by the end of thereporting period
RMB 0,000
| Item | At the end of the report period | At the end of the previous year | Increase and decrease at the end of the report compared with the end of the previous year |
| Current ratio | 1.66 | 1.21 | 37.19% |
| Asset-liability ratio | 40% | 41% | -1% |
| Quick ratio | 1.38 | 1.00 | 38.00% |
| The report period | The same period of the previous year | Increase and decrease in the report period over the same period of last year | |
| Net profit after deducting non-recurring gains and losses | 143,954 | 53,998 | 166.59% |
| EBITDA total debt ratio | 38% | 32% | 6% |
| Interest coverage ratio | 10.38 | 4.88 | 112.70% |
| Cash interest coverage ratio | 23.91 | 11.83 | 102.11% |
| EBITDA interest coverage ratio | 15.09 | 8.15 | 85.15% |
| Loan repayment rate | 100.00% | 100.00% | |
| Interest coverage ratio | 100.00% | 100.00% |
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Section X. Financial ReportI. Report of the Auditors
| Type of Auditor’s Opinion | Standard and unqualified |
| Issue date of Report of the Auditors | April 21, 2022 |
| Name of Auditor’s organization | Asia Pacific (Group) CPAs (special general partnership) |
| Reference number of Report of the Auditors | Ya-Kuai-Shen-Zi (2022) No. 01320028 |
| Name of CPA | Zhou Xianhong, Wu Yiluo |
Auditor’s Report
Ya-Kuai-Shen-Zi (2022) No. 01320028
To the shareholders of CSG Holding Co., Ltd.,
I. Opinion
We have audited the accompanying financial statements of CSG Holding Co., Ltd.(hereinafter “the Company”), which comprise the Separate/Consolidated Statements ofFinancial Position as at 31 December 2021, and the Separate/Consolidated Statements ofprofit or loss, the Separate/Consolidated Statements of changes in equity and theSeparate/Consolidated Statements of cash flows for the year then ended, and the notes tothe financial statements.
In our opinion, the financial statements attached were prepared in line with the regulationsof Accounting Standards for Business Enterprises in all significant aspects which gave atrue and fair view of the consolidated and parent financial position of the Company as atDec. 31, 2021 and the consolidated and parent business performance and cash flow of theCompany for 2021.
II. Basis of Opinion
We conducted our audit in accordance with Standards on Auditing for Certified PublicAccountants. Our responsibility is to express an opinion on these financial statements basedon our audit. Those standards require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether the financialstatements are free from material misstatement. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion.
III. Key audit matters
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Key audit matters are those matters that, in our professional judgement, were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole, and informing our opinion thereon, and we do not provide a separate opinion on these matters.We determine the followings are key audit matters in need of communication in our report.
I) Impairment of Long-term assets
1. Matter description
As disclosed in the financial statements, by 31st December 2021, Impairment provision forconstruction in progress of The Company was RMB 1,276.28 million, Impairment provisionthe fixed assets was RMB 1,013.62 million. The main matters during current year are asfollows:
(1)As the electronic glass product market is updated faster, the management of the company(hereinafter referred to as the management) plan has technically reform to the Phase IElectronic Glass Production Line of the subsidiary Qingyuan CSG Energy Support NewMaterial Co., Ltd., And some of the assets of the original production line have signs ofimpairment.
(2) Based on the rapid spread of the photovoltaic battery and components, high conversionefficiency trends, the subsidiary of Dongguan CSG Photovoltaic Technology Co., Ltd., hasthe technical level lower and high energy consumption Preparation of values, which show asign of impairment.
(3) Yichang CSG Silicon Materials Co., Ltd. polysilicon factory has checked and fullyanalyzed the assets in the process of technical transformation and re-inspection. Someassets of polysilicon factory that need technical transformation, elimination, maintenance orcannot be used, show signs of impairment.
The management has identified and conducted impairment tests for some related assetswhich show a sign of impairment. During the test, the management has engaged anindependent valuer to assist in the identification and valuation of the recoverable amount ofrelevant asset and compared it with the book value of the corresponding assets. The resultsshowed that the recoverable amount of related assets was lower than its book value.According to the differences in amount, the provision for impairment of fixed assets andconstruction in progress should be noted by the company. The impairment test involvesconfirming key parameters including discount rate and assumptions for future administration,such as the revenue growth rate, the gross profit margin etc. Due to the procedure of relatedassets impairment involved significant decisions and predictions made by the managementteam, we therefore have confirmed this as a key audit matter.
2. Countermeasures of Audit
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(1) Understood and tested the effectiveness of design and operation of CSG internal controlsystem relating to the provision for impairment of the fixed assets and the construction inprogress;
(2) Checked the fixed asset and construction in progress in field survey and implemented ofphysical procedures;
(3) Evaluated management's identification of the relevant asset groups assertions and theamount of assets allocated to each asset group and assessed the reasonableness ofmanagement's method of impairment of related assets;
(4) Communicated with management and evaluated impairment of fixed assets andconstruction in progress key assumptions , Valuation method, Cash flow forecast and otherkey parameters for obtaining significant management estimates and judgments, such as therevenue growth rate, the gross profit margin, the expense growth rate and the discount rateetc, to be reviewed;
(5) Assessed the professional competency ,objectivity, and independence of the third partiesof independent valuer and reviewed the evaluation methods, evaluation assumptions,discount rates and other key parameters of valuation reports and reviewed thereasonableness of the calculation of evaluation data;
(6) Checked the provision of impairment of fixed asset and construction in progress relevantpresents and disclosures whether is appropriate and complete in the presentation offinancial statements following accounting standards.
II) Impairment of receivable
1. Matter description
As disclosed in the financial statements, by 31st December 2021, The carrying amount ofnotes receivable was RMB 40 million and impairment provision for notes receivable of TheCompany was RMB 20.78 million, The carrying amount of accounts receivable was RMB
847.85 million and impairment provision for the accounts receivable was RMB 117.32 million.The impairment provision for notes receivable and accounts receivable shall mainly include:
Engineering Glass Business Subsidiaries received the trade acceptance bill endorsed bythe customer and issued by Evergrande and their subsidiaries. The capital turnover ofEvergrande and their subsidiaries is difficult to be paid in the future. The provision for notesreceivable was partially accrued. The carrying amount of other receivables is RMB 246.85million yuan, and the impairment provision is RMB 63.16 million.The impairment provisionof other receivables for this period mainly include: other receivables of the company is RMB171 million from Yichang Hongtai Real Estate Co., Ltd., The risk of company's managementexpects to receive back will be higher in this year, and provision for other receivables was
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partially accrued. According to professional institutions such as lawyers analysis andrecommendation, The management of the company and the company's businessdepartment, the legal department discussed and assessing the recoverable, andreassessing the expected credit risk of the above payments. Due to the receivables andtheir impairment have a significant impact on the financial statements, and the procedure ofreceivable recoverable and credit loss risk involved significant decisions and predictionsmade by the management team, we therefore have confirmed this as a key audit matter.
2. Countermeasures of Audit
(1) Understood and tested the effectiveness of design and operation of CSG internal controlsystem relating to the provision for impairment of the receivables;
(2) Communicated with sales department and understood the company's sales policy, creditpolicy, payback situation, checked the main terms and implementation of the relevant salescontracts;
(3) Through the Chinese referee document network, the national court is inquiry the principalcustomer information on public channels, and evaluates its debt repayment capabilities;
(4) Verified the authenticity of the relevant customers confirmations, the non-responsepartially implemented alternatives, including, but not limited to, check sales contracts, orders,outbound orders, transport orders, sign receipts, acceptors, settlement orders, etc. Whetherthe payment will be checked after the period;
(5) Discussed with the company's management to understand the estimated credit risk ofrelated customers and Checked the company's receivables calculation process, checkedthe expected credit loss rate calculation process of related customers, and re-measure creditrisk loss according to the company's accounting policies;
(6) Check if the receivables and its impairment are appropriately disclosed in the financialstatements.
IV. Other information
The management layer of the Company shall be responsible for other information, includingthe information covered in the financial report, but excludes financial statements and ouraudit report.
Our audit opinion on financial statements does not include other information; we will notmake the authentication conclusion on other information in any form.
In connection with our audit of the financial statements, our responsibility is to read theother information and, in doing so, consider whether the other information is materially
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inconsistent with the financial statements or our knowledge obtained in the audit orotherwise appears to be materially misstated.
If based on the work we have performed, we conclude that there is a material misstatementof this other information, we are required to report that fact. We have nothing to report in thisregard.
V. Responsibilities of Management and Governance for Financial Statements
The management is responsible for preparing the financial statements in accordance withthe provisions of the Accounting Standards for Business Enterprises to achieve a fairreflection, and designing, implementing and maintaining the necessary internal controls sothat the financial statements are free from material misstatement due to fraud or errors.
In preparing financial statements, the management layer is responsible for assessing thecompany's sustained business capability, disclosing matters related to continueoperating,using the going-concern assumption unless management either intends toliquidate the Company or to cease operations, or has no realistic alternative but to do so.
The governance layer is responsible for supervising the financial reporting process of thecompany.
VI. Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance as to whether there are no majormisstatements due to fraud or errors in the overall financial statements, and to issue an auditreport containing audit opinions. Reasonable assurance is the high-level assurance, but itcan’t assure that a certain major misstatement can be always found when auditingaccording to the audit standard. The misstatement may be caused by malpractices or error.If the misstatements within the rational expectations may affect the economic decision of thefinancial statement user according to the financial statement, it shall be deemed that themisstatement is significant.
During the process of conducting the audit work according to audit standards, we applyprofessional judgment and keep professional skepticism. Meanwhile, we also perform thefollowing tasks:
(1) Identify and assess the risks of material misstatement of the financial statements,whether due to fraud or error, design and perform audit procedures responsive to thoserisks, and obtain audit evidence that is sufficient and appropriate to provide a basis for ouropinion. The risk of not detecting a material misstatement resulting from fraud is higher thanfor one resulting from error, as fraud may involve collusion, forgery, intentional omissions,misrepresentations, or the override of internal control.
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(2) Understand the internal control related to audit, so as to design appropriate auditprocedures.
(3)Estimate the appropriateness of the accounting policies selected by the managementlayer, and the rationality of making accounting estimate and relevant disclosures.
(4)Draw a conclusion on the appropriateness of the going concern assumption used by themanagement layer. Meanwhile, according to the obtained audit evidence, it may cause tocome to the conclusion that there are substantial doubtable events or major uncertainty forthe sustainable operation ability of the Company. In case that we come to the conclusionthat there is a significant uncertainty, the audit standards require us to remind the users ofthe statements to pay attention to relevant disclosures in the financial statements in the auditreport; In case of any insufficient disclosure, we shall give modified opinions. Our conclusionis based on the available information up to the audit report day. However, the future eventsor circumstances may cause the Company cannot continue to operate.
(5) Estimate the overall presentation, structure and content (disclosure included) of thefinancial statements, and Estimate whether the financial statements fairly reflect relevanttransactions and matters.
(6) Acquire adequate and appropriate audit evidences on the financial information of theentity or business activities of the Company, and give audit opinions on the consolidatedfinancial statements. We are responsible for guiding, supervising and executing the audit ofthe Group, and take all responsibilities for the audit opinions.
We communicate with the governance layer about the audit scope, schedule, significantaudit findings and other matters within the plan, including the noteworthy internal controldefects recognized by us during the audit.
We also provide statements to the governance layer on the compliance with the professionalethics requirement related to the independence, and communicate with the governancelayer on all relationships and other matters that may reasonably be considered to affect ourindependence, as well as relevant preventive measures.
From the matters that we have communicated with the governance layer, we confirm themost important matters for the audit of the current financial statements, and thus constitutethe key audit matters. We describe these matters in our audit report, unless laws andregulations prohibit the public disclosure of these matters, or in rare cases, if it is reasonablyexpected that the negative consequences of communicating a matter in the audit report willsurpass the benefits in the public interests, we confirm that the matter shall not becommunicated in the audit report.
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| Certified Public Accountants | Certified Public Accountant of China |
| Beijing, China | Certified Public Accountant of China |
21 April 2022
| - 93 - | ||
CSG HOLDING CO., LTD.
CONSOLIDATED AND COMPANY’S BALANCE SHEETSAS AT 31 DECEMBER 2021
(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| 31 December 2021 | 31 December 2020 | 31 December 2021 | 31 December 2020 | ||
| ASSETS | Note | Consolidated | Consolidated | Company | Company |
| Current assets | |||||
| Cash at bank and on hand | 4(1) | 2,765,925,906 | 2,125,788,903 | 1,961,406,035 | 1,072,875,571 |
| Financial assets held for trading | 4(2) | 999,600,000 | - | 999,600,000 | - |
| Notes receivable | 4(3) | 19,220,984 | 207,966,892 | - | - |
| Accounts receivable | 4(4) | 730,525,687 | 681,467,133 | - | - |
| Receivables Financing | 4(5) | 297,046,123 | 382,527,782 | - | - |
| Advances to suppliers | 4(6) | 76,097,276 | 85,928,641 | 639,164 | 1,650,184 |
| Other receivables | 4(7)/16(1) | 183,696,711 | 200,969,854 | 2,899,091,405 | 3,803,908,369 |
| Inventories | 4(8) | 1,093,805,525 | 815,156,318 | - | - |
| Other current assets | 4(9) | 140,705,298 | 140,031,544 | - | 66,321 |
| Total current assets | 6,306,623,510 | 4,639,837,067 | 5,860,736,604 | 4,878,500,445 | |
| Non-current assets | |||||
| Long-term equity investments | 16(2) | - | - | 6,262,391,694 | 5,844,507,870 |
| Investment properties | 4(10) | 383,084,500 | 383,084,500 | - | - |
| Fixed assets | 4(11) | 8,566,515,026 | 9,145,644,569 | 11,509,029 | 19,769,193 |
| Construction in progress | 4(12) | 2,461,088,650 | 1,893,380,611 | - | - |
| Right-of-use assets | 4(13) | 9,911,935 | - | - | - |
| Intangible assets | 4(14) | 1,167,611,402 | 1,139,718,255 | 2,102,548 | 140,836 |
| Development expenditure | 4(14) | 72,019,362 | 49,153,407 | - | - |
| Goodwill | 4(15) | 130,147,859 | 233,375,693 | - | - |
| Long-term prepaid expenses | 3,013,721 | 10,381,937 | - | - | |
| Deferred tax assets | 4(16) | 255,185,923 | 194,979,414 | - | - |
| Other non-current assets | 4(17) | 584,162,622 | 193,359,445 | 104,109,111 | 4,546,275 |
| Total non-current assets | 13,632,741,000 | 13,243,077,831 | 6,380,112,382 | 5,868,964,174 | |
| TOTAL ASSETS | 19,939,364,510 | 17,882,914,898 | 12,240,848,986 | 10,747,464,619 |
| - 94 - | ||
CSG HOLDING CO., LTD.
CONSOLIDATED AND COMPANY’S BALANCE SHEETS (CONT'D)AS AT 31 DECEMBER 2021
(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| 31 December 2021 | 31 December 2020 | 31 December 2021 | 31 December 2020 | ||
| LIABILITIES AND OWNERS' EQUITY | Note | Consolidated | Consolidated | Company | Company |
| Current liabilities | |||||
| Short-term borrowings | 4(19) | 180,770,000 | 352,895,571 | 100,000,000 | 49,800,000 |
| Notes payable | 4(20) | 400,662,713 | 144,851,192 | - | - |
| Accounts payable | 4(21) | 1,428,851,312 | 1,237,833,051 | 315,684 | 249,721 |
| Contract liabilities | 4(22) | 335,188,642 | 296,776,624 | - | - |
| Employee benefits payable | 4(23) | 426,212,979 | 342,352,166 | 68,534,315 | 46,504,458 |
| Taxes payable | 4(24) | 185,009,681 | 194,921,071 | 8,316,132 | 9,457,159 |
| Other payables | 4(25)/16(3) | 289,440,477 | 287,332,992 | 2,067,472,879 | 1,002,135,702 |
| Current portion of non-current liabilities | 4(26) | 503,820,548 | 927,531,709 | 400,000,000 | 800,000,000 |
| Other current liabilities | 4(27) | 40,099,309 | 34,586,292 | - | - |
| Total current liabilities | 3,790,055,661 | 3,819,080,668 | 2,644,639,010 | 1,908,147,040 | |
| Non-current liabilities | |||||
| Long-term borrowings | 4(28) | 1,469,059,824 | 853,253,983 | 690,000,000 | 700,000,000 |
| Debentures payable | 4(29) | 1,996,587,330 | 1,994,020,348 | 1,996,587,330 | 1,994,020,348 |
| Lease liabilities | 4(30) | 220,138 | - | - | - |
| Long-term payables | 4(31) | 168,258,062 | - | - | - |
| Deferred tax liabilities | 4(16) | 84,580,132 | 102,619,932 | - | - |
| Deferred income | 4(32) | 564,129,128 | 498,056,081 | 172,500,000 | 180,496,249 |
| Total non-current liabilities | 4,282,834,614 | 3,447,950,344 | 2,859,087,330 | 2,874,516,597 | |
| Total liabilities | 8,072,890,275 | 7,267,031,012 | 5,503,726,340 | 4,782,663,637 | |
| Shareholders’ equity | |||||
| Share capital | 4(33) | 3,070,692,107 | 3,070,692,107 | 3,070,692,107 | 3,070,692,107 |
| Capital surplus | 4(34) | 596,997,085 | 596,997,085 | 741,824,399 | 741,824,399 |
| Other comprehensive income | 4(35) | 159,200,530 | 161,816,819 | - | - |
| Special reserve | 4(36) | 7,296,397 | 10,269,002 | - | - |
| Surplus reserve | 4(37) | 1,144,887,510 | 1,036,948,422 | 1,159,432,870 | 1,051,493,782 |
| Undistributed profits | 4(38) | 6,450,587,417 | 5,336,266,412 | 1,765,173,270 | 1,100,790,694 |
| Total equity attributable to shareholders of parent company | 11,429,661,046 | 10,212,989,847 | 6,737,122,646 | 5,964,800,982 | |
| Minority interests | 436,813,189 | 402,894,039 | - | - | |
| Total shareholders' equity | 11,866,474,235 | 10,615,883,886 | 6,737,122,646 | 5,964,800,982 | |
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | 19,939,364,510 | 17,882,914,898 | 12,240,848,986 | 10,747,464,619 | |
The accompanying notes form are attached as an integral part of these financial statements.
Legal representative: Principal in charge of accounting: Head of accounting department:
| - 95 - | ||
CSG HOLDING CO., LTD.
CONSOLIDATED AND COMPANY’S INCOME STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
The accompanying notes form are attached as an integral part of these financial statements.
Legal representative: Principal in charge of accounting: Head of accounting department:
| 2021 | 2020 | 2021 | 2020 | ||
| Item | Note | Consolidated | Consolidated | Company | Company |
| Revenue | 4(39) | 13,629,033,650 | 10,671,253,445 | 294,247,989 | 217,297,219 |
| Less: Cost of sales | 4(39) | (8,849,488,093) | (7,444,465,731) | - | - |
| Taxes and surcharges | 4(40) | (148,655,418) | (121,898,522) | (2,560,152) | (2,292,619) |
| Selling and distribution expenses | 4(41) | (270,695,433) | (233,918,938) | - | - |
| General and administrative expenses | 4(42) | (752,605,507) | (666,976,561) | (297,252,293) | (273,626,323) |
| Reseach and development expenses | 4(43) | (511,738,848) | (404,842,498) | (2,631,501) | (1,047,802) |
| Financial expenses - net | 4(44) | (151,182,191) | (224,011,920) | (138,319,862) | (167,576,428) |
| Inclouding: interest expenses | (188,858,163) | (273,308,059) | (177,942,376) | (214,088,327) | |
| Interest income | 42,702,029 | 53,404,661 | 39,200,530 | 49,221,299 | |
| Add：Other Income | 4(48) | 106,465,817 | 99,560,400 | 3,162,514 | 4,228,915 |
| value | 4(46) | - | 179,911,200 | - | - |
| Investment income | 4(47)/16(4) | 16,847,647 | 2,654,504 | 1,279,006,799 | 1,136,439,598 |
| Credit impairment loss | 4(49) | (153,894,437) | (5,722,619) | (48,513,009) | (1,571,191) |
| Asset impairment loss | 4(50) | (981,665,546) | (738,508,094) | - | - |
| Income on disposal assets | 4(51) | (1,493,248) | (1,158,984) | 6,893,580 | 15,761 |
| Operating profit | 1,930,928,393 | 1,111,875,682 | 1,094,034,065 | 911,867,130 | |
| Add: Non-operating revenue | 4(52) | 12,604,534 | 14,369,839 | 383,646 | - |
| Less: Non-operating expenses | 4(53) | (26,130,744) | (20,554,395) | (15,026,836) | (4,895,769) |
| Total profit | 1,917,402,183 | 1,105,691,126 | 1,079,390,875 | 906,971,361 | |
| Less: Income tax (expenses)/revenue | 4(54) | (356,153,729) | (293,738,145) | - | - |
| Net profit | 1,561,248,454 | 811,952,981 | 1,079,390,875 | 906,971,361 | |
| （一）Classified by continuous operation: | |||||
| Net income from continuing operations (“-” for net loss) | 1,561,248,454 | 811,952,981 | 1,079,390,875 | 906,971,361 | |
| Net income from discontinued operations (“-” for net loss) | - | - | - | - | |
| （二）Classified by equity ownership: | |||||
| Attributable to shareholders of parentcompany | 1,529,329,304 | 779,325,592 | - | - | |
| Minority interests | 31,919,150 | 32,627,389 | - | - | |
| Other comprehensive income net after tax | (2,616,289) | 155,250,955 | - | - | |
| Other comprehensive income net after tax attributable to shareholders of parentcompany | (2,616,289) | 155,250,955 | - | - | |
| Other comprehensive income items which will be reclassified subsequently to profit or loss | (2,616,289) | 155,250,955 | - | - | |
| financial statements | (2,616,289) | (5,900,842) | - | - | |
| rights are converted into investment property | - | 161,151,797 | - | - | |
| attributable to minority interests | - | - | - | - | |
| Total comprehensive income | 1,558,632,165 | 967,203,936 | 1,079,390,875 | 906,971,361 | |
| shareholders of parent company | 1,526,713,015 | 934,576,547 | |||
| minority interests | 31,919,150 | 32,627,389 | |||
| Earnings per share | 4(55) | ||||
| Basic earnings per share (RMB Yuan) | 4(55) | 0.50 | 0.25 | ||
| Diluted earnings per share (RMB Yuan) | 4(55) | 0.50 | 0.25 | ||
| - 96 - | ||
CSG HOLDING CO., LTD.
CONSOLIDATED AND COMPANY’S CASH FLOW STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| 2021 | 2020 | 2021 | 2020 | ||
| Item | Note | Consolidated | Consolidated | Company | Company |
| 1. Cash flows from operating activities | |||||
| Cash received from sales of goods or rendering of services | 15,127,773,082 | 11,736,154,948 | 312,321,151 | 223,086,978 | |
| Refund of taxes and surcharges | 53,331,689 | 61,780,834 | - | 613,918 | |
| Cash received relating to other operating activities | 4(56)(a) | 261,031,274 | 177,764,210 | 44,045,856 | 58,247,245 |
| Sub-total of cash inflows | 15,442,136,045 | 11,975,699,992 | 356,367,007 | 281,948,141 | |
| Cash paid for goods and services | (8,246,043,888) | (6,674,993,246) | - | - | |
| Cash paid to and on behalf of employees | (1,638,657,553) | (1,377,255,224) | (232,793,262) | (255,127,287) | |
| Payments of taxes and surcharges | (1,214,512,667) | (769,776,963) | (20,131,229) | (8,844,083) | |
| Cash paid relating to other operating activities | 4(56)(b) | (440,837,552) | (423,054,923) | (51,990,613) | (30,178,208) |
| Sub-total of cash outflows | (11,540,051,660) | (9,245,080,356) | (304,915,104) | (294,149,578) | |
| Net cash flows from/(used in) operating activities | 3,902,084,385 | 2,730,619,636 | 51,451,903 | (12,201,437) | |
| 2. Cash flows from investing activities | |||||
| Cash received from returns on investments | 4,424,000,000 | - | 4,360,335,176 | 411,387,134 | |
| Cash received from returns on invest income | 16,163,055 | 2,654,504 | 1,277,124,439 | 862,091,239 | |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 4,916,078 | 1,887,056 | 2,663,907 | 10,571 | |
| Cash received relating to other investing activities | 4(56)(c) | 80,944,683 | 435,177,324 | - | 300,000,000 |
| Sub-total of cash inflows | 4,526,023,816 | 439,718,884 | 5,640,123,522 | 1,573,488,944 | |
| Cash paid to acquire fixed assets, intangible assets and other long-term assets | (1,827,187,640) | (1,110,769,762) | (5,406,991) | (8,306,897) | |
| Cash paid to acquire investments | (5,523,600,000) | - | (5,877,819,000) | (1,151,168,328) | |
| Cash paid relating to other investing activities | 4(56)(d) | (80,312,270) | (118,741,948) | - | - |
| Sub-total of cash outflows | (7,431,099,910) | (1,229,511,710) | (5,883,225,991) | (1,159,475,225) | |
| Net cash flows (used in)/from investing activities | (2,905,076,094) | (789,792,826) | (243,102,469) | 414,013,719 | |
| 3. Cash flows from financing activities | |||||
| Cash received from investors | 2,000,000 | - | - | - | |
| Cash received from borrowings | 1,637,354,868 | 2,277,466,685 | 814,000,000 | 1,582,799,801 | |
| Cash received from issuing debentures | - | 1,991,680,000 | - | 1,991,680,000 | |
| Cash received relating to other financing activities | 4(56)(e) | 200,000,000 | 153,698,226 | 1,960,258,923 | 74,599,652 |
| Sub-total of cash inflows | 1,839,354,868 | 4,422,844,911 | 2,774,258,923 | 3,649,079,453 | |
| Cash repayments of borrowings | (1,655,022,054) | (5,024,614,676) | (1,173,800,000) | (4,049,999,801) | |
| Cash payments for interest expenses and distribution of dividends or profits | (547,085,016) | (438,591,829) | (520,361,295) | (336,840,490) | |
| Cash payments relating to other financing activities | 4(56)(f) | - | (604,225,442) | - | - |
| Sub-total of cash outflows | (2,202,107,070) | (6,067,431,947) | (1,694,161,295) | (4,386,840,291) | |
| Net cash flows (used in)/from financing activities | (362,752,202) | (1,644,587,036) | 1,080,097,628 | (737,760,838) | |
| 4. Effect of foreign exchange rate changes on cash | (1,806,713) | (4,046,608) | 748,101 | (66,943) | |
| 5. Net increase/(decrease) in cash and cash equivalents | 4(57)(b) | 632,449,376 | 292,193,166 | 889,195,163 | (336,015,499) |
| Add: Cash and cash equivalents at beginning of year | 2,124,028,196 | 1,831,835,030 | 1,071,200,364 | 1,407,215,863 | |
| 6. Cash and cash equivalents at end of year | 4(57)(c) | 2,756,477,572 | 2,124,028,196 | 1,960,395,527 | 1,071,200,364 |
The accompanying notes form are attached as an integral part of these financial statements.
