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公司公告

南 玻B:2018年年度报告(英文版)2019-04-17  

						  CSG HOLDING CO., LTD.

ANNUAL REPORT 2018




     Chairman of the Board:
          CHEN LIN


          April 2019
                                                                                   CSG Annual Report 2018




           Section I Important Notice, Content and Paraphrase

Board of Directors and the Supervisory Committee of CSG Holding Co., Ltd. (hereinafter referred
to as the Company) and its directors, supervisors and senior executives hereby confirm that there
are no any fictitious statements, misleading statements, or important omissions carried in this report,
and shall take all responsibilities, individual and/or joint, for the facticity, accuracy and
completeness of the whole contents.

Ms. Chen Lin, Chairman of the Board, Mr. Wang Jian, responsible person in charge of accounting
and Ms.Wang Wenxin, principal of the financial department (accounting officer) confirm that the
Financial Report enclosed in this 2018 Annual Report is true, accurate and complete.

All directors were present at the meeting of the Board for deliberating the annual report of the
Company in person.

This report involves future plans and some other forward-looking statements, which shall not be
considered as virtual promises to investors. Investors are kindly reminded to pay attention to
possible risks.

Details of the risk factors and countermeasures of future development have been well-described in
this report, please find in Section IV Business Discussion and Analysis.

The deliberated and approved plan of profit distribution and capital reserve converted into share
capital in the Board Meeting is distributing cash dividend of RMB 0.50 yuan (tax included) for
every 10 shares to all shareholders based on 2,863,277,201 shares of the total currently share capital.
Meanwhile the Company will transfer capital reserve into capital with 1 shares for every 10 shares
to all shareholders based on 2,863,277,201 shares of the total currently share capital. (The actual
amount of the cash dividend distributed and capital reserve transferred will be determined according
to the total share capital on the capital reserved registration date for profit distribution
implementation.)

This report is prepared both in Chinese and English. Should there be any inconsistency between the
Chinese and English versions, the Chinese version shall prevail.




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                                                                   Content




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

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

Section III Overview of the Company’s Business ............................................................................................... 9

Section IV. Business Discussion and Analysis .................................................................................................. 13

Section V. Important Events ............................................................................................................................ 37

Section VI. Changes in Shares and Particulars about Shareholders ................................................................ 59

Section VII. Particulars about Directors, Supervisors, Senior Executives and Employees .............................. 70

Section VIII. Corporate Governance ................................................................................................................ 81

Section IX. Financial Report .......................................................................................................................... 88

Section X. Documents Available for Reference .......................................................................................... 173




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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.

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 galss




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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
                                          南玻集团
Company
Legal English name of the Company         CSG Holding Co., Ltd.
Abbr. of legal English name of the
                                          CSG
Company
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
E-mail                                    securities@csgholding.com


II. Person/Way to contact

                                                     Secretary of the Board                 Representative of security affairs
Name                                      Yang Xinyu                                    Chen Chunyan

                                          CSG Building, No.1 of the 6th Industrial CSG Building, No.1 of the 6th Industrial
Contacts add.
                                          Road, Shekou, Shenzhen, P. R.C.          Road, Shekou, Shenzhen, P. R.C.

Tel.                                      (86)755-26860666                              (86)755-26860666
Fax.                                      (86)755-26860685                              (86)755-26860685
E-mail                                    securities@csgholding.com                     securities@csgholding.com


III. Information disclosure and preparation place

                                          Securities Times, China Securities Journal, Shanghai Securities News, Securities
Newspapers for information disclosure
                                          Daily and Hong Kong Commercial Daily

Website assigned by CSRC to release the
                                          www.cninfo.com.cn
annual report

The place for preparation of the annual
                                          Office of the Board of Directors
report


IV. Registration changes of the Company

Organization code                         Unified social credit code: 914403006188385775

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Changes of main business since listing (if
                                              No changes
applicable)

Previous changes for controlling
                                              No changes
shareholders (if applicable)


V. Other relevant information

CPA firm engaged by the Company

Name of CPA firm                              Asia Pacific (Group) CPAs (special general partnership)

                                              Room 301, building 1, No. 9, Che Gong Zhuang Street, Xicheng District, Beijing,
Offices add. for CPA firm
                                              China
Signing Accountants                           Zhao Qingjun, Zhou Xianhong
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 indexes

Whether it has retroactive adjustment or re-statement on previous accounting data for accounting policy changed and accounting
error correction or not

□Yes      √No

                                                   2018                   2017               Changes over last year         2016

Operating income (RMB)                           10,609,963,011           10,879,400,746                    -2.48%       8,974,083,407

Net profit attributable to shareholders of
                                                    452,965,935                825,388,312                 -45.12%         797,721,576
the listed company (RMB)* note1
Net profit attributable to shareholders of
the listed company after deducting
                                                    367,579,835                745,373,108                 -50.69%         776,950,973
non-recurring gains and losses (RMB)
*note2
Net cash flow arising from operating
                                                  2,130,378,100            2,463,446,156                   -13.52%       2,240,852,120
activities (RMB)
Basic earnings per share (RMB/Share)
                                                            0.16                      0.30                 -46.67%                 0.33
*note3
Diluted earnings per share (RMB/Share)
                                                            0.16                      0.29                 -44.83%                 0.33
*note4

Weighted average ROE (%) *note5                            5.16%                   10.15%                   -4.99%             10.33%

                                                                                             Changes over the end       As at 31 Dec.
                                             As at 31 Dec. 2018     As at 31 Dec. 2017
                                                                                                  of last year              2016

Total assets (RMB)                               19,114,234,184           19,535,002,368                    -2.15%      17,146,815,630

Net assets attributable to shareholders of
                                                  9,103,154,571            8,458,587,873                     7.62%       7,808,915,004
the listed company (RMB)
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Influence of equity incentive expense:
Note (1): Data in aforesaid table has contained the equity incentive expense RMB 141.49 million yuan shared and included into loss
and gain in 2018,and the effect on the net profit attributable to shareholder of listed company was RMB 124.63 million yuan.
Excluding the effect of equity incentive expense share, the net profit attributable to shareholder of listed company in 2018 was RMB
577.59 million yuan, a year-on-year decrease of RMB 247.8 million yuan, or 30.02%
Note (2): Excluding the effect of equity incentive expense share, the net profit attributable to shareholders of the listed company after
deducting non-recurring gains and losses in 2018 was RMB 492.21 million yuan, a year-on-year decrease of RMB 253.16 million
yuan, or 33.96%
Note (3): Excluding the effect of equity incentive expense share, the basic earnings per share in 2018 was RMB 0.21yuan, declined
30% year on year.
Note (4): After excluding the effect of equity incentive expense share, the diluted earnings per share in 2018 was RMB 0.20 yuan,
declined 31.03% year on year.
Note (5): After excluding the effect of equity incentive expense share, the weighted average ROE 2018 was 6.58%, declined 3.57%
year on year.



The total share capital of the company as of the previous trading day of disclosure (share)                             2,863,277,201

Fully diluted earnings per share calculated with latest equity (RMB/share)                                                         0.16


Whether there is corporate bonds
□Yes     √No
Whether there is continuous loss in recent two years

□Yes     √No


VII. Accounting Data Differences under Chinese Accounting Standards (CAS) and
International Financial Reporting Standards (IFRS) and Foreign Accounting Standards

1. Net Income and Equity Differences under CAS and IFRS

□ Applicable     √ Not applicable
No such differences for the Report Period.



2. Net Income and Equity Differences under CAS and Foreign Accounting Standards
□ Applicable     √ Not applicable
No such differences for the Report Period.



3. Reason of the difference between domestic and overseas accounting data
□ Applicable     √ Not applicable




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VIII. Main financial indexes by quarter


                                                                                                                              Unit: RMB

                                                                     Q1                 Q2                 Q3                  Q4

Operating income                                                  2,629,471,994      2,841,085,983    2,680,693,459 2,458,711,575

Net profit attributable to shareholders of the listed
                                                                   159,382,821         193,454,332        116,279,185        -16,150,403
company

Net profit attributable to shareholders of the listed
                                                                   152,948,714         180,489,383         86,201,062        -52,059,324
company after deducting non-recurring gains and losses

Net cash flow arising from operating activities                     60,223,706         704,340,382        646,261,934        719,552,078

Whether there are significant differences between the above-mentioned financial index or its total number and the relevant financial
index disclosed in the Company’s quarterly report and semi-annual report or not
□Yes     √ No


IX. Items and amounts of extraordinary gains/losses

√Applicable      □ Not applicable
                                                                                                                              Unit: RMB

                               Item                                       2018               2017               2016            Note

Gains/losses from the disposal of non-current asset (including
                                                                            -454,368         -1,768,993         -1,759,358
the write-off that accrued for impairment of assets)
Governmental subsidy reckoned into current gains/losses (not
including the subsidy enjoyed in quota or ration according to
                                                                          94,835,539         87,875,417         91,627,439
national standards, which are closely relevant to enterprise’s
business)
Gains on disposal of available-for-sale financial assets, gains
and losses from change of fair values of held-for-transaction
financial assets and financial liabilities except for the
effective hedge business related to normal business of the                                      427,636         -9,850,256
Company, and investment income from disposal of
transactional financial assets and liabilities and financial
assets available for sale

Loss and profit on external entrusted loan                                   534,591

Other non-operating income and expenditure except for the
                                                                          12,099,680         12,076,848          1,306,284
aforementioned items
Other gains/losses satisfied definition of extraordinary profit
                                                                                                             -45,909,181
(gains)/loss

Less: Impact on income tax                                                16,483,870         16,209,135         14,327,585

        Impact on minority shareholders’ equity (post-tax)                5,145,472          2,386,569           316,740

Total                                                                     85,386,100         80,015,204         20,770,603

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Reason shall be provided for the non-recurring profit and loss items defined by the company according to the definition in the No. 1
of Explanatory Announcement on Information Disclosure for Companies Offering their Securities to the Public: Non-recurring Profit
and Loss and the listed non-recurring profit and loss items defined into recurring profit and loss items.
□ Applicable    √ Not applicable




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                   Section III Overview of the Company’s Business

I. Main business of the Company in the report period

CSG is a leading domestic brand of energy-saving glass and a renowned brand of solar PV products and display devices. Its products
and technologies are very popular at home and abroad. Its main business covers R&D, manufacturing and sales of high quality float
glass and architectural glass, solar glass, silicon material, renewable energy products such as PV battery and modules, and new
materials and information display products such as ultra-thin electronic glass and display devices. It also provides one-stop services
such as project development, construction, operation and maintenance of solar photovoltaic power plants.

Flat glass industry
CSG now has 10 float glass production lines representing the most advanced technology in domestic market and 2 solar glass
production lines. The annual capacity of various high-grade float glass has reached more than 2.32 million tons and the annual
capacity of solar processed glass has reached over 0.43 million tons. The Company owns quartz sand raw material bases in Jiangyou,
Sichuan Province and Qingyuan, Guangdong Province. The production bases for flat glass, solar glass of the Company located in
Dongguan, Chengdu, Langfang, Wujiang, and Xianning, which can produce various colors of high-grade float glass and ultra-clear
float glass with thickness from 1.3mm to 25mm. Those products are widely used in high-grade buildings, decoration and furniture,
mirror, automotive windshield, scanner, copier light trans missive plate, home appliance panel, display devices protection and solar
energy field, each performance indicator of which has reached domestic advanced level.
The Company always adheres to innovation, transformation and upgrading, and further enhances the profitability of flat glass
industry by the implementation of differentiated competitive strategy. In 2018, after the Production Line II of the subsidiary Hebei
CSG entered commercial operation, it greatly increased the proportion of CSG Group in the ultra-clear float glass market. After the
subsidiary Chengdu CSG’s Production Line I resumed production, the high-quality automotive glass is used as the main product to
further expand the automotive glass substrate market. The expansion of high value-added markets such as ultra-clear and automotive
glass will further enhance the market competitiveness of CSG's flat glass.

Architectural glass industry
As the nation's largest supplier of high-grade engineering and architectural glass, CSG has five architectural and energy-saving glass
processing centers which are located in Tianjin, Dongguan, Xianning, Wujiang and Chengdu. The Company possesses the
international advanced glass deep-processing equipment and testing instruments, and its products cover all kinds of architectural
glass. R&D and use of coating technology of the Company keep pace with the world and its technology of high-end product is even
of the world’s top level. Following the second generation of energy-saving glass products, the Company has successively developed
the third generation and multi-function energy-saving glass products with continuous improving energy-saving and heat-preservation
effect. Its high-quality energy-saving LOW-E insulating glass has always led the domestic high-end building energy-saving glass
market. At present, the Company’s LOW-E coated glass and LOW-E coated insulating glass have reached annual capacity of more
than 36.00 million square meters and 16.00 million square meters respectively.
The Company’s quality management system for engineering and architectural glass has been respectively approved by organizations
of UK AOQC and Australia QAS. The product quality which meets the national standards of the US, the UK and Australia enables
CSG has an advantage in the international tendering and bidding. Since 1988, CSG's engineers and technicians have been
continuously participating in the formulation and compilation of various national standards and industry standards. Various
high-quality architectural glass of the Company has been used in many landmark buildings at home and abroad, such as Beijing
Capital International Airport, CCTV, China Resources Headquarters Building, Shenzhen KingKey100 Building, Shenzhen Shen Nine
Pioneer Park, Shenzhen Trade Qianhai Center, Ping An International Finance Centre, Hangzhou International Airport, Hangzhou

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Europe finance City, Shanghai Qiantan Iron Lion Gate Center, Chengdu Zhongjiao International Center, Changsha World Trade
Center, Hefei Evergrande Center, Beijing subsidiary administrative center, Beijing Daxing International Airport, Qingdao Jiaodong
International Airport, Chengdu International Finance Center, Hangzhou Hampton and other more than ten Hilton Hotels, Hong Kong
Four Seasons Hotel, Melbourne Airport, Midtown, International Centre of Abu Dhabi and Korea LCT.
Furthermore, the new investment of Jade Glass project construction has been just completed, and will be transferred into operation
shortly after. Meanwhile, the company tries to enhance the technology that will open the high level interior decoration glass market
for CSG in future, which that will improved the comprehensive the advantage of competitive in architectural glass industry.

Solar Energy industry
CSG has entered solar photovoltaic industry since 2005 and is one of enterprises which firstly enter the field in China. After more
than ten years of construction, operation and technological upgrading, CSG has built an industry chain in the field, covering high-
purity polycrystalline silicon materials, high-efficiency silicon wafer, silicon solar cell and modules, and the design and construction
of solar photovoltaic power plants, by which the Company ensures the stable quality and best cost-efficiency of its PV products to
customers.
The Company now produces 9,000 ton/year of high purity polycrystalline silicon, 2.2 GW/year of silicon wafer, 0.85GW/year of
solar cell, and 0.4GW/year of modules. The quality and performance indicators of the Company's polysilicon have reached the
advanced level in the industry and it has reserved electronic-grade polysilicon production technology. Meanwhile, the Company is
also promoting silicon wafer project of Yichang CSG, technological innovation, expansion and reconstruction projects of solar cell
module in Dongguan in order to enhance the anti-risk capacity of its PV industry chain and drive the balanced, stable development of
its PV industry chain. When the projects are completed, the quality and performance indicators of the Company's polysilicon, silicon
wafers and silicon solar cells will be greatly increased cut down the manufacturing costs and the general competitiveness of the chain
will be further improved.
To build the whole solar industry chain, the Company established Shenzhen CSG PV Energy Co., Ltd., a wholly-owned subsidiary, in
2015, of which the mainline business is to invest and develop solar power plants and extend CSG's solar energy industry to cover
highly value-added terminal applications. The Company newly established New Energy Application Department to generally manage
the investment, operation and maintenance of the Company's PV power plants and effectively integrate internal assets, so as to
enlarge and strengthen its solar energy business.

Electronic glass and display industry
The company currently owns four electronic glass production bases, Hebei Shichuang, Yichang Photoelectric, Qingyuan CSG and
Xianning Photoelectric. When Xianning Photoelectric has done the trial in the end 2018, the company industrial scale of window
protection electronic glass and the competitiveness has been improved. CSG electronic glass industry is divided into high and
medium aluminum, with 0.20-8.0mm products categorized into high aluminum glass series products and 0.20-1.1mm products into
medium aluminum glass series products respectively. The products are widely applied in mobile intelligent terminal display and body
protection, ITO conductive component, and extend to military security, new type vehicle display screen, special vehicle, smart home
appliance, etc. Through efficient product R&D and market development, CSG electronic glass are at the main of options of domestic
and foreign famous consumer electronic brands for protective glass base material.
In Dec. 2018, the approval works of phase II project of subsidiary Qingyuan CSG were completed and the construction was
commenced. In this project, unique one-kiln and two-line process is adopted to produce 0.33-1.1mm ultra-white and ultra-thin
electronic glass, 3-4mm or 15-22mm ultra-white special glass at the same time. The project will optimize product structure and
combination of the company in the field of electronic glass product, efficiently cutting down manufacturing costs and improved the
comprehensive competitiveness of the company in electronic glass industry.
Since the establishment of Shenzhen CSG Display Technology Co., Ltd. in 2000, with nearly 20 years of experience, the company's
main products and core technologies cover three major businesses, namely vacuum magnetron sputtering coating, yellow light
pattern forming and TP module processing, forming two complete touch industrial chains. On electronic glass substrate with the
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"coating to yellow light pattern glass forming, glass touch module processing" industrial chain, the main business products are: high,
middle-grade ITO conductive glass, glass Sensor/G - TP prevent and reduce the reverse (AR), module, fingerprint (AF), and a
semipermeable (RT), super-hard film (DLC) and so on glass substrate composite coating of differentiated products. Another industry
chain of "substrate coating flexible yellow light pattern processing flexible touch module processing" is based on flexible optical film.
The main products are: high and medium ITO conductive film, ITO copper film, thin film, film Sensor/ F-TP module, etc. The
manufacturing line of AG glass mainly for the market of vehicle central control has been established by the end of 2018 and will
commercialized in 2019, which will offer a new profit growth for CSG Electronic display device industry. In addition, since 2013,
the company has been developing high-end AG glass substrate, and has been able to successfully produce high-quality
sodium-calcium AG glass and high-alumina AG glass in mass production. With years of development, the CSG glass display device
has become a high-quality supplier of electronic application materials in the display touch-control industry, as well as a supplier of
touch-sensors and TP modules, which can provide customers with a full range of one-stop TP solutions.


II. Major changes in main assets

1. Details of major changes in main assets


         Main assets                                                   Note of major changes


Equity assets                 There was no significant change in equity in the report period.

                              Some of subsidiaries fixed assets turned into construction in progress for technical innovation
Fixed assets
                              /renovation in the report period.

Intangible assets             There was no significant change in intangible assets in the report period.

                              Some of subsidiaries fixed assets turned into construction in progress for technical innovation
Construction in progress
                              /renovation in the report period.

Short term Loans              The company has repaid part of the loan in the report period.

Long term Loans               The company issued new medium-term notes during the report period.


2. Main overseas assets

□ Applicable    √ Not applicable


III. Core Competitiveness Analysis

① The Company currently has built complete industrial chains in the involved industries, which has complementary advantage. In
glass industry, the Company has set up the industry chain as quartz sand → high quality float glass → architectural energy-saving
glass. In the solar energy industry, the Company has finished the comprehensive construction of industry chain from high purity
polycrystalline silicon materials, silicon wafer processing to cell and its module, photovoltaic rolled glass, etc. and extended to
terminal application of PV power plant. With the improvement of technology in the chains, the industrial advantages emerged.
② The Company possesses a complete industry layout. At present, the Company has established large production bases in East
China, West China, South China, North China and Central China, which enables the Company to be closer to the market and serve
the market better.
③ The Company has capability of technology innovation and product innovation. It owns independent intellectual property rights of

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high-end float glass production process. The technology level of ultra-thin electronic glass is in the leading position in China. The
Company also keeps its R&D and production of energy-saving glass in line with the world’s advanced level, and its technique and
technology in the field of solar energy keep leading position in domestic market.
④ The Company possesses high anti-risk capability. It has established an effective internal control system. Meanwhile, the
management and control ability of account receivable and inventory stand in a high level within the industry. CSG’s new
management team has an international perspective and a more open management philosophy. It aims to achieve the transfer of
capacity and continues to expand new business fields along with the national policies of the Belt and Road based on the intensive
development of CSG's main business, making the Company be bigger and stronger, so as to be a comprehensive industrial group.




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                     Section IV. Business Discussion and Analysis

I. Introduction

The past 2018 is a year of changing and turbulence. The global economic growth rate is slowing down and the growth momentum is
weakening. The domestic economy is also facing multiple pressures: macroeconomic investment drives and scale-driven economic
growth met bottlenecks. The transformation of economic restructuring and economic growth momentum is on the way. The pace of
de-leveraging and de-capacity is accelerating, energy costs, raw material costs, environmental safety and compliance costs, and labor
costs are constantly increasing with policy changes. International trade protectionism has risen, and Sino-US trade dispute results and
impact has not yet clear, the overall economic growth pattern has shifted to the path of “innovation-driven” and “high-quality
development”. Seeing in the medium and long term, under the “new normal”, the macro-economic growth has maintained a certain
growth rate, and the national strategy to achieve a “soft landing” while completing economic restructuring has been clarified. Under
the strong decision-making leadership of the country, although the overall growth rate has slowed down slightly, the quality of
economic growth has improved significantly. Especially with the supply-side reform and the regulation of financial markets, China's
economic development is moving forward toward a more stable, healthy and high-quality direction.
In 2018, facing the complex and changing economic environment and increasingly fierce market competition, all the staff of the CSG
Group united as one, rising to the challenge, forged ahead, and calmly responded to the policy and market pressure faced by the
photovoltaic new industries, while promoting the development of traditional core industries and new technology industries. Through
the promotion of innovative products, the adjustment of operating mode and the transformation of resource allocation methods, CSG
strives to resolve the problems in the Group's industrial structure, strengthens the competitive advantages of the energy-saving glass
industry, and consolidates the foundation and kinetic energy of the rapid and healthy development of growth business such as
electronic glass and display devices, actively achieves the overall breakthrough of the photovoltaic industry through technological
innovation and capacity upgrade. CSG strived to obtain operating results in a complicated environment.
During the reporting period, although some income loss compare to last year happened due to the photovoltaic industry's polysilicon
and wafer manufacturing pending production and taking          initiative technology upgrades, the company still achieved operating
revenue of over 10 billion yuan, reaching 10.61 billion yuan, a year-on-year reduction of 269 million yuan, or 2.48%. Although the
glass business segment, electronic glass and display device business segment of the company performance profit increased
significantly compared with the previous year, but due to market factors such as photovoltaic policy changes, the overall performance
of the photovoltaic business sector fell sharply, dragging the company the overall profit level, the company achieved a net profit of
472 million yuan, a year-on-year reduction of 356 million yuan or 43.01%, net profit attributable to shareholders of listed companies
was 453 million yuan, a year-on-year reduction of 372 million yuan, or 45.12%, excluding the impact of equity incentive fees
allocation, the net profit attributable to shareholders of listed companies in 2018 was 578 million yuan, a year-on-year reduction of
248 million yuan, or 30.02%.

 (I) Glass industry
The glass business is the Group's traditional core business and profit support. In 2018, despite the slowdown in the growth of the real
estate market and the adverse market conditions such as negative growth in the automotive industry. The glass business, which is the
CSG'S core industry still, bucking the trend growth. In 2018, the glass industry achieved operating revenue of 7.454 billion yuan, an
increase of 402 million yuan or 5.7% year-on-year. The net profit was 802 million yuan, a year-on-year increase of 93 million yuan,
or 13.17%. The performance of the energy-saving glass industry has once again made a breakthrough, benefiting from the
tremendous management benefits that the company has made from hard work in management, operation, research and development,
market and other aspects.

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Flat glass: In 2018, the flat glass overall maintained a good market. The company vigorously promotes technological innovation and
continuously promotes product differentiation. Through the full play of production capacity, continuous optimization of product
structure, and continuous improvement of production cost control and production efficiency management, the company achieved
increase in both revenue and profit although without significant increase in production capacity. Revenue grew up 5.45%
year-on-year; net profit grew up 2.5% year-on-year. The market share and profit contribution of ultra-white, super-long, ultra-thick,
ultra-thin and other differentiating advantageous products continued to rise.
Architectural glass: CSG Group is a leading enterprise in the domestic architectural energy-saving glass industry. The architectural
glass business is the brand support of CSG, and has formed the quality, service and continuous R&D capabilities that match the
brand. In 2018, architectural glass faces the pressure of the big environment and withstands the test of the market. On the one hand, it
strengthens the brand maintenance work, leads the whole industry to purify the market, forms an industry atmosphere that respecting
the brand, respecting technology and quality, which firmly strengthened the CSG brand influence; on the other hand, through
rational optimization of sales strategies, strengthening industry synergies, and through continuous internal production optimization
and improvement, quality management, order management, promoting factory automation production process improvement and
optimizing cost reduction and efficiency, as well as energy saving, the business performance has been greatly improved, with a
revenue increase of 2.53% year-on-year; a net profit increase of 55.38% year-on-year. The introduction of a new national
urbanization strategy, and the confirmation of the national strategy of the integration of Beijing-Tianjin-Hebei, Greater Bay District,
the integration of the Yangtze River Delta, will bring new market opportunities to the company's architectural glass business. In
addition, in 2018, the company invested in the construction of Dongguan CSG JingYu New Materials Co., Ltd. to expand the
company's new business growth point in the field of special decorative glass materials.

(II) Electronic glass and display industry
The electronic glass and display device business is the company's high-growth business segment. In 2018, it achieved revenue of 960
million yuan, a year-on-year increase of 9.86%; net profit of 142 million yuan, a year-on-year increase of 140.26%. The company's
electronic glass keeps pace with the development trend of the industry, continuously increases R&D investment and technology
update, and its competitive ability and brand influence continues to improve. In 2018, its operating income and net profit both
reached record highs. The company's ultra-thin electronic glass products, especially the high-aluminum ultra-thin electronic glass
products, have further increased their domestic market share. The domestically produced electronic glass products led by CSG will
actively expand downstream applications to replace imported products through quality and technology benchmarking international
brands. CSG Electronic Glass has gradually grown into another Celebrity brand business card. In place with Xianning Photoelectric
will be transferred to commercial operation in 2019, and the construction of Qingyuan ultra-white special glass and ultra-thin
electronic glass “one kiln two lines” project will further raise the threshold of electronic glass business and enhance the company's
competitive advantage in the field.
The company's display device industry has long-term technology accumulation and complete industrial chain advantages. In 2018, it
seized the opportunity of the automotive touch-control market, and the shipment volume and profitability of TP module and glass
yellow light business increased significantly. The AG glass production line, which is mainly for the automotive central control panel
market, was completed at the end of 2018 and will be transferred to commercial operation in 2019, which will provide a new profit
growth point for CSG's display device industry.

(III) Solar Energy industry
Affected by the policy change, the whole solar industry experienced a decline in the operating performance in 2018. The profits of all
segments in the industrial chain were severely squeezed further by the expansion of new procuction capacity with new technology of
low-energy-priced regions. The trend of new production capacity, new technology replacing the old has been speeded up. CSG solar
energy industry, especially in the manufacturing base of upstream materials such as polysilicon production and ingots, due to the
relatively high electricity price in the located area, and the prolonged process of introducing new wafer production technology, is
seriously affected by the sudden shrinkage of the downstream market. Facing such difficulties, the company has decided to lead the

                                                                                14
                                                                                                               CSG Annual Report 2018


industry to breakthrough the difficulties by developing the capacity upgrade project of the “large-scale chip applied electronic grade
polysilicon”. At the same time, the company will continuously improve its sustainable operational capability through improving
production efficiency, reducing costs, and improving the industry’s competitiveness.
In 2018, the installed capacity of the company's photovoltaic power plants reached 132 MW, with the annual cumulative power
generation of 131.54 million KWH, an increase of 25.99 million KWH year-on-year. The operation of the company's photovoltaic
power station is stable. Affected by the changes in the solar industry, especially in the material production end market environment,
the solar industry achieved a total operating income of 2.342 billion yuan in 2018, a decrease of 784 million yuan or 25.08%
compared with the same period of last year; net profit reached -237 million yuan, a decrease of 432 million yuan year-on-year, a drop
of 222%.


II. Main business analysis

1. Overview

                                                                                                                               Unit: RMB

              Items                      2018                 2017           Range of Change                  Analysis of reasons

Operating income                     10,609,963,011        10,879,400,746                 -2.48%

Operating costs                        8,120,481,894        8,216,358,372                 -1.17%

                                                                                                   Mainly due to the increase in
Sales expenses                          354,983,459           336,131,723                 5.61% transportation costs and employee
                                                                                                   compensation

                                                                                                   Mainly due to the amortization of
Administration expenses                 731,215,251           588,652,397                24.22%
                                                                                                   expenses in equity incentives

R&D expenses                            338,791,891           330,677,375                 2.45%

                                                                                                   Mainly due to the increase in interest
Financial expenses                      349,403,487           315,961,080                10.58%
                                                                                                   expenses

                                                                                                   Mainly due to the decrease in cash
Net cash flow arising from
                                       2,130,378,100        2,463,446,156                -13.52% received from sales of goods and
operating activities
                                                                                                   provision of labor services.

                                                                                                   Mainly due to the decrease in cash
Net cash flow arising from                                                                         paid for purchasing fix asset,
                                        -778,807,979        -1,220,130,334               -36.17%
investment activities                                                                              intangible assets and other long term
                                                                                                   assets.

                                                                                                   Mainly due to in previous term
Net cash flow arising from                                                                         fund received through financing
                                      -1,588,458,276          634,295,928               -350.43%
financing activities                                                                               lease which is no longer carrying out
                                                                                                   in this reporting period.




                                                                             15
                                                                                                     CSG Annual Report 2018


2. Revenue and cost

(1) Constitution of operation revenue
                                                                                                                 Unit: RMB

                                    2018                                      2017
                                                                                                          Increase/decrease
                                         Ratio in operation                        Ratio in operation
                        Amount                                  Amount                                         y-o-y
                                              revenue                                   revenue

total of operating
                        10,609,963,011                  100%    10,879,400,746                    100%                 -2.48%
income

According to industry

Glass industry           7,453,555,124              70.25%       7,051,910,295                64.82%                   5.70%

Solar energy
                         2,341,776,474              22.07%       3,125,611,234                28.73%                -25.08%
industry

Electronic glass &
                          960,075,428                   9.05%     873,868,480                     8.03%                9.86%
Display industry

Others                     58,900,937                   0.56%      58,687,566                     0.54%                0.36%

Amount of
                          -204,344,952               -1.93%       -230,676,829                 -2.12%               -11.42%
unutilized

According to product

Glass products           7,453,555,124              70.25%       7,051,910,295                64.82%                   5.70%

Solar energy
                         2,341,776,474              22.07%       3,125,611,234                28.73%                -25.08%
products

Electronic glass &
                          960,075,428                   9.05%     873,868,480                     8.03%                9.86%
Display products

Others                     58,900,937                   0.56%      58,687,566                     0.54%                0.36%

Amount of
                          -204,344,952               -1.93%       -230,676,829                 -2.12%               -11.42%
unutilized

According to region

Mainland China           9,151,411,893              86.25%       9,506,249,433                87.38%                   -3.73%

H.K. China                196,186,618                   1.85%     434,551,436                     3.99%             -54.85%

Europe                     53,541,882                   0.51%      26,534,686                     0.24%             101.78%

Asia (excluding
Mainland China and       1,125,389,041              10.61%        848,958,711                     7.80%                32.56%
H.K.)

Australia                  39,605,066                   0.37%      37,937,222                     0.35%                4.40%

North America              31,189,420                   0.29%          6,030,936                  0.06%             417.16%

Other regions              12,639,091                   0.12%      19,138,322                     0.18%             -33.96%

                                                                  16
                                                                                                                   CSG Annual Report 2018


(2) List of the industries, products or regions exceed 10% of the operating income or operating profits of
the Company

√Applicable       □ Not applicable

                                                                                                                               Unit: RMB

                                                                                Increase/decrease Increase/decrease Increase/decrease
                          Operating
                                         Operating cost    Gross profit ratio        of operating     of operating cost   of gross profit
                           revenue
                                                                                     revenue y-o-y         y-o-y           ratio y-o-y

According to industry

Glass industry           7,453,555,124     5,400,796,739             27.54%                  5.70%               3.50%              1.53%

Solar energy
                         2,341,776,474     2,196,725,216              6.19%                 -25.08%            -12.60%            -13.39%
industry

Electronic glass
and display                960,075,428      667,840,703              30.44%                  9.86%               2.43%              5.05%
device industry

According to product

Glass products           7,453,555,124     5,400,796,739             27.54%                  5.70%               3.50%              1.53%

Solar energy
                         2,341,776,474     2,196,725,216              6.19%                 -25.08%            -12.60%            -13.39%
products

Electronic glass
& Display device           960,075,428      667,840,703              30.44%                  9.86%               2.43%              5.05%
products

According to region

Mainland China           9,151,411,893     6,959,210,746             23.95%                  -3.73%             -2.61%             -0.88%

Asia (other than
Mainland China           1,125,389,041      934,918,533              16.92%                 32.56%             34.41%              -1.15%
and Hongkong)

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 the report period
□ Applicable      √ Not applicable


(3) Whether the Company’s goods selling revenue higher than the service revenue

Whether the Company’s goods selling revenue higher than the service revenue
√Yes      □ No




                                                                                17
                                                                                                              CSG Annual Report 2018


                                                                                                                    Increase/decrease
       Industry                        Item              Unit                 2018                  2017
                                                                                                                        y-o-y (%)

                           Sales volume           10,000-ton                            274                   264                 3.79%

Flat glass                 Output                 10,000-ton                            272                   270                 0.74%

                           Inventory              10,000-ton                               6                    9               -33.33%

                           Sales volume           10,000-M2                           2,471                 3,027               -18.37%

Architectural glass        Output                 10,000-M2                           2,500                 3,045               -17.90%

                           Inventory              10,000-M2                              72                    49                46.94%

                           Sales volume           ton                                39,931                34,315                16.37%

Electronic glass           Output                 ton                                43,275                32,073                34.93%

                           Inventory              ton                                 5,742                 2,212              159.58%

                           Sales volume           ton                                 4,753                 2,434                95.28%

Polysilicon                Output                 ton                                 7,692                 8,101                -5.05%

                           Inventory              ton                                    38                   122               -68.85%

                           Sales volume           10,000-piece                       26,346                34,779               -24.25%

Silicon wafer              Output                 10,000-piece                       25,715                34,840               -26.19%

                           Inventory              10,000-piece                          421                   156              169.87%

                           Sales volume           MW                                    836                   540                54.81%

Solar cell                 Output                 MW                                    917                   733                25.10%

                           Inventory              MW                                     19                    15                26.67%

Reasons for y-o-y relevant data with over 30% changes
√Applicable       □ Not applicable
1. Flat glass: The decrease of inventory is mainly caused by reasonable control of delivery pace and appropriate reduction of
inventory level.
2. Architectural glass: Although, because of the sales strategy adjustment and the products composition optimization, sales volume
and output in architectural glass slightly decreases, the profit level of architectural glass significantly improved. Meanwhile, in order
to fit with the adjustment of the sales strategy, inventory reserve is reasonably increased.
3. Electronic glass: The production and inventory increase is mainly due to production capacity increased after the completion of
technical renovation of some subsidiaries taken in the second half of 2017.
4. Polysilicon: The increase in sales volume is mainly due to the increase of the external sales volume of polysilicon, which is caused
by the technological renovation in part of silicon wafers production in this year. The decrease of inventory is mainly due to the
production capacity of polysilicon cut down caused by the technological renovation in polysilicon production.
5. Silicon wafer: The decrease in sales volume and output is mainly due to the technological renovation in part of silicon wafers
production in this year. The increase in inventory is mainly due to the sudden reduction in system installment in downstream industry
caused by new government policy issued on solar industry in 31st May.
6. Solar cell: The increase in sales volume is mainly due to the increase in production capacity.



                                                                              18
                                                                                                                   CSG Annual Report 2018


(4) Fulfillment of significant sales contracts signed by the Company up to the report period

□ Applicable      √ Not applicable


(5) Constitution of operation cost
Constitution of operation cost of main business
Industry classification
                                                                                                                                Unit: RMB

                                                     2018                                      2017
                                                                                                                           Increase/decrease
     Industry                Item                         Ratio in operation                        Ratio in operation
                                           Amount                                    Amount                                     y-o-y
                                                                cost                                      cost

                     Raw material         4,250,705,139             79.08%          3,950,753,501             76.28%                    7.59%

                     Labor wages           506,600,563                 9.42%         483,035,118                 9.33%                  4.88%
Glass industry
                     Manufacturing
                                           618,127,419              11.50%           745,385,164              14.39%                -17.07%
                     costs

                     Raw material          437,942,818              65.75%           407,632,245              62.46%                    7.44%
Electronic glass
                     Labor wages             86,736,184             13.02%            76,167,671              11.67%                 13.88%
& Display
industry             Manufacturing
                                           141,429,615              21.23%           168,846,577              25.87%                -16.24%
                     costs

                     Raw material         1,758,180,912             80.99%          2,045,079,539             82.01%                -14.03%

Solar energy         Labor wages           164,144,458                 7.56%         193,384,939                 7.75%              -15.12%
industry
                     Manufacturing
                                           248,666,105              11.45%           255,426,988              10.24%                 -2.65%
                     costs

Product classification

                                                                                                                                  Unit: RMB

                                                     2018                                       2017
                                                                                                                           Increase/decrease
     Product                 Item                         Ratio in operation                         Ratio in operation
                                           Amount                                     Amount                                     y-o-y
                                                                 cost                                       cost

                     Raw material         4,250,705,139                 79.08%       3,950,753,501               76.28%                 7.59%

                     Labor wages           506,600,563                  9.42%         483,035,118                  9.33%                4.88%
Glass products
                     Manufacturing
                                           618,127,419                  11.50%        745,385,164                14.39%             -17.07%
                     costs

                     Raw material          437,942,818                  65.75%        407,632,245                62.46%                 7.44%
Electronic glass
                     Labor wages             86,736,184                 13.02%          76,167,671               11.67%              13.88%
& Display
products             Manufacturing
                                           141,429,615                  21.23%        168,846,577                25.87%             -16.24%
                     costs

Solar energy         Raw material         1,758,180,912                 80.99%       2,045,079,539               82.01%             -14.03%
                                                                               19
                                                                                                           CSG Annual Report 2018


products              Labor wages                164,144,458          7.56%        193,384,939             7.75%            -15.12%

                      Manufacturing
                                                 248,666,105         11.45%        255,426,988            10.24%              -2.65%
                      costs


(6) Whether the consolidated scope changed during the report period

√ Yes       □No
On February 11, 2018, the group established Qingyuan CSG quartz material co., Ltd. As of December 31, 2018, the group has made a
monetary capital contribution of 6 million yuan, and the group holds 100% of its shares.
On March 30, 2018, the group established Dongguan CSG Jingyu new material co., Ltd. As of December 31, 2018, the group has
made a monetary capital contribution of 24 million yuan, and the group holds 80% of its shares.
On May 22, 2018, the group set up Changshu CSG new energy co., Ltd. As of December 31, 2018, the group has not invested, and
the group holds 100% of its shares.