Legal representative: Principal in charge of accounting: Head of accounting department:
| - 97 - | ||
CSG HOLDING CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITYFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| Attributable to shareholders of parentcompany | |||||||||||||
| Item | Share capital | Capital surplus | Less: Treasury share | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profits | Sub-total | Minority interests | Total shareholders' equity | |||
| Note | 4(33) | 4(34) | 4(35) | 4(36) | 4(37) | 4(38) | |||||||
| Balance at 1 January 2020 | 3,106,915,005 | 683,219,358 | (118,066,397) | 6,565,864 | 11,102,921 | 946,251,286 | 4,859,600,841 | 9,495,588,878 | 370,266,650 | 9,865,855,528 | |||
| Movements for the year ended 31 December 2020 | |||||||||||||
| Total comprehensive income | |||||||||||||
| Net profit | - | - | - | - | - | - | 779,325,592 | 779,325,592 | 32,627,389 | 811,952,981 | |||
| Other comprehensive income | 4(35) | - | - | - | 155,250,955 | - | - | - | 155,250,955 | - | 155,250,955 | ||
| Total comprehensive income | - | - | - | 155,250,955 | - | - | 779,325,592 | 934,576,547 | 32,627,389 | 967,203,936 | |||
| Capital contribution and withdrawal by shareholders | (36,222,898) | (86,222,273) | 118,066,397 | - | - | - | - | (4,378,774) | - | (4,378,774) | |||
| Share-based payments | (36,222,898) | (86,222,273) | 118,066,397 | - | - | - | - | (4,378,774) | - | (4,378,774) | |||
| Profit distribution | - | - | - | - | - | 90,697,136 | (302,660,021) | (211,962,885) | - | (211,962,885) | |||
| Appropriation to surplus reserve | 4(37) | - | - | - | - | - | 90,697,136 | (90,697,136) | - | - | - | ||
| Distribution to the shareholders | 4(38) | - | - | - | - | - | - | (211,962,885) | (211,962,885) | - | (211,962,885) | ||
| Special reserve | - | - | - | - | (833,919) | - | - | (833,919) | - | (833,919) | |||
| Special reserve appropriate | 4(36) | - | - | - | - | - | - | - | - | - | - | ||
| Special reserve used | 4(36) | - | - | - | - | (833,919) | - | - | (833,919) | - | (833,919) | ||
| Balance at 31 December 2020 | 3,070,692,107 | 596,997,085 | - | 161,816,819 | 10,269,002 | 1,036,948,422 | 5,336,266,412 | 10,212,989,847 | 402,894,039 | 10,615,883,886 | |||
| - 98 - | ||
CSG HOLDING CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (CONT’D)FOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| Item | Share capital | Capital surplus | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profits | Sub-total | Minority interests | Total shareholders' equity | |||||||
| Note | 4(33) | 4(34) | 4(35) | 4(36) | 4(37) | 4(38) | ||||||||||
| Balance at 1 January 2021 | 3,070,692,107 | 596,997,085 | 161,816,819 | 10,269,002 | 1,036,948,422 | 5,336,266,412 | 10,212,989,847 | 402,894,039 | 10,615,883,886 | |||||||
| Movements for the year ended 31 December 2021 | ||||||||||||||||
| Total comprehensive income | ||||||||||||||||
| Net profit | - | - | - | - | - | 1,529,329,304 | 1,529,329,304 | 31,919,150 | 1,561,248,454 | |||||||
| Other comprehensive income | 4(35) | - | - | (2,616,289) | - | - | - | (2,616,289) | - | (2,616,289) | ||||||
| Total comprehensive income | - | - | (2,616,289) | - | - | 1,529,329,304 | 1,526,713,015 | 31,919,150 | 1,558,632,165 | |||||||
| Capital increase or decrease from shareholder | - | - | - | - | - | - | - | 2,000,000 | 2,000,000 | |||||||
| Capital increase from minority shareholder | - | - | - | - | - | - | - | 2,000,000 | 2,000,000 | |||||||
| Profit distribution | - | - | - | - | 107,939,088 | (415,008,299) | (307,069,211) | - | (307,069,211) | |||||||
| Appropriation to surplus reserve | 4(37) | - | - | - | - | 107,939,088 | (107,939,088) | - | - | - | ||||||
| Distribution to the shareholders | 4(38) | - | - | - | - | - | (307,069,211) | (307,069,211) | - | (307,069,211) | ||||||
| Special reserve | - | - | - | (2,972,605) | - | - | (2,972,605) | - | (2,972,605) | |||||||
| Special reserve appropriate | 4(36) | - | - | - | - | - | - | - | - | - | ||||||
| Special reserve used | 4(36) | - | - | - | (2,972,605) | - | - | (2,972,605) | - | (2,972,605) | ||||||
| Balance at 31 December 2021 | 3,070,692,107 | 596,997,085 | 159,200,530 | 7,296,397 | 1,144,887,510 | 6,450,587,417 | 11,429,661,046 | 436,813,189 | 11,866,474,235 | |||||||
The accompanying notes form are attached as an integral part of these financial statements.
Legal representative: Principal in charge of accounting: Head of accounting department:
| - 99 - | ||
CSG HOLDING CO., LTD.
COMPANY'S STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITYFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| Attributable to shareholders of parent company | |||||||
| Item | Share capital | Capital surplus | Less: Treasury share | Surplus reserve | Undistributed profits | Total shareholders' equity | |
| Balance at 1 January 2020 | 3,106,915,005 | 828,046,672 | (118,066,397) | 960,796,646 | 496,479,354 | 5,274,171,280 | |
| Movements for the year ended 31 December 2020 | |||||||
| Total comprehensive income | |||||||
| Net profit | - | - | - | - | 906,971,361 | 906,971,361 | |
| Total comprehensive income | - | - | - | - | 906,971,361 | 906,971,361 | |
| Capital increase or decrease from shareholder | (36,222,898) | (86,222,273) | 118,066,397 | - | - | (4,378,774) | |
| Share-based payments | (36,222,898) | (86,222,273) | 118,066,397 | - | - | (4,378,774) | |
| Profit distribution | - | - | - | 90,697,136 | (302,660,021) | (211,962,885) | |
| Appropriation to surplus reserve | - | - | - | 90,697,136 | (90,697,136) | - | |
| Distribution to the shareholders | - | - | - | - | (211,962,885) | (211,962,885) | |
| Capital reserve to share capital | - | - | - | - | - | - | |
| Balance at 31 December 2020 | 3,070,692,107 | 741,824,399 | - | 1,051,493,782 | 1,100,790,694 | 5,964,800,982 | |
| Balance at 1 January 2021 | 3,070,692,107 | 741,824,399 | - | 1,051,493,782 | 1,100,790,694 | 5,964,800,982 | |
| Movements for the year ended 31 December 2021 | |||||||
| Total comprehensive income | |||||||
| Net profit | - | - | - | - | 1,079,390,875 | 1,079,390,875 | |
| Total comprehensive income | - | - | - | - | 1,079,390,875 | 1,079,390,875 | |
| Capital increase or decrease from shareholder | - | - | - | - | - | - | |
| Share-based payments | - | - | - | - | - | - | |
| Profit distribution | - | - | - | 107,939,088 | (415,008,299) | (307,069,211) | |
| Appropriation to surplus reserve | - | - | - | 107,939,088 | (107,939,088) | - | |
| Distribution to the shareholders | - | - | - | - | (307,069,211) | (307,069,211) | |
| Capital reserve to share capital | |||||||
| Balance at 31 December 2021 | 3,070,692,107 | 741,824,399 | - | 1,159,432,870 | 1,765,173,270 | 6,737,122,646 | |
The accompanying notes form are attached as an integral part of these financial statements.
Legal representative: Principal in charge of accounting: Head of accounting department:
| - 100 - | ||
1 General information
CSG Holding Co.,LTD (the “Company”) was incorporated in September 1984, known as China SouthGlass Company, as a joint venture enterprise by Hong Kong China Merchants Shipping Co.,LTD (香港招商局轮船股份有限公司), Shenzhen Building Materials Industry Corporation (深圳建筑材料工业集团公司), China North Industries Corporation (中国北方工业深圳公司) and Guangdong International Trustand Investment Corporation (广东国际信托投资公司). The Company was registered in Shenzhen,Guangdong Province of the People's Republic of China and its headquarters is located in Shenzhen,Guangdong Province of the People's Republic of China. The Company issued RMB-denominatedordinary shares (“A-share”) and foreign shares (“B-share”) publicly in October 1991 and January 1992respectively, and was listed on Shenzhen Stock Exchange on February 1992. As at 31 December 2021,the registered capital was RMB 3,070,692,107, with nominal value of RMB1 per share.
The Company and its subsidiaries (collectively referred to as the “Group”) are mainly engaged in themanufacture and sales of flat glass, specialised glass, engineering glass, energy saving glass, siliconrelated materials, polycrystalline silicon and solar components and electronic-grade display device glassand the construction and operation of photovoltaic plant etc.
Details on the majors subsidiaries included in the consolidated scope in current year were stated inNote .
The financial statements were authorised for issue by the Board of Directors on 21 April 2022.
2 Summary of significant accounting policies and accounting estimates
The Group determines its specific accounting policies and accounting estimates to manufacturing andoperation feature. It mainly reflected in expected credit impairment losses of receivables was measured,inventory costing method, Depreciation of fixed assets and amortization of intangible assets, criteria fordetermining capitalised development expenditure, and timing for revenue recognition.
Refer to the notes for details of the key judgements adopted by the Group in applying importantaccounting policies.
(1) Basis of preparation
The financial statements are prepared in accordance with the Accounting Standards for BusinessEnterprises - Basic Standard, and the specific accounting standards and other relevant regulationsissued by the Ministry of Finance on 15 February 2006 and in subsequent periods (hereafter collectivelyreferred to as “the Accounting Standard for Business Enterprises” or “CAS”), and Information DisclosureRule No. 15 for Companies with Public Traded Securities - Financial Reporting General Provision issuedby China Security Regulatory Commission.
The financial statements have been prepared on a going concern basis.
(2) Statement of compliance with the Accounting Standards for Business Enterprises
The financial statements of the Company for the year ended 31 December 2021 are in compliance withthe Accounting Standards for Business Enterprises, and truly and completely present the financialposition of the consolidated and the Company as at 31 December 2021 and their financial performance,cash flows for the year then ended.
(3) Accounting year
The Company’s accounting year starts on 1 January and ends on 31 December.
(4) Recording currency
The recording currency is Renminbi (RMB).
(5) Business combinations
| - 101 - | ||
(a) Business combinations involving enterprises under common control
The consideration paid and net assets obtained by the absorbing party in a business combination aremeasured at book value. If the merged party was acquired by the ultimate controlling party from a thirdparty in the previous year, the assets and liabilities of the merged party (including the goodwill formedby the ultimate controlling party’s acquisition of the merged party). The difference between book valueof 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 (sharepremium) is not sufficient to absorb the difference, the remaining balance is adjusted against retainedearnings. Costs directly attributable to the combination are included in profit or loss in the period in whichthey are incurred. Transaction costs associated with the issue of equity or debt securities for thebusiness combination are included in the initially recognised amounts of the equity or debt securities.
(b) Business combinations involving enterprises not under common control
The cost of combination and identifiable net assets obtained by the acquirer in a business combinationare measured at fair value at the acquisition date. Where the cost of the combination exceeds theacquirer’s interest in the fair value of the acquiree’s identifiable net assets, the difference is recognisedas goodwill; where the cost of combination is lower than the acquirer’s interest in the fair value of theacquiree’s identifiable net assets, the difference is recognised in profit or loss for the current period.Costs directly attributable to the combination are included in profit or loss in the period in which they areincurred. Transaction costs associated with the issue of equity or debt securities for the businesscombination are included in the initially recognised amounts of the equity or debt securities.
(6) Preparation method of consolidated financial statements
The consolidated financial statements comprise the financial statements of the Company and all of itssubsidiaries.
Subsidiaries are consolidated from the date on which the Group obtains control and are de-consolidatedfrom the date that such control ceases. For a subsidiary that is acquired in a business combinationinvolving enterprises under common control, it is included in the consolidated financial statements fromthe date when it, together with the Company, comes under common control of the
ultimate controlling party. The portion of the net profits realised before the combination date is presentedseparately in the consolidated income statement.
In preparing the consolidated financial statements, where the accounting policies and the accountingperiods of the Company and subsidiaries are inconsistent, the financial statements of the subsidiariesare adjusted in accordance with the accounting policies and the accounting period of the Company. Forsubsidiaries acquired from business combinations involving enterprises not under common control, theindividual financial statements of the subsidiaries are adjusted based on the fair value of the identifiablenet assets at the acquisition date.
All significant intra-group balances, transactions and unrealised profits are eliminated in the consolidatedfinancial statements. The portion of subsidiaries’ equity and the portion of a subsidiaries’ net profits andlosses and comprehensive incomes for the period not attributable to Company are recognised asminority interests and presented separately in the consolidated financial statements under equity, netprofits and total comprehensive income respectively. Unrealised profits and losses resulting from thesales of assets by the Company to its subsidiaries are fully eliminated against net profit attributable toshareholders of the parent company. Unrealised profits and losses resulting from the sales of assets bya subsidiary to the Company are eliminated and allocated between net profit attributable to shareholdersof 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 byone subsidiary to another are eliminated and allocated between net profit attributable to shareholders ofthe parent company and non-controlling interests in accordance with the allocation proportion of theparent in the subsidiary.
After the control over the subsidiary has been gained, whole or partial minority equities of the subsidiaryowned by minority shareholders are acquired from the subsidiary’s minority shareholders. In theconsolidated financial statements, the subsidiary's assets and liabilities are reflected with amount basedon continuous calculation starting from the acquisition date or consolidation date. Capital surplus isadjusted according to the difference between newly increased long-term equity investment arising from
| - 102 - | ||
acquisition of minority equity and the share of net assets calculated based on current shareholding ratiothat the parent company is entitled to. The share is subject to continuous calculation starting from theacquisition date or consolidation date. If the capital surplus (capital premium or share capital premium)is not sufficient to absorb the difference, the remaining balance is adjusted against retained earnings.
If the accounting treatment of a transaction which considers the Group as an accounting entity is differentfrom that considers the Company or its subsidiaries as an accounting entity, it is adjusted from theperspective of the Group.
(7) Cash and cash equivalents
Cash and cash equivalents refer to cash in hand, deposits that can be used for payment at any time,and investments with short holding periods, strong liquidity, easy conversion into known amounts ofcash, and low risk of value changes.
(8) Foreign currency conversion
(a) Foreign currency transaction
Foreign currency transactions are translated into RMB using the exchange rates prevailing at the datesof the transactions.
On the balance sheet date, monetary items denominated in foreign currencies are translated into RMBusing the spot exchange rates on the balance sheet date. Exchange differences arising from thesetranslations are recognised in profit or loss for the current period, except for those attributable to foreigncurrency borrowings that have been taken out specifically for the acquisition or construction of qualifyingassets, which are capitalised as part of the cost of those assets. Non-monetary items denominated inforeign currencies that are measured at historical costs are translated at the balance sheet date usingthe spot exchange rates at the date of the transactions. The effect of exchange rate changes on cash ispresented separately in the cash flow statement.
(b) Conversion of foreign currency financial statements
The asset and liability items in the balance sheets for overseas operations are translated at the spotexchange rates on the balance sheet date. Among the shareholders’ equity items, the items other than“undistributed profits” are translated at the spot exchange rates of the transaction dates. The incomeand expense items in the income statements of overseas operations are translated at the spot exchangerates of the transaction dates. The differences arising from the above translation are presentedseparately in the shareholders’ equity. The cash flows of overseas operations are translated at the spotexchange rates on the dates of the cash flows. The effect of exchange rate changes on cash ispresented separately in the cash flow statement.
(9) Financial instrument
A financial instrument is any contract that gives rise to a financial asset of one entity and afinancial liability or equity instrument of another entity. A financial asset or a financial liability isrecognised when the Group becomes a party to the contractual provisions of the instrument.
(a) Financial assets
(i) Classification and measurement
Based on the business model for managing the financial assets and the contractual cash flowcharacteristics of the financial assets, financial assets are classified as: (1) financial assets atamortised cost; (2) financial assets at fair value through other comprehensive income; (3) financialassets at fair value through profit or loss.
The financial assets are measured at fair value at initial recognition. Related transaction coststhat are attributable to the acquisition of the financial assets are included in the initially recognisedamounts, except for the financial assets at fair value through profit or loss, the related transaction costsof which are recognised directly in profit or loss for the current period. Accounts receivable ornotes receivable arising from sales of products or rendering of services (excluding or without
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regard to significant financing components) are initially recognised at the consideration that isentitled to be charged by the Group as expected.
Debt instruments
The debt instruments held by the Group refer to the instruments that meet the definition of financialliabilities from the perspective of the issuer, and are measured in the following ways.
Measured at amortised cost
The objective of the Group's business model is to hold the financial assets to collect thecontractual cash flows, and the contractual cash flow characteristics are consistent with a basiclending arrangement, which gives rise on specified dates to the contractual cash flows that are solelypayments of principal and interest on the principal amount outstanding. The interest income of suchfinancial assets is recognised using the effective interest method. Such financial assets mainlycomprise cash at bank and on hand, placements with and loans to banks and other financialinstitutions measured at amortised cost, accounts receivable, factoring receivables, loans andadvances, other receivables and long-term receivables. Long-term receivables that are due within oneyear (inclusive) as from the balance sheet date are included in the current portion of non-current assets.
Financial assets at fair value through other comprehensive income:
The objective of the Group's business model is to hold the financial assets to collect the contractualcash flows and selling as target, and the contractual cash flow characteristics are consistent witha basic lending arrangement. Such financial assets are measured at fair value and their changes areincluded in other comprehensive income, but impairment losses or gains, exchange gains and losses,and interest income calculated by the effective interest rate method are all included in the current profitand loss. Such financial assets mainly comprise receivable financing and other financial debtinvestment. Other financial debt investment that are due within one year (inclusive) as from the balancesheet date are included in the current portion as other current assets.
Measured at fair value through profit or loss:
Debt instruments held by the Group that are not divided into those at amortised cost, or those measuredat fair value through other comprehensive income, are measured at fair value through profit orloss and included in financial assets held for trading. At initial recognition, the Group designatesa portion of financial assets as at fair value through profit or loss to eliminate or significantly reducean accounting mismatch. Financial assets that are due within one year (inclusive) as from thebalance sheet date and are expected to be held over one year are included in other non-current financialassets.
Equity instruments
Investments in equity instruments, over which the Group has no control, joint control or significantinfluence, are measured at fair value through profit or loss under financial assets held fortrading; investments in equity instruments expected to be held over one year as from the balancesheet date are included in other non-current financial assets.
In addition, a portion of certain investments in equity instruments not held for trading are designated asfinancial assets at fair value through other comprehensive income under other investments in equityinstruments. The relevant dividend income of such financial assets is recognised in profit or lossfor the current period.
(ii) Impairment
The Group confirms the loss provision based on expected credit losses for financial assets measuredat amortised cost, debt instrument investments at fair value through other comprehensive income, andfinancial guarantee contracts. based on expected credit losses (ECL) and recognizes allowances forlosses.
Giving consideration to reasonable and supportable information on past events, current conditionsand forecasts of future economic conditions, as well as the default risk weight , the expected credit
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loss was confirmed .
On each balance sheet date, the expected credit losses of financial instruments at differentstages are measured respectively. 12-month ECL provision is recognised for financial instrumentsin Stage 1 that have not had a significant increase in credit risk since initial recognition; lifetimeECL provision is recognised for financial instruments in Stage 2 that have had a significantincrease in credit risk yet without credit impairment since initial recognition; and lifetime ECL provisionis recognised for financial instruments in Stage 3 that have had credit impairment since initialrecognition.
For the financial instruments with lower credit risk on the balance sheet date, the Groupassumes there is no significant increase in credit risk since initial recognition and recognisesthe 12-month ECL provision.
For the financial instruments in Stage 1, Stage 2 and with lower credit risk, the Group calculates theinterest income by applying the effective interest rate to the gross carrying amount (before deductionof the impairment provision). For the financial instrument in Stage 3, the interest income iscalculated by applying the effective interest rate to the amortised cost (after deduction of the impairmentprovision from the gross carrying amount).
For notes and accounts receivables and factoring receivables arising from daily business activities suchas selling commodities and providing labor services, the Group recognises the lifetime expected creditloss provision regardless of whether there exists a significant financing component
In case the expected credit losses of an individually assessed financial asset cannot be evaluated withreasonable cost, the Group divides the receivables into certain groupings based on credit riskcharacteristics, and calculates the expected credit losses for the groupings. Basis for determinedgroupings and method for provision are as follows:
| Notes receivables Portfolio 1 | Bank acceptance Notes | Expected credit loss method |
| Notes receivables Portfolio 2 | Trade acceptance Notes | Expected credit loss method |
| Accounts receivables Portfolio 1 | Receivables non-related third party | Expected credit loss method |
| Accounts receivables Portfolio 2 | Receivables related party | Expected credit loss method |
| Other receivables Portfolio 1 | Receivables non-related third party | Expected credit loss method |
| Other receivables Portfolio 2 | Receivables related party | Expected credit loss method |
For notes and accounts receivables and receivable financing arising from daily business activities suchas selling commodities and providing labor services, the Group refers to historical credit loss experience,combined with current conditions and predictions of future economic conditions. In addition to notesreceivable, factoring receivables and other receivables classified as a combination, the Group refers tohistorical credit loss experience, combines current conditions and predictions of future economicconditions, and passes default risk exposure and future 12 The expected credit loss rate within a monthor the entire duration is calculated as the expected credit loss.
The Group recognises the loss provision made or reversed into profit or loss for the current period.For debt instruments that are held at fair value and whose changes are included in other comprehensiveincome, the Group adjusts other comprehensive income while accounting for impairment losses or gainsin the current profit or loss.
(iii) Derecognition
A financial asset is derecognised when any of the below criteria is met: (1) the contractual rights toreceive the cash flows from the financial asset expire; (2) the financial asset has been transferred
and the Group transfers substantially all the risks and rewards of ownership of the financial assetto the transferee; or (3) the financial asset has been transferred and the Group has not retainedcontrol of the financial asset, although the Group neither transfers nor retains substantially all therisks and rewards of ownership of the financial asset.
(b) Financial liabilities
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Financial liabilities are classified as financial liabilities at amortised cost and financial liabilities atfair value through profit or loss at initial recognition.
The Group's financial liabilities are mainly comprise financial liabilities at amortised cost, including billspayable, accounts payable, and other payables. This type of financial liability is initially measured at itsfair value after deducting transaction costs, and is subsequently measured using the actual interest ratemethod. If the maturity is less than one year (including one year), it is listed as current liabilities; Thosewith a maturity of less than one year (including one year) are listed as current liabilities; those with amaturity of more than one year but due within one year (including one year) from the balance sheet dateare listed as non-current liabilities due within one year. The rest are listed as non-current liabilities.
A financial liability is derecognised or partly derecognised when the underlying present obligationis discharged or partly discharged. The difference between the carrying amount ofthe derecognised part of the financial liability and the consideration paid is recognised in profit or lossfor the current period.
(c) Determination of fair value of financial instruments
The fair value of a financial instrument that is traded in an active market is determined at thequoted price in the active market. The fair value of a financial instrument that is not traded in anactive market is determined by using a valuation technique. In valuation, the Group adopts valuationtechniques applicable in the current situation and supported by adequate available data andother information, selects inputs with the same characteristics as those of assets or liabilitiesconsidered in relevant transactions of assets or liabilities by market participants, and givespriority to the use of relevant observable inputs. When relevant observable inputs are not availableor feasible, unobservable inputs are adopted.
(10) Inventories
(a) Classification
Inventories refer to manufacturing sector, including raw materials, work in progress, finished goods andturnover materials, and are measured at the lower of cost and net realisable value.
(b) Issued Inventory costing method
Cost is determined using the weighted average method. The cost of finished goods and work in progresscomprise raw materials, direct labour and systematically allocated production overhead based on thenormal production capacity.
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(10) Inventories (Cont’d)
(c) Amortisation methods of low value consumables and packaging materials
Turnover materials include low value consumables and packaging materials, which are expensed whenissued.
(d) The determination of net realisable value and the method of provision for decline in the value of
inventories
Provision for decline in the value of inventories is determined at the excess amount of book values ofthe inventories over their net realisable value. Net realisable value is determined based on the estimatedselling price in the ordinary course of business, less the estimated costs to completion and estimatedcosts necessary to make the sale and related taxes.
(e) The Group adopts the perpetual inventory system.
(11) Long-term equity investments
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Long-term equity investments comprise the Company’s long-term equity investments in its subsidiaries,and the Group’s long-term equity investments in its associates.
Subsidiaries are the investees over which the Company is able to exercise control. Associates are theinvestees that the Group has significant influence on their financial and operating policies.
Investments in subsidiaries are measured using the cost method in the Company’s financial statements,and adjusted by using the equity method when preparing the consolidated financial statements.Investments in associates are accounted for using the equity method.
(a) Initial recognition of investment cost
For long-term equity investments formed in business combination: when obtained from businesscombinations involving entities under common control, the long-term equity investment is stated atcarrying amount of equity for the combined parties at the time of merger; when the long-term equityinvestment obtained from business combinations involving entities not under common control, theinvestment is measured at combination cost.
For long-term equity investments not formed in business combination: the one paid by cash is initiallymeasured at actual purchase price; the long-term investment obtained by issuing equity securities isstated at fair value of equity securities as initial investment cost..
(b) Subsequent measurement and recognition of related profit or loss
For long-term equity investments accounted for using the cost method, they are measured at the initialinvestment costs, and cash dividends or profit distribution declared by the investees are recognised asinvestment income in profit or loss.
For long-term equity investments accounted for using the equity method, where the initial investmentcost of a long-term equity investment exceeds the Group’s share of the fair value of the investee’s
identifiable net assets at the acquisition date, the long-term equity investment is measured at the initialinvestment cost; where the initial investment cost is less than the Group’s share of the fair value of theinvestee’s identifiable net assets at the acquisition date, the difference is included in profit or loss andthe cost of the long-term equity investment is adjusted upwards accordingly.
Under the equity method, the Group recognises the investment income according to its share of netprofit or loss of the investee. The Group discontinues recognising its share of the net losses of aninvestee after book values of the long-term equity investment together with any long-term interests thatin substance form part of the investor’s net investment in the investee are reduced to zero. However, ifthe Group has obligations for additional losses and the criteria with respect to recognition of provisionsunder the accounting standards on contingencies are satisfied, the Group continues recognising theinvestment losses and the provisions. For changes in owners’ equity of the investee other than thosearising from its net profit or loss, its proportionate share is directly recorded into capital surplus, providedthat the proportion of the shareholding of the Group in the investee remains unchanged. Book value ofthe investment is reduced by the Group’s share of the profit distribution or cash dividends declared byan investee. The unrealised profits or losses arising from the intra-group transactions amongst theGroup and its investees are eliminated in proportion to the Group’s equity interest in the investees, andthen based on which the investment gains or losses are recognised. Any losses resulting fromtransactions between the Group and its investees attributable to asset impairment losses are noteliminated.
(c) Basis for determining existence of control, jointly control or significant influence over investees
The term "control" refers to the power in the investees, to obtain variable returns by participating in therelated business activities of the investees, and the ability to affect the returns by exercising its powerover the investees.
The term "significant influence" refers to the power to participate in the formulation of financial andoperating policies of an enterprise, but not the power to control, or jointly control, the formulation of suchpolicies with other parties.
(d) Impairment of long-term equity investments
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Book value of long-term equity investments in subsidiaries and associates is reduced to the recoverableamount when the recoverable amount is less than book value.
(12) Investment property
Investment property includes leased land use rights, land use rights held and provided for to transferafter appreciation and leased building and construction.
Investment properties are initially measured at acquisition cost. The cost of outsourcing Investmentproperty includes the purchase price, relevant taxes and other expenditures that can be directlyattributable to the asset; the cost of self-built Investment property is determined by the construction ofthe asset. The composition of the necessary expenditures incurred before the usable state.
Investment property adopts the fair value model for subsequent measurement without depreciation oramortization. On the balance sheet date, the book value of the investment properties are initiallymeasured at acquisition cost is adjusted based on the fair value of the investment properties are initiallymeasured at acquisition cost. The difference between the fair value and the original book value will becalculated into the current profit and loss.
When the use of an Investment property is changed to self-use, the investment property is convertedinto fixed assets or intangible assets from the date of change, and the book value and fair value of thefixed assets and intangible assets are determined based on the fair value of the investment property onthe conversion date. The difference with the original book value of the investment property is includedin the current profit and loss. When the purpose of self-use real estate is changed to earning rent orcapital appreciation, from the date of change, the fixed assets or intangible assets are converted intoinvestment properties are initially measured at acquisition cost, and the fair value on the day ofconversion is used as the book value of the investment properties are initially measured at acquisitioncost, and the fair value on the day of conversion If the value is less than the original book value of fixedassets and intangible assets, the difference is included in the current profit and loss. If the fair value onthe day of conversion is greater than the original book value of fixed assets and intangible assets, thedifference is included in other comprehensive income.
When an investment property is disposed of or permanently withdrawn from use and it is expected thatno economic benefits can be obtained from its disposal, the confirmation of the investment real estateshall be terminated. The disposal income from the sale, transfer, scrapping or destruction of investmentreal estate shall deduct its book value and relevant taxes and shall be included in the current profits andlosses. If there is an amount included in other comprehensive income on the original conversion date, itwill also be carried forward and included in the current profit and loss.
(13) Fixed assets
(a) Recognition and initial measurement
Fixed assets comprise buildings, machinery and equipment, motor vehicles and others.
Fixed assets are recognised when it is probable that the related economic benefits will probably flow tothe Group and the costs can be reliably measured. Fixed assets purchased or constructed by the Groupare initially measured at cost at the acquisition date.
Subsequent expenditures incurred for a fixed asset are included in the cost of the fixed asset when it isprobable that the associated economic benefits will flow to the Group and the related cost can be reliablymeasured. Book value of the replaced part is derecognised. All the other subsequent expenditures arerecognised in profit or loss in the period in which they are incurred.
(b) Depreciation methods
Fixed assets are depreciated using the life average method to allocate the cost of the assets to theirestimated residual values over their estimated useful lives. For the fixed assets that have been providedfor impairment loss, the related depreciation charge is prospectively determined based upon theadjusted Book value over their remaining useful lives.
The estimated useful lives, the estimated net residual values expressed as a percentage of cost and theannual depreciation rates of fixed assets are as follows:
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Estimated useful lives Estimated net residual value Annual depreciation rate
Buildings 20 to 35 years 5% 2.71% to 4.75%Machinery and equipment 8 to 20 years 5% 4.75% to 11.88%Transportation and others 5 to 8 years 0% 12.50% to 20.00%
The estimated useful life, the estimated net residual value of a fixed asset and the depreciation methodapplied to the asset are reviewed, 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.
(d) Disposal
A fixed asset is derecognised on disposal or when no future economic benefits are expected from itsuse or disposal. The amount of proceeds from disposals on sale, transfer, retirement or damage of afixed asset net of its carrying amount and related taxes and expenses is recognised in profit or loss forthe current period.
(14) Construction in progress
Construction in progress is recorded at actual cost. Actual cost comprises construction cost, installationcost, borrowing costs eligible for capitalised condition and necessary expenditures incurred for itsintended use. Actual cost also includes net of trial production cost and trial production income beforeconstruction in progress is put into production.
Construction in progress is transferred to fixed assets when the assets are ready for their intended use,and depreciation begins from the following month.
Book value of construction in progress is reduced to the recoverable amount when the recoverableamount is below book value.
(15) Borrowing costs
The borrowing costs that are directly attributable to the acquisition and construction of an asset thatneeds a substantially long period of time for its intended use commence to be capitalised and recordedas part of the cost of the asset when expenditures for the asset and borrowing costs have been incurred,and the activities relating to the acquisition and construction that are necessary to prepare the asset forits intended use have commenced. The capitalisation of borrowing costs ceases when the asset underacquisition or construction becomes ready for its intended use and the borrowing costs incurredthereafter are recognised in profit or loss for the current period. Capitalisation of borrowing costs issuspended during periods in which the acquisition or construction of a fixed asset is interruptedabnormally and the interruption lasts for more than 3 months, until the acquisition or construction isresumed.
For the specific borrowings obtained for the acquisition or construction of an asset qualifying forcapitalisation, the amount of borrowing costs eligible for capitalisation is determined by deducting anyinterest income earned from depositing the unused specific borrowings in the banks or any investmentincome arising on the temporary investment of those borrowings during the capitalisation period.
For the general borrowings obtained for the acquisition or construction of an asset qualifying forcapitalisation, the amount of borrowing costs eligible for capitalisation is determined by applying theweighted average effective interest rate of general borrowings, to the weighted average of the excessamount of cumulative expenditures on the asset over the amount of specific borrowings. The effectiveinterest rate is the rate at which the estimated future cash flows during the period of expected durationof the borrowings or applicable shorter period are discounted to the initial amount of the borrowings.
(16) Intangible assets
Intangible assets, mainly including land use rights, patents and proprietary technologies, exploitationrights and others, are measured at cost.
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(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 the land use rights and the buildings located thereon cannot be reasonablyallocated between the land use rights and the buildings, all of the acquisition costs are recognised asfixed assets.
(b) Patents and proprietary technologies
Patents are amortised on a straight-line basis over the estimated use life.
(c) Exploitation rights
Exploitation rights are amortised on a straight-line basis over permitted exploitation periods on theexploitation certificate.
(d) Periodical review of useful life and amortisation method
For an intangible asset with a finite useful life, review of its useful life and amortisation method isperformed at each year-end, with adjustment made as appropriate.
(e) Research and development
The expenditure on an internal research and development project is classified into expenditure on theresearch phase and expenditure on the development phase based on its nature and whether there ismaterial uncertainty that the research and development activities can form an intangible asset at end ofthe project.
Expenditure on the research phase related to planned survey, evaluation and selection for research onmanufacturing technique is recognised in profit or loss in the period in which it is incurred. Prior to massproduction, expenditure on the development phase related to the design and testing phase in regardsto the final application of manufacturing technique is capitalised only if all of the following conditions aresatisfied:
? the development of manufacturing technique has been fully demonstrated by technical team;? management has approved the budget for the development of manufacturing technique;? there are research and analysis of pre-market research explaining that products manufactured
with such technique are capable of marketing;? There is sufficient technique and capital to support the development of manufacturing
technology and subsequent mass production; and the expenditure on manufacturing technology
development can be reliably gathered.
Other development expenditures that do not meet the conditions above are recognised in profit or lossin the period in which they are incurred. Development costs previously recognised as expenses are notrecognised as an asset in a subsequent period. Capitalised expenditure on the development phase ispresented as development costs in the balance sheet and transferred to intangible assets at the datethat the asset is ready for its intended use.
(f) Impairment of intangible assets
Book value of intangible assets is reduced to the recoverable amount when the recoverable amount isbelow book value.
(17) Long-term prepaid expenses
Long-term prepaid expenses include the expenditures that have been incurred but should be recognisedas expenses over more than one year in the current and subsequent periods. Long-term prepaidexpenses are amortised on the straight-line basis over the expected beneficial period and are presentedat actual expenditure net of accumulated amortisation.
(18) Impairment of long-term assets
Fixed assets, construction in progress, intangible assets with finite useful lives and long-term equityinvestments in joint ventures and associates are tested for impairment if there is any indication that the
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assets may be impaired on the balance sheet date; intangible assets not ready for their intended useare tested at least annually for impairment, irrespective of whether there is any indication that they maybe impaired. If the result of the impairment test indicates that the recoverable amount of an asset is lessthan its carrying amount, a provision for impairment and an impairment loss are recognised for theamount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amountis the higher of an asset’s fair value less costs to sell and the present value of the future cash flowsexpected to be derived from the asset. Provision for asset impairment is determined and recognised onthe individual asset basis. If it is not possible to estimate the recoverable amount of an individual asset,the recoverable amount of a group of assets to which the asset belongs is determined. A group of assetsis the smallest group of assets that is able to generate independent cash inflows.
Goodwill that separately presented in the financial statements is tested at least annually for impairment,irrespective of whether there is any indication that it may be impaired. In conducting the test, book valueof goodwill is allocated to the related asset groups or groups of asset groups which are expected tobenefit from the synergies of the business combination. If the result of the test indicates that therecoverable amount of an asset group or group of asset groups, including the allocated goodwill, is lowerthan its book value, the corresponding impairment loss is recognised. The impairment loss is firstdeducted from book value of goodwill that is allocated to the asset group or group of asset groups, andthen deducted from book values of other assets within the asset groups or groups of asset groups inproportion to book values of assets other than goodwill.
Once the above asset impairment loss is recognised, it will not be reversed for the value recovered inthe subsequent periods.
(19) Employee benefits
Employee benefits include short-term employee benefits, post-employment benefits, terminationbenefits and other long-term employee benefits provided in various forms of consideration in exchangefor service rendered by employees or compensations for the termination of employment relationship.
(a) Short-term employee benefits
Short-term employee benefits include wages or salaries, bonuses, allowances and subsidies, staffwelfare, medical care, work injury insurance, maternity insurance, housing funds, labour union funds,employee education funds and paid short-term leave, etc. The employee benefit liabilities arerecognised in the accounting period in which the service is rendered by the employees, with acorresponding charge to the profit or loss for the current period or the cost of relevant assets. Employeebenefits which are non-monetary benefits shall be measured at fair value.
(b) Post-employment benefits
The Group classifies post-employment benefit plans as either defined contribution plans or definedbenefit plans. Defined contribution plans are post-employment benefit plans under which the Group paysfixed contributions into a separate fund and will have no obligation to pay further contributions; anddefined benefit plans are post-employment benefit plans other than defined contribution plans. Duringthe reporting period, the Group's post-employment benefits mainly include basic pensions andunemployment insurance, both of which belong to the defined contribution plans.
(c) Basic pensions
The Group’s employees participate in the basic pension plan set up and administered by local authoritiesof Ministry of Human Resource and Social Security. Monthly payments of premiums on the basicpensions are calculated according to prescribed bases and percentage by the relevant local authorities.When employees retire, local labour and social security institutions have a duty to pay the basic pensioninsurance to them. The amounts based on the above calculations are recognised as liabilities in theaccounting period in which the service has been rendered by the employees, with a correspondingcharge to the profit or loss for the current period or the cost of relevant assets.
(d) Termination benefits
The Group provides compensation for terminating the employment relationship with employees beforethe end of the employment contracts or as an offer to encourage employees to accept voluntary
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redundancy before the end of the employment contracts. The Group recognises a liability arising fromcompensation for termination of the employment relationship with employees, with a correspondingcharge to profit or loss at the earlier of the following dates: 1) when the Group cannot unilaterallywithdraw the offer of termination benefits because of an employment termination plan or a curtailmentproposal; 2) when the Group recognises costs or expenses related to the restructuring that involves thepayment of termination benefits.
The termination benefits expected to be paid within one year since the balance sheet date are classifiedas current liabilities.
(20) Dividend distribution
Cash dividend is recognised as a liability for the period in which the dividend is approved by theshareholders’ meeting.
(21) Deferred tax assets and deferred tax liabilities
Deferred tax assets and deferred tax liabilities are calculated and recognised based on the differencesarising between the tax bases of assets and liabilities and their carrying amounts (temporary differences).Deferred tax asset is recognised for the deductible losses that can be carried forward to subsequentyears for deduction of the taxable profit in accordance with the tax laws. No deferred tax liability isrecognised for a temporary difference arising from the initial recognition of goodwill. No deferred taxasset or deferred tax liability is recognised for the temporary differences resulting from the initialrecognition of assets or liabilities due to a transaction other than a business combination, which affectsneither accounting profit nor taxable profit (or deductible loss). At the balance sheet date, deferred taxassets and deferred tax liabilities are measured at the tax rates that are expected to apply to the periodwhen the asset is realised or the liability is settled.
Deferred tax assets are only recognised for deductible temporary differences, deductible losses and taxcredits to the extent that it is probable that taxable profit will be available in the future against which thedeductible temporary differences, deductible losses and tax credits can be utilised.
Deferred tax liabilities are recognised for temporary differences arising from investments in subsidiariesand associates, except where the Group is able to control the timing of reversal of the temporarydifference, and it is probable that the temporary difference will not 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 thefuture against which the temporary differences can be utilised, the corresponding deferred tax assetsare recognised.
Deferred tax assets and liabilities that meet the following conditions at the same time are listed as thenet amount after offset:
? Deferred income tax assets and deferred income tax liabilities are related to the same tax payer
within the Group and the same taxation authority; and,? That tax entity within the Group has a legally enforceable right to offset current tax assets against
current tax liabilities.
(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 equityinstruments as a consideration in return for services.
Equity-settled share-based payment The Group‘s stock optionstock option plan is the equity-settledshare-based payment in exchange of employees' services and is measured at the fair value of the equityinstruments at grant date. The equity instruments are exercisable after services in vesting period arecompleted or specified performance conditions are met. In the vesting period, the services obtained incurrent period are included in relevant cost and expenses at the fair value of the equity instruments atgrant date based on the best estimate of the number of exercisable equity instruments, and capitalsurplus is increased accordingly. The Group makes the best estimate of the number of vesting equityinstruments based on the latest obtained changes in the number of vested employees, whether therequired performance conditions are met, and other follow-up information. If the subsequent informationindicates the number of exercisable equity instruments differs from the previous estimate, an adjustment
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is made and, on the exercise date, the estimate is revised to equal the number of actual vested equityinstruments.
In the period at which performance conditions and term of service are met, the relevant cost andexpenses of equity-settled payment should be recognized, and capital surplus is increased accordingly.Before the exercise date, the accruing amounts of equity-settled payments on balance sheet date reflectthe part of expired waiting period and optimal estimation for the number of the Company final vestedequity 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 on this portion should not be recognized. If the share-based payment agreement sets out the market conditions and term of non-vesting, as long asperformance conditions and term of service are met, it is should be regard as exercisable right, no matterthe market conditions and non-vesting conditions are meet or not.
If the terms of equity-settled payment are modified, at least the service is confirmed in accordance withthe unmodified terms. In addition, the increase of the fair value of the authorized equity instruments, orthe beneficial changes to the employees on the modification date, the increase of service are confirmed.If the equity-settled payment is cancelled, the cancellation date shall be deemed as an expeditedexercise, and the unconfirmed amount shall be confirmed immediately. If the employee or other party isable to choose to meet the non-vesting conditions but not satisfied in the waiting period, equity-settledpayment should be cancelled. But if a new equity instrument is granted, and the new equity instrumentis confirm to replace the old equity instrument which is canceled in the authorization date of the newequity instrument, the new equity instrument should be disposed by using the same conditions andterms of the old equity instrument for modifications.
(23) Revenue recognition
The Group recognises revenue at the consideration that the Group is entitled to charge as expectedwhen the Group has fulfilled the performance obligations in the contract, that is, the customer obtainscontrol over relevant goods or services.
(a) Sales of goods
The Group mainly sells flat and engineering glass, products related to solar energy, and electronic glassand displays. For domestic sales, the Group delivers the products to a certain place specified in thecontract. When the buyer takes over the goods, the Group recognises revenue. For export sales, theGroup recognises the revenue when it finished clearing goods for export and deliver the goods on boardthe vessel, or when the goods are delivered to a certain place specified in the contract. The credit periodgranted by the Group to customers is determined based on the customer's credit risk characteristics,consistent with industry practices, and there is no major financing component. The Group’s obligationto transfer goods to customers for consideration received or receivable from customers is listed ascontract liabilities.
Revenue is presented as the net amount after deducting sales discounts and sales returns.
(b) Rendering of services
The Group provides external consulting, loading, unloading, transportation and processing laborservices, and recognizes revenue within a period of time based on the progress of the completed labor.The progress of the completed labor is determined according to the proportion of the cost incurred tothe estimated total cost. On the balance sheet date, the Group re-estimates the progress of completedlabor services so that it can reflect changes in contract performance.
When the Group recognizes revenue based on the performance progress of the completed laborservices, the portion for which the Group has obtained the unconditional right to receive payments isrecognized as accounts receivable, and the remaining portion is recognized as contract assets, and theCompany measures the loss reserve of accounts receivable and contract assets. according to theexpected credit loss; If the contract price received or receivable by the Group exceeds the completedprogress, the excess is recognized as contract liabilities. The Group presents the contract assets andcontract liabilities under the same contract as a net amount.
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(24) Provisions
Business restructuring, provisions for product warranties, loss contracts etc. are recognised when theGroup has a present obligation, it is probable that an outflow of economic benefits will be required tosettle the obligation, and the amount of the obligation can be measured reliably.
A provision is initially measured at the best estimate of the expenditure required to settle the relatedpresent obligation. Factors surrounding a contingency, such as the risks, uncertainties and the timevalue of money, are taken into account as a whole in reaching the best estimate of a provision. Wherethe effect of the time value of money is material, the best estimate is determined by discounting therelated future cash outflows. The increase in the discounted amount of the provision arising frompassage of time is recognised as interest expense.
Book value of provision is reviewed at each balance sheet date and adjusted to reflect the current bestestimate.
The provisions expected to be paid within one year since the balance sheet date are classified as currentliabilities.
(25) Government grants
Government grants are transfers of monetary or non-monetary assets from the government to the Groupat nil consideration, including tax refund and financial subsidies, etc.
A government grant is recognised when there is a reasonable assurance that the grants will be receivedand the Group will comply with all attached conditions. Monetary government grants aremeasured at the amounts received or receivable. Non-monetary government grant are measured at fairvalue, if the fair value cannot be reliably obtained, it is measured at nominal amount.
The government grants related to assets refer to government grant obtained by enterprises and usedfor purchase and construction of long-term assets or formation of long-term asset in other ways. Thegovernment grants related to income refer to grants other than those related to assets.
For government grants related to income, where the grant is a compensation for related expenses orlosses to be incurred by the Group in the subsequent periods, the grant is recognised as deferred income,and included in profit or loss over the periods in which the related costs are recognised; where the grantis a compensation for related expenses or losses already incurred by the Group, the grant is recognisedimmediately in profit or loss for the current period. The company use the same method of presentationfor similar government grants.
The ordinary activitiy government grants should be counted into operating profits; the government grantswhich not belong ordinary activities should be counted into non-operating income.
(26) Leases
A leasing is a contract in which the lessor cedes the right to use an asset to the lessee for a certainperiod of time in return for consideration.
(a) The Group acts as the lessee
The Company recognizes the right-of-use assets on the commencement date of the lease term andrecognizes the lease liabilities at the present value of the outstanding lease payments. The leasepayments include fixed payments, as well as payments where there is reasonable certainty that apurchase option will be exercised or a lease option will be terminated. The variable rent determinedbased on a certain percentage of sales is not included in the lease payment, and is included in thecurrent profit and loss when it actually occurs. The Group will list the non-liabilities within one year thatlease liabilities will be paid one year. from the balance sheet date.
On the commencement date, the Company shall initially measure the right-of-use asset at cost. Thecost of the right-of-use asset shall comprise the amount of the initial measurement of the lease liabilityand any lease payments made at or before the commencement date, and any initial direct costs incurredby the lessee etc, less any lease incentives received, If ownership of the leased asset transfers to theGroup at the end of the lease term, depreciation is calculated using the estimated useful life of the asset.
| - 114 - | ||
Otherwise, the right-of-use assets are depreciated over the shorter of the lease term and the estimateduseful lives of the assets. Where the carrying amount of an asset or a cash generating unit exceeds itsrecoverable amount, the asset or cash generating unit is considered impaired and is written down to itsrecoverable amount.
A short-term lease is a lease that, at the commencement date, has a lease term of 12 months or less,and has a low-value asset leases. The Group does not recognize the right-of-use assets and leaseliabilities. The Group recognizes lease payments on short-term leases and leases of low-value assetsin the related asset costs or profit or loss on a straight-line basis over the lease term.
The Group accounts for a lease modification as a separate lease if both:(1) the modification increasesthe scope of the lease by adding the right to use one or more underlying assets; (2) the considerationfor the lease increases by an amount commensurate with the stand-alone price for the increase in scopeand any appropriate adjustments to that stand-alone price to reflect the circumstances of the particularcontract.
For a lease modification that is not accounted for as a separate lease, at the effective date of the leasemodification the Group remeasures the lease liability by discounting the revised lease payments usinga revised discount rate. Decreasing the carrying amount of the right-of-use asset to reflect the partial orfull termination of the lease for lease modifications that decrease the scope of the lease. The Grouprecognizes in profit or loss any gain or loss relating to the partial or full termination of the lease. Otherlease modifications will remeasure lease liabilities, and the group will make a corresponding adjustmentto the right-of-use asset book value.
(b) The Group acts as the lessor
A lease that transfers substantially all the risks and rewards associated with the ownership of the leasedasset is a finance lease. Other leases are operating leases.
(i) Operating lease
When the Company operates leased buildings, machinery and equipment, and means of transport, therental income from operating leases shall be recognized in accordance with the straight-line methodduring the lease term. The Company will include variable rent determined based on a percentage ofsales in rental income when it actually incurs. For any modification to an operating lease, the Grouptreats it as a new lease from the effective date of the modification, and the received or receivable leasepayments related to the lease prior to the modification are treated as lease payments of the new lease.
(ii) Finance lease
On the beginning date of the lease term, the Company recognizes the finance lease receivables forfinance leases and derecognizes related assets. The Company presents the finance lease receivablesas long-term receivables, and the finance lease receivables received within one year (including one year)from the balance sheet date are presented as non-current assets due within one year.
(27) Assets classified as held for sale
A non-current asset or a disposal group is classified as held for sale when all of the following conditionsare satisfied: (1) the non-current asset or the disposal group is available for immediate sale in its presentcondition subject to terms that are traditionally and customary for sales; (2) the Group has made aresolution and obtained appropriate approval for disposal of the non-current asset or the disposal group,and the transfer is to be completed within one year.
Non-current assets (except for financial assets, investment properties at fair value and deferred taxassets) that meet the recognition criteria for held for sale are recognised at the amount equal to thelower of the fair value less costs to sell and book value. The difference between fair value less costs tosell and carrying amount, should be presented as impairment loss.
Such non-current assets and assets included in disposal groups as classified as held for sale areaccounted for as current assets; while liabilities included in disposal groups classified as held for saleare accounted for as current liabilities, and are presented separately in the balance sheet.
A discontinued operation is a component of the Group that either has been disposed of or is classifiedas held for sale, and is separately identifiable operationally and for financial reporting purposes, andsatisfies one of the following conditions: (1) represents a separate major line of business or geographical
| - 115 - | ||
area of operations; (2) is part of a single coordinated plan to dispose of a separate major line of businessor geographical area of operations; and (3) is a subsidiary acquired exclusively with a view to resale.
The discontinued operation profits on income statement presentation have included the profits and lossof operation and disposal.
(28) Safety production costs
According to relevant regulations of the Ministry of Finance and National Administration of Work Safety,a subsidiary of the Group which is engaged in producing and selling polysilicon appropriates safetyproduction costs on following basis:
(a) 4% for revenue below RMB10 million (inclusive) of the year;(b) 2% for the revenue between RMB10 million to RMB100 million (inclusive) of the year;(c) 0.5% for the revenue between RMB100 million to RMB1 billion (inclusive) of the year;(d) 0.2% for the revenue above RMB1 billion of the year.
The safety production costs is mainly used for the overhaul, renewal and maintenance of safety facilities.The safety production costs are charged to costs of related products or profit or loss when appropriated,and safety production costs in equity account are credited correspondingly. When using the specialreserve, if the expenditures are expenses in nature, the expenses incurred are offset against the specialreserve directly when incurred. If the expenditures are capital expenditures, when projects arecompleted and transferred to fixed assets, the special reserve should be offset against the cost of fixedassets, and a corresponding accumulated depreciation are recognised. The fixed assets are no longerbe depreciated in future.
(29) Segment information
The Group identifies operating segments based on the internal organisation structure, managementrequirements and internal reporting system, and discloses segment information of reportable segmentswhich is determined on the basis of operating segments.