(7) Major changes or adjustment in business, product or service of the Company in the report period

□ Applicable       √ Not applicable


(8) Major customers and major suppliers

Major customers of the Company

Total sales to the top five customers (RMB)                                                                            863,669,956

Proportion in total annual sales volume for top five customers                                                               8.14%

Information of the top five customers of the Company

    Serial                    Name of customer                     Sales volume (RMB)              Proportion in total annual sales

1             Customer A                                                             274,833,538                             2.59%

2             Customer B                                                             259,752,265                             2.45%

3             Customer C                                                             118,336,100                             1.12%

4             Customer D                                                             108,440,154                             1.02%

5             Customer E                                                             102,307,899                             0.96%

Total                                                                                863,669,956                             8.14%

Other statement of main customers
□ Applicable       √ Not applicable


Major suppliers of the Company

Total purchase amount from the top five suppliers (RMB)                                                              1,493,214,098

Proportion in total annual purchase amount from the top five suppliers                                                      18.06%



Information of the top five suppliers of the Company

                                                                           20
                                                                                                                CSG Annual Report 2018


                                                                                                         Proportion in total annual
    Serial                   Name of supplier                  Purchase amount (RMB)
                                                                                                                  purchase

1               Supplier A                                                            463,537,163                                  5.61%

2               Supplier B                                                            368,331,899                                  4.46%

3               Supplier C                                                            255,739,892                                  3.09%

4               Supplier D                                                            226,760,639                                  2.74%

5               Supplier E                                                            178,844,505                                  2.16%

Total                                                                                1,493,214,098                                18.06%

Other statement of main suppliers
□ Applicable      √ Not applicable


3. Expenses

                                                                                                                               Unit: RMB

                                       2018           2017            Increase/decrease y-o-y              Note of major changes

Sales expense                          354,983,459    336,131,723                           5.61%

                                                                                                     Mainly due to the amortization
Management expense                     731,215,251    588,652,397                          24.22%
                                                                                                     of expenses in equity incentives

                                                                                                     Mainly due to the increasing of
Financial expense                      349,403,487    315,961,080                          10.58%
                                                                                                     interest costs.

R&D expenses                           338,791,891    330,677,375                           2.45%


 4. R&D expenses

√Applicable      □ Not applicable
The Company always emphasizes R&D of new products, new technology and new craft, and R&D aims to stay close to the market,
production and industry.


R&D investment of the Company

                                                                  2018                       2017                      Ratio of change

Number of R & D personnel (person)                                             146                        134                      8.96%

Ratio of number of R&D personnel                                          1.35%                         1.11%                      0.24%

Amount of R & D investment (RMB)                                    381,711,070                368,237,629                         3.66%

Ratio of the R&D investment to the operating income                       3.60%                        3.38%                       0.22%

Amount of the capitalized R&D investment (RMB)                       29,735,459                 43,122,431                       -31.04%

Ratio of the capitalized R&D investment to the R&D
                                                                          7.79%                       11.71%                      -3.92%
investment

Reason of remarkable changes over the last year of the ratio of the total R&D investment amount to the operating income
                                                                          21
                                                                                                               CSG Annual Report 2018


□ Applicable    √ Not applicable
Reason of substantial change of the ratio of the R&D investment capitalization and its reasonable explanation
□ Applicable    √ Not applicable


5. Cash flow

                                                                                                                            Unit: RMB

                          Item                                      2018                     2017             Increase/decrease y-o-y

Subtotal of cash in-flow from operation activity                   12,086,856,666          12,256,615,740                       -1.39%

Subtotal of cash out-flow from operation activity                   9,956,478,566           9,793,169,584                        1.67%

Net cash flow from operation activity                               2,130,378,100           2,463,446,156                      -13.52%

Subtotal of cash in-flow from investment activity (i)                  35,327,557             192,127,040                      -81.61%

Subtotal of cash out-flow from investment activity (ii)               814,135,536           1,412,257,374                      -42.35%

Net cash flow from investment activity (iii)                         -778,807,979          -1,220,130,334                      -36.17%

Subtotal of cash in-flow from financing activity (iv)               4,672,680,876           8,129,917,929                      -42.52%

Subtotal of cash out-flow from financing activity                   6,261,139,152           7,495,622,001                      -16.47%

Net cash flow from financing activity (v)                          -1,588,458,276             634,295,928                    -350.43%

Net increased amount of cash and cash equivalent (vi)                -234,626,252           1,875,186,175                     -112.51%

Relevant data year-on-year major changes in the main influencing factors
√Applicable    □ Not applicable
(i) It is mainly caused by the decrease of cash received in connection with other investment activities.
(ii) It is mainly caused by the decrease of cash paid for purchasing/constructing fixed assets, intangible assets and other long-term
assets.
(iii) It is mainly caused by the decrease of cash paid for purchasing/constructing fixed assets, intangible assets and other long-term
assets.
(iv) It is mainly due to the decrease in cash received in connection with leverage lease and interest free loans.
(v) Mainly due to in previous term fund received through financing lease which is no longer carrying out in this reporting period.
(vi) It is mainly caused by the decrease of cash inflow of financing activities.


Notes to the reason of the significant differences between the net cash flow from the operating activities and the net profits of the
year during the report period
√Applicable    □ Not applicable
Adjustment for the difference between net profit and amount of cash flow from operation activity for the year as follows:
                                                                                                                            Unit: RMB

Net profit                                                                                                                472,208,588

Plus: impairment of assets                                                                                                136,546,150

      Depreciation of fixed assets                                                                                        965,935,450



                                                                              22
                                                                                                                    CSG Annual Report 2018



     Amortization of intangible assets                                                                                          50,567,703

     Net change in safe production costs                                                                                         2,843,662

     Amortization of long-term deferred expenses                                                                                 1,647,906

     Share-based pay for employees                                                                                             141,486,074

     Net loss/ (gains) on disposal of fixed assets and intangible assets                                                           454,368

     Financial expenses                                                                                                        401,627,067

     Deferred income tax assets increase                                                                                       -58,656,656

     Increase in deferred income tax liabilities                                                                                 1,202,886

     Decrease in inventories                                                                                                    85,267,118

     Increase in operating receivables                                                                                         -63,345,244

     Decrease in operating payables                                                                                             -7,406,972

Net cash flow from operating activities                                                                                      2,130,378,100


III. Analysis of the non-core business

√Applicable    □ Not applicable
                                                                                                                                 Unit: RMB

                            Amount               Ratio in total profit                  Note for the reason               Sustainable or not

                                                                         Mainly due to decrease in value of long term
Asset impairment               136,546,150                    25.07%                                                             No
                                                                         assets and goodwill

Non-operating                                                            Mainly due to the penalty of the contracts and
                                13,858,651                     2.54%                                                             No
income                                                                   the un-payable accounts

Non-operating                                                            Mainly due to the appraisals of the deviation
                                    1,541,471                  0.28%                                                             No
expense                                                                  electric quantity

Other Income                    94,618,039                    17.37% Mainly due to government subsidy                            No


IV. Assets and liabilities

1. Major changes of assets and liabilities composition

                                                                                                                                 Unit: RMB

                           As at 31 Dec. 2018                   As at 31 Dec. 2017

                                           Proportion                          Proportion Change of
                                                                                                              Notes of major changes
                          Amount            in total           Amount            in total proportion
                                                assets                           assets

Monetary funds          2,226,447,720            11.65%      2,462,605,764        12.61%       -0.96%

Accounts receivable       592,233,312              3.10%       638,238,290         3.27%       -0.17%



                                                                                   23
                                                                                                               CSG Annual Report 2018


                                                                                                 Mainly due to the decrease in
Advance payment                91,176,675      0.48%       143,848,023        0.74%     -0.26%
                                                                                                 prepayment for materials

Inventory                    600,139,750       3.14%       685,895,317        3.51%     -0.37%

Other Current                                                                                    Mainly due to new entrusted loans in
                             445,327,449       2.33%       200,847,989        1.03%      1.30%
Assets                                                                                           the current period

                                                                                                 Mainly due to some subsidiaries
Fix assets                 9,930,843,775      51.96% 11,540,769,697           59.08%    -7.12% transferred the    fixed assets to
                                                                                                 technical projects under construction

                                                                                                 Mainly due to some subsidiaries
Construction in
                           2,559,179,442      13.39%     1,417,624,618        7.26%      6.13% transferred the    fixed assets to
process
                                                                                                 technical projects under construction

Long-term deferred                                                                               Mainly due to amortization of land
                               12,746,609      0.07%         2,223,397        0.01%      0.06%
 expenses                                                                                        lease payments

Deferred income tax                                                                              Mainly due to the increase in share
                             139,529,518       0.73%        80,872,862        0.41%      0.32%
 assets                                                                                          payment and tax losses

                                                                                                 Mainly due to repayment of part of
Short-term loans           2,922,679,590      15.29%     3,704,630,909        18.96%    -3.67%
                                                                                                 the loan

                                                                                                 Mainly due to the new issuance of
Long-term loans            2,315,700,000      12.12%     1,554,120,000        7.96%      4.16%
                                                                                                 medium-term notes

Long term Accounts                                                                               Mainly due to the repayment of
                             529,910,796       2.77%     1,161,794,247        5.95%     -3.18%
payable                                                                                          leverage leases in the current period

Other                                                                                            Mainly due to changes in foreign
Comprehensive                   5,080,234      0.03%         1,948,943        0.01%      0.02% currency statement translation
Income                                                                                           differences

                                                                                                 Mainly due to increased investment in
Special Reserve                 6,068,600      0.03%         3,224,938        0.02%      0.01%
                                                                                                 safety production

                                                                                                 Mainly due to the first phase of the
Treasury stock               277,180,983       1.45%       417,349,879        2.14%     -0.69% restricted equity incentive stock
                                                                                                 unlocked


2. Assets and liabilities measured at fair value

□ Applicable       √ Not applicable


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


             Item                Limited amount                                        Limited reason

Monetary funds                          1,320,807   Limited margin transfer

Fix assets                          2,381,348,551   Limited of Leveraged lease and Mortgage loan


                                                                              24
                                                                                                          CSG Annual Report 2018


Total                                2,382,669,358


V. Investment

1. Overall situation

√Applicable    □ Not applicable

    Investment in the report period        Investment in the same period of last
                                                                                                    Changes
                (RMB)                                  year ( RMB)

                          814,135,536                             1,412,257,374                                            -42.35%


Reasons for large fluctuation:Mainly due to the decrease in cash paid for the purchase and construction of fixed assets, intangible
assets and other long-term assets.


2. The major equity investment obtained in the report period

□ Applicable    √ Not applicable




                                                                              25
                                                                                                                                                                                  CSG Annual Report 2018


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

         √Applicable    □ Not applicable
                                                                                                                                                                                         Unit: RMB 0,000

                                                              Accumulativ
                                                               e amount                                                                        Accumulative                              Date of
                           Fixed                  Amount                                                                                                           Reasons for not                     Index of
                                                                actually                                                                         revenue                                disclosure
                Way of     asset       Industry invested in                                                                        Expected                     achieving the planned                 disclosure
    Project                                                   invested by Source of funds Progress of project (ongoing projects)               achieved by                                 (if
               investment investme involved the report                                                                              return                         progress and the                      (if
                                                               the end of                                                                      the end of the                           applicable
                           nt or not              period                                                                                                           expected return                   applicable)
                                                               the report                                                                      report period                                   )
                                                                period

                                                                                           CSG plans to construct PV power
                                                                                           plants within two years from 2016 to
                                                                                           2017. Its wholly-owned subsidiary,
                                                                                           Shenzhen CSG PV Energy Co., Ltd.
                                                                                           will self-build 200MW and the
                                                                            Own funds and remaining 140MW will be
PV power                               Manufac                                                                                                                                                       Notice
                                                                            loans from     constructed by CSG with Qibin                                        Part of the project has January
plant          Self-built Yes          turing      1,306        26,214                                                                 4,344           2,399                                         number:
                                                                            financial      Group. During 2016 to 2018,                                          been completed.         22, 2016
investment                             industry                                                                                                                                                      2016-006
                                                                            institutions   Shenzhen CSG PV developed and
                                                                                           built a total of 78MW of photovoltaic
                                                                                           power stations, including 58MW of
                                                                                           distributed photovoltaic power plants
                                                                                           and 20MW of centralized
                                                                                           photovoltaic power plants.

4 million ㎡                           Manufac                              Own funds and The Company plans to construct a 4                                    The project was         May 21,      Notice
               Self-built Yes                      9,318        60,776                                                                10,543
light guide                            turing                               loans from     million square meters PV glass                                       transferred to          2016         number:

                                                                                                                   26
                                                                                                                                                      CSG Annual Report 2018
plate and PV                      industry                     financial       production line for new type ultra-thin            commercial operation               2016-025
glass                                                          institutions    LCD display. The line is also                      in January 2019.
production                                                                     provided with a capacity of higher
line                                                                           strength ultra-thin electronic glass
                                                                               than CSG Qingyuan. The equity of
                                                                               Xianning Feng Wei Technology Co.,
                                                                               Ltd. has been acquired at 2016 and
                                                                               the project has been done at
                                                                               December.

Cold repair                                                                    The former 600T line of float glass of
                                                               Own funds and                                                      The project was
upgrading of                      Manufac                                      Hebei CSG was upgraded to produce                                                     Notice
                                                               loans from                                                         transferred to          April 9,
the first line   Self-built Yes   turing     12,405   12,405                   2mm~19mm glass. The project was           3,887                                       number:
                                                               financial                                                          commercial operation 2018
(600T) of                         industry                                     started on September 26, 2018 and                                                     2018-012
                                                               institutions                                                       in January 2019.
Hebei CSG                                                                      was completed in December 2018.

                                                                               It is planned to fully implement the
                                                                               diamond wire cutting technology in
                                                                               the production of silicon wafers,
                                                                               introduce the casting single crystal
Yichang CSG
                                                                               technology and the wet black silicon
Polysilicon                                                    Own funds and
                                  Manufac                                      technology, and upgrade the                        No gains as the                    Notice
wafer capacity                                                 loans from                                                                                 July 28,
                 Self-built Yes   turing      595      595                     production capacity of the 1.3 GW         12,599   project is in the                  number:
technology                                                     financial                                                                                  2018
                                  industry                                     polysilicon wafers in the early stage              construction period                2018-040
upgrade                                                        institutions
                                                                               of the company to form an annual
project
                                                                               output of about 1.2 GW of cast single
                                                                               wafer. And annual production
                                                                               capacity of about 0.8GW wet black
                                                                               silicon wafer.

Qingyuan         Self-built Yes   Manufac     34       34      Own funds and The company plans to adopt an               16,420   No gains as the         December Notice

                                                                                                        27
                                                                                                                                                    CSG Annual Report 2018
CSG                              turing                    loans from      advanced design concept of one kiln                project is in the         22, 2018    number:
Ultra-clean                      industry                  financial       and two lines to build a kiln two-line             construction period                   2018-072
electronic                                                 institutions    (80+620T/D) ultra-white electronic
glass and                                                                  and ultra-white special glass
ultra-white                                                                production line with a daily melting
special glass                                                              capacity of 700 tons in Qingyuan
production                                                                 CSG. The first line plan is 80T/ D
line                                                                       design, will produce 0.33-1.1mm, and
construction                                                               consider 2mm production capacity,
project                                                                    mainly produces electronic display
                                                                           tempered protective glass for mobile
                                                                           phones. The second-line plan is
                                                                           designed according to 620T/D, with
                                                                           two series of 3-4mm and 15-22mm,
                                                                           5-12mm as the transition, mainly
                                                                           producing AG anti-glare, "exposure
                                                                           glass" for scanning and copying
                                                                           machine, TCO and battery for thin
                                                                           film battery. Ultra-white special glass
                                                                           such as front plate and back plate.

                                                                           CSG has added 1GW capacity of                      Project revenue
                                                                           high-efficient polysilicon wafer to                cannot be accounted
                                                                           achieve 2.2GW capacity of                          for separately. The       January     Notice
Yichang CSG                                                Own funds and
                                 Manufac                                   polysilicon wafer. Construction of the             company has decided 06, 2016, number:
to add a 1GW                                               loans from
                Self-built Yes   turing     951   46,625                   first 500 MW capacity of polysilicon      14,853   to stop the               April 16,   2016-001、
silicon wafer                                              financial
                                 industry                                  wafer was completed in September                   implementation of the 2016, July 2016-018、
project                                                    institutions
                                                                           2017. The company has decided to                   post-500MW capacity 28, 2018          2018-040
                                                                           stop the implementation of the other               project. For details,
                                                                           500MW capacity project. For details,               please refer to the

                                                                                                    28
                                                                                                                              CSG Annual Report 2018
                                                              please refer to the announcement of         announcement of the
                                                              the resolution of the extraordinary         resolution of the
                                                              meeting of the 8th Board of Directors       extraordinary meeting
                                                              in 2018.                                    of the 8th Board of
                                                                                                          Directors in 2018.

                                                              Plan to establish a production line for
Hebei Panel
                                                              medium-alumina ultra-thin electronic
Glass project
                                                              glass in Hebei Panel Glass, using
of                               Manufac                                                                                                      Notice
                                                              clean natural gas as the fuel, and          The project has no      October
medium-alumi Self-built Yes      turing     1,266 Own funds                                                                                   number:
                                                              produce 0.33mm~1.1mm                       income at present       29, 2014
na ultra-thin                    industry                                                                                                     2014-030
                                                              medium-alumina ultra-thin glass with
electronic
                                                              float process. The project was still in
glass
                                                              preparation.

Yichang CSG                                                   Plan to build a crystalline silicon solar
700MW                            Manufac                      cell production line with annual                                                Notice
                                                                                                          The project was         December
crystalline     Self-built Yes   turing                       capacity of 700MW. The project was                                              number:
                                                                                                          suspended.              25, 2010
silicon solar                    industry                     suspended and further investment will                                           2010-046
cell project                                                  be based on actual industry situations.

Expanding                                                     Plan to expand the solar module
500MW solar                      Manufac                      production line with annual capacity                                            Notice
                                                                                                          The project was         January
module          Self-built Yes   turing                       of 500MW. The project was                                                       number:
                                                                                                          suspended.              19, 2011
project in                       industry                     suspended and further investment will                                           2011-003
Dongguan                                                      be based on actual industry situations.

Relocation                                                    The Company plans to construct a
and equipment                    Manufac                      module workshop in Xianning, Hubei                                              Notice
                                                                                                          The project was         April 16,
upgrading of    Self-built Yes   turing                       Province, of which the final capacity                                           number:
                                                                                                          suspended.              2016
the solar                        industry                     will be 500MW. By relocation of                                                 2016-018
module                                                        some of the module equipment of its

                                                                                        29
                                                                                                                                           CSG Annual Report 2018
production                                                     subsidiary, Dongguan CSG PV
line in                                                        Technology Co., Ltd. and purchase of
Dongguan                                                       some new equipment, the first stage
                                                               capacity of the Xianning workshop
                                                               will be 300MW and, afterwards, it
                                                               will be expanded to 500MW as
                                                               required upon the market conditions.

Solar online
self-cleaning
                                 Manufac                       The Company plans to construct an                                                           Notice
coated glass                                                                                                             The project was       April 16,
                Self-built Yes   turing                        online self-cleaning coated glass line                                                      number:
project of                                                                                                               suspended.            2016
                                 industry                      in Dongguan.                                                                                2016-018
Dongguan
CSG

                                                               The Company plans to construct an
                                                               architectural glass plant in Negeri
Malaysia-inve
                                 Manufac                       Sembilan, Malaysia. The Phase I                                                             Notice
sted                                                                                                                     The project was       April 16,
                Self-built Yes   turing                        capacity of the newly-built plant will                                                      number:
architectural                                                                                                            suspended.            2016
                                 industry                      be 1,200,000 square meters insulating                                                       2016-018
glass plant
                                                               glass and 1,000,000 square meters
                                                               single coated glass.

Total                                       24,609   147,915                                            62,646   2,399




                                                                                        30
                                                                                                                      CSG Annual Report 2018


    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 such case during the report period.


    VI. Sales of major assets and equity

    1. Sales of major assets

    □ Applicable        √ Not applicable


    2. Sales of major equity

    □ Applicable        √ Not applicable


    VII. Analysis of main holding companies and joint -stock companies

    √Applicable        □ Not applicable

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


                                                                                                                                      Unit: RMB
   Name of                                           Registered
                      Type         Main business                  Total assets   Net Assets    Operating revenue   Operating profit     Net profit
   company                                            capital

                                Development,

Chengdu CSG                     manufacture and
                  Subsidiary                       260 million    994,562,363    592,149,512     1,102,892,837       216,021,025       183,649,322
Glass Co., Ltd.                 sales of various

                                special glass

                                Development and

Xianning CSG                    manufacture and
                  Subsidiary                       235 million    824,479,862    465,476,562       776,293,550       112,165,322       103,106,758
Glass Co., Ltd.                 sales of various

                                special glass


                                                                                  31
                                                                                                                  CSG Annual Report 2018


                                Manufacture and       USD
Hebei CSG
                  Subsidiary    sales of various      48.06millio    956,061,521    481,558,217    636,903,408     84,180,369    73,133,864
Glass Co., Ltd.
                                special glass         n
                                Manufacture and
Wujiang CSG                                           565.04
                  Subsidiary    sales of various                    1,656,890,538   911,692,573   1,570,122,631   171,004,045   151,077,690
Glass Co., Ltd.                                       million
                                special glass

Dongguan

CSG                             Deep processing of
                  Subsidiary                          240 million   1,049,779,965   539,555,636    909,090,550     74,320,886    65,406,546
Architectural                   glass

Glass Co., Ltd.

Wujiang CSG

East China                      Deep processing of
                  Subsidiary                          320 million    724,443,891    471,000,692    627,082,830     35,318,141    32,781,305
Architectural                   glass

Glass Co., Ltd.

Qingyuan
CSG New                         Manufacture
energy                          and sales of
                  Subsidiary                          300 million    750,127,923    357,842,238    262,402,765     88,694,820    75,051,790
saving                          Ultra-thin
materials                       electronic glass
Co., Ltd.

Tianjin CSG                     Development,

Energy                          producing and sales
                  Subsidiary                          336 million    792,189,031    566,048,091    764,301,802     56,349,550    51,796,569
Conservation                    of energy-saving

Glass Co., Ltd                  special glass

                                Manufacture and
Dongguan
                                sales of
CSG Solar         Subsidiary                          480 million   1,212,160,906   683,523,571    998,448,249     96,598,422    84,609,919
                                Solar-Energy Glass
Glass Co., Ltd.
                                products

                                Manufacture and
Yichang CSG
                                sales of high purity 1,467.98
Polysilicon       Subsidiary                                        3,682,288,014 1,141,662,766   1,296,883,246 -345,412,548 -290,103,454
                                silicon material      million
Co., Ltd.
                                products

Shenzhen
                                Manufacture and
Nanbo Display
                  Subsidiary    sales of display      143 million   1,639,483,612   847,511,566    564,971,827     50,839,765    49,063,159
Technology
                                device products
Co., Ltd.

CSG

(Hongkong)                      Investment and        HKD 1
                  Subsidiary                                         100,963,234     58,745,922    391,387,906      8,599,176     6,384,852
Investment                      trading               million
Co., Ltd.



    Particular about subsidiaries obtained or disposed in report period
    □ Applicable        √ Not applicable
                                                                                     32
                                                                                                                 CSG Annual Report 2018


Description of the major holding company:
Among the company's major holding companies, the related subsidiaries of the glass business subsidiaries achieved steady growth in
2018 and achieved constantly growth. The electronic glass and display device business segment closely follows the development
trend of the industry and enhance the R&D and technology updates, the profitability, competitiveness and brand influence
continuously increased. The solar energy industry is facing the adjustment of government policies, and the operation has been under
pressure. However, the company responds energetically and explores better, faster and more stable development of the solar energy
industry from the strategic layout of the industry's development trend.


VIII. Structured main bodies controlled by the Company

□ Applicable    √ Not applicable


IX. Outlook of the Company’s future development

1. Tendency of development of the industries the Company involved
Flat glass industry
In 2018, under the policy of supply-side reform and other policies, the regulation and control of production capacity of the flat glass
industry was further strengthened. With the stricter enforcement of comprehensive standards such as environmental protection and
energy consumption, the elimination of backward production capacity was accelerated. At the end of 2018, some production lines
completed cold repair, and the total production capacity of the industry increased slightly compared with 2017. In 2019, the real
estate control policy is expected to be appropriately loosened. Although the demand in the real estate sector has declined slightly but
the overall demand for glass is basically the same as that in 2018, with the increase in the degree of composite processing of deep
processing glass and the expansion of the use of the field applied; As the de-capacity policy continues to be implemented, more
stringent emission standards may be implemented, and the supply-demand relationship is expected to shift to tighter supply. In
addition, the increase in environmental protection costs in the glass industry will push up the market price, and benefit the CSG
Group, which has always been environmentally friendly and has various environmental protection facilities.


Architectural glass industry
With the domestic economic development entering “New Normal", the growth rate of fixed asset investment has slowed down
obviously, and the price of upstream float glass has risen all the way, resulting in the decline of the overall profitability of the
engineering glass industry since 2017. However, in 2018, CSG further strengthened brand protection and marketing, restructuring the
production framework and promotion trend, vigorously developing equipment automation and informationization, cutting down costs
and increasing efficiency, and the performance of engineering glass recovered and achieved substantial growth in 2018.
In the long run, Low-E energy-saving glass is the key of construction energy-saving whose permeability has been over 80% in
developed countries but less than 15% in China so far. In recent years, Chinese government has expanded more efforts to promote
green building. According to Action Plan of Promoting Production and Application of Green Building Material jointly issued by
Ministry of Industry and Information Technology and Ministry of Housing and Urban-Rural Development, the ratio of green building
material applied will be significantly increased and its quality will be improved dramatically. The proportion of green building
material will take up 30% in new building, 50% in green building, 70% in pilot project, and 80% in renovating existing building.
High-end energy saving glass as an important part in green building has a huge market demand and the prospects for its development
are worth looking forward to. At the same time, the introduction of a new urbanization strategy, Beijing-Tianjin-Hebei integration,
Greater Bay District, and the integration of the Yangtze River Delta was upgraded to a national strategy, which will bring new
opportunities to the company’s engineering glass.

                                                                               33
                                                                                                              CSG Annual Report 2018


Solar energy industry
China's PV market ranks the first in the world for last six years, with component production ranking first in the world for last 12
years. China has become the number one in the world of photovoltaic power production and application. By the end of 2018, China's
PV installed capacity exceeded 170 GW, which has exceeded the basic goal of “Energy Development “13th Five-Year Plan” as “110
million KWH of solar power generation by 2020”. The scale of China's PV industry will continue to expand due to the country's
policy guidance for promoting clean energy and the rapid growth of the PV market.
According to the "13th Five-Year Plan for Solar Energy Development", by 2020, photovoltaic will have to achieve the connection to
grid at an equal price on the electricity user-side. Therefore, technological innovation will become the main theme of the
development of the photovoltaic industry in the future. The drive power of the development of the industry will be turned from
government policy to the technology and the market. The influence of single market policy change to the development of the industry
will be weakened, but the competition on products will become more intense, and the reshuffle of the manufacturing chain will be
intensified. The resources and advantages of the development of the industry will continue to flow to enterprises with strong
technological innovation capabilities, “the stronger will be stronger”


Electronic glass and display industry
Although the smartphone and touch screen industries have entered a stable period in the market, brand manufacturers and supply
chain enterprises are rapidly diverging, and the “T pattern” is becoming more and more obvious. The concentration of orders to
high-quality customers is a positive factor for upstream material manufacturers. With the intensification of market competition,
domestic and foreign consumer electronics brand manufacturers have started the work of cost-cutting of key components, which will
bring a promising market prospect to domestic electronic glass manufacturers represented by CSG.
In addition, with the commercialization of 5G technology in the future, the Internet of Things will penetrate into every corner of
human activities. The concept of things interconnection will greatly promote the industry equipped with human-computer interaction
equipment such as smart homes, smart cars and smart home appliances. Performance electronic glass is one of the important
components of human-computer interaction equipment. In summary, ultra-thin electronics industry and ultra-thin electronic glass
manufacturers including CSG will face new market opportunities and rapid development opportunities.
According to the display industry forecast given by the authoritative research institute Touch Display Research, the global touch
display industry revenue will continue to grow in the next decade, but the growth rate will gradually slow down. In this process,
OLED display technology, as the most competitive display technology, will gradually occupy the dominant position in the market,
especially flexible OLED technology, for its foldable character, becoming a revolutionary technology upgrade. The peripheral
material to flexible OLED is expected to occupy a larger market advantage in the future. In addition, in the field of automotive
electronics, with the rapid development of new energy vehicles, as well as the development of technologies such as vehicle
networking technology, and multi-screen, large-screen or curved surfaces technology integrated automotive touch-control display
products will become the standard layout for automobiles, which has a broad market prospect.


2. Company Development Strategy
2019 is the 35th anniversary of the establishment of CSG Group. The company will firmly stick to the strategy of working hard to
make the glass industry, as our main business, bigger and stronger, and coordinate the development of electronic glass and display
device business, and make efforts to achieve breakthrough in the solar energy industry. On the basis of the high quality endogenous
development, the company aims to realize leap-forward extension development by means of making full use of various resources
such as market and capital, and through domestic and international domestic and international mergers & acquisition.
Taking ‘industrial optimization, technological innovation, structural readjustment, and systemized lean management’ as the main
path, the Group's scientific development capability and level shall be continuously improved. By accelerating the development of
strategic supporting industries; promoting the focusing cultivated of business to grow into a strategic support industry as soon as
                                                                             34
                                                                                                              CSG Annual Report 2018


possible; strengthening the work of industries and enterprises under operating pressure; strengthening party building work, building
up a strong cadre team and workforce, the company tries its best to build up a solid base for the "Hundred years CSG “.
CSG will focus on sharing China's economic development achievements, firmly grasp China's “Belt and Road” strategic opportunity,
and actively promote and strengthen its main business through proactive mergers and acquisitions and overseas investment strategies,
and continue to enhance the industry position of each business segment. CSG will be made into an internationally influential
multinational group with full reach to upstream and downstream of the glass industry.


3. Business Plan of 2019
①Improve functions of headquarters, realize general planning management, promote centralized purchase, lean management, exploit
its potential and increase efficiency, and ensure the completion of operation construction objective of the Company in 2019;
② Improve R&D capacity, build up R&D talent team, and maintain the technical innovation advantage of the Company in the
industry;
③ Create open, equal, fair and initiative enterprise culture, and strengthen core cohesion of the Company;
④ Strengthen talent management, establish remuneration incentive system related to the performance, improve company incentive
mechanism, strengthen employee training, and introduce high-quality talents;
⑤ Rationally plan asset-liability ratio level and ensure controllable financial risk;
⑥ Vigorously conduct potential exploiting and efficiency increase activity, realize energy saving and consumption reduction, and
strengthen competitiveness of the Company;
⑦ Improve information level of the Company, and create the world first-class information management platform.


4. Capital Requirements, Plan and Sources
In 2019, the company's budget capital expenditure was about 950 million yuan, mainly for the construction of ultra-clean electronic
glass and ultra-clean special glass production line, photovoltaic power station investment, PV cellar production line technology
upgrade, engineering glass workshop automation and production capacity expansion. The sources of funds are mainly self-owned
funds, loans from financial institutions, and public issuance of corporate bonds.


5. Risks and Countermeasures
In 2019, in the face of “New Normal” of domestic economic development and the task of building a“Hundred years CSG”, the
Company will face the following risks and challenges:
① In 2018, under the efforts of the Board of Directors and all employees, daily operation of the Company entered normal and stable
operation. However, the Company still faces the risk of insufficient reserves of senior talents for the long-term development of the
Company. To cope with aforesaid risks, the Company will take the following measures:
A. Construct new corporate culture of CSG as soon as possible, establish an kind of open, equal, fair and enterprising corporate
culture, and reinforce internal core cohesion of employees;
B. Establish remuneration incentive system which related to performance and improve employee incentive mechanism;
C. Strengthen internal employee training, introduce external high-quality talent, and rapidly establish a high-quality talent team;
D. Establish sustainable talent recruitment, cultivation, utilization, retaining, and development management system; create a
future-oriented human resource production, development, supply system that can support the future development of CSG.
②The glass industry continue to face the pressure of downward demand and horizontal competition, the solar energy and PV
industry will face the risk of industrial integration and price fluctuation, display devices and electronic glass industry will encounter
the risk of accelerated technical upgrading and slow demand on electronic product. To cope with aforesaid risks, the Company will

                                                                               35
                                                                                                              CSG Annual Report 2018


take the following measures:
A. In the flat glass industry, the Company will accelerate the technical upgrading and reform of existing production line to realize
differential operation, expand industrial scale and strengthen industrial competitiveness through industrial M&A;
B. In architectural glass industry, the Company will strengthen the development of high-end market and overseas market, actively
develop traditional residence market, and at the same time, maintain the industrial advantageous position of the Company through
market-oriented extension of industrial chain;
C. In the solar photovoltaic industry, the company continues to improve the level of polysilicon production technology, enhance
wafer technology and capacity, upgrade the cell PERC technology, and accelerate the layout of solar power plants.
D. In electronic glass and display devices industry, the Company will strengthen research and development of new technology, new
product, maintain its technical leading advantage in the industry, and further improve the product quality of ultra-thin electronic glass,
so as to rapidly develop terminal market and improve industrial profitability.
③ Since 2018, the market price of glass and solar energy PV industrial has fluctuated greatly. At the same time, the prices of
upstream raw materials 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 consumption reduction;
B. Focus on the market change, and lock the price of bulk commodity at proper time;
C. Utilize bulk purchase advantage to reduce purchase cost;
D. Improve automatic production level, raise labor productivity.
④ Risk of fluctuation of foreign exchange rate: At present, nearly 13.84% of the sales revenue of the Company is from overseas, in
the future, the Company will further develop overseas business, and therefore, the fluctuation of exchange rate will bring certain risk
to the operation of the Company. To cope with such risk, the Company will settle exchange in time and use safe and effective risk
evading instrument and product to relatively lock exchange rate and reduce the risk caused by fluctuation of exchange rate.


X. Reception of research, communication and interview

1. Particulars about research, communication and interview in the report period

√Applicable    □ Not applicable

 Reception time         Way              Type                            Basic information index of investigation

                                                    Details can be found in the Record Chart of the Investor Relation Activity
2018-1-16         Field research    Institute
                                                    disclosed on Juchao website (www.cninfo.com.cn) on 18 January 2018.



Reception times                                                                                                                      1

Number of reception institutions                                                                                                    15

Number of reception person                                                                                                            -

Number of other reception                                                                                                             -

Disclosed, released or let out major undisclosed
                                                                                                                                   No
information




                                                                             36
                                                                                                             CSG Annual Report 2018




                                       Section V. Important Events

I. Profit distribution plan of common shares and capitalization of capital reserve plan of the
Company

Implementation or adjustment of profit distribution plan in the report period, cash dividend plan and converting capital reserve into
share capital in particular
√ Applicable    □Not applicable
The profit distribution plan for 2017 was approved by Annual General Shareholders’ Meeting of 2017 held on 14 May 2018 which
distributed distributing cash dividend of RMB 0.5 (tax included) for every 10 shares to all shareholders and transferred capital
reserve into capital with 1.5 shares for every 10 shares to all shareholders. Notice of the distribution was published on China
Securities Journal, Securities Times, Shanghai Securities News and Hong Kong Commercial Daily on 20 June 2018, and the profit
has been distributed.

                                             Special explanation on cash dividend policy

Satisfy regulations of General Meeting or requirement of Article of Association (Yes/No)                          Yes

Well-defined and clearly dividend standards and proportion (Yes/No)                                               Yes

Completed relevant decision-making process and mechanism (Yes/No)                                                 Yes

Independent directors perform duties completely and play a proper role (Yes/No)                                   Yes

Minority shareholders have ample opportunities and their legitimate rights and interests are effectively
                                                                                                                  Yes
protected (Yes/No)

Condition and procedures are compliance and transparent while the cash bonus policy adjusted or changed
                                                                                                                  Yes
(Yes/No)

Statement on profit distribution plan and capitalization of capital reserve plan of the Company in nearly three years (including the
report period)
Statement on profit distribution plan and capitalization of capital reserve proposal of the Company in 2018: based on currently
2,863,277,201 shares of the total share capital, distributing cash dividend of RMB 0.5 (tax included) for every 10 shares to all
shareholders. Meanwhile the Company will transfer capital reserve into capital with 1 share for every 10 shares to all shareholders
based on 2,863,277,201 shares of the total share capital.
Statement on profit distribution plan and capitalization of capital reserve plan of the Company in 2017: based on 2,484,147,547
shares of the total share capital while dividends will be distributed, distributing cash dividend of RMB 0.5 (tax included) for every 10
shares to all shareholders. Meanwhile the Company will transfer capital reserve into capital with 1.5 shares for every 10 shares to all
shareholders based on 2,484,147,547 shares of the total share capital.
Statement on profit distribution plan and capitalization of capital reserve plan of the Company in 2016: based on 2,075,335,560
shares of the total share capital while dividends will be distributed, distributing cash dividend of RMB 1.00 (tax included) for every
10 shares to all shareholders. Meanwhile the Company will transfer capital reserve into capital with 1.5 shares for every 10 shares to
all shareholders based on 2,075,335,560 shares of the total share capital.


Cash dividend in latest three years (including the report period)


                                                                             37
                                                                                                                        CSG Annual Report 2018


                                                                                                                                   Unit: RMB

                                                                                       proportion for
                                                                                  cash dividends in                             Net profit
                              Net profit       Ratio in net profit     cash
                                                                                  other ways to the                           attributable to
                            attributable to      attributable to     dividend
 Year                                                                                    net profit        Amount for         shareholders of
           Amount for     shareholders of       shareholders of       by other
  for                                                                                  attributable to     cash dividend     listed company in
         cash dividend listed company in        listed company         ways
bonus                                                                                    ordinary          (including          consolidation
         (tax included)     consolidation         contained in        (such as
shares                                                                                shareholders of      other ways)      statement for bonus
                            statement for        consolidation       repurchase
                                                                                      listed companies                        year (including
                             bonus year            statement          shares)
                                                                                  in the consolidated                          other ways)
                                                                                        statements

2018       143,163,860          452,965,935                31.61%                                     0%     143,163,860                31.61%

2017       124,207,377          825,388,312                15.05%                                     0%     124,207,377                15.05%

2016       207,533,556          797,721,576                26.02%                                     0%     207,533,556                26.02%

Note:
1. The actual amount of the cash dividend distributed and capital reserve transferred will be determined according to the total share
capital on the capital reserved registration date for profit distribution implementation.
2. Dividends from equity incentives for restricted shares are distributed by the company itself.
The Company gains profits in the report period and the retained profit of parent company is positive but no plan of cash dividend
proposed
□ Applicable    √ Not applicable


II. 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)                                                                                           -

Distributing cash dividend for every 10 shares (tax included) (RMB)                                                                          0.5

Shares added for every 10-share base (Share)                                                                                                    1

Equity base for distribution preplan (share)                                                                                    2,863,277,201

Total amount distribution in cash (RMB) (tax included)                                                                            143,163,860

Cash dividend amount in other ways (such as repurchasing shares) (RMB)                                                                          -

Total cash dividends (including other methods) (RMB)                                                                              143,163,860

Profit available for distribution (RMB)                                                                                           440,114,948

Cash distributing accounted for the proportion of the total amount of profit distribution
                                                                                                                                         100%
(including other methods)

                                               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%.

                                                                                 38
                                                                                                              CSG Annual Report 2018


                  Details of proposal of profit distribution preplan or share conversion from capital public reserve

According to the financial report audited by Asia Pacific (Group) CPAs (special general partnership), the net profit attributable to
equity holders of the Company in consolidated statement was RMB 452,965,935 and combined capital reserve was 1,095,339,421
in 2018.

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 3,713,043 based on the net profit RMB 37,130,433 of parent company statement 2018.
The allocation for Shareholders in 2018 was RMB 440,114,948.

The Board of Directors proposed to distribute every shareholder RMB 0.5 (including tax) for each 10 shares based on the amount
2,863,277,201 shares, and the total amount distribution is RMB 143,163,860 (including tax), and transfer capital reserve into
capital with 1 share for every 10 shares to all shareholders based on 2,863,277,201 shares of the total share capital. With total
transferred amount of 286,327,720 shares, the total share capital of the Company will be changed from 2,863,277,201 shares to
3,149,604,921 shares. Board of directors consider that this proposal of profit distribution meet the specification of Corporation
Law, Accounting Standard for Enterprises and Articles of Association. The actual amount of the cash dividend distributed and
capital reserve transferred will be determined according to the total share capital on the capital reserved registration date for profit
distribution implementation when the company implements the profit distribution plan. The above profit distribution proposal must
be submitted to the 2018 Annual General Meeting of shareholders.


III. Implementation of commitment

1. Commitments completed by the actual controllers, the shareholders, the related parties, the purchasers,
the Company or the other related parties during the report period and those hadn’t been completed
execution by the end of the report period

√Applicable    □ Not applicable

                                               Type of                                      Commitment Commitme Implementatio
 Commitments             Promisee                             Content of commitments
                                            commitments                                        date     nt term      n

                                                            The Company has
                                                            implemented share merger
                                                            reform in May 2006. Till
                                                            June 2009, the share of the                                  By the end of
                                                            original non-tradable                                        the report
                  The original
                                                            shareholders which holding                                   period, the
                  non-tradable
                                                            over 5% total shares of the                                  above
Commitments       shareholder Shenzhen
                                                            Company had all released.                                    shareholders
for               International Holdings Commitment of
                                                            Therein, the original          2006-5-22       N/A           of the
Share Merger      (SZ) Limited and Xin share reduction
                                                            non-tradable shareholder                                     Company had
Reform            Tong Chan Industrial
                                                            Shenzhen International                                       strictly carried
                  Development
                                                            Holdings (SZ) Limited and                                    out their
                  (Shenzhen) Co., Ltd.
                                                            Xin Tong Chan Industrial                                     promises.
                                                            Development (Shenzhen)
                                                            Co., Ltd. both are
                                                            wholly-funded subsidiaries
                                                            to Shenzhen International
                                                                             39
                                                                                                     CSG Annual Report 2018


                                                        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.

                                                        Foresea Life Insurance Co.,
                                                        Ltd., Shenzhen Jushenghua
                                                        Co., Ltd. and Chengtai
                                                        Group Co., Ltd. issued
                                                                                                              By the end of
                                                        detailed report of equity
                                                                                                  During the the report
                                                        change on 29 June 2015, in
                                                                                                  period      period, the
                                       Commitment of which, they undertook to
                                                                                                  when        above
                 Foresea Life          horizontal       keep independent from CSG
Commitments in                                                                                    Foresea     shareholders
                 Insurance Co., Ltd,   competition,     in aspects of personnel,
report of                                                                                         Life        of the
                 Shenzhen Jushenghua affiliate          assets, finance, organization 2015-6-29
acquisition or                                                                                    remains the Company had
                 Co., Ltd. and Chengtai Transaction and set-up and business as long
equity change                                                                                     largest     strictly carried
                 Group Co., Ltd.       capital          as Foresea Life Insurance
                                                                                                  shareholder out their
                                       occupation       remained the largest
                                                                                                  of the      promises.
                                                        shareholder of CSG.
                                                                                                  Company
                                                        Meanwhile, they made
                                                        commitment on regularizing
                                                        related transaction and
                                                        avoiding industry
                                                        competition.

Commitments in
                                                                 Not applicable
assets


                                                                          40
                                                                                                            CSG Annual Report 2018


reorganization

Commitments in
initial public
                                                                    Not applicable
offering or
re-financing

                                                           CSG has promised not to
                                                                                                        During the
                                                           provide loans and other
                                                                                                        implementa The
                                                           forms of financial assistance
Equity incentive                                                                                        tion of the   commitment
                    The listed company                     for restricted stocks for the   2017-10-10
commitment                                                                                              equity        is in normal
                                                           incentive targets under this
                                                                                                        incentive     performance.
                                                           plan, including providing
                                                                                                        plan
                                                           guarantees for their loans.
Other
commitments
for medium and                                                      Not applicable
small
shareholders
Completed on
                                                                          Yes
time(Yes/No)

If the
commitments is
not fulfilled on
                                                                    Not applicable
time, explain the
reasons and the
next work plan


2. If there are assets or projects of the Company, which has profit forecast and the report period is still in
forecasting period, the Company should explain reasons why they reach the original profit forecast

□ Applicable      √ Not applicable


IV. Particular about non-operating fund of listed company which is occupied by controlling
shareholder and its affiliated enterprises

□ Applicable      √ Not applicable
There was no non-operating fund of listed company which is occupied by controlling shareholder and its affiliated enterprises in the
report period.


V. Explanation from Board of Directors, Supervisory Committee and Independent Directors
(if applicable) for “Non-standard audit report” of the period that issued by CPA

□ Applicable      √ Not applicable




                                                                            41
                                                                                                                CSG Annual Report 2018


VI. Particulars about the changes in aspects of accounting policy, accounting estimate and
calculation method compared with the financial report of last year
√Applicable    □ Not applicable
On October 29, 2018, the 7th meeting of the 8th Board of Directors reviewed and approved the “Proposal on Changes in Accounting
Policies”. This accounting policy change was issued on June 15, 2018, according to the Ministry of Finance. Notice of the Financial
Statement Format of the Enterprise (Accounting (2018) No. 15), the revision of the financial statement format of the general
enterprise. According to the notification requirements, the company adjusted the relevant content of the accounting policy
accordingly. The company's “Accounts receivable”, “Notes receivable”, “Accounts payable”, “Notes payable”, “Dividends
receivable”, “Interest receivable” and “Interest payable” "Dividends payable", "Fixed assets", "Fixed assets", "Engineering materials",
"Construction in progress", "Special payables", "long-term payables", "management expenses", "financial expenses", etc. on the
original balance sheet and income statement,. Subjects are subject to adjustments and will be implemented in accordance with the
relevant provisions of the Ministry of Finance's Notice on Amending the 2018 Annual General Financial Statement Format.
Others are still implemented in accordance with the Enterprise Accounting Standards - Basic Standards promulgated by the Ministry
of Finance and the specific accounting standards, application guidelines for business accounting standards, corporate accounting
standards interpretation announcements and other relevant regulations.
The Company has conducted necessary communication with the accounting firm on this matter.


VII. Description of major accounting errors within report period that need retrospective
restatement

□ Applicable    √ Not applicable
There were no major accounting errors within report period that need retrospective restatement.


VIII. Description of changes in consolidation statement’s scope compared with the financial
report of last year

√Applicable    □ Not applicable
On February 11, 2018, the group established Qingyuan CSG quartz material Co., Ltd. As of December 31, 2018, the group has made
a monetary capital contribution of 6 million yuan, and the group holds 100% of its shares.
On March 30, 2018, the group established Dongguan CSG Jingyu new material Co., Ltd. As of December 31, 2018, the group has
made a monetary capital contribution of 24 million yuan, and the group holds 80% of its shares.
On May 22, 2018, the group set up Changshu CSG new energy Co., Ltd. As of December 31, 2018, the group has not invested, and
the group holds 100% of its shares.


IX. 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                                                                               1

Name of domestic CPA                                                                                   Zhao Qingjun, Zhou Xianhong

Continuous life of auditing service for domestic CPA                                                                                    1

                                                                              42
                                                                                                         CSG Annual Report 2018


Whether changed accounting firms in this period or not
□ Yes   √No
Whether changed the accounting firm during the audit period or not
□ Yes   √No
Appointment of internal control auditing accounting firm, financial consultant or sponsor
√Applicable    □ Not applicable
Asia Pacific (Group) CPAs (special general partnership) was engaged as audit institute of internal control for the Company in the
report period, and contracted charges was RMB 0.30 million (not including traveling and accommodation expenses).


X. Particular about the Company suspended from the stock market listing and delisting after
the disclosure of the annual report

□ Applicable    √ Not applicable


XI. Issues related to bankruptcy and reorganization

□ Applicable    √ Not applicable


XII. Significant lawsuits and arbitrations

□ Applicable   √ Not applicable


XIII. Penalty and rectification

□ Applicable   √ Not applicable


XIV. Integrity of the Company and its controlling shareholders and actual controllers

□ Applicable   √ Not applicable


XV. Implementation of the Company’s stock incentive plan, employee stock ownership plan
or other employee incentives

√Applicable    □ Not applicable

On Oct. 10, 2017, the 3rd Meeting of the 8th Board of Directors of the Company deliberated and approved 2017 Restricted A- shares
Incentive Plan of CSG Holding Co., Ltd (Draft )and its summary, the Management Method of the Implementation and Review of
2017 Restricted A-shares Incentive Plan of CSG Holding Co., Ltd and the Resolution on Applying the General Meeting of
Shareholders to Authorize the Board of Directors to Deal With the Related Matters on the Company’s 2017 Restricted A-shares
Incentive Plan. The above contents are detailed in the Announcement of the Resolution on the Third Meeting of the Eighth Session of
the Board of Directors published in www.cninfo.com.cn Oct.11, 2017. (Announcement No.: 2017-063). The Company’s independent
directors issued independent opinions on the issues involved with restricted A- shares incentive plan.

On Oct. 26, 2017, the Company convened the 5th Extraordinary General Meeting in 2017, which deliberated and approved the above
three proposals. The Resolution on Adjusting the Object and Quantity Granted of 2017 Restricted A-share Incentive Plan and the
                                                                            43
                                                                                                                     CSG Annual Report 2018


Resolution on Firstly Granted Restricted Shares to the Object of 2017 Restricted A-share were deliberated and approved on the
21stprovisional meeting of the eighth session board of directors convened on Dec. 11 th, 2017. It determined to grant 97,511,654
restricted shares to 454 objects on Dec. 11, 2017, with price at RMB4.28/share. The reserved restricted shares was 17,046,869 shares.
The granting of shares was completed on Dec. 25, 2017 and the specific content was detailed in the Announcement on Completing
the First Granting of 2017 Restricted Shares disclosed in www.cninfo.com.cn on Dec. 22, 2017 (Announcement No.:2017-079).
On July 20, 2018, the company held the extraordinary meeting of the 8th Board of Directors and the extraordinary meeting of the 8th
Board of Supervisors, and reviewed and approved the Proposal on Repurchase and Restricting Partially Restricted Stocks of
Restricted Stock Incentive Plan. The independent director of the company issued a consent. Opinions; and on August 6, 2018, the
second extraordinary shareholders meeting in 2018 was approved. As of September 10, 2018, the company has completed the
cancellation procedures for the above-mentioned restricted stocks at China Securities Depository and Clearing Co., Ltd. Shenzhen
Branch. The total number of shares of the company was changed from 2,856,769,678 shares to 2,853,450,621 shares.
On September 13, 2018, the company convened an extraordinary meeting of the 8th Board of Directors and an ad hoc meeting of the
8th Board of Supervisors, and reviewed and approved the Proposal on Granting Restricted Stocks to the 2017 Restricted Stock
Incentive Plan for Incentive Objects. The grant date for the second reserved restricted stock was September 13, 2018, and the
company agreed to grant a total of 9,826,580 reserved restricted stocks to 75 incentive targets at a price of 3.68 yuan/share. The
independent directors have issued independent opinions on the above proposal, and the company's supervisory board has once again
verified the list of incentive targets on the grant date. The shares granted have been registered in the Shenzhen Branch of China
Registration and Clearing Corporation and listed on September 28, 2018. The total number of shares of the company has changed
from 2,853,450,621 shares to 2,863,277,201 shares.
On December 12, 2018, the company held the extraordinary meeting of the 8th Board of Directors and the extraordinary meeting of
the 8th Board of Supervisors, and reviewed and approved the Proposal on Repurchase and Restricting Partially Restricted Stocks of
Restricted Stock Incentive Plan, and reviewed and agreed to repurchase 8 people who have not achieve the requirment and write off.
The total number of all restricted stocks that were not eligible for the original incentives but not yet released was limited to 436,719
shares, and was approved by the third extraordinary general meeting of 2018 on December 28, 2018. The above restricted stock has
not completed the cancellation procedure.
On December 12, 018, the company held the extraordinary meeting of the 8th Board of Directors and the 8th Extraordinary Meeting
of the Board of Supervisors, and reviewed and approved the first release of the company's 2017 A-share restricted stock incentive
plan for the first time. In addition to the fact that the eight incentive targets have not been able to lift the restrictions on sales, the total
number of incentives for the conditions for lifting the restrictions is 431, and the number of restricted stocks that can be unlocked is
43,353,050 shares, accounting for the current company. 1.51% of the total share capital. The board of supervisors, independent
directors, and law firms issued separate opinions. The date of the restricted stock release date is December 21, 2018.
According to the relevant provisions of the "Accounting Standards for Business Enterprises", the implementation of the Company's
restricted stock will have a certain impact on the Company's financial status and operating results in the next few years. The results
are based on the annual audit report issued by the accounting firm.


XVI. Major related transaction

1. Related transaction with routine operation concerned

□ Applicable     √ Not applicable
There was no related transaction with routine operation concerned in the report period.




                                                                                 44
                                                                                                               CSG Annual Report 2018


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

□ Applicable    √ Not applicable
There was no related transaction with acquisition of assets or equity, sales of assets or equity concerned in the report period.


3. Related transaction with jointly external investment concerned

□ Applicable    √ Not applicable
There was no related transaction with jointly external investment concerned in the report period.


4. Credits and liabilities with related parties

□ Applicable    √ Not applicable
There were no credits and liabilities with related parties in the report period.


5. Other major related transaction

□ Applicable    √ Not applicable
There was no other major related transaction in the report period.


XVII. Significant contracts and their implementation

1. Trusteeship, contracting and leasing

 (1) Trusteeship

□ Applicable    √ Not applicable
No trusteeship for the Company in the report period.


(2) Contract

□ Applicable    √ Not applicable
No contract for the Company in the report period.


(3) Leasing

□ Applicable    √ Not applicable
No leasing for the Company in the report period.


2. Major guarantees

√Applicable    □ Not applicable




                                                                               45
                                                                                                              CSG Annual Report 2018


(1) Guarantee

                                                                                                                     Unit: RMB 0,000

                  Particulars about the external guarantee of the Company (Barring the guarantee for subsidiaries)
                                                                                                                            Guarante
                     Related
                                                Actual date of                                                   Complete     e for
                    Announce                                          Actual
Name of the Company                  Guarantee happening (Date                     Guarantee        Guarantee    implemen related
                       ment                                          guarantee
    guaranteed                         limit      of signing                         type             term        tation or   party
                    disclosure                                         limit
                                                 agreement)                                                          not     (Yes or
                       date
                                                                                                                               no)
                                          Guarantee of the Company for the subsidiaries
                                                                                                                            Guarante
                     Related
                                                Actual date of                                                   Complete     e for
                    Announce                                          Actual
Name of the Company                  Guarantee happening (Date                     Guarantee        Guarantee    implemen related
                       ment                                          guarantee
    guaranteed                         limit      of signing                         type             term        tation or   party
                    disclosure                                         limit
                                                 agreement)                                                          not     (Yes or
                       date
                                                                                                                               no)
Chengdu CSG Glass                                                                 Joint liability
                        2017-7-31      5,000        2017-8-16          5,000                         1 year          Yes      No
Co.,Ltd.                                                                          guarantee

Dongguan CSG
                                                                                  Joint liability
Architectural Glass     2017-7-31      11,200       2017-8-11         10,000                         1 year          Yes      No
                                                                                  guarantee
Co., Ltd.

Dongguan CSG
                                                                                  Joint liability
Architectural Glass     2017-1-13      18,000        2017-2-9         13,000                         1 year          Yes      No
                                                                                  guarantee
Co., Ltd.

Xianning CSG Glass                                                                Joint liability
                        2017-7-31      7,000        2017-8-11          2,000                         1 year          Yes      No
Co., Ltd.                                                                         guarantee

Xianning CSG Glass                                                                Joint liability
                        2017-7-31      10,000       2017-9-12          1,000                         1 year          Yes      No
Co., Ltd.                                                                         guarantee

Sichuan CSG Energy
                                                                                  Joint liability
Conservation Glass      2017-7-31      7,000        2017-8-11          2,000                         1 year          Yes      No
                                                                                  guarantee
Co., Ltd.

Sichuan CSG Energy
                                                                                  Joint liability
Conservation Glass      2017-1-23      5,000        2017-4-11          2,000                         1 year          Yes      No
                                                                                  guarantee
Co., Ltd.

Wujiang CSG Glass                                                                 Joint liability
                        2016-8-12      10,000        2017-3-7          5,000                         1 year          Yes      No
Co., Ltd.                                                                         guarantee

Wujiang CSG Glass                                                                 Joint liability
                       2017-11-27      10,000       2017-11-30         3,000                         1 year          Yes      No
Co., Ltd.                                                                         guarantee

Wujiang CSG East
                                                                                  Joint liability
China Architectural     2016-8-12      10,000       2017-4-28          6,000                         1 year          Yes      No
                                                                                  guarantee
Glass Co., Ltd.

Wujiang CSG East                                                                  Joint liability
                       2017-11-27      10,000       2017-11-30         3,000                         1 year          Yes      No
China Architectural                                                               guarantee

                                                                           46
                                                                                               CSG Annual Report 2018


Glass Co., Ltd.

Wujiang CSG East
                                                                   Joint liability
China Architectural     2017-7-31    10,000   2017-9-14   10,000                     1 year         Yes       No
                                                                   guarantee
Glass Co., Ltd.

Dongguan CSG Solar                                                 Joint liability
                        2017-7-31    15,000   2017-8-11   2,800                      1 year         Yes       No
Glass Co., Ltd.                                                    guarantee

Yichang Nanbo                                                      Joint liability
                        2017-5-31    3,648    2017-6-2    3,600                      1 year         Yes       No
Display Co., Ltd.                                                  guarantee

Tianjin CSG
                                                                   Joint liability
Energy-Saving Glass     2016-8-12    10,000   2017-2-14   2,000                      1 year         Yes       No
                                                                   guarantee
Co., Ltd.

Dongguan CSG                                                       Joint liability
                        2017-5-22    15,000   2017-6-15   4,680                      1 year         Yes       No
PV-tech Co., Ltd.                                                  guarantee

Yichang CSG                                                        Joint liability
                         2017-8-7    6,600    2017-8-25   4,000                      1 year         Yes       No
Polysilicon Co., Ltd.                                              guarantee

Yichang CSG                                                        Joint liability
                        2017-6-23    30,000   2017-7-10   5,000                      1 year         Yes       No
Polysilicon Co., Ltd.                                              guarantee

Qingyuan CSG New
                                                                   Joint liability
Energy-Saving           2017-9-15    5,000    2017-9-22   2,495                      1 year         Yes       No
                                                                   guarantee
Materials Co., Ltd.

Zhanjiang CSG New                                                  Joint liability
                        2017-7-31    9,000    2017-9-26   7,650                      3 years         No       No
Energy Co., Ltd.                                                   guarantee

Xianning CSG
                                                                   Joint liability
Photovoltaic Glass      2016-8-12    30,000   2017-1-3    19,000                     3 years         No       No
                                                                   guarantee
Co., Ltd.

Xianning CSG
                                                                   Joint liability
Photovoltaic Glass      2017-7-31    20,000   2017-9-7    8,300                      3 years         No       No
                                                                   guarantee
Co., Ltd.

Yichang Nanbo
                                                                   Joint liability
Photoelectric Glass     2017-5-22    5,472    2017-5-26   5,400                      3 years         No       No
                                                                   guarantee
Co., Ltd.

Yichang Nanbo
                                                                   Joint liability
Photoelectric Glass     2016-12-14   2,432    2017-5-23   2,400                      1 year         Yes       No
                                                                   guarantee
Co., Ltd.

Yichang Nanbo
                                                                   Joint liability
Photoelectric Glass     2017-5-22    10,032   2017-5-31   5,549                      3 years         No       No
                                                                   guarantee
Co., Ltd.

Yichang CSG                                                        Joint liability
                        2017-5-22    20,000   2017-6-22   9,928                      3 years         No       No
Polysilicon Co., Ltd.                                              guarantee


                                                             47
                                                                                                CSG Annual Report 2018


Dongguan CSG                                                        Joint liability
                        2017-11-27   20,000   2017-12-20   13,681                     3 years         No       No
PV-tech Co., Ltd.                                                   guarantee

Wujiang CSG Glass                                                   Joint liability
                        2017-8-28    30,000   2017-9-13    20,000                     3 years         No       No
Co., Ltd.                                                           guarantee

Xianning CSG Glass                                                  Joint liability
                        2017-8-28    25,000   2017-9-18    14,583                     3 years         No       No
Co., Ltd.                                                           guarantee

Dongguan CSG Solar                                                  Joint liability
                         2017-8-7    20,000   2017-9-22    16,500                     3 years         No       No
Glass Co., Ltd.                                                     guarantee

Yichang CSG                                                         Joint liability
                        2017-6-23    20,000   2017-6-28    11,214                     3 years         No       No
Polysilicon Co., Ltd.                                               guarantee

Sichuan CSG Energy
                                                                    Joint liability
Conservation Glass      2017-9-25    15,000   2017-9-30    8,750                      3 years         No       No
                                                                    guarantee
Co., Ltd.

Hebei CSG Glass Co.,                                                Joint liability
                        2017-10-10   20,000   2017-10-30   13,679                     3 years         No       No
Ltd.                                                                guarantee

Chengdu CSG Glass                                                   Joint liability
                        2017-9-25    20,000   2017-9-28    12,828                     3 years         No       No
Co.,Ltd.                                                            guarantee

Wujiang CSG Glass                                                   Joint liability
                        2017-11-27   10,000   2017-11-30   3,000                      1 year         Yes       No
Co., Ltd.                                                           guarantee

Dongguan CSG
                                                                    Joint liability
Architectural Glass     2017-1-13    18,000    2017-2-9    13,000                     1 year         Yes       No
                                                                    guarantee
Co., Ltd.

Wujiang CSG Glass                                                   Joint liability
                        2017-8-28    10,000   2017-9-20    2,000                      1 year         Yes       No
Co., Ltd.                                                           guarantee

Wujiang CSG Glass                                                   Joint liability
                        2017-11-27   10,000   2017-11-30   1,000                      1 year         Yes       No
Co., Ltd.                                                           guarantee

Wujiang CSG East
                                                                    Joint liability
China Architectural     2017-11-27   10,000   2017-11-30   1,000                      1 year         Yes       No
                                                                    guarantee
Glass Co., Ltd.

Yichang CSG                                                         Joint liability
                        2017-6-23    30,000   2017-7-10    5,000                      1 year         Yes       No
Polysilicon Co., Ltd.                                               guarantee

Wujiang CSG Glass                                                   Joint liability
                        2017-8-28    10,000   2017-9-20    5,000                      1 year         Yes       No
Co., Ltd.                                                           guarantee

Wujiang CSG East                                                    Joint liability
China Architectural     2017-11-27   10,000   2017-11-30   2,000    guarantee         1 year         Yes       No
Glass Co., Ltd.

Chengdu CSG Glass                                                   Joint liability
                        2017-5-22    5,000     2018-4-2    4,500                      1 year          No       No
Co.,Ltd.                                                            guarantee

Sichuan CSG Energy       2017-5-2    5,000     2018-4-8    2,700    Joint liability   1 year          No       No

                                                              48
                                                                                             CSG Annual Report 2018


Conservation Glass                                                guarantee
Co., Ltd.

Wujiang CSG Glass                                                 Joint liability
                      2017-11-27   10,000    2018-3-7    2,000                      1 year        Yes       No
Co., Ltd.                                                         guarantee

Chengdu CSG Glass                                                 Joint liability
                      2018-7-21    6,500    2018-8-10    4,500                      1 year         No       No
Co.,Ltd.                                                          guarantee

Xianning CSG Glass                                                Joint liability
                      2017-7-31    7,000    2017-8-11    2,000                      1 year        Yes       No
Co., Ltd.                                                         guarantee

Wujiang CSG Glass                                                 Joint liability
                       2018-3-9    10,000   2018-6-28    3,500                      1 year         No       No
Co., Ltd.                                                         guarantee

Wujiang CSG Glass                                                 Joint liability
                      2017-8-28    10,000   2017-9-20    1,000                      1 year        Yes       No
Co., Ltd.                                                         guarantee

Wujiang CSG Glass                                                 Joint liability
                      2018-8-11    10,000   2018-9-11    8,000                      1 year         No       No
Co., Ltd.                                                         guarantee

Wujiang CSG Glass                                                 Joint liability
                      2018-8-11    5,000    2018-11-30   2,551                      1 year         No       No
Co., Ltd.                                                         guarantee

Dongguan CSG Solar                                                Joint liability
                      2017-11-27   3,200    2018-6-14    3,000                      1 year         No       No
Glass Co., Ltd.                                                   guarantee

Tianjin CSG
                                                                  Joint liability
Energy-Saving Glass    2018-4-9    5,000    2018-6-22    2,000                      1 year         No       No
                                                                  guarantee
Co., Ltd.

Wujiang CSG East
                                                                  Joint liability
China Architectural   2017-11-27   10,000   2017-11-30   1,000                      1 year        Yes       No
                                                                  guarantee
Glass Co., Ltd.

Xianning CSG
                                                                  Joint liability
Energy-Saving Glass   2017-7-31    7,000    2017-8-11    3,000                      1 year        Yes       No
                                                                  guarantee
Co., Ltd.

Dongguan CSG
                                                                  Joint liability
Architectural Glass   2018-7-21    11,200   2018-8-10    4,000                      1 year         No       No
                                                                  guarantee
Co., Ltd.

Dongguan CSG
                                                                  Joint liability
Architectural Glass   2018-8-11    18,000   2018-10-30   18,000                     1 year         No       No
                                                                  guarantee
Co., Ltd.

Dongguan CSG
                                                                  Joint liability
Architectural Glass   2018-7-21    11,200   2018-8-10    2,145                      1 year         No       No
                                                                  guarantee
Co., Ltd.

Xianning CSG Glass                                                Joint liability
                      2018-7-21    5,000    2018-8-10    3,000                      1 year         No       No
Co., Ltd.                                                         guarantee

Hebei Shichuang       2018-7-21    1,500    2018-8-10     638     Joint liability   1 year         No       No


                                                            49
                                                                                                            CSG Annual Report 2018


Glass Co., Ltd.                                                                 guarantee

China Southern Glass                                                            Joint liability
                         2018-7-21     6,572    2018-8-10          6,572                          1 year          No       No
(Hong Kong) Ltd.                                                                guarantee

Sichuan CSG Energy
                                                                                Joint liability
Conservation Glass       2018-7-21     6,500    2018-8-10          2,000                          1 year          No       No
                                                                                guarantee
Co., Ltd.

Sichuan CSG Energy
                                                                                Joint liability
Conservation Glass       2018-7-21     6,500    2018-8-10          1,932                          1 year          No       No
                                                                                guarantee
Co., Ltd.

Wujiang CSG East
                                                                                Joint liability
China Architectural      2018-8-11     10,000   2018-09-11         6,000                          1 year          No       No
                                                                                guarantee
Glass Co., Ltd.

Dongguan CSG Solar                                                              Joint liability
                         2018-7-21     15,000   2018-8-10          3,200                          1 year          No       No
Glass Co., Ltd.                                                                 guarantee

Dongguan CSG Solar                                                              Joint liability
                         2018-7-21     15,000   2018-8-10             693                         1 year          No       No
Glass Co., Ltd.                                                                 guarantee

Tianjin CSG
                                                                                Joint liability
Energy-Saving Glass      2018-7-21     2,000    2018-8-10          2,000                          1 year          No       No
                                                                                guarantee
Co., Ltd.

Dongguan CSG                                                                    Joint liability
                          2018-7-3     20,000   2018-8-21          5,527                          1 year          No       No
PV-tech Co., Ltd.                                                               guarantee

Qingyuan CSG New
                                                                                Joint liability
Energy-Saving            2018-8-11     4,330    2018-10-23         1,910                          1 year          No       No
                                                                                guarantee
Materials Co., Ltd.

Yichang Nanbo
                                                                                Joint liability
Photoelectric Glass      2018-7-21     1,520    2018-09-26            100                         1 year          No       No
                                                                                guarantee
Co., Ltd.

Xianning CSG
                                                                                Joint liability
Energy-Saving Glass      2018-7-21     5,000    2018-8-10          2,000                          1 year          No       No
                                                                                guarantee
Co., Ltd.

Dongguan CSG                                                                    Joint liability
                         2017-5-22     10,500   2017-6-15              5                          3 years        Yes       No
PV-tech Co., Ltd.                                                               guarantee

                                                               Total amount of actual
Total amount of approving
                                                               occurred guarantee for
guarantee for subsidiaries in report                 312,621                                                              387,510
                                                               subsidiaries in report period
period (B1)
                                                               (B2)
                                                               Total balance of actual
Total amount of approved
                                                               guarantee for subsidiaries at
guarantee for subsidiaries at the                    453,526                                                              257,530
                                                               the end of reporting period
end of reporting period (B3)
                                                               (B4)

                                                                           50
                                                                                                          CSG Annual Report 2018


                         Total amount of guarantee of the Company( total of three abovementioned guarantee)

Total amount of approving                                           Total amount of actual
guarantee in report period                                 312,621 occurred guarantee in report                              387,510
(A1+B1+C1)                                                          period (A2+B2+C2)
Total amount of approved                                            Total balance of actual
guarantee at the end of report                             453,526 guarantee at the end of                                   257,530
period (A3+B3+C3)                                                   report period (A4+B4+C4)

The proportion of the total amount of actual guarantee in the net
                                                                                                                             28.29%
assets of the Company(that is A4+ B4+C4)

Including:

Total amount of the aforesaid three guarantees(D+E+F)

Amount of guarantee for shareholders, actual controller and its
related parties(D)
The debts guarantee amount provided for the guaranteed parties
whose assets-liability ratio exceed 70% directly or indirectly(E)
Proportion of total amount of guarantee in net assets of the
Company exceed 50%(F)

Total amount of the aforesaid three guarantees(D+E+F)

Explanations on possibly bearing joint and several liquidating
                                                                                                                                 Nil
responsibilities for undue guarantees (if any)

Explanations on external guarantee against regulated procedures
                                                                                                                                 Nil
(if any)

                                                                    The total Guarantee limit was 3,126.21million in the reporting
                                                                    period, and the new Guarantee limit was 1,758.22million, the
Explanations on Guarantee of the Company for the subsidiaries
                                                                    Company and one of subsidiary Yichang CSG Polysilicon Co.,
                                                                    Ltd. jointly guaranteed for Dongguan CSG PV-tech Co., Ltd.


(2) Illegal external guarantee

□ Applicable    √ Not applicable
No Illegal external guarantee in the report period.


3. Entrust others to manage cash assets

(1) Entrusted Financing

√Applicable    □ Not applicable
Overview of Entrusted Financing in the report period
                                                                                                                  Unit: RMB 0,000

                                                                                                              Overdue outstanding
          Type                   Sources of funds       Amount of occurrence        Unexpired balance
                                                                                                                    amount

                                                                           51
                                                                                                             CSG Annual Report 2018


                                                                                                              Overdue outstanding
             Type                 Sources of funds        Amount of occurrence       Unexpired balance
                                                                                                                     amount

 Bank financial products                Own funds                        117,000

   Brokerage financial
                                        Own funds                         65,000
        products

Total                                                                    182,000

The specific circumstances of high-risk entrusted financing with large individual amount or low security, poor liquidity, and no cost
protection
□ Applicable       √ Not applicable
Entrusted financing appears to be unable to recover the principal or there may be other circumstances that may result in impairment
□ Applicable       √ Not applicable


(2) Entrusted loans

√ Applicable       □ Not applicable
                                                                                                                     Unit: RMB 0,000

        Accrued of loan                       Amount of loan               Unexpired balance            Overdue outstanding amount

                            30,000                       Own funds                             30,000



Note:Mar.22.2019,Above loans capital and income has been withdrew.
The specific circumstances of high-risk entrusted loan with large individual amount or low security, poor liquidity, and no cost
protection
□ Applicable       √ Not applicable
Entrusted loan appears to be unable to recover the principal or there may be other circumstances that may result in impairment
□ Applicable       √ Not applicable


4. Other material contracts

□ Applicable       √ Not applicable
No other material contracts for the Company in the report period.


XVIII. Social responsibilities

1. Performance of social responsibilities

2018 Annual Social Responsibilities Report of CSG was the 11th year the Company consecutively released social responsibilities
report. The report emphasized the year of 2018, systemically formulated the Company concrete actions of how to positively perform
the social responsibilities, and the efforts to implement the scientific development perspective, build a harmonious society, and
advance the sustainable development of economic and society. See the full report on www.cninfo.com.cn.