An operating segment is a component of the Group that satisfies all of the following conditions: (1) thecomponent is able to earn revenue and incur expenses from its ordinary activities; (2) whose operatingresults are regularly reviewed by the Group’s management to make decisions about resources to beallocated to the segment and to assess its performance, and (3) for which the information on financialposition, operating results and cash flows is available to the Group. If two or more operating segmentshave similar economic characteristics and satisfy certain conditions, they are aggregated into one singleoperating segment.
(30) Critical accounting estimates and judgements
The Group continually Estimates the critical accounting estimates and key assumptions applied basedon historical experience and other factors, including expectations of future events that are believed tobe reasonable.
The critical accounting estimates and key assumptions that have a significant risk of possibly causing amaterial adjustment to book values of assets and liabilities within the next accounting year are outlinedbelow:
(a) Income tax
The Group is subject to Income tax in numerous jurisdictions. There are some transactions and eventsfor which the ultimate tax determination is uncertain during the ordinary course of business. Significantjudgement is required from the Group in determining the provision for Income tax in each of thesejurisdictions. Where the final identified outcome of these tax matters is different from the initially-recorded amount, such difference will impact the income tax expenses and deferred income tax in theperiod in which such determination is finally made.
(b) Deferred income tax
Estimates on deferred tax assets are based on estimates on amount of taxable income and applicabletax rate for every year. Realisation of deferred income tax are subject to sufficient taxable income that
| - 116 - | ||
are possible to be obtained by the Group in the future. Change of the future tax rate as well as thereversed time of temporary difference might have effects on tax expense (income) and the balance ofdeferred 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 on the balance sheet date should be subject to impairment testing if there are anyindications of impairment. Management determines whether the long-term assets impaired or not byevaluating and analysing following aspects: (1) whether the event affecting assets impairment occurs;
(2) whether the expected obtainable present value of future cash flows is lower than the asset’s carryingamount by continually using the assets or disposal; and (3) whether the assumptions used in expectedobtainable present value of future cash flows are appropriate.
Various assumptions, including the discount rate and growth rate applied in the method of present valueof future cash flow, are required in evaluating the recoverable amount of assets. If these assumptionscannot be conformed, the recoverable amount should be modified, and the long-term assets may beimpaired accordingly.
(d) The useful life of fixed assets
Management estimates the useful life of fixed assets, based on historical experiences on using fixedassets that have similar properties and functions. When there are differences between actually usefullife and previously estimation, management will adjust estimation to useful life of fixed assets. The fixedassets would be written off or written down when fixed assets been disposed or became redundant.Thus, the estimated result based on existing experience may be different from the actual result of thenext accounting period, which may cause major adjustment to book value of fixed assets on balancesheet.
(e) Goodwill impairment
Goodwill impairment reviews are undertaken annually or more frequently if events or changes incircumstances indicate a potential impairment. For the purpose of impairment testing, goodwill acquiredin a business combination is allocated to each of the cash-generating units (“CGUs”), or groups of CGUs,and future cash flow from each CGU or CGUs is forcasted and discounted with appropriate discountrate.
(31) Significant changes in accounting policies and accounting estimates
In Dec 2018, the Ministry of Finance issued the revised “CAS No. 21—Leases” (hereinafter, the “NewLeases Standard”. The Group has adopted the New Leases Standard since 1 January 2021. Forcontracts signed prior to the date of initial application, the Group did not reassess whether they were, orcontained, a lease. The Group choose to adjust the balance of retained earnings and other related itemsin the financial statements at the beginning of the year of initial adoption of such standard based on thecumulative effect of initial adoption of such standard, with no adjustment to the information for thecomparable period. The impact of the implementation of the New Leases Standard changes on thefinancial statements is as follows:
(a) Leases
| Item | December 31,2020 | January 1,2021 | Effected amount |
| Long-term prepaid expenses | 10,381,937 | 741,179 | (9,640,758) |
| Right-of-use assets | - | 11,538,741 | 11,538,741 |
| Current portion of non-current liabilities | 927,531,709 | 928,352,462 | 820,753 |
| Lease liability | - | 1,077,230 | 1,077,230 |
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Implementation of the new leasing standard has no impact on the relevant items of Parent financialstatements at the beginning of the year of 2021.
3 Taxation
(1) The main categories and rates of taxes applicable to the Group are set out below:
| Category | Taxable basis | Tax rate |
| Enterprise income tax | Taxable income | 0% to 25% |
| Value-added tax (“VAT”) (a) | Taxable value-added amount (Tax payable is calculated using the taxable sales amount multiplied by the applicable tax rate less deductible VAT input of the current period) | 1% to 13% |
| City maintenance and construction tax | VAT paid | 1% to 7% |
| Educational surcharge | VAT paid | 5% |
Some subsidiaries of the Group have used the “exempt, credit, refund” method on goods exported andthe refund rate is 0%-13%.
(2) Tax incentives
The main tax incentives the Group is entitled to are as follows:
Tianjin CSG Energy-Saving Glass Co., Ltd. (“Tianjin Energy Conservation”) passed review on a highand new tech enterprise in 2021 and obtained the Certificate of High and New Tech Enterprise, theperiod of validity is three years. It applies to 15% tax rate for three years since 2021.
Dongguan CSG Architectural Glass Co., Ltd. (“Dongguan CSG”) passed review on a high and new techenterprise in 2019 and obtained the Certificate of High and New Tech Enterprise, the period of validityis three years. It applies to 15% tax rate for three years since 2019.
Wujiang CSG East China Architectural Glass Co., Ltd. (“Wujiang CSG Engineering”) passed review ona high and new tech enterprise in 2020 and obtained the Certificate of High and New Tech Enterprise,the period of validity is three years. It applies to 15% tax rate for three years since 2020.
Dongguan CSG Solar Glass Co., Ltd. (“Dongguan CSG Solar”) passed review on a high and new techenterprise in 2020 and obtained the Certificate of High and New Tech Enterprise, the period of validityis three years. It applies to 15% tax rate for three years since 2020.
Yichang CSG Polysilicon Co., Ltd. (“Yichang CSG Polysilicon”) passed review on a high and new techenterprise in 2020 and obtained the Certificate of High and New Tech Enterprise, the period of validityis three years. It applies to 15% tax rate for three years since 2020.
Dongguan CSG PV-tech Co., Ltd. (“Dongguan CSG PV-tech”) passed review on a high and new techenterprise in 2019 and obtained the Certificate of High and New Tech Enterprise, the period of validityis three years. It applies to 15% tax rate for three years since 2019.
Hebei Shichuang Glass Co., Ltd. (“Hebei Shichuang”) passed review on a high and new tech enterprisein 2019 and obtained the Certificate of High and New Tech Enterprise, the period of validity is threeyears. It applies to 15% tax rate for three years since 2019.
Wujiang CSG Glass Co., Ltd. (“Wujiang CSG”) passed review on a high and new tech enterprise in 2020,and obtained the Certificate of High and New Tech Enterprise, and the period of validity was three years.It applies to 15% tax rate for three years since 2020.
Xianning CSG Glass Co Ltd. (“Xianning CSG”) passed review on a high and new tech enterprise in 2020,and obtained the Certificate of High and New Tech Enterprise, and the period of validity was three years.It applies to 15% tax rate for three years since 2020.
| - 118 - | ||
Xianning CSG Energy-Saving Glass Co., Ltd. (“Xianning CSG Energy-Saving”) passed review on a highand new tech enterprise in 2021, and obtained the Certificate of High and New Tech Enterprise, and theperiod of validity was three years. It applies to 15% tax rate for three years since 2021.
Yichang CSG Photoelectric Glass Co., Ltd. (“Yichang CSG Photoelectric”) passed review on a high andnew tech enterprise in 2021, and obtained the Certificate of High and New Tech Enterprise, and theperiod of validity was three years. It applies to 15% tax rate for three years since 2021.
Yichang CSG Display Co., Ltd (“Yichang CSG Display”) passed review on a high and new techenterprisein 2021, and obtained the Certificate of High and New Tech Enterprise, and the period ofvalidity was three years. It applies to 15% tax rate for three years since 2021.
Qingyuan CSG New Energy-Saving Materials Co., Ltd. (“Qingyuan CSG Energy-Saving”) passedreview on a high and new tech enterprise in 2019, and obtained the Certificate of High and New TechEnterprise, and the period of validity was three years. It applies to 15% tax rate for three years since2019.
Hebei CSG Glass Co Ltd. (“Hebei CSG”) passed review on a high and new tech enterprise in 2021, andobtained 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 2021.
Shenzhen CSG Applied Technology Co Ltd. (“Shenzhen Technology”) passed review on a high andnew tech enterprise in 2021, and obtained the Certificate of High and New Tech Enterprise, and theperiod of validity was three years. It applies to 15% tax rate for three years since 2021.
Dongguan CSG Crystal Yuxin Materials Co., Ltd. (“Dongguan Jing Yu Company”) passed review on ahigh and new tech enterprise in 2021 and obtained the Certificate of High and New Tech Enterprise, theperiod of validity is three years. It applies to 15% tax rate for three years since 2021.
Xianning CSG Photoelectric Glass Co., Ltd. (“Xianning Photoelectric”) passed review on a high and newtech enterprise in 2019 and obtained the Certificate of High and New Tech Enterprise, the period ofvalidity is three years. It applies to 15% tax rate for three years since 2019.
Sichuan CSG Energy Conservation Glass Co., Ltd. (“Sichuan CSG Energy Conservation”) obtainsenterprise income tax preferential treatment for Western Development, and temporarily calculatesenterprise income tax at a tax rate of 15% for current year.
Chengdu CSG Glass Co., Ltd. (“Chengdu CSG”) obtains enterprise income tax preferential treatmentfor Western Development, and temporarily calculates enterprise income tax at a tax rate of 15% forcurrent year.
Xian CSG Energy Conservation Glass Co., Ltd. (“Xian CSG Energy Conservation”) obtains enterpriseincome tax preferential treatment for Western Development, and temporarily calculates enterpriseincome tax at a tax rate of 15% for current year.
Yichang CSG New Energy Co., Ltd. (“Yichang CSG New Energy”), Zhangzhou CSG Kibing PV EnergyCo., Ltd. (“Zhangzhou CSG PV Energy”), Heyuang CSG Kibing PV Energy Co., Ltd. (“Heyang CSG”),and Shaoxing CSG Kibing New Energy Co., Ltd. (“Shaoxing CSG New Energy”), Xianning CSG PVEnergy Co., Ltd. (“Xianning PV Energy”), Zhanjiang CSG New Energy Co., Ltd. (“Zhanjiang PV Energy”),are public infrastructure project specially supported by the state in accordance with the Article 87 inImplementing Regulations of the Law of the People's Republic of China on Enterprise Income Tax, andcan enjoy the tax preferential policy of “three-year exemptions and three-year halves”, that is, startingfrom the tax year when the first revenue from production and operation occurs, the enterprise incometax is exempted from the first to the third year, while half of the enterprise income tax is collected for thefollowing three years.
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4 Notes to the consolidated financial statements
(1) Cash at bank and on hand
| 31 December 2021 | 31 December 2020 | ||
| Cash on hand | - | 2,725 | |
| Cash at bank | 2,453,477,573 | 1,463,954,484 | |
| Other cash balances | 312,448,333 | 661,831,694 | |
| 2,765,925,906 | 2,125,788,903 | ||
| Including: Total overseas deposits | 8,906,359 | 8,610,575 |
Other cash balances include margin deposits etc, amounting to RMB 9,448,334 (31 December 2020:
RMB1,760,707), which is restricted cash.
(2) Financial assets held for trading
| 31 December 2021 | 31 December 2020 | ||
| Financial assets at fair value through profit or loss | |||
| -Structural deposits | 999,600,000 | - | |
| 999,600,000 | - |
(3) Notes receivable
| 31 December 2021 | 31 December 2020 | ||
| Trade acceptance notes | 39,999,790 | 207,966,892 | |
| Less: Provision for bad debts | (20,778,806) | - | |
| 19,220,984 | 207,966,892 |
| (a) | As at 31 December 2021, notes receivable which have been endorsed or discounted by the Group but are not yet due are as follows: | |||
| Derecognised | Not derecognised | |||
| Trade acceptance notes | - | 1,000,000 | ||
(b) Notes receivable are analysed by category as follows：
| 31 December 2021 | 31 December 2020 | |||||||||||
| Carrying amount | Provision for bad debts | Carrying amount | Provision for bad debts | |||||||||
| Amount | % of total balance | Provision for bad debts | % | Amount | % of total balance | Provision for bad debts | % | |||||
| Provision for bad debts by groupings | ||||||||||||
| Portfolio 2 | 11,561,541 | 29% | - | - | 207,966,892 | 100% | - | - | ||||
| Provided for bad bebts individually | 28,438,249 | 71% | (20,778,806) | 73% | - | - | - | - | ||||
| 39,999,790 | 100% | (20,778,806) | 52% | 207,966,892 | 100% | - | - | |||||
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(c) As at 31 December 2021, the bad debts of receivables was RMB 28,438,249 (31 December 2020: RMB
Nil ) that to be provided individually. It mainly represented trade acceptance notes due from evergrandeof the part of subsidiary, due to difficult to pay or deterioration of cash operations, the provision for baddebts was fully or partially accrued.
(d) Notes receivable transferred to accounts receivable by the Group due to the drawer's non-performance
at the end of the period：
| 31 December 2021 | 31 December 2020 | ||
| Trade acceptance notes | 109,148,796 | - | |
| 109,148,796 | - |
(4) Accounts receivable
| 31 December 2021 | 31 December 2020 | ||
| Accounts receivable | 847,850,664 | 714,849,669 | |
| Less: Provision for bad debts | (117,324,977) | (33,382,536) | |
| 730,525,687 | 681,467,133 |
(a) The ageing of accounts receivable is analysed as follows:
| 31 December 2021 | 31 December 2020 | ||
| Within 1 year | 707,668,488 | 613,693,950 | |
| 1 to 2 years | 57,430,422 | 51,071,700 | |
| 2 to 3 years | 43,952,579 | 30,876,459 | |
| Over 3 years | 38,799,175 | 19,207,560 | |
| 847,850,664 | 714,849,669 |
(b) Accounts receivable are analysed by category as follows:
(c) For accounts receivable provided for bad debts by portfolio, the expected credit impairment loss for the
portfolio is as follows:
| 31 December 2021 | 31 December 2020 | ||||||||
| Carrying amount | Provision for bad debts | Carrying amount | Provision for bad debts | ||||||
| Amount | Amount | % | Amount | Amount | % | ||||
| Portfolio 1 | 687,880,646 | (13,757,613) | 2% | 682,344,324 | (13,641,135) | 2% | |||
| Portfolio 2 | 33,525 | (671) | 2% | 223,200 | (4,464) | 2% | |||
| 687,914,171 | (13,758,284) | 2% | 682,567,524 | (13,645,599) | 2% | ||||
(d) As at 31 December 2021, the bad debts of receivables was RMB 159,936,493 (31 December 2020:
RMB32,282,145) that to be provided individually. It mainly represented the goods receivable due from
| 31 December 2021 | 31 December 2020 | ||||||||||
| Carrying amount | Provision for bad debts | Carrying amount | Provision for bad debts | ||||||||
| Amount | % of total balance | Provision for bad debts | % | Amount | % of total balance | Provision for bad debts | % | ||||
| Provision for bad debts by groupings | |||||||||||
| Portfolio 1 | 687,880,646 | 81% | (13,757,613) | 2% | 682,344,324 | 95% | (13,641,135) | 2% | |||
| Portfolio 2 | 33,525 | - | (671) | 2% | 223,200 | - | (4,464) | 2% | |||
| Provided for bad bebts individually | 159,936,493 | 19% | (103,566,693) | 65% | 32,282,145 | 5% | (19,736,937) | 61% | |||
| 847,850,664 | 100% | (117,324,977) | 14% | 714,849,669 | 100% | (33,382,536) | 5% | ||||
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a client of the part of subsidiary, due to business dispute or deterioration of customer operations, theprovision for bad debts was fully or partially accrued.
(e) Accounts receivables were written off amount of RMB 153,330 for this year, (31 December 2020: RMB
297,202).
(f) As at 31 December 2021, Total balances for the five largest accounts receivable set out as below:
| Balance | Provision for bad debts | Percentage in total accounts receivable balance | |||
| Total balances for the five largest accounts receivable | 221,637,483 | (42,071,968) | 26% |
(5) Receivables Financing
| 31 December 2021 | 31 December 2020 | ||
| Bank acceptance notes | 297,046,123 | 382,527,782 | |
| 297,046,123 | 382,527,782 |
(6) Advances to suppliers
(a) The ageing of prepayment is analysed below:
| 31 December 2021 | 31 December 2020 | ||||||
| Amount | % of total balance | Amount | % of total balance | ||||
| Within 1 year | 74,971,763 | 98% | 84,647,719 | 99% | |||
| 1 to 2 years | 486,849 | 1% | 1,162,756 | 1% | |||
| 2 to 3 years | 520,498 | 1% | 118,166 | - | |||
| Over 3 years | 118,166 | - | - | - | |||
| 76,097,276 | 100% | 85,928,641 | 100% | ||||
As at 31 December 2021, advances to suppliers over 1 year with a carrying amount of RMB1,125,513(31 December 2020: RMB1,280,922) were mainly prepaid to supplier for materials, which were not fullysettled since the materials had not been received.
(b) As at 31 December 2021, the five largest prepayment are analysed as follows:
| Balance | Percentage in total advances to suppliers balance | ||
| Total balances for the five largest advances to suppliers | 33,857,116 | 44% |
(7) Other receivables
| 31 December 2021 | 31 December 2020 | ||
| Receivables from special fund for talent | 171,000,000 | 171,000,000 |
(a)
| (a) | As at 31 December 2021, receivables financing which have been endorsed or discounted by the Group but are not yet due are as follows: | |||
| Derecognised | Not derecognised | |||
| Bank acceptance notes | 2,369,398,907 | - | ||
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Payments made on behalf of other parties
| Payments made on behalf of other parties | 47,686,819 | 18,672,346 | |
| Advances to suppliers(i) | 10,366,164 | 10,366,164 | |
| Refundable deposits | 9,191,412 | 6,723,194 | |
| Petty cash | 497,273 | 969,748 | |
| Others | 8,110,638 | 9,615,428 | |
| 246,852,306 | 217,346,880 | ||
| Less: Provision for bad debts | (63,155,595) | (16,377,026) | |
| 183,696,711 | 200,969,854 |
(i) The subsidiaries of Yingde CBM Mining Co., Ltd. mainly prepaid to supplier for materials.This
year, the prepayments accounts are transferred to other receivables and the provision of the baddebts was provided individually in current year.
(a) The ageing of other receivables is analysed as follows:
| 31 December 2021 | 31 December 2020 | |||
| Within 1 year | 43,535,751 | 9,644,914 | ||
| 1 to 2 years | 3,139,416 | 5,528,931 | ||
| 2 to 3 years | 599,575 | 4,491,997 | ||
| 3 to 4 years | 2,226,669 | 2,154,911 | ||
| 4 to 5 years | 2,060,967 | 725,287 | ||
| Over 5 years | 195,289,928 | 194,800,840 | ||
| 246,852,306 | 217,346,880 | |||
(b) Other receivables are analysed by category as follows:
| 31 December 2021 | 31 December 2020 | ||||||||||
| Carrying amount | Provision for bad debts | Carrying amount | Provision for bad debts | ||||||||
| Amount | % of total balance | Provision for bad debts | % | Amount | % of total balance | Provision for bad debts | % | ||||
| Provision for bad debts by groupings | |||||||||||
| Portfolio 1 | 64,955,857 | 26% | (1,162,378) | 2% | 205,106,845 | 94% | (4,136,991) | 2% | |||
| Portfolio 2 | 207,380 | - | (4,148) | 2% | - | - | - | - | |||
| Provided for bad bebts individually | 181,689,069 | 74% | (61,989,069) | 34% | 12,240,035 | 6% | (12,240,035) | 100% | |||
| 246,852,306 | 100% | (63,155,595) | 26% | 217,346,880 | 100% | (16,377,026) | 8% | ||||
(c) The reason for the bad debts was provided individually as the payment will not be recoverable due to
long aging time.
(d) For other receivables provided for bad debts by portfolio, the expected credit impairment loss for the
portfolio is as follows:
| 31 December 2021 | 31 December 2020 | ||||||||
| Carrying amount | Provision for bad debts | Carrying amount | Provision for bad debts | ||||||
| Amount | Amount | % | Amount | Amount | % | ||||
| Portfolio 1 | 64,955,857 | (1,162,378) | 2% | 205,106,845 | (4,136,991) | 2% | |||
| Portfolio 2 | 207,380 | (4,148) | 2% | - | - | - | |||
| 65,163,237 | (1,166,526) | 2% | 205,106,845 | (4,136,991) | 2% | ||||
| - 123 - | ||
(e) Provision for bad debts
(f) As at 31 December 2021, the top 5 largest other receivables are analysed as bellow:
| Nature of business | Balance | Ageing | Percentage in total other receivables balance | Provision for bad debts | ||
| Company A | Independent third party | 171,000,000 | Over 5Years | 69% | (51,300,000) | |
| Governmental departmentB | Independent third party | 24,000,000 | Within 1 year | 10% | (480,000) | |
| Governmental departmentC | Independent third party | 11,556,004 | Over 5Years | 5% | (231,120) | |
| Company D | Independent third party | 10,366,164 | Over 5Years | 4% | (10,366,164) | |
| Company E | Independent third party | 5,570,340 | Within 1 year | 2% | (111,407) | |
| 222,492,508 | 90% | (62,488,691) |
| bad debts | Stage 1 | Stage 2 | Stage 3 | |||||
| following 12 months (grouping) | (credit unimpaired) | (credit impaired)） | Total | |||||
| 1 January 2021 | 4,136,991 | - | 12,240,035 | 16,377,026 | ||||
| Amounts in current year | - | - | - | - | ||||
| ——Transferred stage 2 | - | - | - | - | ||||
| ——Transferred stage 3 | (3,420,000) | - | 3,420,000 | - | ||||
| —— Reversed stage 2 | - | - | - | - | ||||
| —— Reversed stage 1 | - | - | - | - | ||||
| Increased in current year | 725,965 | - | 48,570,325 | 49,296,290 | ||||
| Reversed in current year | (276,430) | - | - | (276,430) | ||||
| Write-off in current year | - | - | (2,241,291) | (2,241,291) | ||||
| 31 December 2021 | 1,166,526 | - | 61,989,069 | 63,155,595 |
| - 124 - | ||
(8) Inventories
(a) Inventories are summarised by category as follows:
| 31 December 2021 | 31 December 2020 | ||||||||||
| Carrying amount | Provision for decline in the value of inventories | Book value | Carrying amount | Provision for decline in the value of inventories | Book value | ||||||
| Raw materials | 389,937,319 | (1,002,085) | 388,935,234 | 274,659,097 | (1,756,185) | 272,902,912 | |||||
| Work in progress | 22,801,437 | - | 22,801,437 | 28,355,865 | - | 28,355,865 | |||||
| Finished goods | 632,814,981 | (5,829,059) | 626,985,922 | 479,482,759 | (9,369,218) | 470,113,541 | |||||
| Turnover materials | 55,480,764 | (397,832) | 55,082,932 | 44,603,984 | (819,984) | 43,784,000 | |||||
| 1,101,034,501 | (7,228,976) | 1,093,805,525 | 827,101,705 | (11,945,387) | 815,156,318 | ||||||
(b) Provision for decline in the value of inventories are analysed as follows:
| 31 December 2020 | Increase in current year | Reversal in current year | 31 December 2021 | ||||
| Raw materials | 1,756,185 | - | (754,100) | 1,002,085 | |||
| Finished goods | 9,369,218 | 4,311,293 | (7,851,452) | 5,829,059 | |||
| Turnover materials | 819,984 | 133,290 | (555,442) | 397,832 | |||
| 11,945,387 | 4,444,583 | (9,160,994) | 7,228,976 |
(c) Provision for decline in the value of inventories is as follows:
| Basis for provision for decline in the value of inventories | Reasons of reversal of the decline in the value of inventories | ||
| Finished goods | The drop in product prices results in the difference as the net realizable value is lower than the book value | Sold | |
| Raw materials | The amount of book value less net realisable value due to sluggish or damaged raw materials | Used | |
| Turnover materials | due to sluggish or damaged raw materials | Used |
(9) Other current assets
| 31 December 2021 | 31 December 2020 | ||
| VAT to be offset | 128,033,622 | 110,350,299 | |
| Enterprise income tax prepaid | 3,771,709 | 17,508,242 | |
| VAT input to be recognised | 8,888,295 | 12,106,681 | |
| Others | 11,672 | 66,322 | |
| 140,705,298 | 140,031,544 |
(10) Investment properties
| Buildings and Land use rights | ||
| 31 December 2020 | 383,084,500 | |
| Increased in current year： |
| - 125 - | ||
Transfer from fixed assets and intangible assets in thecurrent year
| Transfer from fixed assets and intangible assets in the current year | - | |
| Fair value movements | - | |
| 31 December 2021 | 383,084,500 |
(i) The company hired a third party evaluation agency with relevant qualifications to evaluate the
Investment properties fair value and there was no changes comparing with the previous year by31st December 2021.