                                                                            52
                                                                                                                           CSG Annual Report 2018


       2. Circumstances related to environmental protection

       Whether the listed company and its subsidiaries belong to the key pollutant discharge units announced by the environmental
       protection department

              Name of
               major
 Name of     pollutants                       Number                                       Implementation
                                                                                                                                   Approved
Company         and            Way of              of    Exhaust vent       Emission           of pollutant                                        Excessive
                                                                                                               Total emission          total
       or    characteris      emission        Exhaust distribution        concentration         emission                                           emissions
                                                                                                                                    emission
subsidiary       tic                              vent                                          standards
             contamina
                 nts

                                                                                           《Emission
                           Discharge                                                                                              Particulates:
                                                                                           standard of air
             Dust\Soot\ after the                                       Dust≤30mg/m;                        Particulates:39.8 96.82t/a;
Xianning                                                                                   pollutants for                                        Reach the
             SO2\          treatment of                  Chimney,       Soot≤40 mg/m;                       1t;SO2:636.5t;SO2:636.5t/a
CSG Glass                                     16                                           flat glass                                            discharge
             Nitrogen      denitrification               Exhaust vent SO2≤300 mg/m;                         NOx:1113.89t/a Nitrogen
Co., Ltd.                                                                                  industry》                                            standard
             oxide         and dust                                     NOx≤350 mg/m;                       ;                  oxides:
                                                                                           (GB26453-2011
                           removal                                                                                                1113.89t/a
                                                                                           )

                                                                                           《Emission
                           Discharge                                                                                              Particulates:
                                                                                           standard of air
             dust\soot after the                                       dust≤30mg/m;                                            129.395t/a;
Chengdu                                                                                    pollutants for     Particulates:72.4           Reach the
             \SO2\ treatment of                        chimney,       soot≤30mg/m;                                        SO2:1035.1
CSG Glass                                     15                                           flat glass         t;SO2: 791.3t;            discharge
             Nitrogen      denitrification               exhaust vent SO2≤304mg/m;                                          62t/a;NOx:
Co., Ltd                                                                                   industry》         NOx :920.7t。               standard
             oxide         and dust                                     NOx≤350mg/m。                                        1811.536t/a
                                                                                           (GB26453-2011
                           removal                                                                                                。
                                                                                           )

                                                                                           《Emission
                           Discharge
                                                                                           standard of air
                           after                                                                                                  Particulates:
             Particulate                                                dust≤30mg/m;     pollutants for
Hebei                      denitrification,                                                                   Particulates:7.4t 59.78t/a;       Reach the
             s\SO2\                                    chimney,       soot≤30mg/m;     flat glass
CSG Glass                  desulfurizatio 10                                                                  ;SO2:37.4t;       SO2:498.18t discharge
             Nitrogen                                    exhaust vent SO2≤304mg/m; industry》
Co., Ltd.                  n and dust                                                                         NOx :176.6t。       /a;NOx: standard
             oxide                                                      NOx≤350mg/m。 DB13/2168-201
                           removal                                                                                                982.2t/a。
                                                                                           5 Hebei local
                           treatment
                                                                                           standard

                                                                                           《Emission
Qingyuan                   Discharge
                                                                                           standard of air
CSG New                    after the                                                                                              SO2:15.228t
             SO2\                                                                         pollutants for                                        Reach the
Energy-Sa                  treatment of                  chimney,       SO2≤20mg/m;                         SO2: 5t;           /a;
             Nitrogen                         4                                            flat glass                                            discharge
ving                       denitrification               exhaust vent NOx≤200mg/m。                          NOx :34.6t。。      NOx :110.28
             oxide                                                                         industry》                                            standard
Materials                  and dust                                                                                               t/a。
                                                                                           (GB26453-2011
Co., Ltd                   removal
                                                                                           )

Yichang      PH\COD\ Discharged to 3                     Sewage vent PH:6-9;              《Sewage           COD:37.5t; COD:                 Reach the

                                                                                          53
                                                                                                                            CSG Annual Report 2018


CSG          Ammonia the sewage                                       COD≤500mg/L; Integrated               Ammonia          198.47t/a; discharge
Polysilico nitrogen\F treatment                                       Fluoride≤10         Emission           nitrogen:0.29t。Ammonia       standard
n Co., Ltd luoride        plant after                                 mg/L。               Standards》Level                    nitrogen:
                          being treated                                                    3 Standard                          2.49t/a。
                          by the                                                           (GB8978-1996)
                          Company's                                                        ,Fluoride
                          sewage                                                           implementation
                          treatment                                                        of primary
                          station.                                                         standards

                                                                                           《Emission
                          Discharge
                                                                                           standard of air                     Particulates:
             Particulate after the                                    Particulates≤40mg                      Particulates:
Wujiang                                                                                    pollutants for                      76.91t/a;    Reach the
             s\SO2\ treatment of                     chimney,       /m;SO2≤200                            69.8t;
CSG Glass                                   39                                             flat glass                          SO2:238.28t discharge
             Nitrogen     denitrification              exhaust vent mg/m;NOx≤300                            SO2:66.5t;
Co., Ltd                                                                                   industry》                          /a;NOx: standard
             oxide        and dust                                    mg/m。                                  NOx :339t。
                                                                                           (GB26453-2011                       818.04t/a。
                          removal
                                                                                           )

                                                                                           《Emission
                          Discharge
                                                                                           standard of air                     Particulates:
Dongguan                  after the                                   dust≤5mg/m;
             dust\soot\                                                                    pollutants for     Particulates8.8t;34.85t/a;   Reach the
CSG Solar                 treatment of                 chimney,       soot≤10 mg/m;
             SO2\Nitro                      22                                             flat glass         SO2: 264.9t;    SO2:300.99t discharge
Glass Co.,                denitrification              exhaust vent SO2≤400 mg/m;
             gen oxide                                                                     industry》         NOx :511t。      /a;NOx: standard
Ltd.                      and dust                                    NOx≤650 mg/m。
                                                                                           (GB26453-2011                       535.67t/a。
                          removal
                                                                                           )

                          Discharged to
                                                                                           《Guangdong
                          the sewage
                                                                                           Province water
                          treatment
Dongguan                                                              pH:6~9COD≤16 pollutant
             pH\COD plant after                                                                                             COD:5.4t/a;
CSG                                                                   mg/L;mg/L;         emission limit》 COD:1.33t;                    Reach the
             \           being treated                                                                                      Ammonia
Architectu                                  1          Sewage vent Ammonia                 (DB44/26-200 Ammonia                           discharge
             Ammonia by the                                                                                                  nitrogen:0.6t
ral Glass                                                             nitrogen≤0.784      1)Second period nitrogen:0.02t。               standard
             nitrogen     Company's                                                                                          /a。
Co., Ltd.                                                             mg/L。               first-level
                          sewage
                                                                                           emission
                          treatment
                                                                                           standard
                          station.

             waste        The                                         waste water:        《Guangdong        waste water:    waste
             water:      wastewater is                               SS≤50mg/L;         Province water     COD:4.39t; water:
             Fluoride\ discharged                                    COD≤70 mg/L; pollutant                Ammonia          COD:
Dongguan COD\            after being       sewage:                  Ammonia              emission limit》 nitrogen:0.58t;14.04t/a;
                                                       Sewage                                                                                Reach the
CSG          Ammonia treated by the 2,                               nitrogen≤10mg/L;(DB44/26-200 Fluoride:0.44t; Ammonia
                                                       vent,                                                                                discharge
PV-tech      nitrogen: sewage              exhaust:                  Fluoride≤8mg/L; 1)Second period exhuast:             nitrogen:
                                                       exhaust vent                                                                          standard
Co., Ltd.    HF\NOx station, and           18                        exhaust:            first level        Nitrogen oxide: 1.56t/a;
             \HCI\      the exhaust                                 NOx≤30mg/m3; standard;               17.62t;         Fluoride:
             CL2\        gas is                                      HF≤3 mg/m3;        《Battery          Fluoride:1.02t;1.56t/a;
             NH3\        discharged                                  CL2≤5mg/m3;        industry           Hydrogen         exhaust:

                                                                                        54
                                                                                                                    CSG Annual Report 2018


             VOC         after being                             HCI≤5mg/m3;       pollutant         fluoride:0.72t;Nitrogen
                         treated by the                          VOC≤30mg/m。 discharge               chlorine:0.16t;oxide:
                         exhaust gas                                                 standards》       VOC:0.25t。 20.825t/a;:
                         treatment                                                   (GB30484-201                          1.5156t/a;
                         tower.                                                      3);VOCs refer                        Hydrogen
                                                                                     to《Volatile                           fluoride:
                                                                                     Organic                                1.0829t/a;
                                                                                     Compound                               chlorine:
                                                                                     Emission                               0.2363t/a;
                                                                                     Standards for                          VOC:
                                                                                     the Furniture                          1.0986t/a。
                                                                                     Manufacturing
                                                                                     Industry》
                                                                                     (DB44/814-20
                                                                                     10)Second time
                                                                                     period standard;
                                                                                     NH3 implement
                                                                                     discharge
                                                                                     standards for
                                                                                     odor pollutants
                                                                                     (GB14554-93
                                                                                     ).

                                                                                     《Electrical
                         Discharge
                                                                                     Glass Industry
Hebei        dust\soot after the                                dust≤30mg/m;                                       Particulates:
                                                                                     Air Pollutant     Particulates:1.81            Reach the
Shichuang \SO2\ treatment of                     chimney,      soot≤20 mg/m;                                      8.2125t/a;
                                           5                                         Emission          t;SO2: 0.5t;               discharge
Glass Co., Nitrogen      denitrification           exhaust vent SO2≤30 mg/m;                                        SO2:22t/aN
                                                                                     Standards》       NOx :12t。                   standard
Ltd.         oxide       and dust                                NOx≤300mg/m。                                       Ox:39.4t/a。
                                                                                     (GB29495-2013
                         removal
                                                                                     )

       Construction and operation of pollution prevention and control facilities

       The Company has built flue gas dust removal and denitrification system on production lines. The system runs normally, and the
       emission of exhaust gas meets regulations standard. Hebei CSG Glass Co., Ltd., Chengdu CSG Glass Co., Ltd. and Wujiang CSG
       Glass Co., Ltd. have added flue gas desulfurization facilities, and pollutant emissions have been further reduced.

       The environmental impact assessment of construction projects and other environmental protection license

       In 2017, the project for the construction of a photoconductive material production line for light guide plates of Xianning CSG
       Photovoltaic Glass Co., Ltd. was newly launched, and environmental impact assessments have been carried out and approved. In 2018,
       the new jade glass plates project of Dongguan CSG Jingyu new material co., Ltd. had been approved and obtained the environmental
       influence appraise. The project construction had been completed and had been turned into production commissioning. The operation
       project of 120 million cells AG&AF glass plate by Yichang Display Co., Ltd. , in 2018, had been approved and obtained the
       environmental influence appraise which is during the construction period. The subsidiaries have effectively carrying out the “Three
       Simultaneous” procedures for all other new and old projects, and have been rewarded with the pollutant discharge license within the
       validity period. They timely declared the pollutant discharge, carried out the monitoring and reporting of pollutant discharge and paid
                                                                                   55
                                                                                                              CSG Annual Report 2018


the pollutant discharge fee according to the relevant regulations of the state.

Emergency response plan system of environment incident

In accordance with the national requirements, all subsidiaries prepared emergency environmental response plan for environment
incident, organized and carried out expert evaluation and filed with the local environmental protection department as required,
conducted the emergency drill against environmental incidents. And there were no major environmental incidents occurred in 2018.

Environmental self-monitoring scheme

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

Other environmental information to be disclosed

Those subsidiaries which were on key monitoring list of the government above municipal level all disclosed their environment
protection status and made regular updating through websites, local government environmental information platform, display pads
and other ways.

Other information related to environment protection
CSG always attaches great importance to environmental protection work, actively fulfills its social responsibility, adheres to the
development road of energy saving, emission reduction, low-carbon and environmental protection. Many subsidiaries have been
honored by the local government for their outstanding environmental protection work. For example, CSG (Xianning) won the award
of “Outstanding Unit for Environmental Protection” in 2018, CSG (Hebei) won the award of “Environmental Social Responsible
Enterprise” and “Environmental Protection Star Enterprise” in 2018, and Hebei Shichuang won the award of “Environmental Social
Responsible Enterprise” and “Environmental Protection Star Enterprise” in 2018. Yichang Display Co., Ltd. won title of “Yichang
Eco-environmental Protection Award” in 2018.


XIX. Statement on other important matters

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


2. Ultra-short-term financing bills
On May 14, 2018, the company’s 2017 annual shareholders’ meeting deliberated and approved the resolution on the application for
registration and issuance of ultra-short-term financing bills. It agreed that the company should register and issue ultra-short-term
financing bills with a registered amount not exceeding 4 billion yuan (not subject to the restriction that the amount of ultra-short-erm
issued shall not exceed 40% of net assets). With the period of validity of the quota not longer than two years, such ultra-short-term
financing bills will be issued by installments in accordance with the actual capital needs of the company and the situation of

                                                                              56
                                                                                                             CSG Annual Report 2018


inter-bank market funds. On Sep. 17, 2018, the Chinese Association of Interbank Market Traders held its 63rd registration meeting in
2018, and decided to approve the registration of the ultra-short-term financing bills with a total amount of 1.5 billion yuan and a
validity period of two years. The ultra-short-term financing bills are underwritten jointly by Minsheng Bank of China Limited and
Industrial Bank Co., Ltd, and can be issued by installments within the validity period of registration.


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


4. Medium-term notes
On 10 December 2014, the First Extraordinary Shareholders’ General Meeting 2014 of CSG Holding Co., Ltd deliberated and
approved the proposal of application for registration and issuance of medium-term notes with total amount of RMB 1.2 billion at
most. On 21 May 2015, National Association of Financial Market Institutional Investors (NAFMII) held the 32nd registration
meeting of 2015, in which NAFMII decided to accept the registration of the Company’s medium-term notes, amounting to RMB 1.2
billion and valid for two years. China Merchants Bank Co., Ltd. and Shanghai Pudong Development Bank Co., Ltd. were joint lead
underwriters of these medium term notes which could be issued by stages within period of validity of the registration on Jul.14, 2015,
the Company issued the first batch of medium term notes with total amount of RMB 1.2 billion and valid term of 5 years at the
issuance rate of 4.94%, which will be redeemed on 14 July 2020.
On April 15, 2016, the Shareholders’ General Meeting of 2015 of CSG deliberated and approved the proposal of application for
registration and issuance of medium-term notes with total amount of RMB 0.8 billion, which could be issued by stages within period
of validity of the registration according to the Company’s actual demands for funds and the 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 the Company’s medium-term notes, amounting to RMB 0.8 billion and valid for two
years. Shanghai Pudong Development Bank Co., Ltd. and China CITIC Bank Corporation Limited were joint lead underwriters of
these medium-term notes which could be issued by stages within period of validity of the registration. On May 4, 2018, the company
issued the first medium-term notes with a total amount of 800 million yuan and a term of three years. The issue rate was 7%, and the
redemption date was May 4, 2021.


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

5. Public issuance of corporate bonds

On March 2, 2017, the 2nd Extraordinary General Meeting of Shareholders in 2017 reviewed and approved “the Proposal on the
Public Issuance of Corporate Bonds for Qualified Investors". On February 27, 2019, the First Extraordinary General Meeting of
Shareholders in 2019 The “Proposal on Extending the Validity Period of the Shareholders' Meeting for the Public Offering of
Corporate Bonds to Qualified Investors” agreed to issue corporate bonds with a total issue of no more than RMB 2 billion and a term
of no more than 10 years.

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

                                                                             57
                                                                                                              CSG Annual Report 2018


On August 17, 2018, the company issued the announcement of "Conference on Holding the First Phase Mid-term Noteholders'
Meeting of China CSG Holding Co., Ltd. in 2015” and “Announcement on Holding the Meeting of the First Phase Mid-term Notes
Holders of China CSG Holding Co., Ltd. in 2018” due to the repurchase and cancellation of the restricted shares of the restricted
equity incentive plan. On August 31, 2018, the company's 2015 first-term medium-term noteholders meeting, 2018 first-phase
medium-term noteholders meeting was held off-site and voted. The 2015 first mid-term note holders meeting and the 2018 first
mid-term noteholders' meeting is not effective as the total voting rights held by the holders attending the meeting did not reach
two-thirds of the total voting rights as required.

7. Payments and interests of other debenture and financial instruments during the reporting period

14 Jul.2018, the company had paid the 3rd times interest of issued the 1st phase medium bill in Jul.14, 2015, total amount as 1.2
billion, interest rate 4.94% per year.

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

During the reporting period, the company obtained bank credit of 11.012 billion yuan, a quota of 3.958 billion yuan being used, and a
quota of 7.054 billion yuan available.


XX. Significant events of subsidiaries of the Company

□ Applicable    √ Not applicable




                                                                             58
                                                                                                                                CSG Annual Report 2018




Section VI. Changes in Shares and Particulars about Shareholders

I. Changes in Share Capital

1. Changes in Share Capital

                                                                                                                                            Unit: Share
                                   Before the Change                      Increase/Decrease in the Change (+, -)                    After the Change
                                                                                 Capitalization
                                                Proportion New shares   Bonus                                                                   Proportion
                                   Amount                                           of public        Others          Subtotal      Amount
                                                   (%)       issued     shares                                                                     (%)
                                                                                     reserve
I. Restricted shares              97,772,560      3.94% 9,826,580                 14,665,883 -44,636,523 -20,144,060               77,628,500     2.71%

1. State-owned shares

2. State-owned         legal
person’s shares

3. Other domestic shares          97,772,560      3.94% 9,826,580                 14,665,883 -44,636,523 -20,144,060               77,628,500     2.71%
Including: Domestic

legal person’s shares

     Domestic natural
                                  97,772,560      3.94% 9,826,580                 14,665,883 -44,636,523 -20,144,060               77,628,500     2.71%
person’s shares

4. Foreign shares

Including: Foreign legal

person’s shares

     Foreign natural

person’s shares

II. Unrestricted shares         2,386,374,987 96.06%                            357,956,248       41,317,466 399,273,714 2,785,648,701 97.29%

1. RMB Ordinary shares 1,509,517,397             60.76%                         226,427,610       41,317,466 267,745,076 1,777,262,473 62.07%
2. Domestically listed
foreign shares                   876,857,590 35.30%                             131,528,638                        131,528,638 1,008,386,228 35.22%
3.    Overseas         listed
foreign shares

4. Others

III.Total shares                2,484,147,547      100% 9,826,580               372,622,131        -3,319,057 379,129,654 2,863,277,201            100%



Reason for equity changes

√Applicable        □Not applicable
1. The company's total share capital increased by 372,622,131 shares due to the implementation of the 2017 annual profit distribution
and capital accumulation fund to increase share capital.
2. The company's total shares fell by 3,319,057 because of the cancellation of some restricted stock of equity incentive plan which
were bought back.
3. The company's total share capital increased by 9,826,580 shares due to restricted stock reserved in the 2017 restricted stock
incentive plan granted to incentive targets.
                                                                                          59
                                                                                                              CSG Annual Report 2018


4. As condition of unlock the first restriction period stock of the company's 2017 a-share restricted stock incentive plan has been met,
43,353,050 restricted shares were unlocked.
5. Due to the change of the company's senior management and the lockup of their shareholding, the Shenzhen branch of China
securities registration and clearing Co., Ltd. shall adjust the restricted shares held by the senior management in accordance with
relevant regulations, and the company’s restricted shares and unrestricted shares changed accordingly.

Approval on equity changes

√Applicable    □Not applicable
1. The company's 2017 annual profit distribution and capital accumulation fund to increase the share capital plan was approved by
the fifth meeting of the eighth board of directors held on April 20, 2018 and the 2017 annual general meeting of shareholders held on
May 14, 2018.
2. The company's buyback and cancellation of some restricted stock incentive plans was deliberated and passed at the extraordinary
meeting of the 8th board of directors and extraordinary meeting of the 8th board of supervisors on July 20, 2018, and was deliberated
and passed at the 2nd interim general meeting of shareholders on August 6, 2018.
3. The company's proposal to grant reserve stock of restricted stock incentive plan 2017 to incentive targets was deliberated and
approved at the extraordinary meeting of the 8th the board of directors and the extraordinary meeting of the 8thboard of supervisors
on September 13, 2018.
4. The company's proposal to confirm the condition of unlock first restriction period stock has been met was deliberated and
approved at the extraordinary meeting of the 8th board of directors, and the extraordinary meeting of the 8th board of supervisors on
December 12, 2018.

Transfer of ownership of changes in shares

√Applicable    □Not applicable

1. The A-share registration date for 2017 annual profit distribution and the capitalization of capital reserve was on June 26, 2018 and
the ex-dividend date was June 27, 2018. A-shares bonus (or capitalized) were directly recorded in the stockholders’ A-share accounts
on June 27, 2018. The registration date and ex-dividend date of B shares were June 29, 2018 and June 27, 2018 respectively.
B-shares bonus (or capitalized) were directly recorded in shareholders’ B-share accounts on June 29, 2018.
2. On September 10, 2018, the company has completed the cancellation procedures of the buyback restricted stock in the Shenzhen
branch of China securities registration and clearing co., Ltd.
3. On September 28, 2018, the company has completed the registration and approval procedures of newly granted restricted stock in
the Shenzhen branch of China securities registration and clearing co., Ltd.
4. Because the condition of unlock the first restriction period stock of the company's 2017 a-share restricted stock incentive plan has
been met, and as the change of senior management and lockup of their shareholdings, the Shenzhen branch of China securities
registration and clearing Co., Ltd. Adjusted the company’s restricted shares and unrestricted shares accordingly in accordance with
relevant regulations.



Implementation progress of share repurchase

□Applicable    √Not applicable


Implementation progress of share buyback reduction through centralized bidding

□Applicable    √Not applicable


                                                                              60
                                                                                                                CSG Annual Report 2018




Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common
shareholders of Company in the latest year and period
√Applicable    □ Not applicable
Please refer to the main accounting data and financial indicators in this report for the details of the impact of stock changes.


Other information necessary to be disclosed or need to be disclosed under requirement from security regulators
□Applicable    √ Not applicable


2. Changes of restricted shares

√Applicable    □ Not applicable
                                                                                                                             Unit: Share
                Number of       Number of Number of Number of
Shareholder       shares          shares     new shares      shares
                                                                             Restriction reasons                Released date
  s’ name     restricted at    released in restricted in restricted at
               Period-begin      the Year     the Year    Period-end
                                                                                                    Unlock period in accordance with
                                                                          Executive lockup stocks the requirement of implementation
                                                                          of 553,317 shares,        of the Company's restricted stock
Chen Lin           3,207,639        1,475,514   1,034,463     2,766,588 equity incentives           equity incentive plan, once
                                                                          restricted stocks of      unlocked executive lockup will be
                                                                          2,213,271 shares.         implemented according to relevant
                                                                                                    policies.

                                                                                                    Unlock period in accordance with
                                                                                                    the requirement of implementation
                                                                          Equity incentives         of the Company's restricted stock
Wang Jian                                       2,300,000     2,300,000 restricted stocks of        equity incentive plan, once
                                                                          2,300,000 shares.         unlocked executive lockup will be
                                                                                                    implemented according to relevant
                                                                                                    policies.

                                                                                                    Unlock period in accordance with
                                                                          Executive lockup stocks the requirement of implementation
                                                                          of 414,988 shares,        of the Company's restricted stock
Lu Wenhui          2,405,729        1,106,635     775,847     2,074,941 equity incentives           equity incentive plan, once
                                                                          restricted stocks of      unlocked executive lockup will be
                                                                          1,659,953 shares.         implemented according to relevant
                                                                                                    policies.

                                                                                                    Unlock period in accordance with
                                                                          Equity incentives         the requirement of implementation
Li Cuixu                                          800,000       800,000 restricted stocks of        of the Company's restricted stock
                                                                          800,000 shares.           equity incentive plan, once
                                                                                                    unlocked executive lockup will be


                                                                              61
                                                                                                               CSG Annual Report 2018


                                                                                                   implemented according to relevant
                                                                                                   policies.

                                                                                                   Unlock period in accordance with
                                                                         Executive lockup stocks the requirement of implementation
                                                                         of 276,000 shares,        of the Company's restricted stock
He Jin             1,600,000       736,000       716,000     1,580,000 equity incentives           equity incentive plan, once
                                                                         restricted stocks of      unlocked executive lockup will be
                                                                         1,304,000 shares.         implemented according to relevant
                                                                                                   policies.

                                                                                                   Unlock period in accordance with
                                                                         Executive lockup stocks the requirement of implementation
                                                                         of 395,226 shares,        of the Company's restricted stock
Yang Xinyu         2,291,170     1,053,938       738,901     1,976,133 equity incentives           equity incentive plan, once
                                                                         restricted stocks of      unlocked executive lockup will be
                                                                         1,580,907 shares.         implemented according to relevant
                                                                                                   policies.

                                                                                                   Unlock period in accordance with
Core
                                                                                                   the requirement of implementation
Managemen         62,410,653    30,256,887    11,673,417 43,827,183 Equity incentives
                                                                                                   of the Company's restricted stock
t Team
                                                                                                   equity incentive plan.

Technology                                                                                         Unlock period in accordance with
and                                                                                                the requirement of implementation
                  23,305,293    10,989,195     6,690,656 19,006,754 Equity incentives
Business                                                                                           of the Company's restricted stock
Backbone                                                                                           equity incentive plan.

                                                                                                   Unlock period in accordance with
                                                                         Supervisor’s departure   the requirement of implementation
                                                                         lockup stocks of 3,306    of the Company's restricted stock
Zhao Peng              2,156                   1,021,050     1,023,206 shares, equity incentives equity incentive plan, once
                                                                         restricted stocks of      unlocked executive lockup will be
                                                                         1,019,900 shares.         implemented according to relevant
                                                                                                   policies.

                                                                         Executive’s departure
                                                                         lockup stocks of          Unlock period in accordance with
                                                                         692,788 shares, equity    the requirement of implementation
Li Weinan          2,549,920     1,053,938       777,713     2,273,695
                                                                         incentives restricted     of the Company's restricted stock
                                                                         stocks of 1,580,907       equity incentive plan.
                                                                         shares.

Total             97,772,560    46,672,107    26,528,047 77,628,500

Note: In case the unlocking conditions of the restricted stock incentive plan is satisfied, the restricted shares Unlock in three phases
after 12 months from the date of grant: 40% of the restricted stocks will be available for circulation within the period (from the first
trading day following the lock-up period of 12 months to the last trading day of lock-up period of 24 months), 30% of the restricted
stocks will be available for circulation within the period (from the first trading day following the lock-up period of 24 months to the
                                                                             62
                                                                                                               CSG Annual Report 2018


last trading day of the lock-up period of 36 months), and 30% of the restricted stocks will be available for circulation within the
period (from the first trading day following the lock-up period of 36 months to the last trading day of the lock-up period of 48
months).


II. Issuance and listing of Securities

1. Security issued (excluding preferred stock) in the report period

√Applicable      □ Not applicable

                                                                                                 Number of
Name of stock and                           Issue price
                                                                                                  permitted           Transaction
   its derivative          Issue date       (or interest      Issue volume      Listing date
                                                                                                     trading       termination date
     securities                                rate)
                                                                                                transactions

Stock class

                                                                              September 28,
Southern Glass A September 13, 2018                    3.68       9,826,580                            9,826,580
                                                                              2018

Explanation of the issuance of securities (excluding preferred shares) during the reporting period

On September 13, 2018, the company convened an extraordinary meeting of the 8th board of Directors and an extraordinary meeting
of the 8th board of supervisors, deliberated and approved proposal to grant restricted stocks to the incentive target for the 2017
restricted stock incentive plan, the grant date of the reserved restricted stock is determined to be September 13, 2018, the company
issued 9,826,580 reserved restrict stock to 75 incentive targets as the grant price at 3.68 yuan/share. The shares granted have been
registered in the Shenzhen branch of China registration and clearing corporation and listed on September 28, 2018. The total number
of shares of the company has changed from 2,853,450,621 shares to 2,863,277,201 shares.


2. Particulars about changes of total shares and shareholder structure as well as changes of assets and
liability structure

√Applicable      □ Not applicable
1. Statement on profit distribution plan and capitalization of capital reserve plan of the Company in 2017: based on 2,484,147,547
shares of the total share capital while dividends will be distributed, distributing cash dividend of RMB 0.5 (tax included) for every 10
shares to all shareholders. Meanwhile the Company will transfer capital reserve into capital with 1.5 shares for every 10 shares to all
shareholders based on 2,484,147,547 shares of the total share capital. The program was completed on June 29, 2018, and the total
share capital was increased to 2,856,769,678 shares after the plan was completed


2. The company repurchased a total of 3,319,057 restricted shares held by the 15 original incentive targets but not yet unlocked. The
share capital was 2,853,450,621 shares after the repurchase. The cancellation of restricted stock repurchase has been completed on
September 10, 2018; the total number of shares of the company was changed from 2,856,769,678 shares to 2,853,450,621 shares.


3. The company grant reserved 9,826,580 restricted shares to 75 incentive targets, the restricted stock grant date is September 13,
2018. Upon completion of the grant, the share capital increased to 2,863,277,201 shares, and the listing date of this grant is
September 28, 2018. The total number of shares of the company was changed from 2,853,450,621 to 2,863,277,201.



                                                                               63
                                                                                                                        CSG Annual Report 2018


4. On December 12, 2018, the company convened an extraordinary meeting of the 8th Board of Directors and an extraordinary
meeting of the 8th Board of Supervisors, and reviewed and approved the “Proposal on Repurchase and Cancel part of Restricted
Stocks of Restricted Stock Incentive Plan”, considered and agreed to repurchase and cancel the total of 436,719 shares of 8 incentive
targets of all restricted stocks that have been granted to them who have not been eligible with stock still under restriction. It was
approved by the third extraordinary general meeting of shareholders in 2018, held on December 28, 2018. The above restricted stock
has not completed the cancellation procedures at the end of the reporting period, which does not affect the changes in the company's
share capital during the reporting period.


5. On December 12, 2018, the company convened an extraordinary meeting of the 8th Board of Directors and an extraordinary
meeting of the 8th Board of Supervisors, and reviewed and approved the "proposal on the achievement of condition for unlock the
first restriction period stock of the 2017 a-share restricted stock incentive plan of the company". Except the 8 incentive objects who
have left the company and are no longer qualified for unlocking, the total number of incentive objects who meet the condition for
unlocking is 431, and the number of restricted shares that can be unlocked is 43,353,050, accounting for 1.51% of the total share
capital of the company at present. The board of supervisors, the independent directors and the law firm have expressed their express
consents. The unlock date/ listing date of these restricted stock is December 21, 2018.


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 preference
                                                                        Total preference                        shareholders with
                                    Total shareholders at
Total shareholders at                                                   shareholders with voting                voting rights recovered
                                    the end of the month
the end of the report    151,514                                149,447 rights recovered at end of            0 at end of the month             0
                                    before this annual
period                                                                  report period (if                       before this annual
                                    report disclosed
                                                                        applicable)                             report disclosed (if
                                                                                                                applicable)

                                     Shareholder with above 5% shares hold or top 10 shareholders

Full name of Shareholders           Nature         of Proportion Total shares Changes in Amou Amount                  of      Number of share
                                    shareholder        of    shares held at the report period nt        of un-restricted      pledged/frozen
                                                       held (%)    end of report                 restrict shares held
                                                                                                                           Share     Amount
                                                                   period                        ed
                                                                                                                           status
                                                                                                 shares
                                                                                                 held

                                    Domestic non
Foresea Life Insurance Co., Ltd.
                                    state-owned             14.81% 423,988,067      55,302,791             423,988,067
– Haili Niannian
                                    legal person


                                                                                   64
                                                                                                               CSG Annual Report 2018


                                   Domestic non
Foresea Life Insurance Co., Ltd.
                                   state-owned         3.76% 107,659,097      14,042,491           107,659,097
– Universal Insurance Products
                                   legal person

                                   Domestic non
Shenzhen Jushenghua Co., Ltd. state-owned              2.75% 78,757,679       10,272,741            78,757,679 pledge        63,000,000
                                   legal person

                                   Domestic non
Foresea Life Insurance Co., Ltd.
                                   state-owned         2.06% 58,877,419           7,679,663         58,877,419
– Own Fund
                                   legal person

Central Huijin Asset               State-owned
                                                       1.84% 52,650,444           6,867,449         52,650,444
Management Ltd.                    legal person

China Galaxy International
                                   Foreign legal
Securities (Hong Kong) Co.,                            1.30% 37,313,064           4,917,019         37,313,064
                                   person
Limited

China Merchants Securities         State-owned
                                                       1.02% 29,078,493           3,021,785         29,078,493
(HK) Co., Limited                  legal person

                                   Domestic non
Shenzhen International Holdings
                                   state-owned         0.92% 26,450,000           3,450,000         26,450,000
(SZ) Limited
                                   legal person

VANGUARD EMERGING
                                   Foreign legal
MARKETS STOCK INDEX                                    0.61% 17,563,848           2,290,937         17,563,848
                                   person
FUND

                                   Foreign legal
NORGES BANK                                            0.49% 14,166,909           1,847,858         14,166,909
                                   person

Strategic investors or general legal N/A
person becomes top 10 shareholders
due to shares issued (if applicable)



Explanation on associated              Among shareholders as listed above, Foresea Life Insurance Co., Ltd.-Haili Niannian, Foresea
relationship among the aforesaid       Life Insurance Co., Ltd.-Universal Insurance Products, Foresea Life Insurance Co., Ltd.-Own
shareholders                           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 36,534,458 shares via
                                       China Galaxy International Securities (Hong Kong) Co., Limited.
                                       Except for the above-mentioned shareholders, it is unknown whether other shareholders
                                       belong to related party or have associated relationship regulated by the Management
                                       Regulation of Information Disclosure on Change of Shareholding for Listed Companies.

                                   Particular about top ten shareholders with un-restrict shares held

                                                                   Amount of un-restrict                   Type of shares
                       Shareholders’ name
                                                                       shares held at                   Type                Amount

                                                                             65
                                                                                                           CSG Annual Report 2018


                                                                        year-end

Foresea Life Insurance Co., Ltd. – Haili Niannian                         423,988,067      RMB ordinary shares        423,988,067

Foresea Life Insurance Co., Ltd. – Universal Insurance
                                                                           107,659,097      RMB ordinary shares        107,659,097
Products

Shenzhen Jushenghua Co., Ltd.                                               78,757,679      RMB ordinary shares         78,757,679

Foresea Life Insurance Co., Ltd. – Own Fund                                58,877,419      RMB ordinary shares         58,877,419

Central Huijin Asset Management Ltd.                                        52,650,444      RMB ordinary shares         52,650,444

China Galaxy International Securities (Hong Kong) Co.,                                        Domestically listed
                                                                            37,313,064                                  37,313,064
Limited                                                                                            foreign shares

                                                                                              Domestically listed
China Merchants Securities (HK) Co., Limited                                29,078,493                                  29,078,493
                                                                                                   foreign shares

Shenzhen International Holdings (SZ) Limited                                26,450,000      RMB ordinary shares         26,450,000

VANGUARD EMERGING MARKETS STOCK INDEX                                                         Domestically listed
                                                                            17,563,848                                  17,563,848
FUND                                                                                               foreign shares

                                                                                              Domestically listed
NORGES BANK                                                                 14,166,909                                  14,166,909
                                                                                                   foreign shares

                                    Among shareholders as listed above, Foresea Life Insurance Co., Ltd.-Haili Niannian, Foresea
                                    Life Insurance Co., Ltd.-Universal Insurance Products, Foresea Life Insurance Co., Ltd.-Own
                                    Fund are all held by Foresea Life Insurance Co., Ltd. Shenzhen Jushenghua Co., Ltd. is a related
Statement on associated             legal person of Foresea Life Insurance Co., Ltd. and Chengtai Group Co., Ltd., another related
relationship or consistent action   legal person of Foresea Life Insurance Co., Ltd, which held 36,534,458 shares via China Galaxy
among the above shareholders:       International Securities (Hong Kong) Co., Limited.
                                    Except for the above-mentioned shareholders, it is unknown whether other shareholders belong
                                    to related party or have associated relationship regulated by the Management Regulation of
                                    Information Disclosure on Change of Shareholding for Listed Companies.

Explanation on shareholders
involving margin business (if       N/A
applicable)



Whether the company’s top 10 common shareholders and the top 10 shareholders of ordinary shares subject to unlimited sales have
agreed to buy back transactions during the reporting period
□Yes   √ No


2. Controlling shareholder of the Company

The nature of controlling shareholders: No holding body
The type of controlling shareholder: Not exist
Explanation on the Company without controlling shareholder
Currently the Company has no controlling shareholder. Foresea Life Insurance Co., Ltd. is the Company's largest shareholder that has
totally held 597,798,139 shares of the Company via Foresea Life Insurance Co., Ltd.–Haili Niannian, Foresea Life Insurance Co.,
                                                                           66
                                                                                                            CSG Annual Report 2018


Ltd.–universal insurance products, Foresea Life Insurance Co., Ltd.–own fund, Foresea Life Insurance Co., Ltd.–a combination of its
own funds together with Huatai till the end of the report period, which accounts for 20.88% of the Company’s total shares; its related
legal person Shenzhen Jushenghua Co., Ltd. held 78,757,679 shares, which accounts for 2.75% of the Company’s total shares; its
related legal person Chengtai Group Co., Ltd. held 47,008,262 shares of B-share via China Galaxy International Securities (Hong
Kong) Co., Ltd and Guosen Securities (Hong Kong) Brokerage Co., Limited, which accounts for 1.64% of the Company’s total shares.
Foresea Life Insurance and its related legal persons totally held 25.27% of the Company’s total shares, which is less than 30%,
meanwhile, the number of directors recommended by Foresea Life Insurance and its related legal persons was no more than half of
total number of the Company’s board of directors.
Other shareholders of the Company hold less than 5% of the shares.
Changes of controlling shareholders in the report period
□ Applicable    √ Not applicable


3. Actual controller of the Company

The nature of actual controller: no actual controller
The type of actual controller: Not exist
Explanation on the Company without actual controller
Currently the Company has no actual controller. Foresea Life Insurance Co., Ltd. is the Company's largest shareholder that has totally
held 597,798,139 shares of the Company via Foresea Life Insurance Co., Ltd.–Haili Niannian, Foresea Life Insurance Co.,
Ltd.–universal insurance products, Foresea Life Insurance Co., Ltd.–own fund, Foresea Life Insurance Co., Ltd.–a combination of its
own funds together with Huatai till the end of the report period, which accounts for 20.88% of the Company’s total shares; its related
legal person Shenzhen Jushenghua Co., Ltd. held 78,757,679 shares, which accounts for 2.75% of the Company’s total shares; its
related legal person Chengtai Group Co., Ltd. held 47,008,262 shares of B-share via China Galaxy International Securities (Hong
Kong) Co., Ltd and Guosen Securities (Hong Kong) Brokerage Co., Limited, which accounts for 1.64% of the Company’s total shares.
Foresea Life Insurance and its related legal persons totally held 25.27% of the Company’s total shares, which is less than 30%,
meanwhile, the number of directors recommended by Foresea Life Insurance and its related legal persons was no more than half of
total number of the Company’s board of directors.
Shareholders with over 10% shares held in ultimate controlling level
√Yes    □No
Natural person
Shares held in ultimate controlling level

                                                                            Whether to obtain the right of abode in other countries
                 Shareholders                           Nationality
                                                                            or regions

                 Yao Zhenhua                               China                                       No

Major occupations and duties                   Chairman of Shenzhen Baoneng Investment Group Co., Ltd.

Situation of holding domestic and abroad
                                               N/A
listed companies over the past 10 years



Changes of actual controller in the report period
□ Applicable    √ Not applicable



                                                                            67
                                                                                                                            CSG Annual Report 2018


    Property right and controlling relationship between the largest shareholder and the Company is as follow: Shenzhen Zheshang Baoneng
    Industry Investment partnership Enterprise Limited




                                             Yao Zhenhua




                                  Shenzhen Baoneng Investment Group
                                               Co., Ltd.
                                                                                                                           Shenzhen Zheshang Baoneng
  Shenzhen Baoneng                                                             Shenzhen Baoyuan Logistics                 Industry Investment partnership
Chuangying Investment                                                                   Co., Ltd                                Enterprise Limited
 partenership Co., Ltd.



                                               67.40%                                                                                  30%
                                                                                       0.68%
         1.92%




                                          Shenzhen          Shenzhen Shenyue            Shenzhen                                             Jinfeng Tongyuan
                                       Jushenghua Co.,          Holding                                       Kaixinheng Co., Ltd.                Co., Ltd.
                    100%                                                                Yueshang
                                             Ltd.                Co., Ltd.          Logisitics Co., Ltd.




                                              51%                     20%                19.80%                     4.6%                           4.6%
      Shenzhen
      Hualitong
     Investment
      Co., Ltd.



              100%
                                                                                Foresea Life Insurance Co., Ltd.
                                      2.75%
   Chengtai Group

      Co., Ltd.