(11) Fixed assets
| Buildings | Machinery and equipment | Motor vehicles and others | Total | ||||
| Cost | |||||||
| 31 December 2020 | 3,935,917,690 | 12,009,950,305 | 240,065,141 | 16,185,933,136 | |||
| Increase in current year | |||||||
| Acquisition | 16,071,980 | 39,251,524 | 22,774,917 | 78,098,421 | |||
| construction in progress | 229,633,673 | 264,782,295 | 8,824,241 | 503,240,209 | |||
| Others | 2,035,166 | 3,461,599 | 111,529 | 5,608,294 | |||
| Decrease in current year | |||||||
| Disposal or retirement | (3,194,063) | (260,778,969) | (13,962,843) | (277,935,875) | |||
| Transfer to construction in progress | - | (12,950,777) | - | (12,950,777) | |||
| Others | (4,973,213) | (3,409,506) | (626,971) | (9,009,690) | |||
| 31 December 2021 | 4,175,491,233 | 12,040,306,471 | 257,186,014 | 16,472,983,718 | |||
| Accumulated depreciation | |||||||
| 31 December 2020 | 1,000,672,653 | 4,982,036,862 | 221,652,650 | 6,204,362,165 | |||
| Increase in current year | |||||||
| Provision | 129,805,541 | 741,229,765 | 22,284,630 | 893,319,936 | |||
| Others | 400,303 | 172,724 | 84,992 | 658,019 | |||
| Decrease in current year | |||||||
| Disposal or retirement | (1,529,427) | (185,718,048) | (12,553,353) | (199,800,828) | |||
| Transfer to construction in progress | - | (4,683,588) | - | (4,683,588) | |||
| Others | - | (246,280) | (757,576) | (1,003,856) | |||
| 31 December 2021 | 1,129,349,070 | 5,532,791,435 | 230,711,343 | 6,892,851,848 | |||
| Provision for impairment loss | |||||||
| 31 December 2020 | 34,966,687 | 800,882,872 | 76,843 | 835,926,402 | |||
| Increase in current year | |||||||
| Provision | 13,540,697 | 210,148,841 | 201,732 | 223,891,270 | |||
| construction in progress | 12,749,513 | - | - | 12,749,513 | |||
| Decrease in current year | |||||||
| Disposal or retirement | (1,355,749) | (57,580,667) | (13,925) | (58,950,341) | |||
| Transfer to construction in progress | - | - | - | - | |||
| 31 December 2021 | 59,901,148 | 953,451,046 | 264,650 | 1,013,616,844 | |||
| Book value |
| - 126 - | ||
31 December 2021
| 31 December 2021 | 2,986,241,015 | 5,554,063,990 | 26,210,021 | 8,566,515,026 | |||
| 31 December 2020 | 2,900,278,350 | 6,227,030,571 | 18,335,648 | 9,145,644,569 |
(a) Fixed assets with pending certificates of ownership
| Carrying amount | Reasons for not yet obtaining certificates of title | |
| Buildings | 899,109,506 | Have submitted the required documents and are in the process of application, or the related land use right certificate pending |
(12) Construction in progress
| 31 December 2021 | 31 December 2020 | ||||||||||
| Carrying amount | Provision for impairment loss | Book value | Carrying amount | Provision for impairment loss | Book value | ||||||
| Yichang CSG Polysilicon Technical Transformation Project | 1,535,368,156 | (857,890,185) | 677,477,971 | 1,535,667,571 | (594,037,334) | 941,630,237 | |||||
| Anhui Fengyang Solar Equipment Lightweight High Tongue Plate Manufacturing Base Project | 765,170,527 | - | 765,170,527 | 15,039,984 | - | 15,039,984 | |||||
| Qingyuan CSG Phase I Technological Transformation Project | 297,932,280 | (174,675,600) | 123,256,680 | 413,852,963 | - | 413,852,963 | |||||
| Zhaoqing CSG high-end energy-saving glass production line project | 279,138,811 | - | 279,138,811 | 47,026,508 | - | 47,026,508 | |||||
| Dongguan Photovoltaic Building B 450MWPERC Battery Technology Upgrade Project | 186,866,743 | (184,998,076) | 1,868,667 | 204,801,994 | - | 204,801,994 | |||||
| Tianjin energy-saving coating production line purchase and upgrade project | 95,225,037 | - | 95,225,037 | - | - | - | |||||
| Xianning CSG 1200T / D Ton Photovoltaic Packaging Material Production Line Project | 66,449,089 | - | 66,449,089 | - | - | - | |||||
| Anhui Fengyang Quartz Sand Construction Project | 56,656,483 | - | 56,656,483 | 1,775,552 | - | 1,775,552 | |||||
| Wujiang Project New Engineering Glass Intelligent Manufacturing Factory Construction Project | 51,766,295 | - | 51,766,295 | 760,313 | - | 760,313 | |||||
| Wujiang float light-quality high-efficiency double glass processing production line construction project | 39,032,912 | - | 39,032,912 | 3,572,478 | - | 3,572,478 | |||||
| Sapphire Project for LED | 32,420,412 | (32,420,412) | - | 32,420,412 | (32,420,412) | - | |||||
| Zhaoqing CSG high-end automobile glass production line project | 27,941,928 | - | 27,941,928 | 3,403,090 | - | 3,403,090 | |||||
| Hebei window ultra-thin electronic glass second line construction project | 24,393,421 | - | 24,393,421 | 9,568,451 | - | 9,568,451 | |||||
| Dongguan solar double-glass extension technology transformation upgrade project | 2,389,871 | - | 2,389,871 | - | - | - | |||||
| Dongguan solar energy processing production line project | 551,795 | - | 551,795 | 56,711,889 | (12,749,513) | 43,962,376 | |||||
| Guangxi Beihai Photovoltaic Green Energy Industry Park (Phase I) Project | 382,997 | - | 382,997 | - | - | - | |||||
| Others | 275,679,766 | (26,293,600) | 249,386,166 | 207,986,665 | - | 207,986,665 | |||||
| 3,737,366,523 | (1,276,277,873) | 2,461,088,650 | 2,532,587,870 | (639,207,259) | 1,893,380,611 | ||||||
| - 127 - | ||
(a) Changes in major construction projects
| Project name | Budget | 31 December 2020 | Increase in current year | Transfer to fixed assets in current year | Other decreases in current year | 31 December 2021 | Proportion between engineering input and budget (i) | Amount of borrowing costs capitalised | Including: Amount of borrowing costs capitalised in 2021 | Capitalisation rate for in current year | Source of fund | ||||||||||
| Yichang CSG Polysilicon Technical Transformation Project | 49,520,000 | 1,535,667,571 | - | - | (299,415) | 1,535,368,156 | 98% | - | - | - | Internal fund and bank loan | ||||||||||
| Anhui Fengyang Solar Equipment Lightweight High Tongue Plate Manufacturing Base Project | 3,739,020,000 | 15,039,984 | 750,130,543 | - | - | 765,170,527 | 20% | 2,445,498 | 2,445,498 | 4.33% | Internal fund and bank loan | ||||||||||
| Qingyuan CSG Phase I Technological Transformation Project | 534,870,000 | 413,852,963 | 8,415,661 | (124,336,344) | - | 297,932,280 | 3% | - | - | - | Internal fund and bank loan | ||||||||||
| Zhaoqing CSG high-end energy-saving glass production line project | 500,000,000 | 47,026,508 | 265,610,162 | (33,497,859) | - | 279,138,811 | 63% | 4,154,925 | 4,064,358 | 3.80% | Internal fund and bank loan | ||||||||||
| Dongguan Photovoltaic Building B 450MWPERC Battery Technology Upgrade Project | 100,990,000 | 204,801,994 | 5,976,556 | (23,911,807) | - | 186,866,743 | 1% | - | - | - | Internal fund and bank loan | ||||||||||
| Tianjin energy-saving coating production line purchase and upgrade project | 114,945,000 | - | 95,225,037 | - | - | 95,225,037 | 83% | 1,510,281 | 1,510,281 | 4.00% | Internal fund and bank loan | ||||||||||
| Xianning CSG 1200T / D Ton Photovoltaic Packaging Material Production Line Project | 858,090,000 | - | 66,449,089 | - | - | 66,449,089 | 8% | 5,123,167 | 5,123,167 | 5.21% | Internal fund and bank loan | ||||||||||
| Anhui Fengyang Quartz Sand Construction Project | 739,990,000 | 1,775,552 | 54,880,931 | - | - | 56,656,483 | 8% | 118,364 | 118,364 | 4.55% | Internal fund and bank loan | ||||||||||
| Wujiang Project New Engineering Glass Intelligent Manufacturing Factory Construction Project | 179,140,610 | 760,313 | 51,005,982 | - | - | 51,766,295 | 29% | 321,094 | 321,094 | 3.85% | Internal fund and bank loan | ||||||||||
| Wujiang float light-quality high-efficiency double glass processing production line construction project | 158,850,000 | 3,572,478 | 36,829,770 | (1,369,336) | - | 39,032,912 | 25% | 387,956 | 387,956 | 4.00% | Internal fund and bank loan | ||||||||||
| Sapphire Project for LED | 35,000,000 | 32,420,412 | - | - | - | 32,420,412 | 93% | 4,650,543 | - | - | Internal fund and bank loan | ||||||||||
| Zhaoqing CSG high-end automobile glass production line project | 609,830,000 | 3,403,090 | 24,538,838 | - | - | 27,941,928 | 5% | - | - | - | Internal fund and bank loan | ||||||||||
| Hebei window ultra-thin electronic glass second line construction project | 284,964,800 | 9,568,451 | 14,835,899 | (10,929) | - | 24,393,421 | 9% | 379 | 379 | 4.35% | Internal fund and bank loan | ||||||||||
| Dongguan solar double-glass extension technology transformation upgrade project | 143,490,000 | - | 2,389,871 | - | - | 2,389,871 | 2% | - | - | - | Internal fund and bank loan | ||||||||||
| Dongguan solar energy processing production line project | 76,140,000 | 56,711,889 | 51,651,067 | (107,811,161) | - | 551,795 | 75% | - | - | - | Internal fund and bank loan | ||||||||||
| Guangxi Beihai Photovoltaic Green Energy Industry Park (PhaseI) Project | 4,942,051,800 | - | 382,997 | - | - | 382,997 | - | - | - | - | Internal fund and bank loan | ||||||||||
| Others | 3,972,228,916 | 207,986,665 | 281,331,056 | (212,302,773) | (1,335,182) | 275,679,766 | 75,810 | 75,810 | Internal fund and bank loan | ||||||||||||
| 17,039,121,126 | 2,532,587,870 | 1,709,653,459 | (503,240,209) | (1,634,597) | 3,737,366,523 | 18,788,017 | 14,046,907 |
(i) The proportion of project expenditure incurred to the budget is determined by the accumulative expenditures incurred divided by the total budget. Some
of the projects are transferred to property, plant, and equipment because the construction is completed.
| - 128 - | ||
(b) Provision for impairment of construction in progress
| Project name | 31 December 2020 | provision increased in current year | Decrease in current year | 31 December 2021 | |||
| Dongguan solar energy processing production line project | 12,749,513 | - | (12,749,513) | - | |||
| Sapphire Project for LED | 32,420,412 | - | - | 32,420,412 | |||
| Yichang CSG Polysilicon Technical Transformation Project | 594,037,334 | 264,134,583 | (281,732) | 857,890,185 | |||
| Dongguan Photovoltaic Building B 450MWPERC Battery Technology Upgrade Project | - | 184,998,076 | - | 184,998,076 | |||
| Qingyuan CSG Phase I Technological Transformation Project | - | 174,675,600 | - | 174,675,600 | |||
| Others | - | 26,293,600 | - | 26,293,600 | |||
| 639,207,259 | 650,101,859 | (13,031,245) | 1,276,277,873 |
CSG HOLDING CO., LTD.
Notes to the financial statementsfor the year ended 31 December 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| - 129 - | ||
(13) Right-of-use assets
| Land | Buildings | Total | |
| Cost | |||
| 31 December 2020 | - | - | - |
| policies | 9,640,758 | 1,897,983 | 11,538,741 |
| 1 January 2021 | 9,640,758 | 1,897,983 | 11,538,741 |
| Increased in current year | 129,600 | - | 129,600 |
| Decreased in current year | - | - | - |
| 31 December 2021 | 9,770,358 | 1,897,983 | 11,668,341 |
| Accumulated amortisation | |||
| 31 December 2020 | - | - | - |
| policies | - | - | - |
| 1 January 2021 | - | - | - |
| Increased in current year | - | - | - |
| Provision in current year | 942,985 | 813,421 | 1,756,406 |
| 31 December 2021 | 942,985 | 813,421 | 1,756,406 |
| Book value | |||
| 31 December 2021 | 8,827,373 | 1,084,562 | 9,911,935 |
| 31 December 2020 | - | - | - |
(14) Intangible assets and development expenditure
| rights | Patents and proprietary technologies | rights | Others | Total | |||||
| Cost | |||||||||
| 31 December 2020 | 1,104,513,769 | 412,396,040 | 4,572,365 | 41,871,072 | 1,563,353,246 | ||||
| Increased in current year | |||||||||
| Acquisition in current year | 65,384,400 | - | 1,079,386 | 5,327,462 | 71,791,248 | ||||
| Transfers from development expenditure in current year | - | 16,592,180 | - | - | 16,592,180 | ||||
| Decreased in current year | |||||||||
| Disposal | - | - | - | (485,294) | (485,294) | ||||
| 31 December 2021 | 1,169,898,169 | 428,988,220 | 5,651,751 | 46,713,240 | 1,651,251,380 | ||||
| Accumulated amortisation | |||||||||
| 31 December 2020 | 207,220,415 | 161,295,114 | 4,462,351 | 37,446,631 | 410,424,511 | ||||
| Increased in current year | |||||||||
| Provision in current year | 23,489,627 | 33,676,803 | 129,259 | 3,194,592 | 60,490,281 |
CSG HOLDING CO., LTD.
Notes to the financial statementsfor the year ended 31 December 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| - 130 - | ||
Decreased in current year
| Decreased in current year | |||||||||
| Disposal | - | - | - | (485,294) | (485,294) | ||||
| 31 December 2021 | 230,710,042 | 194,971,917 | 4,591,610 | 40,155,929 | 470,429,498 | ||||
| Provision for impairment loss | |||||||||
| 31 December 2020 | - | 13,201,347 | - | 9,133 | 13,210,480 | ||||
| 31 December 2021 | - | 13,201,347 | - | 9,133 | 13,210,480 | ||||
| Book value | |||||||||
| 31 December 2021 | 939,188,127 | 220,814,956 | 1,060,141 | 6,548,178 | 1,167,611,402 | ||||
| 31 December 2020 | 897,293,354 | 237,899,579 | 110,014 | 4,415,308 | 1,139,718,255 |
As at 31 December 2021, ownership certificates of land use rights (“Land ownership Certificates”) for certainland use rights of the Group with carrying amounts of approximately RMB 4,963,913 (cost: RMB 6,685,352)had not yet been obtained by the Group (31 December 2020: carrying amount: RMB 4,739,196, cost: RMB6,586,712). The Company’s management are of the view that there is no legal restriction for the Group to applyfor and obtain the Land Ownership Certificates and has no adverse effect on the Group’s business operation.
CSG HOLDING CO., LTD.
Notes to the financial statementsfor the year ended 31 December 2021(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
| - 131 - | ||
The Group’s expenditure is analysed below:
| 31 December 2020 | Increase in current year | Decrease in current year | 31 December 2021 | |||||
| Recognised as expenses | Recognised as intangible assets | |||||||
| Development costs | 49,153,407 | 39,458,135 | - | (16,592,180) | 72,019,362 | |||
In 2021, the total amount of research and development expenditures of the Group was RMB 551,196,983(2020: RMB 434,641,497), including RMB 511,738,848 (2020: RMB 404,842,498) recorded in incomestatement for current period and the research and development expenditure with the amount of RMB16,592,180 recognised as intangible assets for the current period (2020: 65,885,948). As at 31 December2021, the intangible assets arising from internal research and development accounted for 20.47% of costamount of intangible assets (31 December 2020: 20.56%).
(15) Goodwill
(a) Original Book value of goodwill
| 31 December 2020 | Increase in current year | Decrease in current year | 2021 | ||||
| Tianjin CSG Architectural Glass Co., Ltd. | 3,039,946 | - | - | 3,039,946 | |||
| Xianning CSG Photoelectric | 4,857,406 | - | - | 4,857,406 | |||
| Shenzhen CSG Display(i) | 389,494,804 | - | - | 389,494,804 | |||
| 397,392,156 | - | - | 397,392,156 |
(b) Provision for impairment of goodwill
| 31 December 2020 | Increase in current year | Decrease in current year | 2021 | ||||
| Shenzhen CSG Display(i) | 164,016,463 | 103,227,834 | - | 267,244,297 | |||
| 164,016,463 | 103,227,834 | - | 267,244,297 |
(i) The calculation of the impairment used the higher conclusions of the two future measurement methods
of the present value of the expected future cash flow and the fair value minus the disposal expenses.The methods, assumptions, asset groups, etc. of the goodwill impairment test this year was consistentedwith the date of purchase and the previous year.
(i) Shenzhen CSG Display adopting the method of discounting future cashflow is with the following main
hypothesizes:
| 2021 | 2020 | ||
| income growth for the predicted period | 1%-15% | -7%-21% | |
| income growth for the stabilized period | 0% | 0% | |
| gross profit margin | 20%-24% | 22%-27% | |
| discount rate | 13% | 12% |
CSG HOLDING CO., LTD.
Notes to the financial statementsfor the year ended 31 December 2021(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
| - 132 - | ||
Combining with the prediction of the future business and independent third party appraisal institution,theCompany's management considered that the goodwill was impaired RMB 103,227,834 as at 31 December2021 (2020: RMB 81,722,063) .
(16) Deferred tax assets and liabilities
(a) Deferred tax assets before offsetting
| 31 December 2021 | 31 December 2020 | ||||||
| Deductible temporary differences | Deferred tax assets | Deductible temporary differences | Deferred tax assets | ||||
| Provision for asset impairments | 1,005,602,209 | 152,036,386 | 736,119,311 | 113,183,894 | |||
| Tax losses | 621,359,522 | 106,718,563 | 509,689,080 | 86,461,610 | |||
| Government grants | 165,972,475 | 25,755,549 | 175,322,807 | 27,297,200 | |||
| Accrued expenses | 7,908,397 | 1,186,260 | 7,184,597 | 1,077,690 | |||
| Depreciation of fixed assets, etc | 116,353,922 | 21,202,310 | 18,804,540 | 2,822,699 | |||
| 1,917,196,525 | 306,899,068 | 1,447,120,335 | 230,843,093 | ||||
| Including: | |||||||||
| Expected to be reversed within one year (inclusive) | 26,402,235 | 11,504,204 | |||||||
| Expected to be reversed after one year | 280,496,833 | 219,338,889 | |||||||
| 306,899,068 | 230,843,093 | ||||||||
(b) Deferred tax liabilities before offsetting
| 31 December 2021 | 31 December 2020 | ||||||
| Taxable temporary differences | Deferred tax liabilities | Taxable temporary differences | Deferred tax liabilities | ||||
| Depreciation of fixed assets | 527,215,830 | 80,756,420 | 540,143,676 | 82,946,754 | |||
| accounting rules | 370,245,713 | 55,536,857 | 370,245,713 | 55,536,857 | |||
| 897,461,543 | 136,293,277 | 910,389,389 | 138,483,611 | ||||
| Including: |
CSG HOLDING CO., LTD.
Notes to the financial statementsfor the year ended 31 December 2021(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
| - 133 - | ||
Expected to be reversed withinone year (inclusive)
| Expected to be reversed within one year (inclusive) | 7,842,148 | 7,100,568 | |||||
| Expected to be reversed after one year | 128,451,129 | 131,383,043 | |||||
| 136,293,277 | 138,483,611 |
(c) Deductible losses that are not recognised as deferred tax assets of the Group are analysed as follows:
| 31 December 2021 | 31 December 2020 | ||
| Deductible losses | 2,045,391,888 | 1,458,462,329 |
The deductible tax losses not recognised as deferred tax assets mainly represented the tax losses of theCompany and some subsidiaries. Management was unable to expect that whether there were taxable profitwould be available in the future against which these deductible tax losses can be utilised, and accordingly, didnot recognise the deferred tax assets.
(d) The tax losses for which no deferred tax assets were recognised will expire in the following years:
| 31 December 2021 | 31 December 2020 | ||
| 2021 | - | 111,625,585 | |
| 2022 | 83,303,539 | 83,303,539 | |
| 2023 | 146,238,837 | 146,238,837 | |
| 2024 | 178,208,832 | 178,208,832 | |
| 2025 | 939,085,536 | 939,085,536 | |
| 2026 | 698,555,144 | - | |
| 2,045,391,888 | 1,458,462,329 |
(e) The net balances of deferred tax assets and liabilities after offsetting are as follows:
| 31 December 2021 | 31 December 2020 | |||||||
| assets or liabilities | Deductible/taxable temporary differences after offsetting | assets or liabilities | Deductible/taxable temporary differences after offsetting | |||||
| Deferred tax assets | 255,185,923 | 1,579,256,701 | 194,979,414 | 1,214,859,410 | ||||
| Deferred tax liabilities | 84,580,132 | 559,521,719 | 102,619,932 | 678,128,464 | ||||
CSG HOLDING CO., LTD.
Notes to the financial statementsfor the year ended 31 December 2021(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
| - 134 - | ||
(17) Other non-current assets
| 31 December 2021 | 31 December 2020 | ||
| Prepayment for equipment and project | 469,352,622 | 186,849,445 | |
| Prepayment for lease of land use rights | 14,810,000 | 6,510,000 | |
| Certificates of deposit | 100,000,000 | - | |
| 584,162,622 | 193,359,445 |
(18) Impairment of asset
(19) Short-term borrowings
| 31 December 2021 | 31 December 2020 | ||
| Credit loan | 100,000,000 | 49,800,000 | |
| Guaranteed (i) | 80,770,000 | 298,095,571 | |
| Mortgage loan | - | 5,000,000 | |
| 180,770,000 | 352,895,571 |
(i) As at 31 December 2021, the Company provided its subsidiaries with guarantee for the short-term
borrowings of RMB 80,770,000 (31 December 2020: RMB298,095,571).
As at 31 December 2021, the interest of short-term borrowings varied from 3.40% to 3.90% (31
December 2020: 2.05% to 4.20%).
(20) Notes payable
| 31 December 2020 | Increase in current year | Other Increased in current year | Reversal in current year | Written off in current year | Other decreased in current year | 31 December 2021 | |
| Provision for bad debts | 49,759,562 | 168,268,105 | - | (14,373,668) | (2,394,621) | - | 201,259,378 |
| Including: Provision for bad debts of accounts receivable | 33,382,536 | 98,193,009 | - | (14,097,238) | (153,330) | - | 117,324,977 |
| Provision for bad debts of other receivables | 16,377,026 | 49,296,290 | - | (276,430) | (2,241,291) | - | 63,155,595 |
| Provision for decline in the value of inventories | - | 20,778,806 | - | - | - | - | 20,778,806 |
| Provision for decline in the value of inventories | 11,945,387 | 4,444,583 | - | - | (9,160,994) | - | 7,228,976 |
| Provision for impairment of fixed assets | 835,926,402 | 223,891,270 | 12,749,513 | - | (58,950,341) | - | 1,013,616,844 |
| Provision for impairment of construction in progress | 639,207,259 | 650,101,859 | - | - | (281,732) | (12,749,513) | 1,276,277,873 |
| Provision for impairment of intangible assets | 13,210,480 | - | - | - | - | - | 13,210,480 |
| Provision for impairment of goodwill | 164,016,463 | 103,227,834 | - | - | - | - | 267,244,297 |
| 1,714,065,553 | 1,149,933,651 | 12,749,513 | (14,373,668) | (70,787,688) | (12,749,513) | 2,778,837,848 |
CSG HOLDING CO., LTD.
Notes to the financial statementsfor the year ended 31 December 2021(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
| - 135 - | ||
| 31 December 2021 | 31 December 2020 | ||
| Trade acceptance notes | 107,571,279 | 9,903,213 | |
| Bank acceptance notes | 293,091,434 | 134,947,979 | |
| 400,662,713 | 144,851,192 |
All notes payable are due within one year.
(21) Accounts payable
| 31 December 2021 | 31 December 2020 | ||
| Materials payable | 665,770,883 | 755,509,571 | |
| Equipment payable | 268,623,795 | 209,292,511 | |
| Construction expenses payable | 372,802,783 | 146,976,774 | |
| Freight payable | 68,894,843 | 70,011,499 | |
| Utilities payable | 47,260,003 | 49,441,605 | |
| Others | 5,499,005 | 6,601,091 | |
| 1,428,851,312 | 1,237,833,051 |
As at 31 December 2021, the amount of accounts payable over 1 year was approximately RMB163,883,870(31 December 2020: RMB120,702,169), which mainly comprised payables for construction and equipment. Asthe construction work had not passed the final acceptance test yet, the balance was not yet settled.
(22) Contract liabilities
| 31 December 2021 | 31 December 2020 | ||
| Advances for goods from customers | 335,188,642 | 296,776,624 |
(23) Employee benefits payable
| 31 December 2021 | 31 December 2020 | ||
| Short-term employee benefits payable (a) | 426,027,259 | 342,315,790 | |
| Defined contribution plans payable (b) | 11,722 | 461 | |
| Termination benefits(c) | 173,998 | 35,915 | |
| 426,212,979 | 342,352,166 |
(a) Short-term employee benefits
| 31 December 2020 | current year | Decrease in current year | 2021 | |||
CSG HOLDING CO., LTD.
Notes to the financial statementsfor the year ended 31 December 2021(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
| - 136 - | ||
Wages and salaries, bonus,allowances and subsidies
| Wages and salaries, bonus, allowances and subsidies | 322,617,585 | 1,623,933,822 | (1,543,835,057) | 402,716,350 | ||
| Social security contributions | 5,288 | 51,620,713 | (51,620,193) | 5,808 | ||
| Including: Medical insurance | 4,957 | 45,408,305 | (45,408,165) | 5,097 | ||
| Work injury insurance | - | 3,517,365 | (3,517,074) | 291 | ||
| Maternity insurance | 331 | 2,695,043 | (2,694,954) | 420 | ||
| Housing funds | 1,018,185 | 39,944,719 | (40,004,106) | 958,798 | ||
| Labour union funds and employee education funds | 18,674,732 | 19,167,710 | (15,496,139) | 22,346,303 | ||
| 342,315,790 | 1,734,666,964 | (1,650,955,495) | 426,027,259 |
(b) Defined contribution plans
| 31 December 2020 | current year | Decrease in current year | 2021 | |||||
| Basic pensions | 444 | 119,161,500 | (119,150,300) | 11,644 | ||||
| Unemployment insurance | 17 | 3,943,330 | (3,943,269) | 78 | ||||
| 461 | 123,104,830 | (123,093,569) | 11,722 |
(c) Dismissal benefits
| 31 December 2020 | current year | Decrease in current year | 2021 | |||||
| Other dismissal welfare | 35,915 | 6,275,084 | (6,137,001) | 173,998 | ||||
| 35,915 | 6,275,084 | (6,137,001) | 173,998 |
(24) Taxes payable
| 31 December 2021 | 31 December 2020 | ||
| Enterprise income tax payable | 81,469,865 | 90,295,709 | |
| VAT payable | 77,539,743 | 82,055,265 | |
| Housing property tax payable | 4,126,693 | 3,937,112 | |
| Individual income tax payable | 4,947,559 | 3,600,603 | |
| City maintenance and construction tax payable | 5,853,393 | 6,414,982 | |
| Educational surcharge payable | 4,662,534 | 4,762,191 | |
| Environmental tax payable | 1,674,797 | 1,901,375 | |
| Others | 4,735,097 | 1,953,834 | |
| 185,009,681 | 194,921,071 |
(25) Other payables
CSG HOLDING CO., LTD.
Notes to the financial statementsfor the year ended 31 December 2021(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
| - 137 - | ||
| 31 December 2021 | 31 December 2020 | ||
| Interest payable | 95,001,362 | 132,133,902 | |
| Other payables | 194,439,115 | 155,199,090 | |
| 289,440,477 | 287,332,992 |
1、 Interest payable
| 1、 | 31 December 2021 | 31 December 2020 | |
| Interest of medium-term notes | - | 37,955,556 | |
| Interest of long-term borrowings with periodic payments of interest and return of principal at maturity | 2,558,374 | 1,590,247 | |
| Interest of short-term borrowings | 184,923 | 330,034 | |
| Interest of corporate bonds | 92,258,065 | 92,258,065 | |
| 95,001,362 | 132,133,902 |
2、 Other payables
| 31 December 2021 | 31 December 2020 | ||
| Guarantee deposits received from construction contractors | 101,467,608 | 77,932,889 | |
| Provision for operating costs and expenses (i) | 51,592,989 | 38,943,663 | |
| Payable for contracted labour costs | 21,273,645 | 16,548,708 | |
| Temporary receipts for third parties | 6,033,599 | 10,298,957 | |
| Deposit for disabled | 5,796,364 | 4,680,725 | |
| Other | 8,274,910 | 6,794,148 | |
| 194,439,115 | 155,199,090 |
(i) It represented the payment made to external third parties arising from undertaking the rights of debtor
and creditor, comprising water and electricity, professional service fee and travelling expenses etc.
(26) Current portion of non-current liabilities
| 31 December 2021 | 31 December 2020 | ||
| Current portion of long-term borrowings | |||
| - Guaranteed | 66,098,352 | 127,531,709 | |
| - Credit loan | 400,000,000 | ||
| Medium term notes due within 1 year | - | 800,000,000 | |
| Long-term account payable due within 1 year | 36,865,104 | - | |
| Leases liabilities due within one year | 857,092 | - |
CSG HOLDING CO., LTD.
Notes to the financial statementsfor the year ended 31 December 2021(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
| - 138 - | ||
| 503,820,548 | 927,531,709 |
(27) Other current liabilities
| 31 December 2021 | 31 December 2020 | ||
| Output VAT to be transferred | 39,799,309 | 34,286,292 | |
| Other | 300,000 | 300,000 | |
| 40,099,309 | 34,586,292 |
(28) Long-term borrowings
| 31 December 2021 | 31 December 2020 | ||
| Guaranteed | 779,059,824 | 153,253,983 | |
| Credit loan | 690,000,000 | 700,000,000 | |
| 1,469,059,824 | 853,253,983 |
(i) As at 31 December 2021, the interest of long-term borrowings varied from 4.00% to 4.60% (31
December 2020: 3.40% to 4.60%).
(29) Bonds payable
| 31 December 2021 | 31 December 2020 | ||
| Corporate bonds | 1,996,587,330 | 1,994,020,348 | |
| 1,996,587,330 | 1,994,020,348 |
(i) In March 2020, after approved by the China Securities Regulatory Commission, the company was
approved to publicly issue 2020 corporate bonds (first tranche) to qualified investors, with a face valueof RMB 100, an issuance amount of RMB 2 billion, and a period of 3 years (annual interest payment,principal repayment at maturity), the coupon rate is 6%; the issuance date is March 24, 2020 to March25, 2020, and the value date is March 25, 2020.
| Debentures name | value | of issue | Term | amount | 31 December 2020 | accrued at par value | of premium/ discount | 31 December 2021 |
| 20 CSG 01 | 100 | To 2020-3-25 | 3 years | 2,000,000,000 | 1,994,020,348 | 120,000,000 | 2,566,982 | 1,996,587,330 |
| 2,000,000,000 | 1,994,020,348 | 120,000,000 | 2,566,982 | 1,996,587,330 |
CSG HOLDING CO., LTD.
Notes to the financial statementsfor the year ended 31 December 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| - 139 - | ||
(30) Lease liabilities
| 31 December 2021 | 31 December 2020 | ||
| Lease payments | 1,077,230 | - | |
| Less: Current portion of non-current liabilities | (857,092) | - | |
| 220,138 | - |
(31) Long-term account payable
| 31 December 2021 | 31 December 2020 | ||
| Finance lease payable | 168,258,062 | - |
(32) Deferred income
| 31 December 2021 | 31 December 2020 | ||
| Government grants | 564,129,128 | 498,056,081 |
Government grants are analysed as follows:
| Government grants | 31 December 2020 | Increase in current year | Other decrease in current year | Non-operating income in current year | 31 December 2021 | Assets/Income related | |||||
| Tianjin energy saving gold solar project (i) | 43,592,443 | - | - | (3,374,892) | 40,217,551 | Assets related | |||||
| Dongguan project gold solar project (ii) | 35,075,250 | - | - | (2,751,000) | 32,324,250 | Assets related | |||||
| Hebei South Bolk Sun Project (iii) | 35,750,000 | - | - | (2,750,000) | 33,000,000 | Assets related | |||||
| Xianning South Bolt Solar Engineering Project (iv) | 38,891,417 | - | - | (3,030,500) | 35,860,917 | Assets related | |||||
| Wu Jiangnan infrastructure compensation (v) | 27,504,284 | - | - | (4,041,538) | 23,462,746 | Assets related | |||||
| Qingyuan energy-saving project (vi) | 14,176,616 | - | - | (3,267,449) | 10,909,167 | Assets related | |||||
| Yichang polysilicon project (vii) | 13,359,375 | - | - | (2,812,500) | 10,546,875 | Assets related | |||||
| Yichang Nanolate Silicon Molding Project (viii) | 18,456,685 | 3,000,000 | - | (2,355,719) | 19,100,966 | Assets related | |||||
| Sichuan energy-saving glass project (ix) | 5,513,400 | - | - | (1,654,020) | 3,859,380 | Assets related | |||||
| Group coating laboratory project (x) | 2,401,800 | - | - | (901,800) | 1,500,000 | Assets related | |||||
| Yichang high-purity silicon material project (xi) | 2,720,797 | - | - | (303,178) | 2,417,619 | Assets related | |||||
| Yichang semiconductor silicon material project (xii) | 2,866,666 | - | - | - | 2,866,666 | Assets related | |||||
| Yichang Display Company Project (xiii) | 43,233,170 | - | - | (2,667,813) | 40,565,357 | Assets related | |||||
| Xianning Optoelectronics Project (xiv) | 6,760,000 | - | - | (520,000) | 6,240,000 | Assets related | |||||
| Shenzhen medical equipment subsidy project (xv) | 8,342,000 | - | - | (1,164,000) | 7,178,000 | Assets related | |||||
| Hebei float emission reward (xvi) | - | 9,600,000 | - | (244,586) | 9,355,414 | Assets related | |||||
| Group Talent Fund Project (xvii) | 171,000,000 | - | - | - | 171,000,000 | Income related | |||||
| Zhaoqing energy-saving industry to build financial support funds (xviii) | - | 92,718,500 | - | (5,462,789) | 87,255,711 | Income related |
CSG HOLDING CO., LTD.
Notes to the financial statementsfor the year ended 31 December 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| - 140 - | ||
(i) The allowance was granted by Tianjin Municipal Government. The allowance was used for establishing
PV power station by Tianjin Energy Conservation Company. The facilities belonged to Tianjin EnergyConservation Company. The allowance will be credited to income statement in 20 years, the useful lifeof the PV power station.
(ii) The allowance was granted by Dongguan Municipal Government. The allowance was used for
establishing PV power station by Dongguan CSG Architectural Glass Co., Ltd. The facilities belongedto Dongguan CSG upon completion. The allowance will be credited 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 by Hebei CSG Glass Co., Ltd. ("Hebei CSG"). When the facilities wereset up, they belonged to Hebei CSG. The allowance will be credited 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 by Xianning CSG Glass Co Ltd. The facilities belonged to Xianning CSGupon completion. The allowance will be credited to income statement in 20 years, the useful life of thePV power station.
(v) The allowance was infrastructure compensation granted by Wujiang municipal government, and will be
credited to income statement in 15 years, the shortest operating period as committed by the Group.
(vi) The allowance was granted by Guangdong Province and which was a pilot project for strategic emerging
industry clusters development and was used to establish high performance ultra-thin electronic glassproduction lines by Qingyuan CSG. The allowance will be credited to income statement in 10 years, theuseful life of the production line.
(vii) The balance represented amounts granted to Yi Chang CSG polysilicon Materials Co., Ltd. by Yichang
City Dongshan Development Corporation under the provisions of the investment contract signedbetween the Group and the Municipal Government of Yi Chang. The proceeds were designed for theconstruction of electricity transformer and the pipelines. Yichang polysilicon is entitled to the ownershipof 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 of Crucible project of Yichang Hejing Photoelectric Ceramic Co., Ltd. The proceedswould be amortised and credited to income statement by 16 years after related assets were put into use.
(ix) It represented the funds granted by Chengdu local government for energy glass project. It will be
amortised and credited to income statement in 15 years, in accordance with the minimum operatingperiod committed by the Group.
(x) The allowance was granted by Shenzhen City Development and Reform Commission for the
development of Group Coating Film experimental project. The grant will be amortised and credited toincome statement in the estimated useful life of the relevant fixed assets.
| Others | 28,412,178 | 1,142,500 | - | (3,086,169) | 26,468,509 | Related assets/Income related | |||||
| 498,056,081 | 106,461,000 | - | (40,387,953) | 564,129,128 |
CSG HOLDING CO., LTD.
Notes to the financial statementsfor the year ended 31 December 2021(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
| - 141 - | ||
(xi) It represented the funds granted by Hubei local government for inport discount complement and
international corporation special subsidy. The grant will be amortised and credited to income statementby 12 to 15 years.
(xii) It represented the special subsidy of Yichang National Regional Strategic Emerging Industry
Development Pilot Project II, which is used to complement Yichang CSG PolysSilicon “Hubeisemiconductor silicon preparative technique project laboratory”. The grant will be amortised and creditedto income statement by 15 years.
(xiii) It represented the funds granted by Yichang Municipal Government for Yichang CSG Display
Company's flat project construction support funds and construction of coil coating three-line project. Thegrant will be amortised and credited to income statement by 15 years.
(xiv) It represented the funds granted by Xianning Government of the Project supporting fund for
photoconductive glass production line,which is used to pay for Xianning CSG Glass Co. Ltd.constructing the project of photoelectric photoelectric optical glass production line . After the completionof the production line, the ownership belongs to Xianning photoelectric. The allowance will be creditedto income statement in 8 years, the useful life of the production line.
(xv) The allowance was granted by Shenzhen Municipal Government. The allowance was used for the
production line of epidemic prevention materials for Shenzhen CSG Medical Technology Co., Ltd. Thefacilities belonged to Shenzhen CSG Medical Technology Co., Ltd upon completion. The allowance willbe credited to income statement with the useful life of the production line.
(xvi) The allowance was granted by Administrative Commission of Yongqing County Ecological Environment
Bureau.and Hebei CSG. is used to produce line drop emission transformation, and the grant will beamortised and credited to income statement in the residual life of the relevant fixed assets.
(xvii) The allowance was granted by Administrative Commission of Yichang High-tech Industrial Development
Zone. For senior management personnel, engineering technical personnel and senior professionaltechnical team who are working at Yichang or plane to introduction, RMB171 million fund was set up,as a special fund for talent introduction and housing resettlement.
(xviii) The allowance was granted by Administrative Commission of Guangdong Provincial Department of
Finance is a provincial industry to jointly establish financial support funds which is used to Z thedevelopment of enterprises, production and operation, and other expenditure for Zhaoqing EnergySaving Company.
(33) Share capital
| Movement for the year ended 31 December 2021 | ||||||||||||
| 31 December 2020 | New issues during the year | Bonus issue | Capitalisation | Others | 31 December 2021 | |||||||
| RMB-denominated ordinary shares | 1,961,323,047 | - | - | - | - | 1,961,323,047 | ||||||
| Domestically listed foreign shares | 1,109,369,060 | - | - | - | - | 1,109,369,060 | ||||||
| 3,070,692,107 | - | - | - | - | 3,070,692,107 | |||||||
CSG HOLDING CO., LTD.
Notes to the financial statementsfor the year ended 31 December 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| - 142 - | ||
| Movement for the year ended 31 December 2020 | ||||||||||||
| 31 December 2019 | New issues during the year | Bonus issue | Capitalisation | Others | 31 December 2020 | |||||||
| RMB-denominated ordinary shares | 1,961,323,047 | - | - | - | - | 1,961,323,047 | ||||||
| Limited selling condition shares | 36,222,898 | - | - | - | (36,222,898) | - | ||||||
| Domestically listed foreign shares | 1,109,369,060 | - | - | - | - | 1,109,369,060 | ||||||
| 3,106,915,005 | - | - | - | (36,222,898) | 3,070,692,107 | |||||||
The par value of the RMB-denominated ordinary shares is RMB1, and that of domestically listed foreign sharesis HKD1.
(34) Capital surplus
| 31 December 2020 | current year | current year | 31 December 2021 | ||||
| Share premium | 655,424,260 | - | - | 655,424,260 | |||
| Other capital surplus | (58,427,175) | - | - | (58,427,175) | |||
| Share of changes in equity other than comprehensive income and profit distribution of investees under the equity method | 757,420 | - | - | 757,420 | |||
| Share-based payment | - | - | - | - | |||
| Transfer of capital surplus recognised under the previous accounting system | (2,250,222) | - | - | (2,250,222) | |||
| Disposal of fractional shares | 1,316,208 | - | - | 1,316,208 | |||
| Purchase of minority interests | (87,197,562) | - | - | (87,197,562) | |||
| Shareholders interest-free loans | 28,946,981 | - | - | 28,946,981 | |||
| 596,997,085 | - | - | 596,997,085 |
| 31 December 2019 | current year | current year | 31 December 2020 | ||||
| Share premium | 738,834,850 | - | (83,410,590) | 655,424,260 | |||
| Other capital surplus | (55,615,492) | - | (2,811,683) | (58,427,175) | |||
| Share of changes in equity other than comprehensive income and profit distribution of investees under the equity method | 757,420 | - | - | 757,420 | |||
| Share-based payment | 2,811,683 | - | (2,811,683) | - | |||
| Transfer of capital surplus recognised under the previous accounting system | (2,250,222) | - | - | (2,250,222) | |||
| Disposal of fractional shares | 1,316,208 | - | - | 1,316,208 | |||
| Purchase of minority interests | (87,197,562) | - | - | (87,197,562) | |||
| Shareholders interest-free loans | 28,946,981 | - | - | 28,946,981 | |||
| 683,219,358 | - | (86,222,273) | 596,997,085 |
| - 143 - | ||
(35) Other comprehensive income
| Other comprehensive income in Income Statement for the year ended 31 December 2021 | ||||||||||||||
| 31 December 2020 | Attributable to parent company after tax | 31 December 2021 | Actual amount before tax for current year | Less: Reclassification of previous other comprehensive income to profit or loss in current year | Less: Income tax expenses | Attributable to parent company after tax | Attributable to minority shareholders after tax | |||||||
| Other comprehensive income items which will be reclassified subsequently to profit or loss | - | - | - | |||||||||||
| Financial rewards for energy-saving technical retrofits | 2,550,000 | - | 2,550,000 | - | ||||||||||
| Difference on translation of foreign currency financial statements | (1,884,978) | (2,616,289) | (4,501,267) | (2,616,289) | (2,616,289) | |||||||||
| Income generated when self-property and land use rights are converted into investment property | 161,151,797 | - | 161,151,797 | - | ||||||||||
| 161,816,819 | (2,616,289) | 159,200,530 | (2,616,289) | (2,616,289) | ||||||||||
| Other comprehensive income in Income Statement for the year ended 31 December 2020 | ||||||||||||||
| 31 December 2019 | Attributable to parent company after tax | 31 December 2020 | Actual amount before tax for current year | Less: Reclassification of previous other comprehensive income to profit or loss in current year | Less: Income tax expenses | Attributable to parent company after tax | Attributable to minority shareholders after tax | |||||||
| Other comprehensive income items which will be reclassified subsequently to profit or loss | - | - | - | |||||||||||
| Financial rewards for energy-saving technical retrofits | 2,550,000 | - | 2,550,000 | - | ||||||||||
| Difference on translation of foreign currency financial statements | 4,015,864 | (5,900,842) | (1,884,978) | (5,900,842) | (5,900,842) | |||||||||
| Income generated when self-property and land use rights are converted into investment property | ---- | 161,151,797 | 161,151,797 | 189,590,349 | 28,438,552 | 161,151,797 | ||||||||
| 6,565,864 | 155,250,955 | 161,816,819 | 183,689,507 | 28,438,552 | 155,250,955 | |||||||||
| - 144 - | ||
(36) Special reserve
| 31 December 2020 | Increase in current year | Decrease in current year | 31 December 2021 | ||||
| Safety production costs | 10,269,002 | - | (2,972,605) | 7,296,397 |
The subsidiary Yichang CSG PolysSilicon is a high risk chemical production enterprise. Therefore, theCompany appropriated such reserve in accordance with relevant regulations.
(37) Surplus reserve
| 31 December 2020 | Increase in current year | Decrease in current year | 31 December 2021 | ||||
| Statutory surplus reserve | 909,095,854 | 107,939,088 | - | 1,017,034,942 | |||
| Discretionary surplus reserve | 127,852,568 | - | - | 127,852,568 | |||
| 1,036,948,422 | 107,939,088 | - | 1,144,887,510 |
| 31 December 2019 | Increase in current year | Decrease in current year | 31 December 2020 | ||||
| Statutory surplus reserve | 818,398,718 | 90,697,136 | - | 909,095,854 | |||
| Discretionary surplus reserve | 127,852,568 | - | - | 127,852,568 | |||
| 946,251,286 | 90,697,136 | - | 1,036,948,422 |
In accordance with the Company Law of the People’s Republic of China and the Company’s Articles ofAssociation, the Company should appropriate 10% of net profit for the year to the statutory surplusreserve, and the Company can cease appropriation when the statutory surplus reserve accumulated tomore than 50% of the registered capital. The statutory surplus reserve can be used to make up for theloss or increase the paid-in capital after approval from the appropriate authorities. The Companyaccrued statutory surplus reserve at the amount of RMB 107,939,088 based on 10% of the net profit, in2021 (2020: RMB 90,697,136 accrued at 10% of the net profit).
The Company appropriates for the discretionary surplus reserve after the shareholders’ meetingapproves the proposal from the Board of Directors. The discretionary surplus reserve can be used tomake up for the loss or increase the share capital after approval from the appropriate authorities. TheCompany did not appropriate to discretionary surplus reserve during the year.
(38) Undistributed profits
| 2021 | 2020 | ||
| Undistributed profit at the beginning of year | 5,336,266,412 | 4,859,600,841 | |
| Add: Net profits attributable to shareholders of parent company | 1,529,329,304 | 779,325,592 | |
| Less: Appropriation for statutory surplus reserve | (107,939,088) | (90,697,136) | |
| Ordinary share dividends payable (a) | (307,069,211) | (211,962,885) | |
| Undistributed profits at end of year | 6,450,587,417 | 5,336,266,412 |
(a) Pursuant to the resolution of Board of Directors of the Company on 7 May 2021, the Company paid cash
dividends of RMB 1 (tax inclusive) for each 10 shares based on total shares of 3,070,692,107, with thetotal cash dividends distributed of RMB 307,069,211 (tax inclusive).
(39) Revenue and cost of sales
CSG HOLDING CO., LTD.
Notes to the financial statementsfor the year ended 31 December 2021(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
| - 145 - | ||
| 2021 | 2020 | ||
| Revenue from main operations | 13,495,790,939 | 10,586,819,348 | |
| Revenue from other operations | 133,242,711 | 84,434,097 | |
| 13,629,033,650 | 10,671,253,445 | ||
| 2021 | 2020 | ||
| Cost of sales from main operations | 8,827,529,958 | 7,441,135,985 | |
| Cost of sales from other operations | 21,958,135 | 3,329,746 | |
| 8,849,488,093 | 7,444,465,731 |
(a) Revenue and cost of sales from main operations
Revenue and cost of sales from main operations analysed by industry and product are set out below:
| 2021 | 2020 | ||||||
| Revenue | Cost | Revenue | Cost | ||||
| Glass industry | 10,992,359,659 | 7,061,394,960 | 8,648,968,925 | 5,978,411,008 | |||
| Electronic glass and display | 1,875,794,696 | 1,220,707,376 | 1,080,294,536 | 755,486,558 | |||
| Solar and other industries | 870,025,461 | 787,816,499 | 918,644,331 | 768,326,863 | |||
| Elimination | (242,388,877) | (242,388,877) | (61,088,444) | (61,088,444) | |||
| 13,495,790,939 | 8,827,529,958 | 10,586,819,348 | 7,441,135,985 | ||||
(b) Revenue and cost of sales from other operations
| 2021 | 2020 | ||||||
| Revenue | Cost | Revenue | Cost | ||||
| Sales of raw materials and Others | 133,242,711 | 21,958,135 | 84,434,097 | 3,329,746 | |||
| 133,242,711 | 21,958,135 | 84,434,097 | 3,329,746 | ||||
(40) Taxes and surtax
| 2021 | 2020 | ||
| City maintenance and construction tax | 40,516,097 | 35,628,490 | |
| Educational surcharge | 35,188,375 | 29,987,714 | |
| Housing property tax | 32,643,067 | 28,957,233 | |
| Land use rights | 23,513,848 | 12,958,802 | |
| Stamp tax | 8,559,125 | 5,074,506 | |
| Environmental tax | 6,836,101 | 7,731,103 | |
| Others | 1,398,805 | 1,560,674 | |
| 148,655,418 | 121,898,522 |
(41) Selling expenses
CSG HOLDING CO., LTD.
Notes to the financial statementsfor the year ended 31 December 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| - 146 - | ||
| 2021 | 2020 | ||
| Employee benefits | 183,925,526 | 151,981,631 | |
| Entertainment fees | 20,359,285 | 18,142,648 | |
| Business travel expenses | 8,791,046 | 7,092,008 | |
| Freight expenses | 8,738,363 | 12,684,512 | |
| Vehicle use fees | 8,505,855 | 7,664,729 | |
| Rental expenses | 7,422,419 | 6,846,194 | |
| Depreciation expenses | 803,741 | 908,207 | |
| Others | 32,149,198 | 28,599,009 | |
| 270,695,433 | 233,918,938 |
(42) Administrative expenses
| 2021 | 2020 | ||
| Employee benefits | 441,265,481 | 345,024,244 | |
| Depreciation expenses | 68,995,374 | 60,876,687 | |
| Amortisation of intangible assets | 60,490,281 | 58,303,184 | |
| General office expenses | 30,570,337 | 29,724,065 | |
| Labour union funds | 19,409,807 | 14,096,131 | |
| Entertainment fees | 19,772,396 | 13,021,278 | |
| Business travel expenses | 7,657,160 | 6,555,071 | |
| Utility fees | 5,551,260 | 6,571,509 | |
| Canteen costs | 8,389,711 | 7,475,271 | |
| Vehicle use fees | 6,399,995 | 5,515,675 | |
| Consulting advisers | 21,279,093 | 17,515,445 | |
| Shutdown loss | - | 43,071,647 | |
| Others | 62,824,612 | 59,226,354 | |
| 752,605,507 | 666,976,561 |
(43) Research and development expenses
| 2021 | 2020 | ||
| Research and development expenses | 511,738,848 | 404,842,498 | |
| 511,738,848 | 404,842,498 |
(44) Financial expenses
| 2021 | 2020 | ||
| Interest on borrowings | 202,905,070 | 282,470,740 | |
| Less: Capitalised interest | (14,046,907) | (9,162,681) | |
| Interest expenses | 188,858,163 | 273,308,059 | |
| Less: Interest income | (42,702,029) | (53,404,661) |
CSG HOLDING CO., LTD.
Notes to the financial statementsfor the year ended 31 December 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| - 147 - | ||
Exchange losses
| Exchange losses | 2,721,960 | (1,688,559) | |
| Others | 2,304,097 | 5,797,081 | |
| 151,182,191 | 224,011,920 |
(45) Expenses by nature
The cost of sales, selling and distribution expenses, general and administrative expenses, research anddevelopment expenses in the income statement are listed as follows by nature:
| 2021 | 2020 | ||
| Changes in inventories of finished goods and work in progress | (147,777,794) | 45,430,285 | |
| Consumed raw materials and low value consumables, etc. | 5,221,358,883 | 4,061,391,717 | |
| Fuel fee | 1,461,994,755 | 1,281,713,451 | |
| Employee benefits | 1,761,698,146 | 1,424,069,878 | |
| Depreciation and amortisation expenses | 955,997,061 | 923,292,967 | |
| Utility fees | 602,529,940 | 541,569,991 | |
| Freight expenses | 173,156,501 | 154,114,713 | |
| General office expenses | 44,661,748 | 45,667,757 | |
| Canteen costs | 37,879,067 | 35,705,412 | |
| Business travel expenses | 21,895,145 | 16,682,603 | |
| Entertainment fees | 45,541,461 | 34,020,807 | |
| Vehicle use fee | 16,091,881 | 14,285,144 | |
| Rental expenses | 18,631,989 | 21,279,601 | |
| Others | 170,869,098 | 150,979,402 | |
| 10,384,527,881 | 8,750,203,728 |
(46) Gains arising from changes in fair value
| 2021 | 2020 | ||
| Investment real estate measured at fair value | - | 179,911,200 | |
| - | 179,911,200 |
(47) Investment income
| 2021 | 2020 | ||
| Income from structural deposits etc | 16,847,647 | 2,654,504 | |
| 16,847,647 | 2,654,504 |
CSG HOLDING CO., LTD.
Notes to the financial statementsfor the year ended 31 December 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| - 148 - | ||
(48) Other income
(49) Credit impairment losses
| 2021 | 2020 | ||
| Losses on bad debts of accounts receivable | 84,095,771 | 5,120,629 | |
| Losses on bad debts of other receivables | 49,019,860 | 601,990 | |
| Losses on bad debts of Notes receivables | 20,778,806 | - | |
| 153,894,437 | 5,722,619 |
(50) Asset impairment losses
| 2021 | 2020 | ||
| Impairment loss of fixed assets | 223,891,270 | 428,132,973 | |
| Decline in the value of inventories | 4,444,583 | 9,712,924 | |
| Impairment loss in construction in progress | 650,101,859 | 218,940,134 | |
| Impairment loss in goodwill | 103,227,834 | 81,722,063 | |
| 981,665,546 | 738,508,094 |
(51) Asset disposal income
| Gains on disposal of non-current assets | (1,493,248) | (1,158,984) | |
| (1,493,248) | (1,158,984) |
| 2021 | 2020 | ||
| Government subsidy amortization | 40,387,953 | 35,444,848 | |
| Industry support funds | 4,315,700 | 4,063,000 | |
| Research grants | 11,171,171 | 9,531,120 | |
| Government incentive funds | 31,591,282 | 29,508,022 | |
| Others | 18,999,711 | 21,013,410 | |
| 106,465,817 | 99,560,400 |
CSG HOLDING CO., LTD.