                                      CSG Holding
                  1.64%                 Co., Ltd.                       20.88%




    Actual controller controlling of the Company by entrust or other assets management
    □Applicable          √Not applicable


    4. Particulars about other legal person shareholders holding over 10% shares

    □ Applicable         √ Not applicable


                                                                                       68
                                                                                    CSG Annual Report 2018


5. Limitation on share reduction of controlling shareholders, actual controllers, Recombination party and
other commitment subjects

□ Applicable   √ Not applicable




                                                           69
                                                                                                                 CSG Annual Report 2018




           Section VII. Particulars about Directors, Supervisors, Senior

                                           Executives and Employees

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

                                                                                               Amount of Amount
                                                                              Shares held       shares    of shares
                                                                End date of                                            Other
                        Working                                 office term          at        increased decrease                 Shares held at
              Title                 Sex     Age   Start dated
                                                                                                                      changes      period-end
 Name                     status                   of office                  period-begi       in this   d in this                  (Share)
                                                     term                                                             (share)
                                                                               n (Share)        period     period
                                                                                                (Share)   (Share)
                        Currently
Chen Lin Chairman of              Female     47 2016-11-19 2020-05-02              3,207,639                            481,146       3,688,785
         the Board      in office
         Secretary of
         the Party
Wang     Committee,     Currently
         Deputy                   Male       55 2016-01-21 2020-05-02                                                 2,300,000       2,300,000
Jian                    in office
         Chairman of
         the Board,
         CEO
Zhan     Independent    Currently
                                  Male       55 2016-12-14 2020-05-02
Weizai   Director       in office
Zhu       Independent   Currently
                                  Male       55 2017-05-02 2020-05-02
Guilong   Director      in office
Zhu       Independent   Currently
                                  Female     44 2019-4-10       2020-05-02
Qianyu    Director      in office
Zhang                   Currently
          Director                Male       54 2017-05-02 2020-05-02
Jinshun                 in office
Ye                      Currently
          Director                Female     47 2016-01-21 2020-05-02
Weiqing                 in office
Cheng                   Currently
          Director                Female     37 2016-01-21 2020-05-02
Xibao                   in office
         Chairman of
         the
Li       supervisory    Currently
                                  Male       42 2019-03-27 2020-05-02
Jianghua board,         in office
         employee
         supervisory
                        Currently
Li Xinjun Supervisor              Male       51 2017-01-13 2020-05-02
                        in office
Gao      Employee       Currently
                                  Male       50 2018-08-30 2020-05-02
Changkun Supervisor     in office
Lu       Executive      Currently
                                  Male       56 2017-02-23 2020-05-02              2,405,729                            360,859       2,766,588
Wenhui   Vice President in office
                        Currently
Li Cuixu Vice president           Male       44 2018-04-08 2020-05-02                                                   800,000         800,000
                        in office
                        Currently
He Jin   Vice president in office Male       47 2018-04-08 2020-05-02              1,600,000                            440,000       2,040,000
Yang     Secretary of Currently Male         39 2017-05-02 2020-05-02              2,291,170                            343,675       2,634,845
Xinyu    the Board      in office

                                                                              70
                                                                                                                        CSG Annual Report 2018


Pan      Director &         Post
                                           Male          50 2017-02-23 2018-06-29
Yonghong CEO                Leaving
Jin         Independent     Post
                                           Male          62 2016-12-14 2019-4-10
Qingjun     Director        Leaving

Zhang   Chairman of         Post
                                           Femal         50 2017-1-13     2019-3-27
Wandong the board of        Leaving
        supervisors
Zhao    Employee            Post
                                           Male          57 2017-01-11 2018-08-30               2,875                          1,019,900       1,022,775
Peng    Supervisor          Leaving
Li                         Post
            Vice president Leaving         Male          57 2017-02-23 2019-02-18           2,636,170                           395,425        3,031,595
Weinan
Total                                                                                       12,143,583                         6,141,005      18,284,588


        II. Changes of directors, supervisors and senior executives

        √Applicable   □ Not applicable

              Name               Title                  Type                    Date                                  Reason
                                                                                                    Senior management employed by the Board
        Wang Jian          CEO                    Be employed     2018-07-02
                                                                                                    of Directors
                                                                                                    Senior management employed by the Board
        Li Cuixu           Vice president         Be employed     2018-04-08
                                                                                                    of Directors
                                                                                                    Senior management employed by the Board
        He Jin             Vice president         Be employed     2018-04-08
                                                                                                    of Directors
                      Independent
        Zhu Qianyu                                Be employed     2019-04-10                        Election by the independent director
                      Director
                      Chairman of the
                      supervisory                                 2019-04-01                        Election by the supervisory board
        Li Jianghua                               Be employed
                      board, employee                             2019-03-27                        Election by the employees meeting
                      supervisory
                      Employee
        Gao Changkun                              Be employed     2018-08-30                        Election the employee supervisory board
                      Supervisor
        Pan Yonghong  CEO                         Post leaving    2018-06-29                        Resigned
                      Employee
        Zhao Peng                                 Post leaving    2018-08-30                        Resigned
                      Supervisor
        Li Weinan     Vice president              Be employed     2019-02-18                        Removed
                      Chairman of the
        Zhang Wandong board of                    Post leaving    2019-03-27                        Resigned
                      supervisors
                      Independent
        Jin Qingjun                               Post leaving    2019-04-10                        Resigned
                      Director


        III. Post-holding

        Major professional background, working experience of directors, supervisors and senior executive and their major responsibility in
        the Company at present
        Chen Lin: took posts of Department Manager, General Manager Assistant in Shenzhen Shum Yip Logistics Group Co., Ltd. At
        present, she is the Senior Vice President of Shenzhen Baoneng Investment Group Co., Ltd., Deputy General Manager in Shenzhen
        Shum Yip Logistics Group Co., Ltd. Chairman of Board of Supervisors of Foresea Life Insurance Co., Ltd., Director of Guangdong
        Shaoneng Group Co., Ltd., Director of Nanning department store Co., Ltd. Chairman of the Board of Jonjee Hi-tech Industrial &
        Commercial Holding Co., Ltd. Chairman of the Board of           Baoneng Automobile Co., Ltd., and Chairman of the Board of the
        Company.


        Wang Jian: took posts of General Manager and Executive Director of China North Industries Tianjin Corporation, General Manager

                                                                                       71
                                                                                                         CSG Annual Report 2018


of China North Vehicle Co., Ltd., and Deputy Chairman and Chairman of Shanghai Nonferrous Metals E-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 Baoyin Electricity Co., Ltd., Chairman of the Board of
North Property Development Company Limited. At present he is Secretary of the Party Committee, Deputy Chairman and CEO of
the Company.


Zhan Weizai: took posts of Vice Manager of the financial department of Donghui Industrial Co., Ltd, General Manager Assistant of
Shenzhen Xili Hotel, Director and Chief Financial Officer of Shenzhen Qiaoshe Industry Co.,Ltd.., the Leader of the audit & law
department of Shenzhe Truism (Group) Company and Vice General Manager of Sinosafe General Insurance Company Limited. He
currently holds the post of Supervisor of Shenzhen Dewo Industrial Development Co., Ltd, Supervisor of Shenzhen Dewo
Investment Development Co., Ltd., Visiting Professor of Jiangxi University of Finance and Economics, Visiting Professor at Social
Security Center of Wuhan University, Chairman of Shenzhen Jiangcairen Education Management Co., Ltd., Vice President, of
Shenzhen Research Institute, Jiangxi University of Finance and Economics. Independent Director of Shenzhen Longood Intelligent
Electric Co., Ltd., Independent Director of Shenzhen Neptunus Bioengineering Co., Ltd., Independent Director of Shenzhen
Liantronics Co., Ltd, Independent Director of Shenzhen Weiye Decoration Group Co., Ltd., and Independent Director of the
Company.


Zhu Guilong: took posts of the researcher of the Institute of Forecasting and Development at Hefei University of Technology, the
Independent Director of Jiangsu Saifutian Steel Cable Co., Ltd. Currently, he is a professor and doctoral tutor of the School of
Business Administration, South China University of Technology, and holds a concurrent post of the Vice Chairman of Systems
Engineering Society of China, Executive Director of Chinese Association For Science of Science and S&T Policy, the Vice Chairman
of Guangdong Institute of Technical Economy and Management Modernization, and Guangdong Economic Society, the Independent
Director of GRG BANKING EQUIPMENT CO., LTD., , Independent Director of Guangzhou Kingmed Diagnostics Group Co., Ltd.,
and the Independent Director of the Company.


Zhu Qianyu: took posts of lecturer and associate professor of Central South University for Nationalities, a postdoctoral fellow at
Peking University, and an independent director of Jilin Shixian Paper Co., Ltd., At present, he is associate professor at Renmin
University of China and independent director of the Company.


Zhang Jinshun: took posts of member of the Party Committee and Deputy President of the head office of Ping An Bank, as well as
Chairman of Board of Ping An Trust Co., Ltd., President and CEO of Shenzhen jushenghua Co., Ltd., and the Secretary of the Party
Committee. He currently serves as Deputy Chairman of the Board of Shenzhen Baoneng Investment Group Co., Ltd. Chairman of
Board of Foresea Life Insurance Co., Ltd., General Manager of Chang’an International Trust Co., Ltd.,and Director of the Company.


Ye Weiqing: took posts of the Financial Administrator, Senior Vice President and Director of Shenzhen Baoneng Investment Group
Co., Ltd., Director of Foresea Life Insurance Co., Ltd., Chairman of Board of Qinglan Industry (Shenzhen) Co., Ltd., Director of
Jonjee Hi-tech Industrial & Commercial Holding Co., Ltd. At present, she is the Chairman of Board and General Manager of
Shenzhen Jushenghua Co., Ltd., Chairman of Board and General Manager of Baoneng Real Estate Co., Ltd., Deputy Chairman of
Baoneng holdings (China) co., Ltd., Chairman of Board of Baoneng South China Investment Co., Ltd, Executive Director and
General Manager of Shenzhen Shining Asset Management Co., Ltd, the Executive Director and General Manager of Qianhai
E-payment Co., Ltd, Chairman of Board and General Manager of Shenzhen Laihua Property Development Co., Ltd, Chairman of
Board and General Manager of Shenzhen Liujin Plaza Investment Co., Ltd, the Chairman of Board and General Manager of
Shenzhen Shum Yip Logistics Center Investment Development Co., Ltd., Chairman of Board and the Director of Shenzhen Baoneng

                                                                          72
                                                                                                         CSG Annual Report 2018


Jianye Property Co., Ltd, Chairman of Board and General Manager of Shenzhen Baoneng Century Property Development Co., Ltd.
Chairman of Board and General Manager of All City Co., Ltd, Chairman of Board and General Manager of Shenzhen Hualitong
Investment Co., Ltd, Director of Shenzhen Baoyuan Logistics Co., Ltd, Chairman of Board of Baoneng Hotel Investment Co., Ltd,
Chairman of Board and General Manager of Shenzhen Zhonglin Industry Development Co., Ltd, Director of Shenzhen Baoneng
Investment Group Co., Ltd., Director of Shenzhen Shum Yip Logistics Group Co., Ltd. and Director of the Company.


Cheng Xibao: took posts of Deputy Manager and Manager of financial department of Huizhou Olympic Garden Co., Ltd., which is a
subsidiary of China Sports Group Industry, Manager of financial department of Shenzhen Xuansheng Investment Co., Ltd., which is
a subsidiary of Foxconn, and Manager, Vice President, Executive Vice President of financial department, President Assistant and
Vice President of Shenzhen Baoneng Investment Group Co., Ltd. At present, she is Vice President of Shenzhen Baoneng Investment
Group Co., Ltd. and Vice President of Shenzhen Jushenghua Co., Ltd., Vice President of Baoneng City Development and
Construction Group Co., Ltd., the Supervisor of Xinjiang Qianhai United Property & Casualty Insurance Co., Ltd., Director of
Foresea Life Insurance Co., Ltd. Director of Baoneng Automobile Co., Ltd., Director of Qoros Automobile Co., Ltd., Supervisor of
Guizhou Baoneng Automobile Co., Ltd. and Director of the Company.


Li Jianghua: took post of group manager of Ping’an Technology (Shenzhen) Co., Ltd., IT engineer of Shenzhen One Card Club
Technology Services Co., Ltd., the assistant of general manager and deputy general manager of the Operation Service Department of
the Information Management Center of Foresea Life Insurance, the deputy general manager of IT Department of Xinjiang Qianhai
United Property & Casualty Insurance Co., Ltd., the general manager of Integrated Financial Development Department of Foresea
Life Insurance, and chairman of the supervisory board of the Company.


Li Xinjun: took the post of the Chief Financial Officer of Shenzhen Zhongshanglong Industrial Co., Ltd. He currently serves as the
General Manager of Shenzhen Zhongzhun Certified Tax Agent Co., Ltd., Chairman of Board of Zhongzhun Certified Public
Accountants (Shenzhen) Office and Supervisor of the Company.


Gao Changkun: took the post of the operation director of Beijing lianxing ketong microelectronics Co., LTD., and the investment
specialist of Pintree (Shanghai) Equity investment and management Co., Ltd. At present, he is the President of the solar energy
business division and the supervisor of the employees of the Company.

Lu Wenhui: took posts of Vice General Manager of the Company and General manager of Float Glass Business Department of the
company, the vice president of the company and the general manager of the Engineering and Automotive Glass Business Department
of the company, the chief economy expert of the company, the director of Enterprise Operation Department, the vice president of the
Solar Business Department, the vice president of the company and the president of the Fine Glass Business Department, and the
president of Shenzhen Monitor Company, a subsidiary company. At present, he is the vice president and the president of the Overseas
business unit of the Company.

Li Cuixu: took posts of the director of the Safety Production Department of Hebei Shijiazhuang New Cast Pipe Co., Ltd., the project
manager, assistant general manager and deputy general manager of the Investment and Management Department of China North
Industrial Company. He is present the vice president of the company.

He Jin: took posts of a the general manager of CSG (Shenzhen) Float Glass Co., Ltd., the vice president of Float Glass Department,
the general manager of CSG (Dongguan) Solar Glass Co., Ltd., the general manager of CSG (Chengdu) Co., Ltd. and the general
manager of CSG (Qingyuan) Energy Saving New Material Co., Ltd. He is currently the assistant president of the company, the
president of the Flat Panel and Electronic Glass Department and the vice president of the company.


                                                                          73
                                                                                                                 CSG Annual Report 2018


Yang Xinyu: took posts of the Securities Department of Beijing KWM Law Firm, the risk control director, the assistant of the
chairman of the board 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 the company. He is currently the secretary of the board of
directors,


Post-holding in shareholder’s unit
√Applicable □ Not applicable

                                                                                                                   Received remuneration
                                                        Position in shareholder’s Start dated of End date of
Name                  Name of shareholder’s unit                                                                 from shareholder’s unit
                                                                   unit             office term   office term
                                                                                                                           or not

                                                    Chairman of Supervisory
Chen Lin        Foresea Life Insurance Co., Ltd.                                    Apr. 2012                     Yes
                                                    Committee

                Shenzhen Juhua Investment and
Zhang                                               President & CEO                 Jan. 2016     Aug. 2018       Yes
                Development Co., Ltd.
Jinshun
                Foresea Life Insurance Co., Ltd.    Chairman of Board               Sep. 2017                     No

                                                    Chairman of Board and
                Shenzhen Jushenghua Co., Ltd.                                       Nov. 2009                     No
Ye Weiqing                                          General Manager

                Foresea Life Insurance Co., Ltd.    Director                        Feb. 2012     Dec. 2018       No

                Shenzhen Jushenghua Co., Ltd.       Vice President                  Mar. 2016                     No
Chen Xibao
                Foresea Life Insurance Co., Ltd.    Director                        Oct. 2017                     No

Note of
post-holding
in              N/A
shareholder’
s unit



Post-holding in other unit
√Applicable    □Not applicable
                                                                                    Start dated of                Received remuneration
                                                                                                   End date of
     Name                Name of other units             Position in other unit n    office term
                                                                                                   office term     from other unit or not
             Shenzhen Shum Yip Logistics Group          Deputy General
                                                                                    May 2003                     No
             Co., Ltd.                                  Manager

             Shenzhen Baoneng Investment Group                                      Oct. 2014
                                                        Senior Vice Present                                      No
             Co., Ltd.

Chen Lin Guangdong Shaoneng Group Co., Ltd. Director                                Nov. 2015                    Yes

             Nanning department store co., Ltd.         Director                    Apr. 2018                    Yes

             Jonjee       Hi-tech     Industrial    &                               Nov. 2018
                                                        Chairman of the Board                                    Yes
             Commercial Holding Co., Ltd.

             Baoneng Automobile Co., Ltd.               Chairman of the Board Dec. 2017                          No

                                                                               74
                                                                                                       CSG Annual Report 2018


Zhu
          Renmin University of China               Associate Professor         Mar. 2010               Yes
Qianyu

          Shenzhen Dewo Industrial                                             June 2010
                                                   Supervisor                                          No
          Development Co., Ltd,

          Shenzhen Dewo Investment                                             Sep. 2011
                                                   Supervisor                                          No
          Development Co., Ltd.

          Shenzhen Longood Intelligent Electric                                Oct. 2012
                                                   Independent director                                Yes
          Co., Ltd.

          Shenzhen Neptunus Bioengineering                                     Aug. 2013
Zhan                                               Independent director                                Yes
          Co., Ltd.
Weizai
          Shenzhen Liantronics Co., Ltd.           Independent director        Nov. 2016               Yes

          Shenzhen Jiangcairen Education
                                                   Chairman of the Board Jul. 2017                     No
          Management Co., Ltd.

          Jiangxi University of Finance and
                                                   Subdecanal                  Jul. 2017               No
          Economics Shenzhen Research Institute

          Shenzhen Weiye Decoration Group Co.,
                                                   Independent director        Sep. 2018               Yes
          Ltd.

                                                   Professor and Doctoral
          South China University of Technology                                 Aug. 2000               Yes
                                                   tutor

          GRG BANKING EQUIPMENT CO.,
Zhu                                                Independent director        Jan. 2018               Yes
          LTD.
Guilong
          Jiangsu Saifutian Steel Cable Co., Ltd. Independent director         Aug. 2017   Dec. 2018   Yes

          Guangzhou Kingmed Diagnostics
                                                   Independent director        Nov. 2015               Yes
          Group Co., Ltd.

          Shenzhen Baoneng Investment Group        Deputy Chairman of the
Zhang                                                                          Mar. 2017               No
          Co., Ltd.                                Board
Jinshun
          Changan International Trust Co., Ltd.    General Manager             Sep. 2018               Yes

          Baoneng South China Investment Co.,
                                                   Chairman of the Board Aug. 2017                     No
          Ltd.

          Shenzhen Shining Asset Management Executive Director and Jun. 2015
                                                                                                       No
          Co., Ltd.                         General Manager

                                                   Executive Director and Jun. 2014
          Qianhai E-payment Co., Ltd.                                                                  No
Ye                                                 General Manager
Weiqing
          Shenzhen          Laihua         Property Chairman of Board and Nov. 2016
                                                                                                       No
          Development Co., Ltd.                     General Manager

          Shenzhen Liujin Plaza Investment Co., Chairman of Board and Feb. 2014
                                                                                                       No
          Ltd.                                  General Manager

          Shenzhen Shum Yip Logistics Center       Chairman of Board and Feb. 2014
                                                                                                       No
                                                   General Manager
                                                                          75
                                                                                                            CSG Annual Report 2018


            Investment Development Co., Ltd.

            Shenzhen Baoneng Jianye Property                                    Aug. 2013
                                                     Director                                              No
            Co., Ltd.

            Shenzhen Baoneng Century Property        Chairman of Board and Jul. 2013
                                                                                                           No
            Development Co., Ltd.                    General Manager

            All City Co., Ltd.                       Chairman of Board and Apr. 2013
                                                                                                           No
                                                     General Manager
            Shenzhen Hualitong Investment Co.,       Chairman of Board and Mar. 2012
                                                                                                           No
            Ltd.                                     General Manager

            Shenzhen Baoyuan Logistics Co., Ltd. Director                       Jun. 2010                  No

            Baoneng Hotel Investment Co., Ltd.       Chairman of Board          Mar. 2010                  No

            Qinglan Industry (Shenzhen) Co., Ltd. Chairman of Board             Jul. 2012    May 2018      No

            Baoning Property Co., Ltd.               Chairman of Board and May 2012
                                                                                                           No
                                                     General Manager
            Shenzhen Zhonglin Industry               Chairman of Board and May 2012
                                                                                                           No
            Development Co., Ltd.                    General Manager

            Shenzhen Baoneng Investment Group                                   Oct. 2013
                                                     Director                                              Yes
            Co., Ltd.

            Jonjee Hi-tech Industrial &                                         May 2016
                                                     Director                                Nov. 2018     No
            Commercial Holding Co., Ltd.

            Shenzhen Shum Yip Logistics Group                                   Oct. 2003
                                                     Director                                              No
            Co., Ltd.

            Baoneng Holdings (China) Co., Ltd.       Deputy Chairman            May 2018                   No
            Shenzhen Baoneng Investment Group
                                                     Vice President             Dec. 2017                  Yes
            Co., Ltd.
            Baoneng City Development and
                                                     Vice President             Oct. 2018                  No
            Construction Group Co., Ltd.
            Xinjiang Qianhai United Property &
                                                     Supervisor                 Sep. 2016                  No
Chen        Casualty Insurance Co., Ltd.
Xibao       Baoneng Automobile Co., Ltd.             Director                   Mar. 2017                  No

            Qoros Automobile Co., Ltd.               Director                   Dec. 2017                  No

            Guizhou Baoneng Automobile Co., Ltd. Supervisor                     Jan. 2018                  No
            Shenzhen Renda Certified Tax Agent                                  Dec. 2004
                                                     General Manager                                       Yes
            Co., Ltd.
Li Xinjun
            Zhongzhun Certified Public                                          Nov. 2010
                                                     Chairman of Board                                     Yes
            Accountants (Shenzhen) Office
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




                                                                           76
                                                                                                                 CSG Annual Report 2018


IV. Remuneration for directors, supervisors and senior executives

Decision-making procedures, recognition basis and payment for directors, supervisors and senior executives
1. Decision-making procedures: The allowances for independent directors, external directors from non-shareholder’s unit and
external supervisors are 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 supervisors are confirmed based on
industry standards and real situation of the Company. The remuneration for senior executives implements floating reward mechanism
with reference to basic salary and business performance. Bonus for performance rewards is withdrawal 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 from
non-shareholder’s unit and each external supervisor are RMB 0.10 million per year, paid by actual month of service. The total
remuneration for directors, supervisor and senior executives in the report period was RMB 23.846 million.
Remuneration for directors, supervisors and senior executives of the Company within the report period
                                                                                                                         Unit: RMB0,000

                                                                                                         Total             Received
                                                                                                     remuneration         remuneration
                                                                                    Post-holding
      Name                      Title                   Sex           Age                          obtained from the from related party
                                                                                        status
                                                                                                   Company before        of the Company
                                                                                                       taxation              or not
                                                                                  Currently in
Chen Lin          Chairman of the Board            Female              47                                                             Yes
                                                                                  office
                  Secretary of the Party
                                                                                  Currently in
Wang Jian         Committee, Deputy Chairman Male                      55                                    408.94                   No
                                                                                  office
                  of the Board, CEO
                                                                                  Currently in
Zhan Weizai       Independent Director             Male                55                                          10                 No
                                                                                  office
                                                                                  Currently in
Zhu Guilong       Independent Director             Male                55                                          10                 No
                                                                                  office
                                                                                  Currently in
Zhu Qianyu        Independent Director             Female              44                                                             No
                                                                                  office
                                                                                  Currently in
Zhang Jinshun     Director                         Male                54                                                             Yes
                                                                                  office
                                                                                  Currently in
Ye Weiqing        Director                         Female              47                                                             Yes
                                                                                  office
                                                                                  Currently in
Cheng Xibao       Director                         Female              37                                                             Yes
                                                                                  office
                  Chairman of the supervisory
                                                                                  Currently in
Li Jianghua       board                            Male                42                                                             No
                                                                                  office
                  Employee Supervisor
                                                                                  Currently in
Li Xinjun         Supervisor                       Male                51                                          10                 No
                                                                                  office
                                                                                  Currently in
Gao Changkun      Employee Supervisor              Male                50                                        27.93                No
                                                                                  office
                                                                                  Currently in
Lu Wenhui         Executive Vice President         Male                56                                    506.10                   No
                                                                                  office
                                                                                  Currently in
Li Cuixu          Vice president                   Male                44                                    144.95                   No
                                                                                  office
                                                                                  Currently in
He Jin            Vice president                   Male                47                                    128.57                   No
                                                                                  office
                                                                                  Currently in
Yang Xinyu        Secretary of the Board           Male                39                                    185.47                   No
                                                                                  office

                                                                              77
                                                                                                                         CSG Annual Report 2018


Zhao Peng             Employee Supervisor              Male                57        Post leaving                      103.53                     No

Pan Yonghong          CEO                              Male                50        Post leaving                      423.01                     No

Li Weinan             Vice president                   Male                57        Post leaving                      406.10                     No

Jin Qingjun           Independent Director             Male                62        Post leaving                          10                     No
                      Chairman of the supervisory
Zhang Wandong                                          Female              50        Post leaving                          10                     No
                      board
       Total                                                                                                       2,384.60

Directors and senior management of the company were granted equity incentives during the reporting period
√Applicable      □Not applicable
                                                                                                                                        Unit: Share

                                                         The
                                                       exercise
                                                                                     The                    Number of
                                           Number of   price of      Market                                                  The            The
                              Number                                              number of                 restricted
                                            shares       the       price at the                 Number of                  granting     number of
                              of shares                                           restricted                 shares
                                            already    exercised end of the                      shares                    price of      restricted
                              outstandi                                           stocks held                 newly
  Name             Title                   exercised    shares       report                     unlocked                  restricted stocks held
                              ng during                                             at the                   granted
                                           during the during the     period                      in this                    stock        at the end
                              the report                                          beginning                 during the
                                             report     report      (RMB /                       period                    (RMB /          of the
                               period                                               of the                    report
                                            period      period       share)                                                 share)        period
                                                                                    period                   period
                                                       (RMB /
                                                        share)

               Chairman of
Chen Lin                                                                           3,207,639 1,475,514                           4.28 2,213,271
               the Board

               Secretary of
               the Party
               Committee,
Wang Jian Deputy                                                                                            2,300,000            3.68 2,300,000
               Chairman of
               the Board,
               CEO

               Executive
Lu Wenhui Vice                                                                     2,405,729 1,106,635                           4.28 1,659,953
               President

               Vice
Li Cuixu                                                                                                      800,000            3.68      800,000
               president

                                                                                                                         First
               Vice                                                                                                      grant:4.28
He Jin                                                                             1,600,000      736,000     200,000                    1,304,000
               president                                                                                                 Reserved
                                                                                                                         grant:3.68

Yang           Secretary of                                                        2,291,170 1,053,938                           4.28 1,580,907


                                                                                    78
                                                                                                                CSG Annual Report 2018


Xinyu        the Board

             Vice
Li Weinan                                                                    2,291,170 1,053,938                        4.28 1,580,907
             president

   Total                                                                   11,795,708 5,426,025 3,300,000                     11,439,038

                           ①In case the unlocking conditions of the restricted stock incentive plan is satisfied, the restricted shares
                           Unlock in three phases after 12 months from the date of grant: 40% of the restricted stocks will be
                           available for circulation within the period (from the first trading day following the lock-up period of 12
                           months to the last trading day of lock-up period of 24 months), 30% of the restricted stocks will be
                           available for circulation within the period (from the first trading day following the lock-up period of 24
                           months to the last trading day of the lock-up period of 36 months), and 30% of the restricted stocks will
                           be available for circulation within the period (from the first trading day following the lock-up period of 36
                           months to the last trading day of the lock-up period of 48 months).
Remarks (if any)           ②In the above directors and senior managers, Mr. Wang Jian, Mr. Li Cuixu and Mr. He Jin (200,000
                           shares) were granted reservations for restricted shares at a price of 3.68 yuan per share on Sep. 13, 2018.
                           ③ In the above-mentioned directors and senior managers, Ms. Chen Lin, Mr. Lu Wenhui, Mr. He Jin
                           (with the exception of 200,000 shares reserved), Mr. Yang Xinyu and Mr. Li Weinan, are awarded
                           restricted shares on Dec. 11, 2017. The conditions to unlock restricted shares in the first restriction periods
                           have been satisfied after 12 months from the date of award, and therefore, the conditions on restricted
                           shares were lifted on Dec. 21, 2018 in the first restriction periods. The amount of restricted shares
                           involved accounts for 40% of the total number of restricted shares granted.




V. Particulars of workforce

1. Number, professional composition and educational background of employees


Number of employees in the parent company (person)                                                                                    162

Number of employees in major subsidiaries of the Company (person)                                                                  10,638

Total number of employees (person)                                                                                                 10,800

Total number of employees received salaries in the period (person)                                                                 10,800

Number of retired employees whose costs bore by the parent company and its
main subsidiaries (person)
                                                       Professional composition

                      Category of professional composition                             Number of professional composition (person)

Production personnel                                                                                                                7,593

Salesman                                                                                                                              599

Technician                                                                                                                          1,435

Financial personnel                                                                                                                   118

Administrative personnel                                                                                                            1,055


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Total                                                                                                                      10,800

                                                     Educational background

                      Category of educational background                                        Number (person)

Doctor                                                                                                                           7

Master                                                                                                                          164

Undergraduate                                                                                                               2,227

Junior college                                                                                                              1,989

Degree below junior college                                                                                                 6,413

Total                                                                                                                      10,800


2. Staff remuneration policy

In 2018, the company strengthened the application of performance results in salary management. By introducing the concept of
organizational performance, the company advocated to provide favorable remuneration to high-performance organizations.
Meanwhile, employees have been encouraged to improve their personal performance by working hard and make more contributions
to the company, with accordingly rising performance incentives. The effective salary incentive has improved the enthusiasm of
employees, enhanced the overall performance of the organization and thus help to achieve business objectives.


3. Staff training plan

The company has always attached great importance to the construction of talent team and the education and development of
employees. Every year, the company sets up special funds for the training of employees’ skills, ability development and quality
improvement. The company has established all kinds of staff learning and development system and tailored learning and
development system for high-, middle- and basic-level employees to stimulate employees’ internal driving force, enhance enterprise
competitiveness, and provide strong guarantee for the development of CSG. Based on the sustainable development strategy of H&R,
the company will continuously deepen the scientific and systematic operation of learning and development work in order to promote
management and increase efficiency.


4. Labor outsourcing

□ Applicable    √ Not applicable




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                                Section VIII. Corporate Governance


I. Corporate governance of the Company

In strict compliance with the requirements of the relevant laws and regulation including The Company Law, Securities Law and Rule
of Governance for Listed Company, the Company has been putting efforts in improving the corporate governance, strengthening
management of information disclosure, regulating operation activities and establishing a modern corporate system. At present, the
system for corporate governance of the Company is basically perfect, operation is regulated, corporate governance is consummated,
which accord with the requirements of relevant documents on corporate governance of listed company issued by CSRS.
The Company has established the Information Disclosure Management System and promptly improved it in accordance with newly
issued laws and regulations, clarified the standards of insider information, and established inside information insider registration
system and record management system. In order to further strengthen the Company's internal information disclosure control, enhance
the disclosure consciousness of relevant personnel, and improve the quality of corporate information disclosure, in 2016, the
Company set up information Disclosure Committee, and formulate Rules for the implementation of the information disclosure
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 companies to ensure that investors are able to
keep abreast of the Company's operation and development strategies. There was no regulatory punishment caused by information
disclosure in the report period. Meanwhile, the Company delivered the Inside Information Insider Table to Shenzhen Stock Exchange
when submitting periodic reports. It didn’t exist that insiders used the inside information to trade the Company’s shares before the
major sensitive information which could affect the Company’s share price was disclosed.
The Company has seriously implemented the requirements of the relevant regulatory to cash dividends. The Company formulated the
Return plan for Shareholders of CSG Holding Co., Ltd. in the Next Three Years (2018- 2020) according 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 (ZGZJHGG No. [2013] 43) issued by China Securities Regulatory
Commission, further improved the Company’s decision-making and supervision mechanism for distribution of profits, and protected
the interests of investors.
During the report period, it did not exist that the Company provided the undisclosed information to the largest shareholder and actual
controller. And it did not exist that non-operating fund of listed company was occupied by the largest shareholder and its affiliated
enterprises.
Is there any difference between the actual condition of corporate governance and relevant regulations about corporate governance for
listed company from CSRC?
□Yes   √ No
There are no differences between the actual condition of corporate governance and relevant regulations about corporate governance
for listed company from CSRC.


II. Independency of the Company relative to the largest shareholder’ in aspect of businesses,
personnel, assets, organization and finance

The Company has been absolutely independent in business, personal, assets, organization and financial from its substantial
shareholders ever since its establishment. The Company had an independent and complete business system and independent
management capability.
1. In terms of business: The Company owns independent purchase and supply system of the raw resources, complete production


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systems, independent sale system and customers. The Company is completely independent from the substantial shareholders in
business. The substantial shareholders and their subsidiaries do not engage any identical business or similar business as the Company.
2. In terms of personnel: The Company established integrated management system of labor, personnel, salaries and the social security,
which were absolutely independent from its holding shareholder’s. Personnel of the managers, person in charge of the financial and
other executive managers are obtained remuneration from the Company since on duty in the Company, and never received
remuneration or take part-time jobs in large shareholders’ company and other enterprises controlled by large shareholders. The
recruitment and dismissal of Directors are conducted through legal procedure since the Company was listed and the manager has
been appointed or dismissed by Board of Directors. The Board of Directors and the Shareholders’ General Meeting have not received
any interference of decisions on personnel appointment and removal from the largest shareholders.
3. In terms of asset: the Company is able to operate business independently and enjoys full control over the production system,
auxiliary production system and facilities, land use right, industry property and non-patent technology owned or used by the
Company. The investments to the Company from largest shareholder are monetary assets, and the largest shareholder has never
occupied, damage or intervene to operation on these assets.
4. In terms of organization: The Company possessed sound corporate governance structure, established Shareholders’ General
Meeting, Board of Directors, Supervisory Committee, appointed general manager, and fixed related function departments. The
Company had been totally independent from its large shareholders in organization structure. The Company has its own office and
production sites that are different from those of the large shareholders. The largest shareholder and its related parties didn’t deliver
any operation plan and order to the Company, neither influence the independence on management of the Company by any forms.
5. In terms of finance: The Company has set up independent financial department, established independent accounting calculation
system and financial management system (included management system of its subsidiaries). The financial personnel of the Company
didn’t take part-time jobs in units of large shareholder or its subordinate units. The Company had independent bank accounts,
separated from the large shareholders. The Company is independent taxpayer, paid taxes independently according the laws and didn’t
pay mixed taxes with the large shareholders. The financial decision-making of the Company was independent, and the large
shareholders never interfered the usage of the Company’s capital. The Company never offered guarantee to their large shareholders
and its subordinate units and other related party. The largest shareholder and its related has never occupy or occupy disguised the
capital.


III. Horizontal competition

□ Applicable    √ Not applicable


IV. Annual shareholders’ general meeting and extraordinary shareholders’ general meeting
convened in the report period

1. Annual Shareholders’ General Meeting in the report period

                                                                Ratio of investor                 Date of
           Session of meeting                   Type                                 Date                        Index of disclosure
                                                                 participation                   disclosure
                                                                                                      Announcement No.:
 The First Extraordinary General       Extraordinary General
                                                                         26.99% 2018-03-15 2018-03-16 2018-011
 Shareholders’ Meeting of 2018        Shareholders’ Meeting
                                                                                                      (www.cninfo.com.cn)
                                                                                                      Announcement No.:
 Annual General Shareholders’         Annual General
                                                                         27.27% 2018-05-14 2018-05-15 2018-024
 Meeting of 2017                       Shareholders’ Meeting
                                                                                                      (www.cninfo.com.cn)
                                                                                                      Announcement No.:
 The Second Extraordinary General      Extraordinary General
                                                                         26.84% 2018-08-06 2018-08-07 2018-041
 Shareholders’ Meeting of 2018        Shareholders’ Meeting
                                                                                                      (www.cninfo.com.cn)
 The Third Extraordinary General       Extraordinary General             26.43% 2018-12-28 2018-12-29 Announcement No.:


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Shareholders’ Meeting of 2018            Shareholders’ Meeting                                               2018-074
                                                                                                               (www.cninfo.com.cn)


2. The preference shareholders convening the general meeting whose right to vote has been resumed

□ Applicable     √ Not applicable


V. Responsibility performance of independent directors in the report period

1. The attending of independent directors to Board meetings and general shareholders’ meeting

                      The situation of independent directors attending the board of directors and shareholders' meetings
                                                                                                            Whether
                             Times of Board        Times of       Times of                                 absent the
           Name of                                                                  Times of
                           meeting supposed to     Presence     attending by                    Times of Meeting for       Times of
         independent                                                                entrusted
                           attend in the report     on the     communication                    Absence the second         Presence
           director                                                                 presence
                                 period             scene           way                                  time in a row
                                                                                                             or not
        Jin Qingjun                           18           2                  16                                     No           3
        Zhan Weizai                           18           2                  16                                     No           3
        Zhu Guilong                           18           2                  16                                     No           2
Explanation of absence for the Board Meeting twice in a row
Not applicable


2. Objection for relevant events from independent directors
Whether independent directors came up with objection about the Company’s relevant matters or not
□ Yes   √No
During the report period, the independent directors did not raise objections to the Company's related matters.
3. Other explanation about responsibility performance of independent directors
Whether the opinions from independent directors were adopted or not
√Yes     □ No
Explanation of the opinions from independent directors which were adopted or not adopted
In the report period, independent directors of the Company attended the board meetings and general shareholders’ meetings,
conscientiously performed their duties, and put forward constructive opinions or suggestions for the development of the Company
strictly according to the requirements of the Guidelines for Operation of the Listed Companies on Main Board of Shenzhen Stock
Exchange, the Listing Rules of Shenzhen Stock Exchange Stock, the Guidelines for Establishment of Independent Director Mechanism
for Listed Companies and the Article of Association. Each independent director seriously deliberated all motions of the board of
directors, gave independent opinions on significant operating management issues, engagement of senior management, internal
control construction and so on, which played a positive role in safeguarding the interests of the company and minority shareholders.


VI. Duty performance of the special committees under the board during the reporting period

1. Performance of the audit committee of the Board
The Audit Committee of the Board of Directors of the Company is constituted with 5 directors, and 3 of them are independent
directors. The convoker is independent director. During the report period, according to demands of CSRC and Shenzhen Stock
Exchange, and regulations of Rules of Procedure of the Audit Committee of the Board of Directors, Procedure for Annual Report
Work of the Audit Committee, the committee paid attention to the construction of corporate internal control system, audited the
internal audit report and financial report periodically, diligently and faithfully. They performed the following duties:



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①Deliberate the Company’s financial statement and issue opinions

During the reporting period, in accordance with the requirements of the CSRC, the Audit Committee reviewed the relevant annual
work plan for the audit of annual reports submitted by certified public accountants before the annual audited certified public
accountants entered the market, and provided guidance opinions; At the same time, the basis, principles, and methods for the
preparation of the Company's accounting statements are in compliance with the relevant provisions of national laws and regulations,
and in all major respects they fairly reflect the financial status of the Company on December 31, 2018 and its operating results in
2018.

②Supervise the audit works conducted by the accountant firm

The Audit Committee communicated with the accounting firms and provides guidance and requirements for the annual financial
report audit work and the plans and arrangements for the internal control report audit work. After the CPA came into the audit, the
members of the Audit Committee kept close contact with the Company and the main project responsible personnel to understand the
progress of the audit work and the concerns of the accountants, and timely feedback to the company’s relevant departments to ensure
that the annual audit and information disclosure work was conducted as scheduled.

③ Summarize report on the audit works conducted by the accountant firm in previous year

Asia Pacific (Group) CPAs (special general partnership) strictly follows the China Auditing Standards and practices diligently, paying
attention to the communication with the management and the audit committee, which reflects strong professional knowledge, good
professional ethics and risk awareness. The firm successfully completed the company’s 2018 financial statement audit work and
internal control audit work, and the audit quality is trustworthy.

2. Performance of the remuneration and examination committee of the Board
The remuneration and examination committee of the Board of Directors of the Company is constituted with 4 directors, and 3 of
them are independent directors. The convoker is independent director.

①During the reporting period, the Compensation and Assessment Committee examined the remuneration of the management team of
CSG and approved to report such remuneration to the board of directors for consideration.

②According to regulations of Rules of Procedure of The Remuneration and Appraisal Committee, the Remuneration and Appraisal
Committee makes examination on the disclosed remuneration of the directors, supervisors and senior executives and thought it
accorded with the relevant laws and regulations of the remuneration and appraisal system of the Company.

③The remuneration and examination committee deliberated the relevant items of equity incentive, relevant beneficiary avoiding for
vote, and the deliberation results were submitted to the Board.

3. Performance of the nomination committee of the Board
The nomination committee of the Board of Directors of the Company is constituted with 5 directors, and 3 of them are independent
directors. The convoker is independent director.
Nomination committee of the Board performed evaluation on the work of the Board, and believed that the directors of 8 th session of
the Board abided by the State laws, administrative rules and regulation of Article of Association since they took office. They attended
or delegated to attend the Board Meeting and general meeting of shareholders on time, performed voting rights based on relevant
regulations, actively kept eyes on the management situation of the Company, and performed the duty of Directors diligently.

4. Performance of the strategy committee of the Board
The strategy committee of the Board of Directors of the Company is constituted with 4 directors, and 1 of them is independent
directors.
As the special institution responsible for the long-term development strategy and significant investment decision-making, the strategy
committee made earnest research on the significant decisions affecting the Company’s development and issued relevant
recommendations according to the procedure rules of the strategy committee. During the reporting period, the committee considered


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the profit distribution plan, and held the view that the profit distribution plan conformed to the requirements of the Company Law,
the Enterprise Accounting Principles and the Articles of Association, and agreed to submitted the same to the board and general
meeting for consideration. At the same time, the strategy committee considered issues concerning significant operation management,
guarantee for controlling subsidiaries, related transaction, and investment projects of the Company, which were submitted to the
board for consideration.


VII. Performance of the Supervisory Committee

During the report period, the Supervisory Committee found whether there was risk in the Company in the supervisory activities.
□ Yes   √ No
The Supervisory Committee had no objection on the supervised events during the report period.


VIII. Performance examination and incentives of senior management

On December 21, 2018, the company held an extraordinary meeting of the 8th board of directors, and reviewed and approved the
“Proposal on the Compensation of CSG Group Management Team”. In order to maximize the company's operating efficiency, fully
mobilize the enthusiasm of the management team to ensure the completion of the company's various operational indicators, the board
of directors agreed to adopt an annual salary system for the company's management team. The annual salary system consists of a
fixed annual salary and performance bonus. The performance bonus is an incentive income. The company conducts accounting
according to the overall business situation and individual assessment. The specific payment rules are implemented according to the
company's annual assessment plan. These measures have been implemented since 2018.


 IX. Internal Control

1. Particulars about significant defects found in the internal control during the report period

□ Yes   √ No


2. Self-appraisal report of internal control

Disclosure date of full text of self-appraisal report of internal control         17 April 2019
                                                                                  More details found in “Report of Internal Control of
Disclosure index of full text of self-appraisal report of internal control        CSG for year of 2018” published on Juchao Website
                                                                                  (http://www.cninfo.com.cn)
The ratio of the total assets of the units included in the scope of evaluation
                                                                                                                                     92%
to the total assets of the Company's consolidated financial statements
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                                                           95%
statements
                                                     Standards of Defects Evaluation
          Category                             Financial Reports                                    Non-financial Reports
                             Major defects:                                           Major defects:
                             A. Fraud of directors, supervisors and senior            A. Major decision-making mistakes caused by
                             management;                                              decision-making process of key business;
                             B. Ineffective control environment;                      B. Serious violation of state laws and regulations;
                             C. Invalid internal supervision;                         C. Serious brain drain of senior and middle
Qualitative criteria         D. Major internal control defects found and              management and or personnel at key technological
                             reported to the management but haven’t been             posts;
                             corrected after a reasonable time;                       D. Major or significant defects found in the
                             E. Material misstatements are found by the external      internal control evaluation have not been rectified
                             audit but haven’t been found in the process of          and reformed;
                             internal control;                                        E. The company's major negative news frequently

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                               F. Financial reports submitted during the reporting     appears on media;
                               period completely cannot meet the needs and are         Significant defects:
                               severely punished by regulatory agencies;               A. Big deviation of execution caused by executive
                               G. Other major defects that may affect the report       routine of key business;
                               users’ correct judgment.                               B. Regulatory authorities impose large amount of
                               Significant defects:                                    fines because the violation of laws and regulations;
                               A. Defects or invalidation of important financial       C. Defects or invalidation of important business’
                               control procedures;                                     internal control procedures;
                               B. Significant misstatements are found by the           Common defects: Other control defects except for
                               external audit but haven’t been found in the process   major defects and significant defects.
                               of internal control;
                               C. Financial reports submitted during the reporting
                               period have mistakes frequently;
                               D. Other significant defects that may affect the
                               report users’ correct judgment.
                               Common defects: Other control defects except for
                               major defects and significant defects.
                               Major defects:                                          Major defects:
                               A. Amount of net profit affected by misstatements       A. Amount of direct property loss: the direct loss
                               (based on consolidated statements): amount affected     amount is equal to or greater than 30 million yuan;
                               by misstatements is equal to or greater than 3% of      B.Group's reputation: major negative news spreads
                               net profit and the absolute amount is no less than 30   in numerous business areas or is widely reported
                               million yuan;                                           by national media and causes significant damages
                               B. Amount of assets and liabilities affected by         to the corporate reputation which takes more than
                               misstatements (based on consolidated statements):       six months to be restored.
                               amount affected by misstatements is equal to or         Significant defects:
                               greater than 1% of total assets.                        A. Amount of direct property loss: the direct loss
                               Significant defects:                                    amount is equal to or greater than 20 million yuan
                               A. Amount of net profit affected by misstatements       but less than 30 million yuan;
Quantitative standard
                               (based on consolidated statements): not belong to       B. Group's reputation: negative news spreads
                               major defects and amount affected by                    inside the industry or is reported or focused by
                               misstatements is equal to or greater than 2% of net     local media and causes certain damages to the
                               profit and the absolute amount is no less than 20       corporate reputation which takes more than three
                               million yuan;                                           months but less than six months to be restored.
                               B. Amount of assets and liabilities affected by         Common defects:
                               misstatements (based on consolidated statements):       A. Amount of direct property loss: defects except
                               amount affected by misstatements is equal to or         for major and significant defects.
                               greater than 0.5% of total assets but less than 1% of   B. Group's reputation: negative news spreads
                               total assets.                                           within the group and causes minor damages to the
                               Common defects: Defects except for major and            corporate reputation which takes less than three
                               significant defects.                                    months to be restored.
Amount of significant
defects in financial reports
Amount of significant
defects in non-financial
reports
Amount of important
defects in financial reports
Amount of important
defects in non-financial
reports
Notes of the major issues related to internal control:
As of the issuance date of the report, the company did not find internal control information which might have a significant impact on
the investors’ understanding of the internal control evaluation report or their evaluation of internal control of the company or on the
investment decisions made by investors.




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X. Audit report of internal control

√Applicable     □ Not applicable
                                           Deliberations in Internal Control Audit Report
According to Guidelines of Enterprise Internal Control Audit and the relevant requirements of CICPA auditing standards, Asia
Pacific (Group) CPAs (special general partnership) (hereinafter referred to as AP) audited the effectiveness of internal control over
financial statements of the Company up to 31 December 2018, issued AP Ya-Kuai- A-Zhuan-Zi (2019) No. 0021 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, 2018.
Date of disclosing the internal
                                     17 April 2019
control audit reports
Disclosure index of internal control More details can be found in 2018 Internal Control Audit Report of CSG released on Juchao
audit report                         Website (http://www.cninfo.com.cn)
Type of the auditor’s opinion       Standard unqualified opinion
Whether there are major flaws in
                                     No
the non-financial report or not
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 from the Board or
not?
√ Yes   □ No




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                                        Section IX. Financial Report


I. Report of the Auditors

Type of Auditor’s Opinion                                         Standard and unqualified
Issue date of Report of the Auditors                               16 April 2019
Name of Auditor’s organization                                    Asia Pacific (Group) CPAs (special general partnership)
Reference number of Report of the Auditors                         Ya-Kuai- A-Shen-Zi (2019) No. 0034
Name of CPA                                                        Zhao Qingjun, Zhou Xianhong



                                                         Auditor’s Report



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 of Financial Position as at 31 December 2018, and the Separate/Consolidated Statements of profit or
loss, the Separate/Consolidated Statements of changes in equity and the Separate/Consolidated Statements of cash flows for the year
then ended, and the notes to the financial statements.

In our opinion, the financial statements attached were prepared in line with the regulations of Accounting Standards for Business
Enterprises in all significant aspects which gave a true and fair view of the consolidated and parent financial position of the Company
as at Dec. 31, 2018 and the consolidated and parent business performance and cash flow of the Company for 2018.


II.       Basis of Opinion

We conducted our audit in accordance with Standards on Auditing for Certified Public Accountants. Our responsibility is to express an
opinion on these financial statements based on our audit. Those standards require that we comply with ethical requirements and plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.


III.       Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in
forming 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 fixed assets and the construction in progress

1. Matter description

As disclosed in the financial report, by 31st Dec 2018, Impairment provision for construction in progress of the CSG Group was RMB
366.69 million , Impairment provision for the fixed assets was RMB111.68 million. On 31 may 2018, the state introduced the ‘Circular
of matters concerning Photovoltaic Power Generation in 2018’, The policies mentioned above considerably affected the operations of


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CSG’s solar industry, by ‘the section 8 of accounting standards for business enterprises- impairments of assets’, the management of the
company identified and ran impairment tests for some parts of related assets showing a sign of impairment. During the impairment test,
the management has engaged an independent valuer to assist in the identification and valuation of the recoverable amount of relevant
asset, and compared it with the book value of the corresponding assets. The test results showed that the recoverable amount of related
assets was less than its book value. According to the difference, the provision for impairment of fixed assets and construction in
progress should be noted by the company.

Due to the procedure of related assets impairment involved significant decisions and predictions made 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 its execution of the internal control system of the fixed assets and the construction in
progress;

2 Evaluated management's identification of relevant asset groups assertions and the amount of assets allocated in each asset group;

3 Checked the management's process of identifying the signs of impairment of related assets and assessed the reasonableness of their
judgments;

4 Discussed with the management the specific process of the relevant asset impairment test, and understood the evaluation and
approval process of the impairment test results;

5 Evaluated the management's use of the valuation method, discussed with the independent valuer the appropriateness of the valuation
method, and independently compare the key assumptions, parameters and discount rates of the assessment with historical financial
data and industry trends analysis;

6 Checked the asset in field survey and understood use of relevant asset      and Reviewed relevant disclosures in the presentation of
financial statements



II) Provision of Impairment in goodwill

1. Matter description

As disclosed in Notes, in December 31, 2018, the original value of CSG Group goodwill RMB 397.39 million as its acquired
Shenzhen CSG Display Technology Co., Ltd. The management is required to annually perform the impairment test for goodwill. The
management has engaged an independent valuer to assist in the identification and valuation of the recoverable amount of asset groups.
The management tests goodwill for impairment by estimating the recoverable amounts of the asset groups that goodwill is allocated to,
and then comparing these recoverable amounts with the carrying value of those asset groups and goodwill. The result of the
impairment test indicated that the recoverable amount of the relevant asset group of goodwill is lower than the book value, and the
provision for goodwill impairment should be noted by company. The group predicted the recoverable amounts which involves forecast
of asset groups future cash flows, including significant judgments and assumptions including the selling price, the cost of production,
the operating expense, the discount rate, the growth rate, etc. As the goodwill impairment test involved a complex process and the
significant judgments of the Company’s management, therefore, we consider this matter as key audit matters.

2. Countermeasures of Audit

1 Understood and tested the effectiveness of its execution of the internal control system of the provision of impairment in goodwill;

2 Checked whether goodwill was allocated to each of the cash-generating units in a reasonable methods;

3 Compared the relevant asset groups actual results in 2018 with their corresponding estimates made in the prior year to evaluate the
reliability of the management’s estimates on cash flows;

4 Discussed with the management on key assumptions and assessed its rationality, including but not limited the key parameters for
obtaining significant management estimates and judgments, such as the revenue growth rate, the gross profit margin, the expense
growth rate and the discount rate etc., compared and analyzed historical data and industry level of relevant asset groups;

5 Discussed with the valuation experts the appropriateness of the application of the valuation method, and make independent


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comparison and analysis of the key assumptions, parameters and discount rates of the assessment combined with historical financial
data and industry development trends;

6 Checked the goodwill impairment test model calculation accuracy ;

7 Checked whether the impairment of goodwill have been properly presented and disclosed in the financial statements as required.

IV.       Other information

The management layer of the Company (hereinafter referred to as the management layer) shall be responsible for other information,
including the information covered in the financial report, but excludes financial statements and our audit report.

Our audit opinions on financial statements do not cover other information; we will not make the authentication conclusion on other
information in any form.

Combining our audit of the financial statement, our responsibility is to read other information, during which, we shall consider that
whether other information has any significant difference with the financial statement or the circumstance we know during the audit or
is there any significant misstatement.

Based on the work we already executed, if we confirm that there are significant misstatements in other information, we shall report
such a fact. On such aspect, there is nothing to report.

V.        Management’s Responsibility for the Financial Statements

Management of the Company is responsible for the preparation and fair presentation of these financial statements in accordance with
the requirements of the Accounting Standards for Business Enterprises, and for such internal control as management

determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud
or error.

In preparing financial statements, the management layer is responsible for assessing the Company's sustained business capability,
disclosing matters related to continue operating,using the going-concern assumption unless management either intends to liquidate the
Company or to cease operations, or has no realistic alternative but to do so.

The governance layer is responsible for supervising the financial reporting process of the company.

VI.       The responsibility of Certified Public Accountants for the financial statement auditing.

Our objective is to obtain reasonable assurance on whether there is no misstatement in overall financial statements caused by fraud or
error, and issue the audit report with audit opinions. Reasonable assurance is the high-level assurance, but it can’t assure that a certain
major misstatement can be always found when auditing according 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 the financial statement user according
to the financial statement, it shall be deemed that the misstatement is significant.

During the process of conducting the audit work according to audit standards, we apply professional judgment and keep professional
skepticism. Meanwhile, we also perform the following tasks:

(1) Identify and Estimate the significant misstatement risks of the financial statement due to the malpractices and error, design and
implement the audit procedures to respond those risks, and obtain adequate and proper audit evidence serving as the basis of
publishing the audit opinions. Since malpractices may involve in collusion, falsification, intentional omission, misrepresentation or
overriding the internal control, the risk of failing to detect a significant misstatement due to malpractices is higher than the risk of
failing to detect a significant misstatement due to the error.

(2) Understand the internal control related to audit, so as to design appropriate audit procedures.

(3) Estimate the appropriateness of the accounting policies selected by the management layer, and the rationality of making accounting
estimate and relevant disclosures.


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                                                                                                                 CSG Annual Report 2018




(4) Draw a conclusion on the appropriateness of the going concern assumption used by the management layer. Meanwhile, according
to the obtained audit evidence, it may cause to come to the conclusion that there are substantial doubtable events or major uncertainty
for the sustainable operation ability of the Company. In case that
we come to the conclusion that there is a significant uncertainty, the audit standards require us to remind the users of the statements to
pay attention to relevant disclosures in the financial statements in the audit report; In case of any insufficient disclosure, we shall give
modified opinions. Our conclusion is based on the available information up to the audit report day. However, the future events or
circumstances may cause the Company cannot continue to operate.

(5) Estimate the overall presentation, structure and content (disclosure included) of the financial statements, and Estimate whether the
financial statements fairly reflect relevant transactions and matters.

(6) Acquire adequate and appropriate audit evidences on the financial information of the entity or business activities of the Company,
and give audit opinions on the consolidated financial statements. We are responsible for guiding, supervising and executing the audit of
the Group, and take all responsibilities for the audit opinions.

We communicate with the governance layer about the audit scope, schedule, significant audit findings and other matters within the
plan, including the noteworthy internal control defects recognized by us during the audit.

We also provide statements to the governance layer on the compliance with the professional ethics requirement related to the
independence, and communicate with
the governance layer on all relationships and other matters that may reasonably be considered to affect our independence, as well as
relevant preventive measures.

From the matters that we have communicated with the governance layer, we confirm the most important matters for the audit of the
current financial statements, and thus constitute the key audit matters. We describe these matters in our audit report, unless laws and
regulations prohibit the public disclosure of these matters, or in rare cases, if it is reasonably expected that the negative consequences
of communicating a matter in the audit report will surpass the benefits in the public interests, we confirm that the matter shall not be
communicated in the audit report.




Asia-Pacific (Group)                                     Certified Public Accountant of China
Certified Public Accountants
(special general partnership)




Beijing, China                                           Certified Public Accountant of China
16April 2019




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CSG HOLDING CO., LTD.
CONSOLIDATED AND COMPANY’S                                BALANCE SHEETS
AS AT 31 DECEMBER 2018
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
                                                             31 December 2018    31 December 2017   31 December 2018     31 December 2017
                   ASSETS                       Note             Consolidated        Consolidated          Company              Company
Current assets
  Cash at bank and on hand                       4(1)           2,226,447,720       2,462,605,764      1,700,726,151        1,681,877,320
  Notes     receivable      and    Accounts
  receivable                                    4(2)             1,311,608,760      1,190,470,710                  -                    -

  Inclouding :Notes receivable                  4(2)1             719,375,448         552,232,420                  -                    -
                 Accounts receivable            4(2)2             592,233,312         638,238,290                  -                    -
  Advances to suppliers                          4(3)              91,176,675         143,848,023            438,167              146,132
  Other receivables                           4(4)/17(1)          207,424,295         205,939,019      2,912,516,245        2,400,334,816
  Inventories                                    4(5)             600,139,750         685,895,317                  -                    -
  Assets classified as held for sale             4(6)              45,983,520          45,983,520                  -                    -
  Other current assets                           4(7)             445,327,449         200,847,989        300,000,000                    -

Total current assets                                            4,928,108,169       4,935,590,342      4,913,680,563        4,082,358,268


Non-current assets
  Long-term receivables                         17(3)                        -                  -      1,200,000,000        1,200,000,000
  Long-term equity investments                  17(2)                        -                  -      4,964,696,831        4,795,987,652
  Fixed assets                                   4(8)           9,930,843,775      11,540,769,697         20,926,071           22,182,246
  Construction in progress                       4(9)           2,559,179,442       1,417,624,618                  -                    -
  Intangible assets                             4(10)           1,035,731,324       1,047,222,407            879,146            1,742,109
  Development expenditure                       4(10)              74,549,257          61,365,537                  -                    -
  Goodwill                                      4(11)             376,720,156         397,392,156                  -                    -
  Long-term prepaid expenses                                       12,746,609           2,223,397                  -                    -
  Deferred tax assets                           4(12)             139,529,518          80,872,862                  -                    -
  Other non-current assets                      4(13)              56,825,934          51,941,352            732,038            2,132,041

Total non-current assets                                       14,186,126,015      14,599,412,026      6,187,234,086        6,022,044,048



TOTAL ASSETS                                                   19,114,234,184      19,535,002,368     11,100,914,649       10,104,402,316




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CSG HOLDING CO., LTD.
CONSOLIDATED AND COMPANY’S BALANCE SHEETS (CONT'D)
AS AT 31 DECEMBER 2018
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]


                                                                  31 December 2018     31 December 2017      31 December 2018      31 December 2017

      LIABILITIES AND OWNERS' EQUITY                    Note           Consolidated        Consolidated              Company               Company

   Current liabilities

     Short-term borrowings                              4(15)         2,922,679,590       3,704,630,909         2,000,000,000         2,600,000,000

     Notes payable and Accounts payable                 4(16)         1,315,009,263       1,613,567,664               261,024               261,024

     Including : Notes payable                         4(16)1          105,150,000          213,401,622                      -                     -

                       Accounts payable                4(16)2         1,209,859,263       1,400,166,042               261,024               261,024

     Advances from customers                            4(17)          206,631,008          195,563,465                      -                     -

     Employee benefits payable                          4(18)          266,459,151          272,170,660            41,096,020            40,856,313

     Taxes payable                                      4(19)          111,967,365          111,996,764             1,099,231             1,762,580
                                                         4(20)
     Other payables                                     /17(4)         552,751,187          653,357,094         1,668,587,218           912,523,726

     Including : Interest payable                      4(20)1           73,612,703           34,032,740            41,572,125             3,090,735

                       Dividends    payable            4(20)2             2,846,362                    -            2,846,362                      -

                       Other payables                  4(20)3          476,292,122          619,324,354         1,624,168,731           909,432,991

     Current portion of non-current liabilities         4(21)          819,448,742          904,261,397                      -          180,000,000

     Other current liabilities                                             300,000               300,000                     -                     -

   Total current liabilities                                          6,195,246,306       7,455,847,953         3,711,043,493         3,735,403,643



   Non-current liabilities

     Long-term borrowings                               4(22)         2,315,700,000       1,554,120,000         2,000,000,000         1,200,000,000

     Long-term       payables                           4(23)          529,910,796        1,161,794,247                      -                     -

     Deferred tax liabilities                           4(12)           22,118,840           20,915,954                      -                     -

     Deferred income                                    4(24)          601,825,780          562,701,103           184,642,520           186,526,280

   Total non-current liabilities                                      3,469,555,416       3,299,531,304         2,184,642,520         1,386,526,280



   Total liabilities                                                  9,664,801,722      10,755,379,257         5,895,686,013         5,121,929,923



   Shareholders’ equity

     Share capital                                      4(25)         2,863,277,201       2,484,147,547         2,863,277,201         2,484,147,547

     Capital surplus                                    4(26)         1,095,339,421       1,306,381,765         1,240,166,735         1,451,209,079

     Less: Treasury shares                              4(27)         (277,180,983)        (417,349,879)         (277,180,983)         (417,349,879)

     Other comprehensive income                         4(28)            5,080,234            1,948,943                     -                     -
     Special reserve                                    4(29)             6,068,600           3,224,938                     -                     -
     Surplus reserve                                    4(30)          924,305,375          920,592,332           938,850,735           935,137,692

     Undistributed profits                              4(31)         4,486,264,723       4,159,642,227           440,114,948           529,327,954
     Total equity attributable to shareholders of
   parent company                                                     9,103,154,571       8,458,587,873         5,205,228,636         4,982,472,393

     Minority interests                                                346,277,891          321,035,238                      -                    -
   Total shareholders' equity                                         9,449,432,462       8,779,623,111         5,205,228,636         4,982,472,393


   TOTAL LIABILITIES AND
   SHAREHOLDERS’ EQUITY                                             19,114,234,184      19,535,002,368        11,100,914,649        10,104,402,316



The accompanying notes form an integral part of these financial statements.

Legal representative: Chen Lin                    Principal in charge of accounting: Wang Jian        Head of accounting department:Wang Wenxin

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CSG HOLDING CO., LTD.
CONSOLIDATED AND COMPANY’S INCOME STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]


                                                                                    2018                  2017            2018              2017
                               Item                              Note       Consolidated           Consolidated        Company          Company

       Revenue                                                   4(32)    10,609,963,011         10,879,400,746     58,900,937        58,687,566

       Less: Cost of sales                                       4(32)    (8,120,481,894)    (8,216,358,372)                  -                 -
               Taxes and surcharges                              4(33)     (140,424,851)          (124,523,926)       (516,457)       (4,942,397)
               Selling and distribution expenses                 4(34)     (354,983,459)          (336,131,723)               -                 -

               General and administrative expenses               4(35)     (731,215,251)          (588,652,397)   (177,600,771)     (117,287,822)

               Research and development expenses                 4(36)     (338,791,891)          (330,677,375)         (7,601)           (6,779)
               Financial expenses - net                          4(37)     (349,403,487)          (315,961,080)    (76,503,819)      (42,124,252)
            Including: interest expenses                                   (401,627,067)          (314,603,596)   (131,665,668)      (53,413,267)
                        interest income                                       61,857,535            12,606,285      57,796,521        11,043,439
                 Asset impairment loss                           4(39)     (136,546,150)           (69,399,755)        (22,950)          (80,219)
                                                                 4(40)
               Investment income/(loss)                          /17(5)                 -              427,636     231,537,607       436,068,825
               Income on disposal assets                         4(41)         (454,368)            (1,768,993)          2,440                  -
               Other Income                                      4(42)        94,618,039            84,341,814       2,049,664         1,568,240

       Operating profit                                                      532,279,699           980,696,575      37,839,050       331,883,162
       Add: Non-operating revenue                                4(43)        13,858,651            20,763,042         134,006            40,000
       Less: Non-operating expenses                              4(44)        (1,541,471)           (5,152,591)       (243,265)       (3,426,562)

       Total profit                                                          544,596,879           996,307,026      37,729,791       328,496,600
       Less: Income tax (expenses)/revenue                       4(45)      (72,388,291)          (167,670,991)       (599,358)        (7,655,575)

       Net profit                                                            472,208,588           828,636,035      37,130,433       320,841,025

       Classified by continuous operation:
       Net income from continuing operations (“-” for net
       loss)                                                                 472,208,588           828,636,035      37,130,433       320,841,025

       Net income from discontinued operations (“-” for
       net loss)                                                                        -                     -               -                 -
       Classified by equity ownership:

       Attributable to shareholders of parent company                        452,965,935           825,388,312                -                 -

       Minority interests                                                     19,242,653              3,247,723               -                 -

       Other comprehensive income net after tax                                3,131,291            (2,705,028)               -                 -

       Other comprehensive income net after tax
       attributable to shareholders of parent company                          3,131,291            (2,705,028)               -                 -

       Other comprehensive income items which will be                          3,131,291            (2,705,028)               -                 -
       reclassified subsequently to profit or loss
          Differences on translation of foreign currency
                                                                               3,131,291            (2,705,028)               -                 -
       financial statements
          Other comprehensive income net after tax
       attributable to minority interests                                              -                     -                -                 -

       Total comprehensive income                                4(28)       475,339,879           825,931,007      37,130,433       320,841,025


       Total comprehensive income            attributable   to
                                                                             456,097,226           822,683,284
       shareholders of parent company
       Total comprehensive income attributable to minority
                                                                              19,242,653              3,247,723
       interests

       Earnings per share                                        4(46)

       Basic earnings per share (RMB Yuan)                       4(46)              0.16                   0.30

       Diluted earnings per share (RMB Yuan)                     4(46)              0.16                   0.29

The accompanying notes form an integral part of these financial statements.

Legal representative: Chen Lin                    Principal in charge of accounting: Wang Jian        Head of accounting department: Wang Wenxin

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CSG HOLDING CO., LTD.
CONSOLIDATED AND COMPANY’S CASH FLOW STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
                                                                                                    2018                      2017              2018                  2017

                                    Item                                  Note       Consolidated              Consolidated           Company               Company

1. Cash flows from operating activities

    Cash received from sales of goods or rendering of services                           11,788,692,400         12,159,560,836           61,224,074            84,336,551

    Refund of taxes and surcharges                                                          82,340,672               24,706,337                     -                    -

    Cash received relating to other operating activities                 4(47)(a)          215,823,594               72,348,567          62,104,734            16,104,051

       Sub-total of cash inflows                                                         12,086,856,666         12,256,615,740          123,328,808           100,440,602

    Cash paid for goods and services                                                  (7,251,436,467)           (7,206,584,779)                     -             (65,853)

    Cash paid to and on behalf of employees                                           (1,316,396,954)           (1,204,981,471)        (96,333,808)          (61,388,549)

    Payments of taxes and surcharges                                                      (784,858,705)           (795,627,245)          (3,313,177)         (17,355,536)

    Cash paid relating to other operating activities                     4(47)(b)         (603,786,440)           (585,976,089)        (31,902,035)          (26,421,920)

       Sub-total of cash outflows                                                     (9,956,478,566)           (9,793,169,584)       (131,549,020)         (105,231,858)

    Net cash flows from/(used in) operating activities                                    2,130,378,100           2,463,446,156          (8,220,212)           (4,791,256)

2. Cash flows from investing activities

    Cash received from returns on investments                                                              -                     -      231,537,607           436,068,825

    Net cash received from disposal of fixed assets, intangible assets
                                                                                              4,272,239               4,370,785                 2,440                    -
       and other long-term assets

    Cash received relating to other investing activities                 4(47)(c)           31,055,318              187,756,255                        -        5,966,582

       Sub-total of cash inflows                                                            35,327,557              192,127,040         231,540,047           442,035,407

    Cash paid to acquire fixed assets, intangible assets and other
       long-term assets                                                                   (695,872,456)         (1,212,172,338)          (6,675,786)           (3,996,610)

    Cash paid to acquire investments                                                                   -                         -     (72,000,000)                      -

    Cash paid relating to other investing activities                     4(47)(d)         (118,263,080)           (200,085,036)             (45,168)            (284,975)

       Sub-total of cash outflows                                                         (814,135,536)         (1,412,257,374)        (78,720,954)            (4,281,585)

    Net cash flows (used in)/from investing activities                                    (778,807,979)         (1,220,130,334)         152,819,093           437,753,822

3. Cash flows from financing activities

    Cash received from capital contributions                                                36,161,814              417,349,879          36,161,814           417,349,879

    Including: Cash received from capital contributions by minority
    shareholders of subsidiaries                                                                       -                         -                  -                    -

    Cash received from borrowings                                                         4,636,519,062           4,096,568,050       3,340,000,000         2,750,693,638

    Cash received relating to other financing activities                 4(47)(e)                      -          3,616,000,000          44,696,063         2,700,067,157

       Sub-total of cash inflows                                                          4,672,680,876           8,129,917,929       3,420,857,877         5,868,110,674

    Cash repayments of borrowings                                                     (4,737,952,772)           (5,154,107,768)      (3,320,000,000)       (4,646,723,365)

    Cash payments for interest expenses and distribution of dividends
    or profits                                                                            (503,060,429)           (558,404,559)       (225,366,612)         (275,981,816)

    Including: Cash payments for dividends to minority shareholders of
    subsidiaries                                                                                       -            (2,488,500)                     -                    -

    Cash payments relating to other financing activities                 4(47)(f)     (1,020,125,951)           (1,783,109,674)                     -                    -

       Sub-total of cash outflows                                                     (6,261,139,152)           (7,495,622,001)      (3,545,366,612)       (4,922,705,181)

    Net cash flows (used in)/from financing activities                                (1,588,458,276)               634,295,928       (124,508,735)           945,405,493



4. Effect of foreign exchange rate changes on cash                                            2,261,903             (2,425,575)          (1,248,202)              666,398




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                                                                                                                        CSG Annual Report 2018



5. Net increase/(decrease) in cash and cash equivalents           4(48)(b)        (234,626,252)      1,875,186,175     18,841,944    1,379,034,457

       Add: Cash and cash equivalents at beginning of year                        2,459,753,165       584,566,990    1,680,672,390    301,637,933



6. Cash and cash equivalents at end of year                       4(48)(c)        2,225,126,913      2,459,753,165   1,699,514,334   1,680,672,390




The accompanying notes form an integral part of these financial statements.




Legal representative: Chen Lin                Principal in charge of accounting: Wang Jian        Head of accounting department: Wang Wenxin




                                                                             96
                                                                                                                                                                                                     CSG Annual Report 2018

CSG HOLDING CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2018
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]

                                                                                                         Attributable to shareholders of parent company
                                                                                                         Other                                                                                                         Total
                                                                                     Less: Treasury   comprehensi                           Surplus       Undistributed                           Minority         shareholders'
                   Item                        Share capital       Capital surplus       share         ve income      Special reserve       reserve         profits             Sub-total         interests           equity

                                      Note              4(25)                4(26)            4(27)         4(28)              4(29)              4(30)            4(31)



 Balance at 1 January 2017                    2,075,335,560        1,260,702,197                  -    4,653,971         5,843,473       888,508,230      3,573,871,573       7,808,915,004     320,276,015       8,129,191,019
 Movements for the year ended 31 December
 2017

 Total comprehensive income

   Net profit                                                  -                 -                -             -                  -                  -    825,388,312         825,388,312        3,247,723        828,636,035

   Other comprehensive income         4(28)                    -                 -                -   (2,705,028)                  -                  -                   -     (2,705,028)                   -     (2,705,028)

 Total comprehensive income                                    -                 -                -   (2,705,028)                  -                  -    825,388,312         822,683,284        3,247,723        825,931,007
 Capital contribution and
 withdrawal by shareholders                      97,511,654         356,979,901      (417,349,879)              -                  -                  -                   -     37,141,676                    -     37,141,676

   Share-based payments                          97,511,654         328,032,920      (417,349,879)              -                  -                  -                   -       8,194,695                   -       8,194,695
     Shareholders’ Interest-free
 borrowing                                                     -     28,946,981                   -             -                  -                  -                   -     28,946,981                    -     28,946,981

 Profit distribution                                           -                 -                -             -                  -      32,084,102      (239,617,658)       (207,533,556)     (2,488,500)       (210,022,056)

   Appropriation to surplus reserve   4(30)                    -                 -                -             -                  -      32,084,102       (32,084,102)                     -                 -                    -

   Distribution to the shareholders   4(31)                    -                 -                -             -                  -                  -   (207,533,556)       (207,533,556)     (2,488,500)       (210,022,056)

 Special reserve                                               -                 -                -             -      (2,618,535)                    -                   -     (2,618,535)                   -     (2,618,535)

   Special reserve appropriate        4(29)                    -                 -                -             -        7,831,127                    -                   -       7,831,127                   -       7,831,127

   Special reserve used               4(29)                    -                 -                -             -     (10,449,662)                    -                   -    (10,449,662)                   -    (10,449,662)
 Internal transfer of shareholders'
 equity                                        311,300,333         (311,300,333)                  -             -                  -                  -                   -                 -                 -                    -

   Capital reserve to share capital            311,300,333         (311,300,333)                  -             -                  -                  -                   -                 -                 -                    -


 Balance at 31 December 2017                  2,484,147,547        1,306,381,765     (417,349,879)     1,948,943         3,224,938       920,592,332      4,159,642,227       8,458,587,873     321,035,238       8,779,623,111




                                                                                                                              97
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CSG HOLDING CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (CONT’D)
FOR THE YEAR ENDED 31 DECEMBER 2018
                                                                                                           Attributable to shareholders of parent company
                                                                                                           Other                                                                                                         Total
                                                                                       Less: Treasury   comprehensi                           Surplus        Undistributed                          Minority         shareholders'
                   Item                          Share capital       Capital surplus       share         ve income      Special reserve       reserve          profits             Sub-total        interests           equity
                                        Note              4(25)                4(26)            4(27)         4(28)              4(29)              4(30)             4(31)


 Balance at 1 January 2018                      2,484,147,547        1,306,381,765     (417,349,879)     1,948,943          3,224,938      920,592,332       4,159,642,227       8,458,587,873     321,035,238      8,779,623,111
 Movements for the year ended 31 December
 2018

 Total comprehensive income

   Net profit                                                    -                 -                -             -                  -                  -     452,965,935         452,965,935       19,242,653       472,208,588

   Other comprehensive income           4(28)                    -                 -                -    3,131,291                   -                  -                    -       3,131,291                  -       3,131,291

 Total comprehensive income                                      -                 -                -    3,131,291                   -                  -     452,965,935         456,097,226       19,242,653       475,339,879
   Capital increase or decrease from
 shareholder                                        6,507,523         161,579,787       140,168,896               -                  -                  -                    -    308,256,206        6,000,000       314,256,206
   Minority shareholders invest
 capital                                                         -                 -                -             -                  -                  -                    -                 -     6,000,000          6,000,000

 Share-based payments                               6,507,523         161,579,787       140,168,896               -                  -                  -                    -    308,256,206                   -    308,256,206

 Profit distribution                                             -                 -                -             -                  -        3,713,043      (126,343,439)       (122,630,396)                  -   (122,630,396)

   Appropriation to surplus reserve     4(30)                    -                 -                -             -                  -        3,713,043        (3,713,043)                     -                -                    -

   Distribution to the shareholders     4(31)                    -                 -                -             -                  -                  -    (122,630,396)       (122,630,396)                  -   (122,630,396)

 Special reserve                                                 -                 -                -             -         2,843,662                   -                    -       2,843,662                  -       2,843,662

   Special reserve appropriate          4(29)                    -                 -                -             -         8,319,885                   -                    -       8,319,885                  -       8,319,885

   Special reserve used                 4(29)                    -                 -                -             -       (5,476,223)                   -                    -     (5,476,223)                  -     (5,476,223)
 Internal transfer of shareholders'
 equity                                          372,622,131         (372,622,131)                  -             -                  -                  -                    -                 -                -                    -

   Capital reserve to share capital              372,622,131         (372,622,131)                  -             -                  -                  -                    -                 -                -                    -


 Balance at 31 December 2018                    2,863,277,201        1,095,339,421     (277,180,983)     5,080,234          6,068,600      924,305,375       4,486,264,723       9,103,154,571     346,277,891      9,449,432,462

The accompanying notes form an integral part of these financial statements.

Legal representative:            Chen Lin                              Principal in charge of accounting:        Wang Jian                                  Head of accounting department: Wang Wenxin

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   CSG HOLDING CO., LTD.