Notes to the financial statementsfor the year ended 31 December 2021(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
| - 149 - | ||
(52) Non-operating income
| 2021 | 2020 | Amount of non-recurring gains and losses included in 2021 | |||
| Government grants | - | 100,000 | - | ||
| Compensation income | 2,945,158 | 2,985,667 | 2,945,158 | ||
| Amounts unable to pay | 5,229,842 | 4,572,559 | 5,229,842 | ||
| Others | 4,429,534 | 6,711,613 | 4,429,534 | ||
| 12,604,534 | 14,369,839 | 12,604,534 |
(53) Non-operating expenses
| 2021 | 2020 | Amount of non-recurring gains and losses included in 2021 | |||
| Compensation | 256,750 | 1,507,494 | 256,750 | ||
| Donation | 319,746 | 17,321,288 | 319,746 | ||
| Government subsidy return back | 15,028,336 | - | 15,028,336 | ||
| Others | 10,525,912 | 1,725,613 | 10,525,912 | ||
| 26,130,744 | 20,554,395 | 26,130,744 |
(54) Income tax expenses
| 2021 | 2020 | ||
| Current income tax | 434,400,038 | 238,941,249 | |
| Deferred income tax | (78,246,309) | 54,796,896 | |
| 356,153,729 | 293,738,145 |
Reconciliation of income tax calculated at the applicable tax rate based on total profit in the consolidatedincome statement to the income tax expenses is listed below:
| 2021 | 2020 | ||
| Total profit | 1,917,402,183 | 1,105,691,126 | |
| Income tax expenses calculated at applicable tax rates by company | 324,483,014 | 181,218,682 | |
| Effect of changes in tax rates | 2,971,669 | - | |
| Costs, expenses and losses not deductible for tax purposes | 3,970,483 | 2,517,415 | |
| Deductible losses of unrecognised deferred income tax assets in the previous period | (6,855,521) | (2,772,095) | |
| Deductible losses for which no deferred tax asset was recognised in current period | 105,049,758 | 161,018,094 |
CSG HOLDING CO., LTD.
Notes to the financial statementsfor the year ended 31 December 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| - 150 - | ||
Effect of tax incentives
| Effect of tax incentives | (71,109,609) | (42,340,548) | |
| Reconciliation of income tax for prior years in annual filing | (2,356,065) | (5,903,403) | |
| Income tax expenses | 356,153,729 | 293,738,145 |
(55) Earnings per share
The basic earnings per share is calculated by dividing the net profit attributable to ordinary shareholdersof the company by the weighted average number of ordinary shares outstanding.
The numerator of diluted earnings per share is determined based on the net profit attributable to thecommon shareholders of the company's common stock. The following factors are adjusted to determine:
(1) interest on dilutive potential ordinary shares that have been recognized as expenses in the currentperiod; (2) dilutive potential ordinary The income or expenses that will be generated when the sharesare converted; (3) The above-mentioned adjustments related to income tax effects.
The denominator of the diluted earnings per share equals the sum of: (1) the weighted average numberof ordinary shares of the parent company in the underlying earnings per share; (2) ordinary shares thatare increased assuming the dilution of potential ordinary shares into common shares The weightedaverage.
When calculating the weighted average of the number of ordinary shares increased from dilutedcommon stocks to ordinary shares, the diluted potential ordinary shares issued during the previousperiod are assumed to be converted at the beginning of the current period; diluted potential ordinaryshares of the current period are issued,assuming a conversion on the issue date.
The basic calculation of basic earnings per share and diluted earnings per share are as follows:
(a) Basic earnings per share:
Basic earnings per share is calculated by dividing the consolidated net profit attributable to ordinaryshareholders of the parent company by the weighted average number of ordinary shares issued by theparent company.
| 2021 | 2020 | ||
| Consolidated net profit attributable to ordinary shareholders of parent company | 1,529,329,304 | 779,325,592 | |
| Weighted average number of outstanding ordinary | 3,070,692,107 | 3,070,692,107 | |
| Basic earnings per share | 0.50 | 0.25 |
(b) Diluted earnings per share:
Diluted earnings per share are calculated by dividing consolidated net profit attributable to ordinaryshareholders of the parent company adjusted based on the dilutive potential ordinary shares by theadjusted weighted average number of outstanding ordinary shares of the Company. For the year ended31 December 2021, the Company had diluted earnings per shares of RMB 0.50 (2020: RMB 0.25 pershare).
(56) Notes to the cash flow statement
(a) Cash generated by other operating activities
CSG HOLDING CO., LTD.
Notes to the financial statementsfor the year ended 31 December 2021(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
| - 151 - | ||
| 2021 | 2020 | ||
| Government grants | 172,538,864 | 83,690,924 | |
| Interest income | 42,702,029 | 53,404,661 | |
| Others | 45,790,381 | 40,668,625 | |
| 261,031,274 | 177,764,210 |
(b) Cash paid relating to other operating activities
| 2021 | 2020 | ||
| Freight expenses | 10,850,337 | 50,765,589 | |
| Canteen costs | 38,269,921 | 38,460,290 | |
| General office expenses | 42,874,346 | 39,088,171 | |
| Business travel expenses | 21,292,700 | 17,586,616 | |
| Entertainment fees | 40,958,494 | 31,779,755 | |
| Vehicle use fee | 15,575,367 | 12,831,298 | |
| Maintenance fee | 25,907,924 | 22,961,067 | |
| Rental expenses | 23,997,442 | 22,006,257 | |
| Insurance | 14,037,127 | 13,934,943 | |
| Fees | 2,304,097 | 5,797,081 | |
| Consulting advisers | 23,166,436 | 24,030,410 | |
| Government subsidy return back | 15,028,336 | - | |
| Others | 166,575,025 | 143,813,446 | |
| 440,837,552 | 423,054,923 |
(c) Cash generated by other investing activities
| 2021 | 2020 | ||
| Entrusted Loan | - | 300,000,000 | |
| Income from trial production of construction in progress | 59,262,312 | 124,382,895 | |
| Deposit | 21,682,371 | 10,794,429 | |
| 80,944,683 | 435,177,324 |
(d) Cash paid relating to other investing activities
| 2021 | 2020 | ||
| Trial production expenditure in construction | 56,312,270 | 118,741,948 | |
| Advance payment for others | 24,000,000 | - | |
| 80,312,270 | 118,741,948 |
(e) Cash generated by other financing activities
CSG HOLDING CO., LTD.
Notes to the financial statementsfor the year ended 31 December 2021(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
| - 152 - | ||
| 2021 | 2020 | ||
| Income from finance lease | 200,000,000 | - | |
| Received deposit and security deposit | - | 153,698,226 | |
| 200,000,000 | 153,698,226 |
(f) Cash payments relating to other financing activities
| 2021 | 2020 | ||
| Repay financing leases | - | 478,319,392 | |
| Payment of loan, security and fee for bills | - | 3,460,879 | |
| Equity incentive fund | - | 122,445,171 | |
| - | 604,225,442 |
(57) Supplementary information to the cash flow statement
(a) Reconciliation from net profit to cash flows from operating activities
| 2021 | 2020 | ||
| Net profit | 1,561,248,454 | 811,952,981 | |
| Add: Provision for asset impairment | 981,665,546 | 738,508,094 | |
| Provision for credit impairment | 153,894,437 | 5,722,619 | |
| Depreciation of fixed assets | 893,319,936 | 863,408,582 | |
| Amortisation of intangible assets | 60,490,281 | 58,303,184 | |
| Amortisation of long-term prepaid expenses | 430,438 | 1,581,201 | |
| Depreciation of right-of-use assets | 1,756,406 | - | |
| Losses on disposal of fixed assets and intangible assets | 1,493,248 | 1,158,984 | |
| Financial expenses | 188,858,163 | 273,308,059 | |
| Gains arising from changes in fair value | - | (179,911,200) | |
| Investment income | (16,847,647) | (2,654,504) | |
| Decrease/(increase) in deferred tax assets | (60,206,509) | 10,813,173 | |
| Increase/(decrease) in deferred tax liabilities | (18,039,800) | 43,983,723 | |
| Decrease in inventories | (273,932,796) | (8,426,451) | |
| Decrease/(increase) in operating receivables | 104,211,540 | (84,621,855) | |
| Increase in operating payables | 323,742,688 | 197,493,046 | |
| Net cash flows from operating activities | 3,902,084,385 | 2,730,619,636 |
(b) Net increase/(decrease) in cash
| 2021 | 2020 | ||
| Cash and cash equivalents at end of year | 2,756,477,572 | 2,124,028,196 | |
| Less: Cash and cash equivalents at beginning of year | (2,124,028,196) | (1,831,835,030) |
CSG HOLDING CO., LTD.
Notes to the financial statementsfor the year ended 31 December 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| - 153 - | ||
Net increase in cash and cash equivalents
| Net increase in cash and cash equivalents | 632,449,376 | 292,193,166 |
(c) Cash and cash equivalents
| 31 December 2021 | 31 December 2020 | ||
| Cash | |||
| - Cash on hand | - | 2,725 | |
| - Bank deposits that can be readily drawn on demand | 2,453,477,573 | 1,463,954,484 | |
| - Other cash balances that can be readily drawn on demand | 302,999,999 | 660,070,987 | |
| Cash at end of year | 2,756,477,572 | 2,124,028,196 |
(58) Assets with restricted ownership or use rights
| 2021 | 2020 | Reason | ||
| Monetary assets | 9,448,334 | 1,760,707 | Restricted deposit flow etc | |
| Property,plant and equipment | 165,095,479 | 238,490,675 | Limited finance lease and Restricted mortage loan | |
| 174,543,813 | 240,251,382 |
(59) Monetary items denominated in foreign currencies
| 31 December 2021 | |||||
| Balances denominated in foreign currencies | Exchange rates | Balances denominated in RMB | |||
| Cash at bank and on hand— | |||||
| - HKD | 2,910,735 | 0.8176 | 2,379,817 | ||
| - USD | 4,157,847 | 6.3757 | 26,509,188 | ||
| - JPY | 2,016,029 | 0.0554 | 111,688 | ||
| - AUD | 797 | 4.6220 | 3,686 | ||
| 29,004,379 | |||||
Accounts receivable—
| Accounts receivable— | |||||
| - HKD | 2,119,096 | 0.8176 | 1,732,573 | ||
| - USD | 17,430,781 | 6.3757 | 111,133,429 | ||
| - EUR | 834,785 | 7.2197 | 6,026,900 | ||
| 118,892,902 | |||||
| Accounts payable -— | |||||
| - HKD | 246,968 | 0.8176 | 201,921 | ||
| - USD | 6,321,968 | 6.3757 | 40,306,973 | ||
| - EUR | 295,835 | 7.2197 | 2,135,837 | ||
| - JPY | 3,362,148 | 0.0554 | 186,263 | ||
| - GBP | 11,000 | 8.6064 | 94,670 | ||
| 42,925,664 |
CSG HOLDING CO., LTD.
Notes to the financial statementsfor the year ended 31 December 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| - 154 - | ||
5 The changes of consolidation scope
On 19 April 2021, the Group set up a subsidiary, Xi'an Csg Energy Saving Glass Technology Co., Ltd.("Xi'an Energy Saving Company") and the Group has invested RMB 1,000,000.The Group owns 100%of its equity.
On 25 June 2021, the Group set up a subsidiary, Anhui CSG Silicone Mingdu Mining Development Co.,Ltd. ("Anhui Silicon Valley Mingdu Mining Company") and the Group has invested RMB 3,000,000. TheGroup owns 60% of its equity.
On 09 October 2021, the Group set up a subsidiary, Guangxi CSG New Energy Materials TechnologyCo., Ltd. ("Guangxi New Energy Materials Company") and the Group has invested RMB 31,000,000 .The Group owns 100% of its equity.
On 11 November 2021, the Group set up a subsidiary, Qinghai CSG Sunrise New Energy TechnologyCo., Ltd. ("Qinghai CSG New Energy") and the Group has not invested . The Group owns 100% of itsequity.
On 8 December 2021, the Group set up a subsidiary, Hefei CSG Energy Saving Material IntelligentManufacturing Co., Ltd. ("Hefei Energy Saving Company") and the Group has not invested . The Groupowns 100% of its equity.
On 9 December 2021, the Group set up a subsidiary, Shenzhen CSG New Energy IndustryDevelopment Co., Ltd. ("Shenzhen CSG New Energy") and the Group has not invested . The Groupowns 100% of its equity.
On 13 December 2021, the Group set up a subsidiary, Zhaoqing CSG New Energy Technology Co., Ltd.(referred to as "Zhaoqing CSG New Energy") and the Group has not invested . The Group owns 100%of its equity.
6 Equity in other entities
(1) Interest in subsidiaries
(a) Structure of the enterprise group
As at 31 December 2021, information of the Company’s major subsidiaries is set out below:
| Major business location | Place of registration | Scope of business | Shareholding (%) | ||
| Direct | Indirect | ||||
| Chengdu CSG | Chengdu, PRC | Chengdu, PRC | Development, production and sales of special glass | 75% | 25% |
| Sichuan CSG Energy Conservation | Chengdu, PRC | Chengdu, PRC | Development, production and sales of special glass and processing of glass | 75% | 25% |
| Tianjin Energy Conservation | Tianjin, PRC | Tianjin, PRC | Development, production and sales of special glass | 75% | 25% |
| Dongguan CSG Engineering | Dongguan, PRC | Dongguan, PRC | Intensive processing of glass | 75% | 25% |
| Dongguan CSG Solar | Dongguan, PRC | Dongguan, PRC | Production and sales of solar glass | 75% | 25% |
| Dongguan CSG PV-tech | Dongguan, PRC | Dongguan, PRC | Production and sales of hi-tech green battery and components | 100% | - |
| Yichang CSG PolysSilicon | Yichang, PRC | Yichang, PRC | Production and sales of high-purity silicon materials | 75% | 25% |
| Wujiang CSG Engineering | Wujiang, PRC | Wujiang, PRC | Intensive processing of glass | 75% | 25% |
| Hebei CSG | Yongqing, PRC | Yongqing, PRC | Production and sales of special glass | 75% | 25% |
| Wujiang CSG | Wujiang, PRC | Wujiang, PRC | Production and sales of special glass | 100% | - |
CSG HOLDING CO., LTD.
Notes to the financial statementsfor the year ended 31 December 2021(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
| - 155 - | ||
China Southern Glass (Hong Kong) Limited
| China Southern Glass (Hong Kong) Limited | Hong Kong, PRC | Hong Kong, PRC | Investment holding | 100% | - |
| Xianning CSG | Xianning, PRC | Xianning, PRC | Production and sales of special glass | 75% | 25% |
| Xianning CSG Energy-Saving | Xianning, PRC | Xianning, PRC | Intensive processing of glass | 75% | 25% |
| Qingyuan CSG Energy-Saving | Qingyuan, PRC | Qingyuan, PRC | Production and sales of ultra-thin electronic glass | 100% | - |
| Shenzhen CSG Financial Leasing Co., Ltd. | Shenzhen, PRC | Shenzhen, PRC | Finance leasing, etc. | 75% | 25% |
| Jiangyou CSG Mining Development Co. Ltd. | Jiangyou, PRC | Jiangyou, PRC | Production and sales of silica and its by-products | 100% | - |
| Shenzhen CSG Display: | Shenzhen, PRC | Shenzhen, PRC | Production and sales of display component products | 60.80% | - |
| Zhaoqing Energy Saving Company | PRC | PRC | Production and sales of various special glasses | 100% | - |
| Zhaoqing Automobile Company | PRC | PRC | Production and sales of various special glasses | 100% | - |
| Anhui Energy Company | Fengyang, PRC | Fengyang, PRC | Production and sales of solar glass products | 100% | - |
| Anhui Quartz Company | Fengyang, PRC | Fengyang, PRC | Production and sales of solar glass products | 100% | - |
| Anhui Silicon Valley Mingdu Mining Company | Fengyang, PRC | Fengyang, PRC | Mineral resources exploitation | 60% | |
| Xi'an energy conservation company | , PRC | , PRC | Production and sales of various special glasses | 55% | 45% |
| Guangxi New Energy Materials Company | , PRC | , PRC | Production and sales of various special glasses | 75% | 25% |
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| - 156 - | ||
(b) Subsidiaries with significant minority interests
| Subsidiaries | Shareholding of minority shareholders | Profit or loss attributable to minority shareholders for the year ended 31 December 2021 | Dividends distributed to minority shareholders for the year ended 31 December 2021 | Minority interests as at 31 December 2021 |
| Shenzhen CSG Display | 39.2% | 31,774,809 | - | 404,409,486 |
(c) Main financial information of important non-wholly-owned subsidiaries
| 31 December 2021 | |||||||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | ||||
| Shenzhen CSG Display | 210,979,056 | 1,378,748,179 | 1,589,727,235 | 448,244,735 | 54,572,497 | 502,817,232 | |||
| 2021 | |||||||||
| Revenue | Net profit | Total comprehensive income | Cash flows from operating activities | ||||||
| Shenzhen CSG Display | 746,690,439 | 88,873,060 | 88,873,060 | 196,460,847 | |||||
7 Segment information
The Group's business activities are classifcated by product and service as follows:
- Glass segment, engaged in production and sales of float glass and engineering glass and thesilica for the production thereof, etc.- Solar energy segment, engaged in manufacturing and sales of polycrystalline silicon and solarbattery and applications, etc.- Solar and other segment divisions, responsible for the production and sales of polysilicon andsolar cell module products, photovoltaic energy development and other products, etc.
The reportable segments of the Group are the business units that provide different products or service.Different businesses require different technologies and marketing strategies. The Group, therefore, separatelymanages the production and operation of each reportable segment and Estimates their operating resultsrespectively, in order to make decisions about resources to be allocated to these segments and to assess theirperformance.
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. Theliabilities are allocated based on the operations of the segment. Expenses indirectly attributable to eachsegment are allocated to the segments based on the proportion of each segment’s revenue.
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| - 157 - | ||
(a) Segment information as at and for the year ended 31 December 2021 is as follows:
| Flat glass | and displays | Solar and other industries | Unallocated | Elimination | Total | ||||||
| Revenue from external customers | 10,999,313,889 | 1,720,865,369 | 908,553,830 | 300,562 | - | 13,629,033,650 | |||||
| Inter-segment revenue | 70,650,930 | 177,299,135 | 170,023,434 | 294,564,450 | (712,537,949) | - | |||||
| Interest income | 2,657,543 | 624,472 | 216,356 | 39,203,658 | - | 42,702,029 | |||||
| Interest expenses | 1,563,185 | (12,363,737) | 21,288 | (178,078,899) | - | (188,858,163) | |||||
| Asset impairment losses | (4,057,296) | (174,808,890) | (699,571,526) | (103,227,834) | - | (981,665,546) | |||||
| Credit impairment loss | (105,309,554) | (443,724) | 371,850 | (48,513,009) | - | (153,894,437) | |||||
| Depreciation and amortisation expenses | (607,940,780) | (228,084,049) | (113,738,670) | (6,233,562) | - | (955,997,061) | |||||
| Total profit/(loss) | 2,657,577,760 | 264,148,325 | (673,621,904) | (330,701,998) | - | 1,917,402,183 | |||||
| Income tax (expenses)/income | (339,464,522) | (28,170,648) | 1,933,346 | 9,548,095 | - | (356,153,729) | |||||
| Net profit/(loss) | 2,318,113,238 | 235,977,677 | (671,688,558) | (321,153,903) | - | 1,561,248,454 | |||||
| Total assets | 9,771,021,576 | 3,646,349,435 | 2,550,051,949 | 3,971,941,550 | - | 19,939,364,510 | |||||
| Total liabilities | 3,549,162,935 | 593,290,450 | 323,987,924 | 3,606,448,966 | - | 8,072,890,275 | |||||
| Increase in non-current assets | 1,697,686,349 | 48,535,659 | 105,317,713 | 5,243,175 | - | 1,856,782,896 |
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| - 158 - | ||
(b) Segment information as at and for the year ended 31 December 2020 is as follows:
| Flat glass | and displays | Solar and other industries | Unallocated | Elimination | Total | ||||||
| Revenue from external customers | 8,666,093,920 | 1,083,132,521 | 916,115,834 | 5,911,170 | - | 10,671,253,445 | |||||
| Inter-segment revenue | 43,677,341 | 4,229,293 | 72,667,092 | 212,060,390 | (332,634,116) | - | |||||
| Interest income | 2,140,733 | 1,471,264 | 402,262 | 49,390,402 | - | 53,404,661 | |||||
| Interest expenses | (30,646,424) | (12,125,558) | (15,354,096) | (215,274,796) | 92,815 | (273,308,059) | |||||
| Asset impairment losses | (7,746,072) | (1,038,135) | (648,001,824) | (81,722,063) | - | (738,508,094) | |||||
| Credit impairment loss | 31,741 | (229,992) | (3,965,108) | (1,559,260) | - | (5,722,619) | |||||
| Depreciation and amortisation expenses | (601,759,885) | (164,905,846) | (150,718,578) | (5,908,658) | - | (923,292,967) | |||||
| Total profit/(loss) | 1,711,049,125 | 185,625,578 | (475,933,924) | (315,049,653) | - | 1,105,691,126 | |||||
| Income tax (expenses)/income | (222,653,492) | (23,877,511) | (49,229,706) | 2,022,564 | - | (293,738,145) | |||||
| Net profit/(loss) | 1,488,395,633 | 161,748,067 | (525,163,630) | (313,027,089) | - | 811,952,981 | |||||
| Total assets | 8,618,862,132 | 3,784,793,003 | 3,227,533,456 | 2,251,726,307 | - | 17,882,914,898 | |||||
| Total liabilities | 2,075,265,799 | 688,502,626 | 326,834,407 | 4,176,428,180 | - | 7,267,031,012 | |||||
| Increase in non-current assets | 337,211,912 | 615,441,677 | 128,344,547 | 6,281,914 | - | 1,087,280,050 |
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| - 159 - | ||
The Group’s revenue from external customers domestically and in foreign countries or geographicalareas, and the total non-current assets other than financial assets and deferred tax assets locateddomestically and in foreign countries or geographical areas are as follows:
| Revenue from external customers | 2021 | 2020 | |
| Mainland | 12,355,492,022 | 9,538,506,225 | |
| Overseas | 1,273,541,628 | 1,132,747,220 | |
| 13,629,033,650 | 10,671,253,445 |
| Total non-current assets | 31 December 2021 | 31 December 2020 | |
| Mainland | 12,982,067,078 | 12,652,550,312 | |
| Hong Kong, PRC | 12,403,499 | 12,463,605 | |
| 12,994,470,577 | 12,665,013,917 |
No revenue from a single customer exceeded 10% or more of the Group’s revenue.
8 Related parties and related party transactions
(1) Information of the parent company
The Company regards no entity as the parent company.
(2) The subsidiaries
The general information and other related information of the subsidiaries are set out in Note 6(1).
(3) General information of the Group’s associate
None
(4) Other related parties information
| Relationship with the Group | |
| Shenzhen Jushenghua Co.,Ltd. (“Jushenghua”) | Persons acting in concert with the first majority shareholder of the Group |
| Shenzhen Qianhai Ruinan Investment LLP | Controlled by the former key management personnel of the Croup |
| Xinjiang Qianhai United Property & Casualty Insurance | Related parties of the company's largest shareholder of taking concerted action |
| Suzhou Baoqi Logistics Co., Ltd. | Related parties of the company's largest shareholder of taking concerted action |
| Wuxi Baowan Department Store Co., Ltd. Nanjing Yanziji Store | Related parties of the company's largest shareholder of taking concerted action |
| Baoneng Department Store Retail Co., Ltd. | Related parties of the company's largest shareholder of taking concerted action |
| Shenzhen Baoneng Auto Sales & Service Co., Ltd. | Related parties of the company's largest shareholder of taking concerted action |
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| - 160 - | ||
Guangdong Chubang Food Co., Ltd.
| Guangdong Chubang Food Co., Ltd. | Related parties of the company's largest shareholder of taking concerted action |
(5) Related party transactions
(a) Purchase and sales of goods, provision and receiving of labour
| Related parties | Related transaction | Transaction pricing policy | 2021 | 2020 | |
| Suzhou Baoqi Logistics Co., Ltd. | Receive service | Market price | 6,851,844 | 2,117,344 | |
| Wuxi Baowan Department Store Co., Ltd. Nanjing Yanziji Store | goods | Market price | - | 2,866,100 | |
| Shenzhen Baoneng Auto Sales & Service Co., Ltd. | goods | Market price | 1,171,470 | - | |
| Others | Purchase of goods and receive service | Market price | 511,390 | 330,568 | |
| 8,534,704 | 5,314,012 |
Selling goods and providing services
| Related parties | Related transaction content | Transaction pricing policy | 2021 | 2020 | |
| Shenzhen Jushenghua Co., Ltd. | Sales of goods | Market price | 500 | 12,118,000 | |
| Guangdong Chubang Food Co., Ltd. | Sales of goods | Market price | - | 1,500,000 | |
| Baoneng Department Store Retail Co., Ltd. | Sales of goods | Market price | - | 899,940 | |
| Others | Sales of goods | Market price | 659,185 | 4,485,120 | |
| 659,685 | 19,003,060 |
Note: Other related parties will be listed together as they showed many companies and the amounts arescattered
(b) Purchase of insurance
| Related parties | Related party transactions | 2021 | 2020 | |
| Shenzhen Qianhai Ruinan Investment LLP | Buy life insurance for employees | 5,541,857 | 5,086,401 |
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| - 161 - | ||
Xinjiang Qianhai United Property& Casualty Insurance
| Xinjiang Qianhai United Property & Casualty Insurance | Buy car insurance | 761,693 | 1,099,639 | |
| 6,303,550 | 6,186,040 |
(c) Leases
| Related parties | Related party transactions | 2021 | 2020 | |
| Others | Rental factory and water charges | 1,062,524 | - | |
| 1,062,524 | - |
(d) Gains on equity transfer
None
(e) Acquisition of equity
None
(f) Advances paid on behalf of related parties
None
(g) Remuneration of key management
| 2021 | 2020 | ||
| Remuneration | 25,749,501 | 23,628,100 |
(6) Accounts receivable from related parties
(a) Receivables
| Related parties | 31 December 2021 | 31 December 2020 | |||
| Carrying amount | Provision for bad debts | Carrying amount | Provision for bad debts | ||
| Baoneng Department Store Retail Co., Ltd. | - | - | 192,000 | (3,840) | |
| Others | 242,620 | (4,819) | 31,200 | (624) | |
| 242,620 | (4,819) | 223,200 | (4,464) | ||
(b) payables
| Related parties | 2021 | 2020 | |
| Suzhou Baoqi Logistics Co., Ltd. | 2,731,013 | 2,617,344 | |
| Others | 133,408 | - | |
| 2,864,421 | 2,617,344 |
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| - 162 - | ||
9 Contingencies
Nil.