   COMPANY'S STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
   FOR THE YEAR ENDED 31 DECEMBER 2018
   (All amounts in RMB Yuan unless otherwise stated)
   [English translation for reference only]


                                                                                               Attributable to shareholders of parent compan
                                                                                                                                                                    Total
                                                                                                             Less: Treasury     Surplus        Undistributed    shareholders'
                       Item                                   Share capital       Capital surplus                share          reserve          profits           equity




  Balance at 1 January 2017                                   2,075,335,560        1,405,529,511                          -   903,053,590       448,104,587    4,832,023,248

  Movements for the year ended 31 December 2017

  Total comprehensive income

    Net profit                                                                -                     -                     -               -     320,841,025     320,841,025

    Total comprehensive income                                                -                     -                     -               -     320,841,025     320,841,025
  Capital increase       or    decrease      from
  shareholder                                                    97,511,654          356,979,901             (417,349,879)                -                -      37,141,676

    Share-based payments                                         97,511,654          328,032,920             (417,349,879)                -                -       8,194,695

    Shareholders’ Interest-free borrowing                                    -       28,946,981                          -               -                -      28,946,981

Profit distribution                                                           -                     -                     -    32,084,102      (239,617,658)   (207,533,556)

    Appropriation to surplus reserve                                          -                     -                     -    32,084,102       (32,084,102)                    -

    Distribution to the shareholders                                          -                     -                     -               -    (207,533,556)   (207,533,556)

    Capital reserve to share capital                            311,300,333        (311,300,333)                          -               -                -                    -

  Balance at 31 December 2017                                 2,484,147,547        1,451,209,079             (417,349,879)    935,137,692       529,327,954    4,982,472,393

  Balance at 1 January 2018                                   2,484,147,547        1,451,209,079             (417,349,879)    935,137,692       529,327,954    4,982,472,393
  Movements for the year ended 31 December 2018
  Total comprehensive income

    Net profit                                                                -                     -                     -               -      37,130,433       37,130,433

    Total comprehensive income                                                -                     -                     -               -      37,130,433       37,130,433
  Capital increase       or    decrease      from
  shareholder                                                     6,507,523          161,579,787              140,168,896                 -                -    308,256,206

    Share-based payments                                          6,507,523          161,579,787              140,168,896                 -                -    308,256,206

Profit distribution                                                           -                     -                     -     3,713,043      (126,343,439)   (122,630,396)

    Appropriation to surplus reserve                                          -                     -                     -     3,713,043        (3,713,043)                    -

    Distribution to the shareholders                                          -                     -                     -               -    (122,630,396)   (122,630,396)

  Capital reserve to share capital                              372,622,131        (372,622,131)                          -               -                -                    -

  Balance at 31 December 2018                                 2,863,277,201        1,240,166,735             (277,180,983)    938,850,735       440,114,948    5,205,228,636




   The accompanying notes form an integral part of these financial statements.



   Legal representative: Chen Lin                   Principal in charge of accounting: Wang Jian                    Head of accounting department: Wang Wenxin




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1   General information

    CSG Holding Co., LTD (the “Company”) was incorporated in September 1984, known as China South Glass Company, as a joint
    venture enterprise by Hong Kong China Merchants Shipping Co., LTD (香港招商局轮船股份有限公司), Shenzhen 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 Trust and Investment Corporation (广东国际信托投资公司). The Company was registered in Shenzhen,
    Guangdong Province of the People's Republic of China and its headquarters is located in Shenzhen, Guangdong Province of the
    People's Republic of China. The Company issued RMB-denominated ordinary shares (“A-share”) and foreign shares (“B-share”)
    publicly in October 1991 and January 1992 respectively, and was listed on Shenzhen Stock Exchange on February 1992. As at 31
    December 2018, the registered capital was RMB2,863,277,201, with nominal value of RMB1 per share.

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

    Details on the majors subsidiaries included in the consolidated scope in current year were stated in Note 6(1).

    The financial statements were authorized for issue by the Board of Directors on 16 April 2019.

2   Summary of significant accounting policies and accounting estimates

    The Group determines its specific accounting policies and estimates according to manufacturing and operation feature. It mainly
    reflected in provision for bad debts of receivables (Note 2(10)), inventory costing method (Note 2(11)), amortization of Property,
    plant and equipment and intangible assets (Note 2(13) and (16)), criteria for determining capitalized development expenditure (Note
    2(16)), and timing for revenue recognition (Note 2(24)).

    Please see Note 2(30) for the key judgments adopted by the Group in applying important accounting policies.

(1) Basis of preparation

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

    As at 31 December 2018, the Group current liabilities exceed current assets about RMB1.267 billion and committed capital
    expenditure of about RMB 0.131 billion (Note 11(1)). The directors of the Company has assessed the following facts and conditions:
    a) the Group has been able to generate positive operating cash flows in prior years and expect to do so in the next 12 months, and in
    2018, the net cash inflow from operation activities is approximately RMB 2.13 billion; b) the Group has maintained good
    relationship with banks, so the Group has been able to successfully renew the bank facilities upon the expiry. As at 31 December
    2018, the Group had unutilized banking facilities of approximately RMB7.054billion, among which long-term banking facilities were
    about RMB0.357 billion. In addition, the shareholder of the Group or other appointed related parties are willing to provide the Group
    with RMB2.00 billion interest-free loan. As at report date, the shareholder of Group has provided RMB 2 billion interest-free loan.
    The Group also has other sources of financing, such as
    issuing short-term bonds, ultra-short-term financing bonds and medium-term notes. The directors are of view that the banking
    facilities and shareholder’s support above can meet the funding requirements of the Group’s debt servicing and capital commitment.
    Accordingly, the directors of the Company had adopted the going concern basis in the preparation of the financial statements of the
    Company and the Group.

(2) Statement of compliance with the Accounting Standards for Business Enterprises

    The financial statements of the Company for the year ended 31 December 2018 are in compliance with the Accounting Standards for
    Business Enterprises, and truly and completely present the financial position of the consolidated and the Company as at 31 December
    2018 and their financial performance, cash flows and other information for the year then ended.

(3) Accounting year

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



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(4) Recording currency

   The recording currency is Renminbi (RMB).The economic environment of subsidiaries (China Southern Glass(Hong Kong) Limited,
   Hong Kong Southern Glass Trading co., Limited) determines their recording currency is Hongkong dollar. This report ‘s recording
   currency is Renminbi (RMB).

(5) Business combinations

(a) Business combinations involving enterprises under common control

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

(6) Preparation of consolidated financial statements

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

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

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

   All significant intra-group balances, transactions and unrealized profits are eliminated in the consolidated financial statements. The
   portion of subsidiaries’ equity and the portion of a subsidiaries’ net profits and losses and comprehensive incomes for the period not
   attributable to Company are recognized as minority interests and presented separately in the consolidated financial statements under
   equity, net profits and total comprehensive income respectively. Unrealized profits and losses resulting from the sales of assets by the
   Company to its subsidiaries are fully eliminated against net profit attributable to shareholders of the parent company. Unrealized
   profits and losses resulting from the sales of assets by a subsidiary to the Company are eliminated and allocated between net profit
   attributable to shareholders of the parent company and non-controlling interests in accordance with the allocation proportion of the
   parent company in the subsidiary. Unrealized profits and losses resulting from the sales of assets by one subsidiary to another are
   eliminated and allocated between net profit attributable to shareholders of the parent company and non-controlling interests in
   accordance with the allocation proportion of the parent in the subsidiary.

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

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

(7) Cash and cash equivalents

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

(8) Foreign currency transaction

(a) Foreign currency transaction

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

(b) Translation of foreign currency financial statements

    The asset and liability items in the balance sheets for overseas operations are translated at the spot exchange rates on the 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 income and expense items in the income statements of overseas operations are translated at the spot
    exchange rates of the transaction dates. The differences arising from the above translation are presented separately in the
    shareholders’ equity. The cash flows of overseas operations are translated at the spot exchange rates on the dates of the cash flows.
    The effect of exchange rate changes on cash is presented separately in the cash flow statement.

(9) Financial instrument

(a) Financial assets

(i) Classification of financial assets

    Financial assets are classified into the following categories at initial recognition: financial assets at fair value through profit or loss,
    receivables, available-for-sale financial assets and held-to-maturity investments. The classification of financial assets depends on the
    Group’s intention and ability to hold the financial assets. The Group had no financial assets at fair value through profit or loss and
    held-to-maturity investments for 2017.

    Receivables

    Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.
    Receivables comprise notes receivable, accounts receivable and other receivables. (Note 2(10))

    Available-for-sale financial assets

    Available-for-sale financial assets are non-derivative financial assets that are either designated in this category or not classified in any
    of the other categories at initial recognition. Available-for-sale financial assets are included in other current assets on the balance
    sheet if management intends to dispose of them within 12 months after the balance sheet date.

(ii) Recognition and measurement

    Financial assets are recognized at fair value on the balance sheet when the Group becomes a party to the contractual provisions of the
    financial instrument. The related transaction costs that are attributable to the acquisition of receivables and available-for-sale
    financial assets are included in their initial recognition amounts.

    Available-for-sale financial assets are subsequently measured at fair value. Investments in equity instruments are measured at cost
    when they do not have a quoted market price in an active market and whose fair value cannot be reliably measured. Receivables are
    measured at amortized cost using the effective interest method.

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    Gains or losses arising from change in fair value of available-for-sale financial assets are recognized directly in equity, except for
    impairment losses and foreign exchange gains and losses arising from translation of monetary financial assets. When such financial
    assets are derecognized, the cumulative gains or losses previously recognized directly into equity are recycled into profit or loss for
    the current period. Interests on available-for-sale investments in debt instruments calculated using the effective interest method
    during the period in which such investments are held and cash dividends declared by the investee on available-for-sale investments in
    equity instruments are recognized as investment income, which is recognized in profit or loss for the period.

(iii) Impairment of financial assets

    The Group assesses book values of financial assets at each balance sheet date. If there is objective evidence that a financial asset is
    impaired, an impairment loss is provided for.

    The objective evidence of impairment losses on financial assets refers to events that actually incurred after the initial recognition of
    financial assets, have influence on the expected future cash flow from the financial assets and the influence can be reliably measured.

    Objective evidence which indicates the occurrence of impairment for available-for-sale equity instruments includes significant or
    non-temporary decrease of fair value of equity instruments investment. The Group conducts individual Checkion on each
    available-for-sale equity instruments investment at balance sheet date, if the fair value of the available-for-sale equity instrument is
    less than its initial investment cost for more than 50% (inclusive) or less than its initial investment cost continually for more than 1
    year, that means impairment incurred; if the fair value of the available-for-sale equity instrument is less than its initial investment
    cost for more than 20% (inclusive) but has not reached 50%, the Group will comprehensively consider other factors such as price
    volatility to determine whether the equity instrument investment has been impaired. The Group calculates the initial investment cost
    of initial available-for-sale equity instruments investment using the weighted average method.

    When an impairment loss on a financial asset carried at amortized cost has occurred, the amount of loss is provided for at the
    difference between the asset’s carrying amount and the present value of its estimated future cash flows (excluding future credit losses
    that have not been incurred). If there is objective evidence that the value of the financial asset is recovered and the recovery is related
    objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed and the
    amount of reversal is recognized in profit or loss.

    If an impairment loss on available-for-sale financial assets measured at fair value is incurred, the cumulative losses arising from the
    decline in fair value that had been recognized directly in shareholders' equity are transferred out from equity and into impairment loss.
    For an investment in debt instrument classified as available-for-sale on which impairment losses have been recognized, if, in a
    subsequent period, its fair value increases and the increase can be objectively related to an event occurring after the impairment loss
    was recognized in profit or loss, the previously recognized impairment loss is reversed into profit or loss for the current period. For
    an investment in an equity instrument classified as available-for-sale on which impairment losses have been recognized, the increase
    in its fair value in a subsequent period is recognized directly in equity.

(iv) Derecognition of financial assets

    Financial assets are derecognized when: i) the contractual rights to receive the cash flows from the financial assets have expired; or ii)
    all substantial risks and rewards of ownership of the financial assets have been transferred; or iii) the control over the financial asset
    has been waived even if the Group does not transfer or retain nearly all of the risks and rewards relating to the ownership of a
    financial asset.

    On derecognition of a financial asset, the difference between book value and the sum of the consideration received and the
    cumulative changes in fair value that had been recognized directly in owner's equity, is recognized in profit or loss.

(b) Financial liabilities

    Financial liabilities are classified into two categories at initial recognition: financial liabilities at fair value through profit or loss and
    other financial liabilities. The financial liabilities of the Group mainly comprise other financial liabilities, including payables,
    borrowings and bonds payable.

    The fair value change of financial liabilities at fair value through profit or loss is charged to income statement.

    Payables comprise accounts payable, notes payable and other payables, which are recognized initially at fair value and measured
    subsequently at amortized cost using the effective interest method.

    Borrowings and bonds payable are recognized initially at fair value, net of transaction costs incurred, and subsequently measured at
    amortized cost using the effective interest method.

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   Other financial liabilities within one year (inclusive) is presented as current liabilities, while non-current financial liabilities due with
   one year (inclusive) is reclassified as non-current liabilities due within one year. Others are presented as non-current liabilities.

   A financial liability (or a part of a financial liability) is derecognized when all or part of the obligation is extinguished. The difference
   between book value of a financial liability (or a part of financial liability) extinguished and the consideration paid is recognized in the
   income statement.

(c) Determination of fair value of financial instruments

   The fair value of a financial instrument that is traded in an active market is determined at the quoted price in the active market. The
   fair value of a financial instrument that is not traded in an active market is determined by using a valuation technique. During
   valuation, the Group adopts a valuation technique suitable for current situation, which is supported by sufficient available data and
   other information, chooses the inputs consistent with the feature of assets or liabilities considered in the transaction thereof with
   market participants, and uses related observable inputs in preference to the greatest extent. Unobservable inputs are used when it is
   unable to obtain or is infeasible for related observable inputs.

(10) Receivables

   Receivables comprise notes receivable, accounts receivable and other receivables. Accounts receivable arising from sales of goods or
   rendering of services are initially recognized at fair value of the contractual payments from the buyers or service recipients.

(a) Receivables with amounts that are individually significant and subject to separate assessment for provision for bad debts

   Receivables with amounts that are individually significant are subject to separate assessment for impairment. If there exists objective
   evidence that the Group will not be able to collect the amount under the original terms, a provision for bad debts of that receivable is
   made at the difference between its carrying amount and the present value of its estimated future cash flows.

   The basis or amount for individually significant receivables is individually greater than RMB20 million.

(b) Receivables with amounts that are not individually significant but subject to separate assessment for provision for bad debts

   If there exists objective evidence that the Group will not be able to collect the amount under the original terms, a provision for bad
   debts of that receivable is made at the difference between its carrying amount and the present value of its estimated future cash flows.

(c) Receivables that are subject to provision for bad debts on the grouping basis

   Receivables with amounts that have not been individually provided for impairment are classified into certain groupings based on
   their credit risk characteristics. The provision for bad debts is determined based on the historical loss experience for the groupings of
   receivables with similar credit risk characteristics, taking into consideration of the current circumstances.

   Basis for portfolio is as follows:

   Portfolio 1                            Receivables not impaired after separate assessment
   Portfolio 2                            Related party portfolio

   The percentage of provision for the portfolio:

                                               Percentage of provision for
                                                  accounts receivable                Percentage of provision for other receivables


   Portfolio 1                                             2%                                              2%
   Portfolio 2                                             2%                                              2%

(d) The Group transfers receivables which have no recourse right to financial institution, the difference between book values which is
    trade amount cut the write-off receivables and related tax expenses charged into the income statement.




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(11) Inventories

(a)   Classification

      Inventories refer to manufacturing sector, including raw materials, work in progress, finished goods and turnover materials, and are
      measured at the lower of cost and net realizable value.

(b)   Inventory costing method

      Cost is determined using the weighted average method. The cost of finished goods and work in progress comprise raw materials,
      direct labor and systematically allocated production overhead based on the normal production capacity.

(c)   Amortization methods of low value consumables and packaging materials

      Turnover materials include low value consumables and packaging materials, which are expensed when issued.

(d)   The determination of net realizable 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 of the inventories over their net
      realizable value. Net realizable value is determined based on the estimated selling price in the ordinary course of business, less the
      estimated costs to completion and estimated costs necessary to make the sale and related taxes.

(e)   The Group adopts the perpetual inventory system.

(12) Long-term equity investments

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

      Subsidiaries are the investees over which the Company is able to exercise control. Associates are the investees 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

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

      For long-term equity investments not formed in business combination: the one paid by cash is initially measured at actual purchase
      price; the long-term investment obtained by issuing equity securities is stated 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 initial investment costs, and cash
      dividends or profit distribution declared by the investees are recognized as investment income in profit or loss.

      For long-term equity investments accounted for using the equity method, where the initial investment cost 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 initial investment cost; where the initial investment cost is less than the Group’s share of the fair
      value of the investee’s identifiable net assets at the acquisition date, the difference is included in profit or loss and the cost of the
      long-term equity investment is adjusted upwards accordingly.

      Under the equity method, the Group recognizes the investment income according to its share of net profit or loss of the investee. The
      Group discontinues recognizing its share of the net losses of an investee after book values of the long-term equity investment
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      together with any long-term interests that in substance form part of the investor’s net investment in the investee are reduced to zero.
      However, if the Group has obligations for additional losses and the criteria with respect to recognition of provisions under the
      accounting standards on contingencies are satisfied, the Group continues recognizing the investment losses and the provisions. For
      changes in owners’ equity of the investee other than those arising from its net profit or loss, its proportionate share is directly
      recorded into capital surplus, provided that the proportion of the shareholding of the Group in the investee remains unchanged. Book
      value of the investment is reduced by the Group’s share of the profit distribution or cash dividends declared by an investee. The
      unrealized profits or losses arising from the intra-group transactions amongst the Group and its investees are eliminated in proportion
      to the Group’s equity interest in the investees, and then based on which the investment gains or losses are recognized. Any losses
      resulting from transactions between the Group and its investees attributable to asset impairment losses are not eliminated.

(c)   Basis for determining existence of control, jointly control or significant influence over investees

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

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

(d)   Impairment of long-term equity investments

      Book value of long-term equity investments in subsidiaries and associates is reduced to the recoverable amount when the recoverable
      amount is less than book value (Note 2(18)).

(13) Fixed assets

(a)   Recognition and initial measurement

      Fixed assets comprise buildings, machinery and equipment, motor vehicles and others.

      Fixed assets are recognized when it is probable that the related economic benefits will probably flow to the Group and the costs can
      be reliably measured. Fixed assets purchased or constructed by the Group are initially measured at cost at the acquisition date.

      Subsequent expenditures incurred for a fixed asset are included in the cost of the fixed asset when it is probable that the associated
      economic benefits will flow to the Group and the related cost can be reliably measured. Book value of the replaced part is
      derecognized. All the other subsequent expenditures are recognized in profit or loss in the period in which they are incurred.

(b)   Depreciation methods

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

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

                                            Estimated useful lives    Estimated net residual value          Annual depreciation rate

      Buildings                                     20 to 35 years                              5%                  2.71% to 4.75%
      Machinery and equipment                        8 to 20 years                              5%                 4.75% to 11.88%
      Motor vehicles 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 method applied 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 (Note 2 (18)).

(d)   Disposal

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

(14)   Construction in progress

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

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

       Book value of construction in progress is reduced to the recoverable amount when the recoverable amount is below book value (Note
       2 (18)).

(15)   Borrowing costs

       The borrowing costs that are directly attributable to the acquisition and construction of an asset that needs a substantially long period
       of time for its intended use commence to be capitalized and recorded as 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 for its intended use have commenced. The capitalization of borrowing costs ceases when the asset under acquisition or
       construction becomes ready for its intended use and the borrowing costs incurred thereafter are recognized in profit or loss for the
       current period. Capitalization of borrowing costs is suspended during periods in which the acquisition or construction of a fixed asset
       is interrupted abnormally and the interruption lasts for more than 3 months, until the acquisition or construction is resumed.

       For the specific borrowings obtained for the acquisition or construction of an asset qualifying for capitalization, the amount of
       borrowing costs eligible for capitalization is determined by deducting any interest income earned from depositing the unused specific
       borrowings in the banks or any investment income arising on the temporary investment of those borrowings during the capitalization
       period.

       For the general borrowings obtained for the acquisition or construction of an asset qualifying for capitalization, the amount of
       borrowing costs eligible for capitalization is determined by applying the weighted average effective interest rate of general
       borrowings, to the weighted average of the excess amount of cumulative expenditures on the asset over the amount of specific
       borrowings. The effective interest rate is the rate at which the estimated future cash flows during the period of expected duration of
       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, exploitation rights and others, are measured
       at cost.

 (a)   Land use rights

       Land use rights are amortized 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 reasonably allocated between the land use rights and the buildings, all of
       the acquisition costs are recognized as fixed assets.

 (b)   Patents and proprietary technologies

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

 (c)   Exploitation rights

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

 (d)   Periodical review of useful life and amortization method

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

 (e)   Research and development
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       The expenditure on an internal research and development project is classified into expenditure on the research phase and expenditure
       on the development phase based on its nature and whether there is material uncertainty that the research and development activities
       can form an intangible asset at end of the project.

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

            The development of manufacturing technique has been fully demonstrated by technical team;
            The management has approved the budget for the development of manufacturing technique;
            There are research and analysis of pre-market research explaining that products manufactured with such technique are capable
            of marketing;
            There is sufficient technical and capital to support the development of manufacturing technique and subsequent mass
            production; and the expenditure on manufacturing technique development can be reliably gathered.

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

 (f)   Impairment of intangible assets

       Book value of intangible assets is reduced to the recoverable amount when the recoverable amount is below book value (Note 2
       (18)).

(17)   Long-term prepaid expenses

       Long-term prepaid expenses include the expenditures that have been incurred but should be recognized as expenses over more than
       one year in the current and subsequent periods. Long-term prepaid expenses are amortized on the straight-line basis over the expected
       beneficial period and are presented at actual expenditure net of accumulated amortization.

(18)   Impairment of long-term assets

       Fixed assets, construction in progress, intangible assets with finite useful lives and long-term equity investments in joint ventures and
       associates are tested for impairment if there is any indication that the assets may be impaired at the balance sheet date; intangible
       assets not ready for their intended use are tested at least annually for impairment, irrespective of whether there is any indication that
       they may be impaired. If the result of the impairment test indicates that the recoverable amount of an asset is less than its carrying
       amount, a provision for impairment and an impairment loss are recognized for the amount by which the asset’s carrying amount
       exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and the present value
       of the future cash flows expected to be derived from the asset. Provision for asset impairment is determined and recognized on the
       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 assets is the smallest group of assets that is able to generate
       independent cash inflows.

       Goodwill that is 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 value of goodwill is allocated to the related asset groups
       or groups of asset groups which are expected to benefit from the synergies of the business combination. If the result of the test
       indicates that the recoverable amount of an asset group or group of asset groups, including the allocated goodwill, is lower than its
       carrying amount, the corresponding impairment loss is recognized. The impairment loss is first deducted from book value of
       goodwill that is allocated to the asset group or group of asset groups, and then deducted from book values of other assets within the
       asset groups or groups of asset groups in proportion to book values of assets other than goodwill.

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

(19)   Employee benefits

       Employee benefits include short-term employee benefits, post-employment benefits, termination benefits and other long-term
       employee benefits provided in various forms of consideration in exchange for service rendered by employees or compensations for
       the termination of employment relationship.
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 (a)   Short-term employee benefits

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

 (b)   Post-employment benefits

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

       Basic pensions

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

 (c)   Termination benefits

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

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

(20)   Dividend distribution

       Cash dividend is recognized as a liability for the period in which the dividend is approved by the shareholders’ meeting.

(21)   Deferred tax assets and deferred tax liabilities

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

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

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

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       Deferred tax assets and liabilities are offset when:

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

(22)   Provisions

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

       A provision is initially measured at the best estimate of the expenditure required to settle the related present obligation. Factors
       surrounding a contingency, such as the risks, uncertainties and the time value of money, are taken into account as a whole in reaching
       the best estimate of a provision. Where the effect of the time value of money is material, the best estimate is determined by
       discounting the related future cash outflows. The increase in the discounted amount of the provision arising from passage of time is
       recognized as interest expense.

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

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

(23)      Share-based payments

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

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

       In the period at which performance conditions and term of service are met, the relevant cost and expenses of equity-settled 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 reflect the part of expired waiting period and optimal estimation for the number of the Company final
       vested equity instruments.

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

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

       If the equity-settled payment is cancelled, the cancellation date shall be deemed as an expedited exercise, and the unconfirmed
       amount shall be confirmed immediately. If the employee or other party is able to choose to meet the non-vesting conditions but not
       satisfied in the waiting period, equity-settled payment should be cancelled. But if a new equity instrument is granted, and the new
       equity instrument is confirm to replace the old equity instrument which is canceled in the authorization date of the new equity
       instrument, the new equity instrument should be disposed by using the same conditions and terms of the old equity instrument for
       modifications

(24)   Revenue recognition

       The amount of revenue is determined in accordance with the fair value of the consideration received or receivable for the sales of
       goods and services in the ordinary course of the Group’s activities. Revenue is shown net of discounts, rebates and returns.
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       Revenue is recognized when the economic benefits associated with the transaction will probably flow to the Group, the related
       revenue can be reliably measured, and the specific revenue recognition criteria have been met for each type of the Group’s activities
       as described below:

(a)    Sales of goods

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

(b)    Rendering of services

       Revenue is recognized for the rendering of service by the Group to external parties upon the completion of related service.

(c)    Transfer of asset use rights

       Interest income is recognized on a time-proportion basis using the effective interest method.

(25)   Government grants

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

       A government grant is recognized when there is a reasonable assurance that the grants will be received and the Group will comply
       with all attached conditions. Monetary government grants are measured at the amounts received or receivable. Non-monetary
       government grant are measured at fair value, if the fair value cannot be reliably obtained, it is measured at nominal amount.

       The government grants related to assets refer to government grant obtained by enterprises and used for purchase and construction of
       long-term assets or formation of long-term asset in other ways. The government 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 or losses to be incurred by the
       Group in the subsequent periods, the grant is recognized as deferred income, and included in profit or loss over the periods in which
       the related costs are recognized; where the grant is a compensation for related expenses or losses already incurred by the Group, the
       grant is recognized immediately in profit or loss for the current period. The company uses the same method of presentation for
       similar government grants.

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

(26)   Leases

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

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

       Lease income under an operating lease is recognized as revenue on a straight-line basis over the period of the lease.

(27)   Assets classified as held for sale

       A non-current asset or a disposal group is classified as held for sale when all of the following conditions are satisfied: (1) the
       non-current asset or the disposal group is available for immediate sale in its present condition subject to terms that are traditionally
       and customary for sales; (2) the Group has made a resolution 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.


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       Non-current assets (except for financial assets, investment properties at fair value and deferred tax assets) that meet the recognition
       criteria for held for sale are recognized at the amount equal to the lower of the fair value less costs to sell and book value. The
       difference between fair value less costs to sell 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 are accounted for as current assets; while
       liabilities included in disposal groups classified as held for sale are 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 classified as held for sale, and is
       separately identifiable operationally and for financial reporting purposes, and satisfies one of the following conditions: (1) represents
       a separate major line of business or geographical area of operations; (2) is part of a single coordinated plan to dispose of a separate
       major line of business or 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 loss of operation and disposal.

(28)   Safety production costs

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

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

       The safety production costs is mainly used for the overhaul, renewal and maintenance of safety facilities. The safety production 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 special reserve, if the expenditures are expenses in nature, the expenses incurred are offset against
       the special reserve directly when incurred. If the expenditures are capital expenditures, when projects are completed and transferred
       to fixed assets, the special reserve should be offset against the cost of fixed assets, and a corresponding accumulated depreciation are
       recognized. The fixed assets are no longer be depreciated in future.

(29)   Segment information

       The Group identifies operating segments based on the internal organization structure, management requirements and internal
       reporting system, and discloses segment information of reportable segments which is determined on the basis of operating segments.

       An operating segment is a component of the Group that satisfies all of the following conditions: (1) the component is able to earn
       revenue and incur expenses from its ordinary activities; (2) whose operating results are regularly reviewed by the Group’s
       management to make decisions about resources to be allocated to the segment and to assess its performance, and (3) for which the
       information on financial position, operating results and cash flows is available to the Group. If two or more operating segments have
       similar economic characteristics and satisfy certain conditions, they are aggregated into one single operating segment.

(30)   Critical accounting estimates and judgments

       The Group continually Estimates the critical accounting estimates and key assumptions applied based on historical experience and
       other factors, including expectations of future events that are believed to be reasonable.

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

 (a)   Income tax

       The Group is subject to Income tax in numerous jurisdictions. There are some transactions and events for which the ultimate tax
       determination is uncertain during the ordinary course of business. Significant judgment is required from the Group in determining the
       provision for Income tax in each of these jurisdictions. 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 the period in which such
       determination is finally made.



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 (b)   Deferred income tax

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

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

       Long-term assets at the balance sheet date should be subject to impairment testing if there are any indications of impairment.
       Management determines whether the long-term assets impaired or not by evaluating and analyzing 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 carrying amount by continually using the assets or disposal; and (3) whether the assumptions used in expected obtainable
       present value of future cash flows are appropriate.

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

 (d)   The useful life of fixed assets

       Management estimates the useful life of fixed assets, based on historical experiences on using fixed assets that have similar
       properties and functions. When there are differences between actually useful life and previously estimation, management will adjust
       estimation to useful life of fixed assets. The fixed assets 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 the next
       accounting period, which may cause major adjustment to book value of fixed assets on balance sheet.

 (e)   Goodwill impairment

       Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate a potential
       impairment. For the purpose of impairment testing, goodwill acquired in 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 forecasted and discounted
       with appropriate discount rate.

(31)   Significant changes in accounting policies

       In 2018, the Ministry of Finance issued the Notice of the Ministry of Finance on Revising the Format of 2018 General Enterprise
       Financial Statements (Finance (2018) No.15), and revised the financial statement format of general enterprises accordingly .The
       line items of "Notes receivable" and "Accounts receivable" in the balance sheet are listed as "Notes receivable and accounts
       receivable"; "Interest receivable " "Dividends receivable" and "Other receivables” are included in "Other receivables"; "Fixed assets"
       and "Disposal of fixed assets" is included in "Fixed assets"; "Engineering materials” and "Construction in progress" is included in
       "Construction in progress"; The "Notes Payable" and "Accounts payable" in the balance sheet are listed as "Notes Payable" and
       "Accounts payable; "Interest payable " "dividend payable” and "Other payables” are included in "Other payables"; "Long-term
       payables" and "Special payables" is included in "Long-term payables". In income statement, the original "Administration expenses"
       is reclassified as "Administration expenses” and "R&D Expenses" separately; The items "Including: interest expenses" and "Interest
       income" are added to the financial expenses in the income statement. In the table of changes in owner's equity, the item
       "Carry-forward retained earnings of the variation of the defined benefit plan" is added. The company adopts the retrospective
       adjustment method for the change of the accounting policy, and the items in 2017 financial statements are retrospectively adjusted as
       follows:


                                  Before adjustment                                                    After adjustment
       Notes receivable                                      552,232,420    Notes receivable     and    Accounts
                                                                                                                           1,190,470,710
       Accounts receivable                                   638,238,290    receivable

       Other receivables                                     205,939,019
       Interest receivable                                              -   Other receivables                               205,939,019
       Dividends receivable                                             -
       Fixed assets                                        11,540,769,697
                                                                            Fixed assets                                  11,540,769,697
       Disposal of fixed assets                                         -
       Construction in progress                             1,417,624,618
                                                                            Construction in progress                       1,417,624,618
       Engineering material                                             -
       Notes payable                                         213,401,622    Notes payable        and    Accounts
                                                                                                                           1,613,567,664
       Accounts payable                                     1,400,166,042   payable

       Other payables                                        619,324,354    Other payables                                  653,357,094

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      Interest payable                                         34,032,740
      Dividend payable                                                   -
      Long-term payable                                      1,161,794,247
                                                                             Long-term prepaid expenses              1,161,794,247
      Special payable                                                    -
                                                                             General     and     administrative       588,652,397
      General and administrative expenses                     919,329,772    expenses
                                                                             Research and development cost            330,677,375
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 6% to 17%
                                               taxable sales amount multiplied by the applicable tax rate less
                                               deductible VAT input of the current period)
      City maintenance and construction VAT paid                                                                  1% to 7%
        tax
      Educational surcharge                 VAT paid                                                              3% to 5%

      Some subsidiaries of the Group have used the “exempt, credit, refund” method on goods exported and the refund rate is 5%-17%.

(2)    Tax incentives

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

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

      Dongguan CSG Architectural Glass Co., Ltd. (“Dongguan CSG”) passed review on a high and new tech enterprise in 2016 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 2016.

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

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

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

      Dongguan CSG PV-tech Co., Ltd. (“Dongguan CSG PV-tech”) passed review on a high and new tech enterprise in 2016 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
      2016.

      Hebei Shichuang Glass Co., Ltd. (“Hebei Shichuang”) passed review on a high and new tech enterprise in 2016 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
      2016.

      Wujiang CSG Glass Co., Ltd. (“Wujiang CSG”) was recognised as a high and new tech enterprise in 2017, 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 2017.

      Xianning CSG Glass Co Ltd. (“Xianning CSG”) was recognised as a high and new tech enterprise in 2017, 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
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since 2017.

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

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

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

Qingyuan CSG New Energy-Saving Materials Co., Ltd. (“Qingyuan CSG Energy-Saving”) was recognised as a high and new tech
enterprise in 2016, 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 2016.

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

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

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

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

Qingyuan CSG New Energy Co., Ltd. (“Qingyuan CSG New Energy”), Suzhou CSG PV Energy Co., Ltd. (“Suzhou CSG PV
Energy”), Jiangsu Wujiang CSG New Energy Co., Ltd. (“Wujiang CSG New Energy”), and Yichang CSG New Energy Co., Ltd.
(“Yichang CSG New Energy”), Zhangzhou CSG Kibing PV Energy Co., Ltd. (“Zhangzhou CSG”), Heyuan CSG Kibing PV Energy
Co., Ltd. (“Heyuan CSG”), Shaoxing CSG Kibing PV Energy Co., Ltd. (“Shaoxing CSG”) Xinning CSG PV Energy Co.,
Ltd.(“Xianning CSG PV Energy”) and Zhanjiang CSG New Energy Co., Ltd. (“Zhanjiang CSG PV Energy””),are public
infrastructure project specially supported by the state in accordance with the Article 87 in Implementing Regulations of the Law of the
People's Republic of China on Enterprise Income Tax, and can enjoy the tax preferential policy of “three-year exemptions and
three-year halves”, that is, starting from the tax year when the first revenue from production and operation occurs, the enterprise
income tax is exempted from the first to the third year, while half of the enterprise income tax is collected for the following three
years. Qingyuan CSG New Energy, Suzhou CSG PV Energy and Wujiang CSG New Energy started to carry out operations in 2015;
The applicable enterprise income tax rate for them is 12.5% for the current year. Yichang CSG New Energy started operation in 2016,
Zhangzhou CSG, Heyuan CSG and Shaoxing CSG started operation in 2017. Zhanjiang CSG PV Energy、Xianning CSG PV Energy
started operation in 2018.The applicable enterprise income tax rate for them is 0% for the current year.

In addition, pursuant to the document Fogang Guo Shui Shui Tong [2015] No. 2489, the VAT for photovoltaic power generation of
Qingyuan CSG New Energy is subject to the refund upon collection policy.




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4     Notes to the consolidated financial statements

(1)     Cash at bank and on hand



                                                                               31 December 2018             31 December 2017


        Cash on hand                                                                         9,731                     36,182

        Cash at bank                                                                 2,225,117,182              2,409,716,983

        Other cash balances                                                              1,320,807                 52,852,599

                                                                                     2,226,447,720              2,462,605,764



        Including: Total overseas deposits                                              37,790,337                 24,049,075


        Other cash balances include margin deposits for issuing letters of credit and applying loans, amounting to RMB1,320,807 (31
        December 2017: RMB2,852,599), which is restricted cash.

(2)     Notes receivable and Accounts receivable

                                                                               31 December 2018             31 December 2017


        Notes receivable                                                                719,375,448                552,232,420

        Accounts receivable                                                             592,233,312                638,238,290
                                                                                      1,311,608,760              1,190,470,710


 1.      Notes receivable

                                                                               31 December 2018             31 December 2017


        Trade acceptance notes                                                          415,194,892                329,405,579
        Bank acceptance notes                                                           304,180,556                222,826,841
                                                                                        719,375,448                552,232,420



(a)     As at 31 December 2018, notes receivable which have been endorsed or discounted by the Group but are not yet due are as
        follows:


                                                                                       Derecognized          Not derecognized


        Trade acceptance notes                                                                   -               224,935,914

        Bank acceptance notes                                                        1,991,011,932                          -

                                                                                     1,991,011,932               224,935,914




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2.    Accounts receivable

                                                                                           31 December 2018                  31 December 2017


       Accounts receivable                                                                         611,899,209                      660,150,357

       Less: Provision for bad debts                                                               (19,665,897)                     (21,912,067)

                                                                                                   592,233,312                      638,238,290


(a)    The ageing of accounts receivable is analysed as follows:

                                                                                           31 December 2018                  31 December 2017


       Within 1 year                                                                               583,789,669                      639,294,320

       1 to 2 years                                                                                 15,284,163                         8,343,672

       2 to 3 years                                                                                  6,586,079                       12,512,365

       Over 3 years                                                                                  6,239,298                                     -

                                                                                                   611,899,209                      660,150,357


        As at 31 December 2018, accounts receivable of RMB138,819,578 (31 December 2017: RMB93,961,486) were overdue.
        But based on analysis on financial positions and credit records of such customers, such receivables were considered
        recoverable and unimpaired by the Company. Therefore no provision for impairment loss had been made. The overdue
        ageing of the accounts receivable is analyzed as follows:



                                                                                           31 December 2018                  31 December 2017



        Within 1 year                                                                             127,058,887                       86,358,511

        1 to 2 years                                                                               7,822,324                         7,448,217
        2 to 3 years                                                                               3,938,367                           154,758

                                                                                                 138,819,578                        93,961,486


(b)    Accounts receivable are analysed by categories as follows:


                                                         31 December 2018                                       31 December 2017
                                                                       Provision for bad                                       Provision for bad
                                             Carrying amount                 debts                  Carrying amount                  debts
                                                         % of total   Provision for                             % of total   Provision for
                                             Amount       balance        bad debts     %             Amount      balance        bad debts      %


       Provision for   bad   debts    by
          groupings

         Portfolio 1                       598,852,703         98%     (11,976,169)    2%         636,614,136         96%     (12,233,039)     2%
       With amounts that are         not
        individually significant     but
        that the related provision   for
        bad debts is provided on     the
        individual basis                    13,046,506          2%      (7,689,728)   59%          23,536,221          4%      (9,679,028)    41%

                                           611,899,209        100%     (19,665,897)    3%         660,150,357        100%     (21,912,067)     3%



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(c)   Provision for bad debts provided on grouping basis using the percentage of provision method is analysed as follows:

                                      31 December 2018                                                31 December 2017
                        Carrying amount         Provision for bad debts             Carrying amount              Provision for bad debts
                                   Amount               Amount            %                    Amount                     Amount           %



      Portfolio 1               598,852,703          (11,976,169)         2%                 636,614,136              (12,233,039)       2%

                                598,852,703          (11,976,169)         2%                 636,614,136              (12,233,039)       2%


(d)   As at 31 December 2018, the Company had no accounts receivable with amounts that were individually significant and that the
      related provision for bad debts was provided on the individual basis (31 December 2017: Nil).