10 Commitments
(1) Capital expenditure commitments
Capital expenditures contracted for by the Group at the balance sheet date but are not yet necessaryto be recognized on the balance sheet are as follows:
| 31 December 2021 | 31 December 2020 | |||
| Buildings, machinery and equipment | 2,994,615,272 | 552,259,223 |
11 Events after the balance sheet date
(a) Statement of profit distribution after balance sheet date
| Amount | |
| Proposed distribution of cash dividends | 614,138,421 |
According to the resolution of the board of directors on April 21, 2022, the board of directors proposedthat the company distribute a cash dividend of RMB 614,138,421 to all shareholders. This proposal isapproving by the general meeting of shareholders. The cash dividend proposed after the balance sheetdate has not been confirmed in this financial statement as a liability.
12 Other significant events
(1) 171 million special funds for the introduction of talents was follow-up progress.
(a) Matter description
As at December 10, 2012, the People's Government of Yichang City and the Company signed theCooperation Agreement on Fine Glass and Ultrathin Electronic Glass Project ;The managementcommittee of Yichang High-tech Industrial Development Zone agreed to establish a RMB 171 milliontalent fund as a special fund subsidy for the introduction of talents and the placement of talented peoplein 2014. The company of Yichang CSG PolysSilicon Co.Ltd. is responsible for formulating the housingresettlement subsidy program and supervising the use of this special fund.The funds were subsidizedby the government to the company, but Yichang CSG PolysSilicon Co., Ltd. received this amount andtransferred it to Yichang Hongtai Real Estate Co., Ltd. in full amount without proper approval from thecompany's board of directors and other relevant authorities. ( Yichang Hongtai Real Estate Co.,Ltd. is acompany jointly indirect controlled by part of the former natural executives of the company. Thecompany has no equity relationship with the company ) .Yichang CSG PolysSilicon Co., Ltd. receivedthe above fund and transferred it to Yichang Hongtai Real Estate Co., Ltd. in full and also handled theaccounting treatment according to the collecting and paying. In 2017, Prior period accounting error fromabove matters was corrected by company.
(b) Subsequent progress
Shenzhen Municipal People's Procuratorate (hereinafter referred to as "Deep Retrieval") with Zeng Nanand others suspected of trusting the interests of listed companies, filed a public prosecution to theShenzhen Intermediate People's Court, tried by the court, and made a criminal involvement for ZengNan etc. Decision of prosecution. On December 15, 2021, the company filed a litigation of Zeng Nanand others and Yichang Hongtai Real Estate Co., Ltd., and the Shenzhen Intermediate People's Courtwas officially accepted on January 28, 2022.
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| - 163 - | ||
(c) Receivable talent fund from Yichang Hongtai Real Estate Co., Ltd.
| December 31, 2021 | December 31, 2020 | |||||||
| Book balance | Bad debt preparation | Book balance | Bad debt preparation | |||||
| Other receivables | Yichang Hongtai Real Estate Company | 171,000,000 | (51,300,000) | 171,000,000 | (3,420,000) | |||
(i) The management of the company is expected to get back this receivables risk further this year,
so the single-item declaration is prepared.
13 Financial instrument and risk
The Group's activities expose it to a variety of financial risks: market risk (primarily foreign exchange riskand interest rate risk), credit risk and liquidity risk. The Group's overall risk management programfocuses on the unpredictability of financial market and seeks to reduce potential adverse effects on theGroup's financial performance.
(1) Market risk
(a) Foreign exchange risk
The Group’s major operational activities are carried out in Mainland China and a majority of thetransactions are denominated in RMB. Some export business, however, is denominated in foreigncurrencies. In addition, the Group is exposed to foreign exchange risk arising from the recognizedassets and liabilities, and future transactions denominated in foreign currencies, primarily with respectto US dollars and Hong Kong dollar. The Group monitors the scale of foreign currency transactions,foreign currency assets and liabilities, and adjust settlement currency of export business, to furthestreduce the currency risk.
(1) Market risk (Cont'd)
On 31 December 2021, book values in RMB equivalent of the Group’s assets and liabilitiesdenominated in foreign currencies are summarized below:
| 31 December 2021 | |||||||
| USD | HKD | Others | Total | ||||
| Financial assets denominated in foreign currency - | |||||||
| Cash at bank and on hand | 26,509,188 | 2,379,817 | 115,374 | 29,004,379 | |||
| Receivables | 111,133,429 | 1,732,573 | 6,026,900 | 118,892,902 | |||
| 137,642,617 | 4,112,390 | 6,142,274 | 147,897,281 | ||||
| Financial liabilities denominated in foreign currency - | |||||||
| Payables | 40,306,973 | 201,921 | 2,416,770 | 42,925,664 | |||
| 40,306,973 | 201,921 | 2,416,770 | 42,925,664 | ||||
| 31 December 2020 | |||||||
| USD | HKD | Others | Total | ||||
| Financial assets denominated in foreign currency - | |||||||
| Cash at bank and on hand | 16,599,430 | 5,997,799 | 1,109,657 | 23,706,886 | |||
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021
(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| - 164 - | ||
Receivables
| Receivables | 84,333,333 | 1,392,919 | 6,699,153 | 92,425,405 | |||
| 100,932,763 | 7,390,718 | 7,808,810 | 116,132,291 |
Financial liabilities denominatedin foreign currency -
| Financial liabilities denominated in foreign currency - | |||||||
| Short-term borrowings | - | 63,120,000 | - | 63,120,000 | |||
| Payables | 47,632,226 | 3,868,806 | 4,443,735 | 55,944,767 | |||
| 47,632,226 | 66,988,806 | 4,443,735 | 119,064,767 |
On 31 December 2021, if the currency had strengthened/weakened by 10% against the USD while allother variables had been held constant, the Group’s net profit for the year would have beenapproximately RMB 8,273,530 lower/higher (31 December 2020: approximately RMB 4,530,546lower/higher) for various financial assets and liabilities denominated in USD.
Other changes in exchange rate had no significant impact on the Group's operating activities exceptUSD dollar.
(b) Foreign exchange risk
The Group's interest rate risk arises from long-term interest bearing debts including long-termborrowings and bonds payable. Financial liabilities issued at floating rates expose the Group to cashflow interest rate risk. Financial liabilities issued at fixed rates expose the Group to fair value interestrate risk. The Group determines the relative proportions of its fixed rate and floating rate contractsdepending on the prevailing market conditions. As at 31 December 2021, the Group’s long-term interest-bearing debts at and fixed rates and floating rates are illustrated below:
| 31 December 2021 | 31 December 2020 | ||
| Debt at fixed rates | 2,404,372,257 | 2,105,274,331 | |
| Debt at floating rates | 1,061,274,897 | 742,000,000 | |
| 3,465,647,154 | 2,847,274,331 |
The Group continuously monitors the interest rate position of the Group. Increases in interest rates willincrease the cost of new borrowing and the interest expenses with respect to the Group’s outstandingfloating rate borrowings, and therefore could have a material adverse effect on the Group’s financialposition. The Group makes adjustments timely with reference to the latest market conditions, whichincludes increasing/decreasing long-term fixed rate debts at the anticipation of increasing/decreasinginterest rate.
(2) Credit risk
Credit risk is managed on the grouping basis. Credit risk mainly arises from cash at bank, notesreceivable, accounts receivable, other receivables.
The Group expects that there is no significant credit risk associated with cash at bank since they aremainly deposited at state-owned banks and other medium or large size listed banks. Management doesnot expect that there will be any significant losses from non-performance by these counterparties.Furthermore, as the Group’s bank acceptance notes receivable are generally accepted by the state-owned banks and other large and medium listed banks, management believes the credit risk should belimited.
In addition, the Group has policies to limit the credit exposure on accounts receivable, other receivablesand trade acceptance notes receivable. The Group assesses the credit quality of and sets credit limitson its customers by taking into account their financial position, the availability of guarantee from third
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| - 165 - | ||
parties, their credit history and other factors such as current market conditions. The credit history of thecustomers is regularly monitored by the Group. In respect of customers with a poor credit history, theGroup will use written payment reminders, or shorten or cancel credit periods, to ensure the overallcredit risk of the Group is limited to a controllable extent.
(3) Liquidity risk
Cash flow forecasting is performed by each subsidiary of the Group and aggregated by the Group’sfinance department in its headquarters. The Group’s finance department at its headquarters monitorsrolling forecasts of the Group's short-term and long-term liquidity requirements to ensure it hassufficient cash reserve, while maintaining sufficient headroom on its undrawn committed borrowingfacilities from major financial institutions so that the Group does not breach borrowing limits orcovenants on any of its borrowing facilities to meet the short-term and long-term liquidity requirements.
Management will implement the following measures to ensure the liquidation risk limited to acontrollable extent:
(a) The Group will have steady cash inflows from operating activities;(b) The Group will pay the debts that mature and finance the construction projects through theexisting bank facilities;(c) The Group will closely monitoring the payment of construction expenditure in terms of paymenttime and amount.
The financial liabilities of the Group at the balance sheet date are analyzed by their maturity datebelow at their undiscounted contractual cash flows:
| 31 December 2021 | |||||||||
| Within 1 year | 1 to 2 years | 2 to 5years | Over 5 years | Total | |||||
| Short-term borrowings | 182,299,506 | - | - | - | 182,299,506 | ||||
| Notes payable | 400,662,713 | - | - | - | 400,662,713 | ||||
| Accounts payable | 1,428,851,312 | - | - | - | 1,428,851,312 | ||||
| Other payables | 289,440,477 | - | - | - | 289,440,477 | ||||
| Other current liabilities | 40,099,309 | - | - | - | 40,099,309 | ||||
| Non-current liabilities due within one year | 514,569,537 | - | - | - | 514,569,537 | ||||
| Long-term payables | - | 168,258,062 | - | - | 168,258,062 | ||||
| Long-term borrowings | 60,580,998 | 374,241,583 | 889,057,539 | 363,125,181 | 1,687,005,301 | ||||
| Bonds payable | 120,000,000 | 2,120,000,000 | - | - | 2,240,000,000 | ||||
| 3,036,503,852 | 2,662,499,645 | 889,057,539 | 363,125,181 | 6,951,186,217 | |||||
| 31 December 2020 | |||||||||
| Within 1 year | 1 to 2 years | 2 to 5years | Over 5 years | Total | |||||
| Short-term borrowings | 357,872,322 | - | - | - | 357,872,322 | ||||
| Notes payable | 144,851,192 | - | - | - | 144,851,192 | ||||
| Accounts payable | 1,237,833,051 | - | - | - | 1,237,833,051 | ||||
| Other payables | 287,332,992 | - | - | - | 287,332,992 | ||||
| Other current liabilities | 34,586,292 | - | - | - | 34,586,292 | ||||
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| - 166 - | ||
Non-current liabilities duewithin one year
| Non-current liabilities due within one year | 951,180,309 | - | - | - | 951,180,309 | ||||
| Long-term borrowings | 32,663,037 | 731,295,181 | 154,771,873 | - | 918,730,091 | ||||
| Bonds payable | 120,000,000 | 120,000,000 | 2,027,741,935 | - | 2,267,741,935 | ||||
| 3,166,319,195 | 851,295,181 | 2,182,513,808 | - | 6,200,128,184 |
14 Fair value estimates
Based on the lowest level input that is significant to the fair value measurement in its entirety, the fairvalue hierarchy has the following levels:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset orliability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability.
(a) Assets continuously measured at fair value
By December 31, 2021, the Group’s using assets and liabilities measured at fair value are listed threelevels as followings:
| 31 December 2021 | |||||||
| Level 1 | Level 2 | Level 3 | Total | ||||
| Financial assets at fair value through profit or loss | |||||||
| -Structural deposits | - | 999,600,000 | - | 999,600,000 | |||
| Measured at fair value through other comprehensive income | |||||||
| -Receivables Financing | - | 297,046,123 | - | 297,046,123 | |||
| -Investment property | - | 383,084,500 | - | 383,084,500 | |||
| - | 1,679,730,623 | - | 1,679,730,623 | ||||
(b) Assets and liability that not measured but disclosed at fair value
The group’s financial assets and financial liabilities measured at amortized cost mainly include:
accounts receivable, short-term borrowings, accounts payable, long term borrowings, bonds payable ,long-term payables, ect.
Except for financial liabilities listed below, book value of the other financial assets and liabilities notmeasured at fair value is a reasonable approximation of their fair value.
| 31 December 2021 | 31 December 2020 | ||||||
| Carrying amount | Fair value | Carrying amount | Fair value | ||||
| Financial liabilities | |||||||
| Medium term notes | - | - | 800,000,000 | 803,364,000 | |||
| Corporate bonds | 1,996,587,330 | 2,014,330,000 | 1,994,020,348 | 1,987,041,277 | |||
| 1,996,587,330 | 2,014,330,000 | 2,794,020,348 | 2,790,405,277 | ||||
The fair values of Corporate bonds and medium-term notes are the present value of the contractuallydetermined stream of future cash flows at the rate of interest applied at that time by the market to
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| - 167 - | ||
instruments of comparable credit status and providing substantially the same cash flows on the sameterms, thereinto medium term notes belong to Level 2.
15 Capital management
The Group’s capital management policies aim to safeguard the Group’s ability to continue as a goingconcern in order to provide returns for shareholders and benefits for other stakeholders, and to maintainan optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paidto shareholders, refund capital to shareholders, issue new shares or sell assets to reduce debts.
The Group is not subject to external mandatory capital requirements, and monitors capital on the basisof gearing ratio.
As at 31 December 2021 and 31 December 2020, the Group's gearing ratio is as follows:
| 31 December 2021 | 31 December 2020 | ||
| Total liabilities | 8,072,890,275 | 7,267,031,012 | |
| Total assets | 19,939,364,510 | 17,882,914,898 | |
| Gearing ratio | 40% | 41% |
16 Notes to the Company’s financial statements
(1) Other receivables
| 31 December 2021 | 31 December 2020 | ||
| Dividend receivable | 250,000,000 | 249,087,257 | |
| Other receivables | 2,649,091,405 | 3,554,821,112 | |
| 2,899,091,405 | 3,803,908,369 |
1、 Dividend receivable
| 31 December 2021 | 31 December 2020 | ||
| Dividends receivable from subsidiaries | 250,000,000 | 249,087,257 | |
| 250,000,000 | 249,087,257 |
2、 Other receivables
| 31 December 2021 | 31 December 2020 | ||
| Receivables from related parties | 2,526,427,812 | 3,383,284,639 | |
| Others | 174,005,021 | 176,588,183 | |
| 2,700,432,833 | 3,559,872,822 | ||
| Less: Provision for bad debts | (51,341,428) | (5,051,710) | |
| 2,649,091,405 | 3,554,821,112 |
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| - 168 - | ||
2、 Other receivables (Cont'd)
(a) The ageing of other receivables is analysed as follows:
| 31 December 2021 | 31 December 2020 | ||
| Within 1 year | 2,528,274,319 | 3,384,862,561 | |
| Over 1year | 172,158,514 | 175,010,261 | |
| 2,700,432,833 | 3,559,872,822 |
(b) Other receivables are analysed by category as follows:
| 31 December 2021 | 31 December 2020 | |||||||||||
| Carrying amount | Provision for bad debts | Carrying amount | Provision for bad debts | |||||||||
| Amount | % of total balance | for bad debts | % | Amount | % of total balance | Provision for bad debts | % | |||||
| Provision for bad debts by groupings | ||||||||||||
| - Group 1 | 3,005,021 | - | (40,708) | 1% | 175,037,217 | 5% | (3,500,744) | 2% | ||||
| - Group 2 | 2,526,427,812 | 94% | (720) | - | 3,383,284,639 | 95% | - | - | ||||
| Provided for bad bebts individually | 171,000,000 | 6% | (51,300,000) | 30% | 1,550,966 | - | (1,550,966) | 100% | ||||
| 2,700,432,833 | 100% | (51,341,428) | 2% | 3,559,872,822 | 100% | (5,051,710) | - | |||||
(c) For other receivables provided for bad debts by portfolio, the expected credit impairment loss for the
portfolio is as follows:
| 31 December 2021 | 31 December 2020 | ||||||||
| Carrying amount | Provision for bad debts | Carrying amount | Provision for bad debts | ||||||
| Amount | Amount | % | Amount | Amount | % | ||||
| Group 1 | 3,005,021 | (40,708) | 1% | 175,037,217 | (3,500,744) | 2% | |||
| Group 2 | 2,526,427,812 | (720) | - | 3,383,284,639 | - | - | |||
| 2,529,432,833 | (41,428) | - | 3,558,321,856 | (3,500,744) | - | ||||
(d) Provision for bad debts
| bad debts | Stage 1 | Stage 2 | Stage 3 | |||||
| following 12 months (grouping) | (credit unimpaired) | Lifetime expected credit losses (credit impaired)） | Total | |||||
| 1 January 2021 | 3,500,744 | - | 1,550,966 | 5,051,710 | ||||
| Amounts in current year | - | - | - | - | ||||
| ——Transferred stage 2 | - | - | - | - | ||||
| ——Transferred stage 3 | (3,420,000) | - | 3,420,000 | - | ||||
| —— Reversed stage 2 | - | - | - | - | ||||
| —— Reversed stage 1 | - | - | - | - | ||||
| Increased in current year | 11,619 | - | 48,552,325 | 48,563,944 | ||||
| Reversed in current year | (50,935) | - | - | (50,935) | ||||
| Write-off in current year | - | - | (2,223,291) | (2,223,291) | ||||
| 31 December 2021 | 41,428 | - | 51,300,000 | 51,341,428 |
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| - 169 - | ||
(e) As at 31 December 2021, the Group’s top five entities with the largest other receivables balances are
analysed as below:
| Relationship with the Group | Amount | Ageing | % of total balance | |
| Dongguan Solar Energy | Subsidiary | 544,204,144 | Within 1 year | 20% |
| Qingyuan Energy Saving Company | Subsidiary | 419,921,121 | Within 1 year | 16% |
| Shenzhen Display Company | Subsidiary | 314,681,520 | Within 1 year | 12% |
| Xianning Photoelectric Corporation | Subsidiary | 262,911,269 | Within 1 year | 10% |
| CSG (Hong Kong) Co. Ltd. | Subsidiary | 240,438,085 | Within 1 year | 9% |
| 1,782,156,139 | 67% |
(2) Long-term equity investments
| 31 December 2021 | 31 December 2020 | ||
| Subsidiaries (a) | 6,277,391,694 | 5,859,507,870 | |
| Less: Impairment provision for investments in subsidiaries (a) | (15,000,000) | (15,000,000) | |
| 6,262,391,694 | 5,844,507,870 |
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| - 170 - | ||
(a) Subsidiaries
| Movement in current year | |||||||||||
| 2020 | Decrease in investment | 31 December 2021 | Provision for impairment loss | Cash dividends declared in current year | |||||||
| Chengdu CSG | 151,397,763 | - | - | 151,397,763 | - | 309,767,142 | |||||
| Sichuan Energy Conservation Company | 119,256,949 | - | - | 119,256,949 | - | - | |||||
| Tianjin Energy Conservation Company | 247,833,327 | - | - | 247,833,327 | - | 109,166,321 | |||||
| Dongguan Engineering Company | 198,276,242 | - | - | 198,276,242 | - | - | |||||
| Dongguan Solar Energy Company | 355,120,247 | - | - | 355,120,247 | - | - | |||||
| Yichang Silicon Material Company | 640,856,170 | - | - | 640,856,170 | - | - | |||||
| Wujiang Engineering Company | 254,401,190 | - | - | 254,401,190 | - | - | |||||
| Hebei CSG | 266,189,705 | - | - | 266,189,705 | - | 222,189,079 | |||||
| CSG (Hong Kong) Co., Ltd. | 87,767,304 | - | - | 87,767,304 | - | 250,000,000 | |||||
| Wujiang CSG | 567,645,430 | - | - | 567,645,430 | - | - | |||||
| Jiangyou Sands Company | 102,415,096 | - | - | 102,415,096 | - | - | |||||
| Xianning Float Company | 181,116,277 | - | - | 181,116,277 | - | - | |||||
| Xianning Energy Saving Company | 165,452,035 | - | - | 165,452,035 | - | 73,898,157 | |||||
| Qingyuan Energy Saving Company | 885,273,105 | - | - | 885,273,105 | - | 100,628,677 | |||||
| Shenzhen CSG Financial Leasing Co., Ltd. | 133,500,000 | - | - | 133,500,000 | - | - | |||||
| Shenzhen CSG Photovoltaic Energy Co., Ltd. (i) | 100,335,176 | - | (100,335,176) | - | - | - | |||||
| Shenzhen Display Company | 550,765,474 | - | - | 550,765,474 | - | - | |||||
| Zhaoqing Energy Saving Company | 129,701,000 | 20,299,000 | - | 150,000,000 | - | - | |||||
| Zhaoqing CSG Automotive Glass Co., Ltd. | 43,201,000 | 14,920,000 | - | 58,121,000 | - | - | |||||
| Dongguan CSG PV-tech | 382,112,183 | - | - | 382,112,183 | - | - | |||||
| Anhui Energy Company | 20,000,000 | 435,000,000 | - | 455,000,000 | - | - | |||||
| Anhui Quartz Company | 3,000,000 | 34,000,000 | - | 37,000,000 | - | - | |||||
| Shenzhen CSG Medical Company | 20,000,000 | - | - | 20,000,000 | - | - | |||||
| Anhui Silicon Valley Mingdu Mining Company | - | 3,000,000 | - | 3,000,000 | - | - | |||||
| Xi'an energy conservation company | - | 1,000,000 | - | 1,000,000 | - | - | |||||
| Guangxi New Energy Materials Company | - | 1,000,000 | - | 1,000,000 | - | - | |||||
| Nanba (Suzhou) Corporate Headquarters Management Co., Ltd. | - | 9,000,000 | - | 9,000,000 | - | - | |||||
| Others (ii) | 253,892,197 | - | - | 253,892,197 | (15,000,000) | - | |||||
| 5,859,507,870 | 518,219,000 | (100,335,176) | 6,277,391,694 | (15,000,000) | 1,065,649,376 | ||||||
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
| - 171 - | ||
(i) During the year, the company traded its subsidiary Shenzhen CSG Photovoltaic Energy Co., Ltd.
to its wholly-owned subsidiary Dongguan CSG PV-tech and Shenzhen CSG PV Energy Co., Ltd.were changed to sub-subsidiary Company.
(ii) Subsidiaries for which impairment provision has been made are those that have basically ceased
operations in previous years. The company has made provision for impairment of long-term equityinvestments in these companies in previous years based on recoverable amounts.
(3) Other payables
| 31 December 2021 | 31 December 2020 | ||
| Interest payable | 93,596,328 | 131,513,019 | |
| Other payables | 1,973,876,551 | 870,622,683 | |
| 2,067,472,879 | 1,002,135,702 |
1、 Interest payable
| 31 December 2021 | 31 December 2020 | ||
| Interest of medium-term notes | - | 37,955,556 | |
| Interest of short-term borrowings | 94,444 | 53,256 | |
| Interest of long-term borrowings with periodic payments of interest and return of principal at maturity | 1,243,819 | 1,246,142 | |
| Interest of corporate bonds | 92,258,065 | 92,258,065 | |
| 93,596,328 | 131,513,019 |
2、 Other payables
| 31 December 2021 | 31 December 2020 | ||
| Subsidiaries | 1,959,266,523 | 861,745,492 | |
| Others | 14,610,028 | 8,877,191 | |
| 1,973,876,551 | 870,622,683 |
(4) Investment income
| 2021 | 2020 | ||
| Investment income from long-term equity investment under cost method | 1,065,649,376 | 1,108,523,992 | |
| Proceeds from long-term equity transfer | 196,665,194 | 25,261,102 | |
| Income from structural deposits etc | 16,692,229 | 2,654,504 | |
| 1,279,006,799 | 1,136,439,598 |
There is no significant restriction on the remittance of investment income to the Company.
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2021(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]
I Statement of non-recurring gains and losses
- 172 -
| 2021 | 2020 | ||
| Gains or losses on disposal of non-current assets | 1,493,248 | 1,158,984 | |
| Government grants recognised in profit or loss for current period | (104,507,242) | (99,660,400) | |
| Income from external entrusted loans | - | (5,546,384) | |
| Fair value movement of investment property | - | (179,911,200) | |
| Reversal of provision for impairment of receivables subject to separate impairment test | (1,429,653) | - | |
| Income from structural deposits etc. | (16,847,647) | (2,654,504) | |
| Non-operating income and expenses other than aforesaid items | 13,526,210 | 6,284,556 | |
| (107,765,084) | (280,328,948) | ||
| Effect of income tax | 14,201,899 | 38,334,180 | |
| Effect of minority interests (after tax) | 3,774,138 | 2,645,633 | |
| Total non-recurring gains and losses | (89,789,047) | (239,349,135) |
(1) Basis for preparation of statement of non-recurring gains and losses
Under the requirements in Explanatory Announcement No. 1 on Information Disclosure by Companies OfferingSecurities to the Public – Non-recurring Profit or Loss [2008] from CSRC, non-recurring profit or loss refer tothose arises from transactions and events that are not directly relevant to ordinary activities, or that are relevantto ordinary activities, but are extraordinary and not expected to recur frequently that would have an influenceon users of financial statements making economic decisions on the financial performance and profitability ofan enterprise.
II Return on net assets and earnings per share
| Weighted average return on net assets | Earnings per share | |||||
| Basic earnings per share | Diluted earnings per share | |||||
| 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | |
| Net profit attributable to ordinary shareholders of the Company | 14.13 | 7.91 | 0.50 | 0.25 | 0.50 | 0.25 |
| Net profit attributable to ordinary shareholders of the Company after deducting non-recurring gains and losses | 13.30 | 5.48 | 0.47 | 0.18 | 0.47 | 0.18 |