(e)   As at 31 December 2018, accounts receivable of RMB13,046,506 (31 December 2017: RMB23,536,221) were not individually
      significant but provided for bad debts separately. It mainly represented the goods receivable due from a client of the subsidiary,
      Yichang CSG Display. Due to the client’s bankruptcy, Yichang CSG Display made full provision against this receivable. It also
      represented the goods receivable due from a client of the subsidiary, Dongguan CSG PV-tech. Due to business dispute, Dongguan
      CSG PV-tech made partial provision against the receivable.

(f)   Accounts receivables of RMB 2,750,772 were written off this year, The reasons for the written-off included disputes with
      customers and ability to reach a settlement with creditors.

(g)   As at 31 December 2018, Total balances for the five largest accounts receivable        set out as below:

                                                                               Provision for bad           Percentage in total accounts
                                                         Balance                     debts                     receivable balance


      Total balances for the five largest accounts
        receivable                                          82,666,183                 (1,653,324)                                       14%


(3)   Advances to suppliers

(a)   The ageing of prepayment is analysed below:

                                                       31 December 2018                                 31 December 2017
                                                                          % of total                                        % of total
                                                 Amount                    balance                 Amount                    balance


      Within 1 year                                    76,372,805                   84%               130,813,397                        91%
      1 to 2 years                                      2,034,196                      2%                  264,952                             -
      2 to 3 years                                                  -                    -             12,769,674                          9%
      Over 3 years                                     12,769,674                   14%                           -                            -
                                                       91,176,675                 100%                143,848,023                     100%


      As at 31 December 2018, advances to suppliers over 1 year with a carrying amount of RMB14,803,870 (31 December 2017:
      RMB13,034,626) were mainly advances paid for Natural gas and materials, which were not fully settled since the materials had not
      been received.




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(b)   As at 31 December 2018, the five largest prepayment are analyzed as follows:

                                                                                                         Percentage in total
                                                                                                        advances to suppliers
                                                                                     Balance                  balance


      Total balances for the five largest advances to suppliers                          48,332,569                        53%


(4)   Other receivables

                                                                              31 December 2018              31 December 2017


      Receivables from special fund for talent                                          171,000,000                171,000,000
      Refundable deposits                                                                21,351,937                  16,957,562
      Payments made on behalf of other parties                                           15,036,194                  19,306,658
      Petty cash                                                                           489,912                      875,714
      Export tax rebates receivable                                                        137,744                              -
      Others                                                                              3,962,723                   2,319,489
                                                                                        211,978,510                 210,459,423
      Less: Provision for bad debts                                                     (4,554,215)                 (4,520,404)
                                                                                        207,424,295                 205,939,019


(a)   The ageing of other receivables is analyzed as follows:

                                                                               31 December 2018              31 December 2017


      Within 1 year                                                                     11,684,072                  22,924,535
      1 to 2 years                                                                      14,639,759                   2,813,012
      2 to 3 years                                                                       1,060,654                   11,211,511
      3 to 4 years                                                                      11,121,084                 171,855,888
      4 to 5 years                                                                     171,843,311                       86,395
      Over 5 years                                                                       1,629,630                   1,568,082
                                                                                       211,978,510                 210,459,423


       As at 31 December 2018, other receivables of RMB13,594,025 (31 December 2017: RMB2,510,365) were overdue. But
       based on analysis on financial positions and credit records of such customers, such receivables were considered recoverable
       and unimpaired by the Company. Therefore no provision for impairment loss had been made.




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(b)   Other receivables are analysed by categories as follows:

                                                         31 December 2018                                                   31 December 2017
                                                                             Provision for bad
                                             Carrying amount                       debts                         Carrying amount              Provision for bad debts
                                                         % of total        Provision for                                     % of total        Provision for
                                             Amount       balance             bad debts             %            Amount       balance             bad debts        %


      Provision for bad debts by
        groupings

        Portfolio 1                      211,655,605           100%          (4,231,310)            2%        39,136,518           19%            (777,499)        2%

        Portfolio 2                                 -                 -                -                -   171,000,000            81%          (3,420,000)        2%
      Not individually significant
      but provided for bad debts
      separately                             322,905                  -       (322,905) 100%                     322,905                  -       (322,905) 100%

                                         211,978,510         100%            (4,554,215)        2%          210,459,423          100%           (4,520,404)     2%


(c)   The reason why         not individually significant but provided for bad debts separately is the payment is not recoverable
      over 5 years.

(d)   For other receivables provided for bad debts by portfolio, the percentage of provision for the portfolio is as follows:

                                                   31 December 2018                                                        31 December 2017
                                     Carrying amount            Provision for bad debts                       Carrying amount          Provision for bad debts
                                              Amount                  Amount                %                        Amount                      Amount         %


      Portfolio 1                        211,655,605            (4,231,310)                2%                     39,136,518                    (777,499)       2%

      Portfolio 2                                    -                                          -                171,000,000                  (3,420,000)       2%

                                         211,655,605            (4,231,310)                2%                    210,136,518                  (4,197,499)       2%


(e)   As at 31 December 2018, the top 5 largest other receivables are analysed as bellow:

                                                                                                                 Percentage in total other     Provision for bad
                                       Nature of business             Balance                       Ageing           receivables balance                   debts


      Company A                    Independent third party        171,000,000                4 to5Years                    81%                          3,420,000
      Governmental
      department B                 Independent third party            11,067,754             3 to4Years                    5%                             221,355
      Company C                    Independent third party                5,000,000         1 to 2 years                   2%                             100,000
      Company D                    Independent third party                3,859,460        Within 1 year                   2%                               77,189
      Company E                    Independent third party                3,350,000         1 to 2 years                   2%                               67,000
                                                                  194,277,214                                              92%                          3,885,544




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(5)   Inventories

(a)   Inventories are summarized by categories as follows:

                                                  31 December 2018                                               31 December 2017

                                                     Provision for                                                   Provision for
                                                     decline in the                                                  decline in the
                                      Carrying            value of                                                        value of
                                        amount         inventories       Carrying amount     Carrying amount           inventories       Carrying amount



      Raw materials                224,107,756       (1,438,767)           222,668,989           213,348,012          (1,447,590)          211,900,422

      Work in progress              25,088,903                    -          25,088,903           45,614,905                      -          45,614,905

      Finished goods               309,132,138          (566,246)          308,565,892           387,489,714             (68,974)          387,420,740

      Turnover materials            43,815,966                    -          43,815,966           40,959,250                      -          40,959,250

                                   602,144,763       (2,005,013)           600,139,750           687,411,881          (1,516,564)          685,895,317


(b)   Provision for decline in the value of inventories are analyzed as follows:

                                   31 December
                                          2017             Increase in current year              Reversal in current year             31 December 2018


      Finished goods                     68,974                            497,272                                      -                       566,246

      Raw materials                   1,447,590                                    -                             (8,823)                      1,438,767

                                      1,516,564                            497,272                               (8,823)                      2,005,013


(c)   Provision for decline in the value of inventories is as follows:

                                                                                                             Reasons of reversal of the decline
                                       Basis for provision for decline in the value of inventories                 in the value of inventories


                                  The amount of carrying amount less net realizable value due to
      Finished goods                                                decline in price of products                                                Sold
                                       The amount of book value less net realizable value due to
      Raw materials                                         sluggish or damaged raw materials                                                   Used

(6)   Assets classified as held for sale

                                                    carrying amounts                                              Estimated                  Estimated
                           Item                   at the end of period                  Fair value             disposal costs             disposal time



       Intangible assets                                   15,048,314                  18,390,394                                        June of 2019

       Construction in progress                            30,935,206                  37,805,606                                         June of 2019

                                                           45,983,520                  56,196,000                           -


      The subsidiary of the Group, Dongguan CSG PV-tech signed a grant contract of land use right with third party Dongguan Chaoyin
      Textile Co., LTD. (Dongguan Chaoyin Company) on 17 June 2016. Dongguan CSG PV-tech sells its land use right along with the
      buildings on the land to Dongguan Chaoyin Company. Therefore, the construction-in-progress and intangible assets of Dongguan
      CSG PV-tech were transferred to assets held for sale. As at 31 December 2018, the transfer of propery rights had not been finalised.




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(7)   Other current assets

                                                                         31 December 2018               31 December 2017


      VAT to be offset                                                          115,329,834                   181,667,326

      Entrusted loan (i)                                                        300,000,000                                 -

      Enterprise income tax prepaid                                              21,277,486                     1,132,508

      VAT input to be recognized                                                  8,720,129                    18,048,155

                                                                                445,327,449                   200,847,989


      (i)On December 21, 2018, reviewed and approved by the Group's eighth session of the Board of Directors , The group issued
      Tengchong Yuezhou Water Investment Development Co., Ltd. entrusted Loans RMB 0.3 billion via China Everbright Bank
      shenzhen(Nanshan) branch . The period of entrusted loan was 3 months and annual interest rate 8.5%

(8)    Fixed assets


                                                              Machinery and      Motor vehicles
                                             Buildings           equipment             and others                   Total
      Cost

      31 December 2017                   3,999,368,700       12,462,823,260          208,292,757           16,670,484,717

      Increase in current year

         Acquisition                         3,370,397           48,694,459            11,144,592             63,209,448
        Transfers from construction in
                                          133,371,640         1,178,070,597             6,488,900           1,317,931,137
        progress (Note 4(9))

        Others                               5,630,152            2,636,218                         -           8,266,370

      Decrease in current year

      Disposal or retirement                      -             (15,440,941)           (5,023,202)            (20,464,143)

        Others                            (291,848,507)      (2,790,972,405)           (3,640,750)        (3,086,461,662)

      31 December 2018                   3,849,892,382       10,885,811,188          217,262,297           14,952,965,867


      Accumulated depreciation

      31 December 2017                    751,518,811         3,908,894,072          188,549,283            4,848,962,166

      Increase in current year

        Provision                         125,540,858           817,166,294           23,228,298             965,935,450

      Decrease in current year

      Disposal or retirement                      -              (2,736,162)           (4,792,845)             (7,529,007)

        Others                             (61,216,903)        (832,213,509)           (3,494,074)          (896,924,486)

      31 December 2018                    815,842,766         3,891,110,695          203,490,662            4,910,444,123


      Provision for impairment loss
      31 December 2017                     10,580,861           270,171,993                     -            280,752,854

        Increase in current year




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                                                                                                                                              CSG Annual Report 2018




        Provision                                          11,270,855                  1,103,115                               -                   12,373,970

        Others                                                                        19,876,460                               -                   19,876,460

       Decrease in current year

        Disposal or retirement                                        -              (11,214,371)                              -                  (11,214,371)

        Others                                                        -            (190,110,944)                               -                (190,110,944)
      31 December 2018                                     21,851,716                 89,826,253                               -                  111,677,969


      Carrying amount

      31 December 2018                                 3,012,197,900              6,904,874,240                     13,771,635                 9,930,843,775

      31 December 2017                                 3,237,269,028              8,283,757,195                     19,743,474                11,540,769,697


      In 2018, the depreciation amount provided for fixed assets was RMB965,935,450 (2017: RMB980,581,921), and the amount of
      depreciation expenses charged to cost of sales, selling and distribution expenses, general and administrative expenses and
      construction in progress was          RMB902,224,539, RMB 973,181, RMB 62,737,730 and RMB 0 (2017:RMB 890,575,701, RMB
      970,739, RMB 65,929,139 and RMB 23,106,342) respectively.

      In 2018, the cost of fixed assets transferred from construction in progress amounted to RMB 1,317,931,137 (2017:RMB
      1,438,870,858).

(a)   Fixed assets with pending certificates of ownership

                                    Carrying amount                             Reasons for not yet obtaining certificates of title


                                                      Have submitted the required documents and are in the process of application,
      Buildings                           874,593,679 or the related land use right certificate pending



(9)   Construction in progress

                                                            31 December 2018                                            31 December 2017

                                            Carrying          Provision for       Carrying               Carrying        Provision for
                                                                                                                                                Carrying amount
                                            amount           impairment loss      amount                 amount         impairment loss
       Yichang CSG polysilicon
                                           1,465,710,819        (253,983,876)      1,211,726,943                    -                     -                       -
       tech-innovation project
       Yichang CSG polysilicon
       Wafer production capacity and        707,199,477          (25,475,004)      681,724,473                      -                     -                       -
       tech-upgrade project
       Yichang display device
       company flat panel display           354,190,988          (14,160,474)      340,030,514           298,794,622        (14,160,474)             284,634,148
       project
       Dongguan Solar Glass Phase I
                                             78,970,995          (40,248,018)       38,722,977            78,970,995        (40,248,018)              38,722,977
       and II improvement project
       Yichang 1GW silicon slice
                                             48,859,613                     -       48,859,613            43,617,802                      -           43,617,802
       project
       Dongguan Solar New PV Tech
                                             41,074,003                             41,074,003             1,888,363                      -            1,888,363
       Glass Processing Project

       LED Sapphire Substrate Project        32,420,412          (32,420,412)                -            30,886,629        (19,303,853)              11,582,776

       Hebei CSG Environmental
                                             19,012,500                     -       19,012,500                      -                     -                       -
       reforming project
       Chendu float Environmental
                                             16,989,203                     -       16,989,203                      -                     -                       -
       reforming project
       Wujiang float Environmental
                                             16,494,538                     -       16,494,538                      -                     -                       -
       reforming project
       Dongguan Jingyu Jadeglass
                                             14,273,358                     -       14,273,358                      -                     -                       -
       Project

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Qingyuan CSG Ultra-white
electronic glass and ultra-white
                                        338,679                -        338,679                      -              -                    -
special glass production line
project
Xianning CSG Photoelectric
                                               -               -               -          400,665,493               -         400,665,493
Glass project
Yichang Optoelectronic
                                               -               -               -          242,055,237               -         242,055,237
Technology Reform Project
Hebei float 600T
                                               -               -               -          113,762,853               -         113,762,853
tech-innovation project
Zhanjiang Photovoltaic 20MV
Step-by-step Photovoltaic                      -               -               -          100,570,104               -         100,570,104
Power Plant Project
Wujiang energy glass
                                               -               -               -           72,600,518    (19,876,460)          52,724,058
expansion project
Wujiang Photovoltaic
                                               -               -               -            7,414,854               -            7,414,854
Packaging Materials Project

Others                              130,338,624        (405,983)    129,932,641           120,391,936      (405,983)          119,985,953

                                   2,925,873,209   (366,693,767)   2,559,179,442         1,511,619,406   (93,994,788)        1,417,624,618




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(a)   Movement of significant project

                                                                                                                                                                                                 Including:
                                                                                                                                                      Proportion            Amount of
                                                                                       Transfer to fixed                                                                                        Amount of
                                                   31 December       Increase in                               Other decreases   31 December           between            borrowing costs                           Capitalisation rate   Source of
            Project name           Budget                                              assets in current                                                                                      borrowing costs
                                                       2017         current year                               in current year       2018         engineering input        capitalised in                           for in current year     fund
                                                                                             year                                                                                              capitalised in
                                                                                                                                                    and budget (i)             2018
                                                                                                                                                                                                   2018


                                                                                                                                                                                                                                          Internal fund
      Yichang CSG polysilicon
                                     49,520,000                 -    1,465,710,819                         -                 -    1,465,710,819                 19%                       -                     -                     -       and bank
      tech-innovation project                                                                                                                                                                                                                      loan

      Yichang CSG polysilicon                                                                                                                                                                                                             Internal fund
      Wafer production capacity     144,570,000                 -      707,199,477                         -                 -      707,199,477                  4%                 30,138               30,138                  5.28%        and bank
      and tech-upgrade project                                                                                                                                                                                                                     loan

      Yichang display device                                                                                                                                                                                                              Internal fund
      company flat panel display   1,970,000,000      298,794,622       55,910,329                (513,963)                  -      354,190,988                 86%               8,543,752           4,399,593                  4.06%        and bank
      project                                                                                                                                                                                                                                      loan

      Dongguan Solar Glass
      Phase I and II                396,410,000        78,970,995                  -                       -                 -       78,970,995                 80%                       -                     -                     -   Internal fund
      improvement project
      Yichang 1GW silicon slice                                                                                                                                                                                                           Internal fund
                                   1,073,209,600       43,617,802        9,506,541              (4,264,730)                  -       48,859,613                 44%              11,713,945           3,083,952                  5.28%        and bank
      project                                                                                                                                                                                                                                      loan

      Dongguan Solar New PV
      Tech Glass Processing          60,000,000         1,888,363       55,105,795             (15,920,155)                  -       41,074,003                 95%                       -                     -                     -   Internal fund
      Project
      LED Sapphire Substrate                                                                                                                                                                                                              Internal fund
                                     35,000,000        30,886,629        1,533,783                         -                 -       32,420,412                 93%               4,650,543                     -                     -       and bank
      Project                                                                                                                                                                                                                                      loan

      Hebei CSG Environmental                                                                                                                                                                                                                  Internal
                                     25,700,000                 -       19,012,500                         -                 -       19,012,500                 74%                       -                     -                     -          fundn
      reforming project
      Chendu float
      Environmental reforming        25,000,000                 -       16,989,203                         -                 -       16,989,203                 68%                       -                     -                     -   Internal fund
      project
      Wujiang float
      Environmental reforming        50,300,000                 -       16,494,538                         -                 -       16,494,538                 33%                       -                     -                     -   Internal fund
      project
      Dongguan Jingyu
                                     30,000,000                 -       14,273,358                         -                 -       14,273,358                 48%                       -                     -                     -   Internal fund
      Jadeglass Project
      Qingyuan CSG
      Ultra-white electronic                                                                                                                                                                                                              Internal fund
      glass and ultra-white         785,000,000                 -         338,679                          -                 -         338,679                        -                   -                     -                     -       and bank
      special glass production                                                                                                                                                                                                                     loan
      line project




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                                                                                                                                                                                          Including:
                                                                                                                                                   Proportion        Amount of
                                                                                  Transfer to fixed                                                                                      Amount of
                                              31 December       Increase in                               Other decreases     31 December           between        borrowing costs                           Capitalisation rate   Source of
       Project name           Budget                                              assets in current                                                                                    borrowing costs
                                                  2017         current year                               in current year         2018         engineering input    capitalised in                           for in current year     fund
                                                                                        year                                                                                            capitalised in
                                                                                                                                                 and budget (i)         2018
                                                                                                                                                                                            2018
Xianning CSG                                                                                                                                                                                                                       Internal fund
                               510,000,000       400,665,493       93,175,330            (493,840,823)                    -                -                100%          20,466,317           12,695,704                 4.75%    and bank
Photoelectric Glass project                                                                                                                                                                                                        loan

Yichang Optoelectronic                                                                                                                                                                                                             Internal fund
Technology Reform              258,296,536       242,055,237        7,999,369            (250,054,606)                    -                -                100%                   -                     -                     -   and bank
Project                                                                                                                                                                                                                            loan

Hebei float 600T                                                                                                                                                                                                                   Internal fund
                               145,750,000       113,762,853      124,052,098            (234,744,769)          (3,070,182)                -                100%           1,830,487            1,830,487                 4.94%    and bank
tech-innovation project                                                                                                                                                                                                            loan

Zhanjiang Photovoltaic
20MV Step-by-step                                                                                                                                                                                                                  Internal fund
                               133,000,000       100,570,104                  -           (97,484,158)          (3,085,946)                -                 99%           2,280,097                     -                     -   and bank
Photovoltaic Power Plant                                                                                                                                                                                                           loan
Project
Wujiang energy glass                                                                                                                                                                                                               Internal fund
                               845,630,000        72,600,518        2,197,579             (74,798,097)                    -                -                100%          20,120,444                     -                     -   and bank
expansion project                                                                                                                                                                                                                  loan

Wujiang Photovoltaic                                                                                                                                                                                                               Internal fund
Packaging Materials            520,100,000         7,414,854       22,445,450             (29,860,304)                    -                -                100%                   -                     -                     -   and bank
Project                                                                                                                                                                                                                            loan

                                                                                                                                                                                                                                   Internal fund
Others                        1,185,132,635      120,391,936      127,596,221            (116,449,532 )         (1,200,001)      130,338,624                              32,839,290              96,251                       -   and bank
                                                                                                                                                                                                                                   loan

                              8,242,618,771    1,511,619,406    2,739,541,069          (1,317,931,137)          (7,356,129)    2,925,873,209                             102,475,013           22,136,125




(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.

(ii)         The budget and actual expenditures incurred for these kinds of projects include cost of acquiring land use rights. The balance of construction in progress does not include the costs
             of acquiring land-use rights.




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(b)   Provision for impairment of construction in progress

                                                                                  provision from
                                                           provision increased   long-term assets       Decrease in current
                 Project name           31 December 2017                                                                        31 December 2018
                                                             in current year       transferred in             year
                                                                                    current year


       Dongguan Solar Glass Phase I
                                              40,248,018                     -                      -                     -           40,248,018
       and II improvement project

       Wujiang float glass project            19,876,460                     -                      -         (19,876,460)                     -

       Yichang CSG Display panel
                                              14,160,474                     -                      -                     -           14,160,474
       display project

       LED Sapphire Substrate Project         19,303,853           13,116,559                       -                     -           32,420,412

       Yichang CSG polysilicon Wafer
       production capacity and                         -           20,537,934             4,937,070                       -           25,475,004
       tech-upgrade project(i)
       Yichang CSG polysilicon
                                                       -           68,810,002         185,173,874                         -          253,983,876
       tech-innovation project(i)

       Others                                    405,983                     -                      -                     -              405,983

                                              93,994,788          102,464,495         190,110,944             (19,876,460)           366,693,767



       (i)On 31 may 2018, the state introduced the ‘Circular of matters concerning Photovoltaic Power Generation in 2018’, The policies
       mentioned above considerably affected the operations of CSG’s solar industry, by the‘section 8 of accounting standards for business
       enterprises– impairments of assets’, the management of the company identified and ran impairment tests for some parts of related
       assets showing a sign of impairment, and the provision for impairment was noted by company.




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(10)   Intangible assets and development expenditure


                                                                   Patents and
                                           Land use rights         proprietary           Exploitation rights           Others                Total
                                                                  technologies

       Cost

       31 December 2017                     1,026,603,700                246,011,919              4,456,536             36,106,710           1,313,178,865

       Acquisition in current year                         -               1,440,455                       -             1,900,706               3,341,161

       Transfers from development
                                                           -              29,735,459                       -                        -           29,735,459
       expenditure in current year

       Others                                              -               6,000,000                       -                        -            6,000,000

       31 December 2018                     1,026,603,700                283,187,833              4,456,536             38,007,416           1,352,255,485

       Accumulated amortization

       31 December 2017                       149,057,265                 74,985,236              3,706,724             24,996,753             252,745,978

       Provision in current year                  21,184,631              22,400,518               400,641               6,581,913              50,567,703

       31 December 2018                       170,241,896                 97,385,754              4,107,365             31,578,666             303,313,681

       Provision for impairment loss

       31 December 2017                                    -              13,201,347                       -                    9,133           13,210,480

       31 December 2018                                    -              13,201,347                       -                    9,133           13,210,480

       Carrying amount

       31 December 2018                       856,361,804                172,600,732               349,171               6,419,617           1,035,731,324

       31 December 2017                       877,546,435                157,825,336               749,812              11,100,824           1,047,222,407




       In 2018, the amortization of intangible assets amounted to RMB50,567,703 (2017: RMB 43,884,166).

       As at 31 December 2018, ownership certificates of land use rights (“Land ownership Certificates”) for certain land use rights of the
       Group with carrying amounts of approximately RMB5,228,694 (cost: RMB6,586,712) had not yet been obtained by the Group (31
       December 2017: carrying amount: RMB5,473,442, cost: RMB 6,586,712). The Company’s management are of the view that there is
       no legal restriction for the Group to apply for and obtain the Land Ownership Certificates and has no adverse effect on the Group’s
       business operation.

       Research expenditure is analyzed below:

                                                           Increase in
                                                                               Decrease in current year
                          31 December 2017                current year                                              31 December 2018
                                                                           Recognised as         Recognised as
                                                                             expenses           intangible assets


       Development costs             61,365,537            42,963,845                  (44,666)         (29,735,459)            74,549,257


       In 2018, the total amount of research and development expenditures of the Group was RMB 381,711,070 (2017: RMB 368,237,629),
       including RMB 338,791,891 (2017: RMB 330,677,375) recorded in income statement for current period and the research and
       development expenditure with the amount of RMB 29,735,459 recognized as intangible assets for the current period (2017:
       43,122,431). At 31 December 2018, the intangible assets arising from internal research and development accounted for 14.21% of
       total of intangible assets (31 December 2017: 12.37%).




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(11)   Goodwill

(a)    Book value of goodwill
                                                              31 December        Increase in       Decrease in          31 December
                                                                     2017        current year      current year                2018


       Tianjin CSG Architectural Glass Co., Ltd.                   3,039,946                                                3,039,946
       Xianning CSG Photoelectric                                  4,857,406                                                4,857,406
       Shenzhen CSG Display                                     389,494,804                                               389,494,804
                                                                397,392,156                                               397,392,156


(b)    Provision of impairment of goodwill
                                                              31 December            Increase in   Decrease in          31 December
                                                                     2017           current year   current year                2018


       Tianjin CSG Architectural Glass Co., Ltd.
       Xianning CSG Photoelectric
       Shenzhen CSG Display                                                           20,672,000                           20,672,000
                                                                                      20,672,000                           20,672,000



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

       Combining with the prediction of the future business and independent third party appraisal institution, the Company's management
       considered that the goodwill was impaired RMB 20,672,000 as at 31 December 2018.

       The recoverable amount of asset groups is determined by net present value of estimated future cash flows which is determined
       according to the five-year budget approved by management. The cash flow exceed five years is forecasted by using growth rates not
       exceeding similar long-term average growth rates of each asset group’s industry. The discount rates used are the pre-tax interest rates
       that are able to reflect the risks specific to the related asset groups.

(12)   Deferred tax assets and liabilities

(a)    Deferred tax assets before offsetting

                                                      31 December 2018                                31 December 2017
                                               Deductible
                                                                     Deferred tax         Deductible temporary
                                               temporary                                                            Deferred tax assets
                                                                        assets                differences
                                               differences


       Provision for asset impairments              394,331,591            68,458,375               361,149,562               55,552,592
       Tax losses                                   407,739,415            72,421,592               133,658,792               24,457,319
       Government grants                            256,949,965            41,523,325               128,189,967               20,424,022
       Accrued expenses                              42,393,456             6,359,019                50,193,405                7,529,011
       Depreciation of fixed assets                  27,973,574             4,311,723                33,762,174                8,000,331
       Share payment                                 16,366,061             2,597,038                 5,196,945                  867,677
                                                   1,145,754,062          195,671,072               712,150,845             116,830,952




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       Including:
       Expected to be reversed within
                                                                         54,631,827                                          33,751,219
         one year (inclusive)
       Expected to be reversed after one
                                                                        141,039,245                                          83,079,733
         year
                                                                        195,671,072                                         116,830,952


 (b)   Deferred tax liabilities before offsetting

                                                    31 December 2018                                  31 December 2017
                                        Taxable temporary                                   Taxable temporary
                                               differences    Deferred tax liabilities             differences   Deferred tax liabilities


       Depreciation      of   fixed
                                                474,157,813                78,260,394             371,115,284                56,874,044
        assets


       Including:
       Expected to be reversed within
                                                                         23,373,156                                          4,247,230
         one year (inclusive)
       Expected to be reversed after one
                                                                         54,887,238                                        52,626,814
         year
                                                                         78,260,394                                        56,874,044


 (c)   Deductible losses that are not recognized as deferred tax assets of the Group are analyzed as follows:

                                                                                      31 December 2018             31 December 2017


       Deductible losses                                                                     517,898,158                  425,759,321


       The deductible tax losses not recognized as deferred tax assets mainly represented the tax losses of the Company and some closed
       subsidiaries. Management was unable to expect that whether there were taxable profit would be available in the future against which
       these deductible tax losses can be utilized, and accordingly, did not recognize the deferred tax assets.

 (d)   The tax losses for which no deferred tax assets were recognized will expire in the following years:

                                                                                      31 December 2018             31 December 2017


        2018                                                                                           -                    54,100,000

        2019                                                                                  82,300,000                    82,300,000

        2020                                                                                  94,430,197                    94,430,197

        2021                                                                                 111,625,585                   111,625,585

        2022                                                                                  83,303,539                    83,303,539

        2023                                                                                 146,238,837                               -

                                                                                             517,898,158                  425,759,321
(e)    The net balances of deferred tax assets and liabilities after offsetting are as follows:




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                                                           31 December 2018                                                31 December 2017
                                                                              Deductible/taxable                                             Deductible/taxable
                                             Net deferred tax          temporary differences after         Net deferred tax assets        temporary differences
                                           assets or liabilities                        offsetting                   or liabilities             after offsetting


       Deferred tax assets                      139,529,518                         817,628,525                      80,872,862                      472,134,707
       Deferred tax liabilities                  22,118,840                         146,032,276                      20,915,954                      131,099,146


(13)   Other non-current assets

                                                                                                     31 December 2018                      31 December 2017


       Prepayment for equipment and software upgrading expenses                                                 50,315,934                            45,431,352
       Prepayment for lease of land use rights                                                                    6,510,000                            6,510,000
                                                                                                                56,825,934                            51,941,352


(14)   Provision for asset impairment

                                                                                                  Other
                                                    31 December           Increase in       Increased in         Reversal in      Written off in        31 December
                                                           2017          current year       current year        current year       current year                2018


       Provision for bad debts                        26,432,471           13,699,656                  -       (13,161,243)            (2,750,772)        24,220,112
       Including: Provision for bad debts of
                    accounts receivable               21,912,067           13,421,633                  -       (12,917,031)            (2,750,772)        19,665,897
                   Provision for bad debts of
                     other receivables                  4,520,404             278,023                  -          (244,212)                      -         4,554,215
       Provision for decline in the value of
         inventories                                    1,516,564             497,272                  -                   -               (8,823)         2,005,013
       Provision for impairment of fixed
         assets                                      280,752,854           12,373,970        19,876,460                    -      (201,325,315)          111,677,969
       Provision for impairment of
         construction in progress                     93,994,788         102,464,495        190,110,944                    -          (19,876,460)       366,693,767
       Provision for impairment of intangible
         assets                                       13,210,480                        -              -                   -                     -        13,210,480
       Provision for impairment of goodwill                        -       20,672,000                  -                   -                     -        20,672,000
                                                     415,907,157         149,707,393        209,987,404        (13,161,243)       (223,961,370)          538,479,341


(15)   Short-term borrowings

                                                                                                     31 December 2018                      31 December 2017


       Unsecured                                                                                            2,008,000,000                       2,691,732,609

       Guaranteed (i)                                                                                          909,679,590                      1,012,898,300

       Mortgage loan                                                                                              5,000,000                                    -

                                                                                                            2,922,679,590                       3,704,630,909


       (i)      As at 31 December 2018, the Company provided its subsidiaries with guarantee for the short-term borrowings of
                RMB909,679,590 (31 December 2017: RMB1,012,898,300), and the Company had no counter guarantee from minority
                shareholders of subsidiaries (31 December 2017: Nil).




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                As at 31 December 2018, the interest of short-term borrowings varied from 2.95% to 5.66% (31 December 2017: 2.70% to
                5.66%).

(16)   Notes payable and Accounts payable

                                                                              31 December 2018            31 December 2017


       Notes payable                                                               105,150,000                   213,401,622
       Accounts payable                                                          1,209,859,263                 1,400,166,042
                                                                                 1,315,009,263                 1,613,567,664


1、    Notes payable

                                                                             31 December 2018             31 December 2017


       Bank acceptance notes                                                       105,150,000                   213,401,622


       All notes payable are due within one year.

2、      Accounts payable

                                                                             31 December 2018             31 December 2017


       Materials payable                                                             749,987,838                798,178,206

       Equipment payable                                                             230,997,567                329,926,045

       Construction expenses payable                                                 133,247,003                167,394,038

       Freight payable                                                                62,455,534                 61,671,023

       Utilities payable                                                              27,099,683                 35,973,405

       Others                                                                          6,071,638                  7,023,325
                                                                                   1,209,859,263              1,400,166,042


       As at 31 December 2018, the amount of accounts payable over 1 year was approximately RMB159,491,611 (31 December 2017:
       RMB160,638,075), which mainly comprised payables for construction and equipment. As the construction work had not passed the
       final acceptance test yet, the balance was not yet settled.

(17)   Advances from customers

                                                                             31 December 2018             31 December 2017


       Advances for goods from customers                                           206,631,008                  195,563,465


       The ageing of balances was substantively within 1 year.




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(18)   Employee benefits payable

                                                                                  31 December 2018                  31 December 2017


       Short-term employee benefits payable (a)                                          262,906,600                     272,144,440

       Defined contribution plans payable (b)                                                  54,313                         26,220

       Termination benefits(c)                                                               3,498,238
                                                                                         266,459,151                     272,170,660


(a)     Short-term employee benefits


                                                                               Increase in    Decrease in current     31 December
                                                     31 December 2017
                                                                              current year                   year            2018


         Wages and salaries, bonus, allowances and
       subsidies                                         175,485,615      1,207,779,066        (1,140,700,379)        242,564,302

         Social security contributions                         13,752         43,590,775           (43,579,846)            24,681
       Including: Medical insurance                            12,358         36,366,039           (36,357,092)            21,305
                Work injury insurance                             984          4,692,227            (4,690,854)             2,357
                Maternity insurance                               410          2,532,509            (2,531,900)             1,019
         Housing funds                                      2,758,371         45,979,653           (46,124,437)         2,613,587
         Labour union funds and employee
         education funds                                  15,280,702          15,807,368           (13,384,040)        17,704,030

         Management bonus (i)                             78,606,000                     -         (78,606,000)                 -
       Share-based payments                                          -      144,278,158           (144,278,158)                 -


                                                         272,144,440      1,457,435,020        (1,466,672,860)        262,906,600



       (i) Pursuant to the resolution at the 8th session in the temporary conference of the board of directors of the Company on 11 December
       2017, to implemented equity incentive plans of restricted stock for the Company directors and senior management, core management
       team, backbones of technology and business. The company first awarded 97,511,654 restricted shares to 454 incentive objects for the
       first time at RMB4.28 per share. The total fair value of the equity instruments granted to the incentive object by the company for the
       first time is RMB289,519,900. The total value of such fair value as the total cost of the company's equity incentive plan will be
       confirmed in stages according to the ratio of unlocking/exercising in the implementation of the equity incentive plan, and it is
       included in the cost in the term of "management fees and Construction in progress " and "capital reserves - other capital
       reserves".

       Pursuant to the resolution at the 8th session in the temporary conference of the board of directors of the Company on 13 September
       2018, The grant date was confirmed on September 13,2018. The company awarded 9,826,580 restricted shares to 75 incentive objects
       for the first time at RMB3.68 per share. The total fair value of the equity instruments granted to the incentive object by the company
       is RMB8,256,000. The total value of such fair value as the total cost of the company's equity incentive plan will be confirmed in
       stages according to the ratio of unlocking/exercising in the implementation of the equity incentive plan, and it is included
       in the cost in the term of "management fees and Construction in progress " and "capital reserves - other capital reserves".

       In addition, according to the Group’s performance in 2018, the unlocking conditions for the second post lock-up period for the
       ordinary A restricted shares incentive plan for 2017 In addition, according to the Group’s performance in 2018, the unlocking
       conditions for the second post lock-up period for the restricted shares incentive plan for 2017 and for the second post lock-up period
       for the restricted shares incentive plan for 2018 were not met. Therefore, by December 31 2018 ,expenses for the second post lock-up
       period for the ordinary A restricted shares was reduced by RMB 41,856,285.


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       The Company unlock the conditions of restricted share in 2018, and the cost associated with equity incentive plan is confirmed at
       RMB144,278,158 in this phase.

(b)    Defined contribution plans

                                                                      Increase in         Decrease in
                                             31 December 2017        current year         current year      31 December 2018


       Basic pensions                                    25,388      106,923,957        (106,896,772)                   52,573

       Unemployment insurance                               832         3,774,201          (3,773,293)                    1,740

                                                         26,220      110,698,158        (110,670,065)                   54,313


(c)    Termination benefits

                                                                      Increase in         Decrease in
                                             31 December 2017        current year         current year      31 December 2018


       Other dismissal welfare                                 -        9,812,341          (6,314,103)               3,498,238

                                                              -         9,812,341          (6,314,103)               3,498,238




(19)   Taxes payable

                                                                               31 December 2018             31 December 2017


       Enterprise income tax payable                                                   36,008,341                    35,100,800
       VAT payable                                                                      54,091,751                   48,496,225
       Housing property tax payable                                                      5,156,058                    8,617,044
       Individual income tax payable                                                     3,367,389                    5,177,080
       City maintenance and construction tax payable                                     3,246,775                    4,261,902
       Educational surcharge payable                                                     2,586,657                    3,348,566
       Environmental tax payable                                                         2,350,943                                -
       Others                                                                            5,159,451                    6,995,147
                                                                                      111,967,365                   111,996,764


(20)   Other payables

                                                                               31 December 2018             31 December 2017


       Interest payable                                                                73,612,703                    34,032,740
       Dividend payable                                                                2,846,362                                  -
       Other payables                                                                 476,292,122                   619,324,354
                                                                                     552,751,187                  653,357,094




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1.      Interest payable
                                                                                    31 December 2018              31 December 2017


       Interest payable for medium term notes                                                65,267,308                   27,622,465
       Interest of long-term borrowings with periodic payments of interest
         and return of principal at maturity                                                    754,878                      938,950

       Interest payable for short-term borrowings                                             7,590,517                    5,471,325
                                                                                             73,612,703                   34,032,740


2.     Dividend payable

                                                                                    31 December 2018              31 December 2017



       Restricted share dividend payable                                                     2,846,362
                                                                                             2,846,362                               -
3.       Other payables

                                                                                    31 December 2018              31 December 2017


       Guarantee deposits received from construction contractors                             63,181,510                   49,624,256

       Accrued cost of sales (i)                                                             37,407,112                   58,584,562

       Temporary collection of payment for land transfer                                     56,106,781                   56,196,000

       Payable for contracted labor costs                                                    16,030,100                   17,568,695

       Temporary receipts                                                                    13,581,459                    7,964,070

       Deposit for disabled                                                                   4,943,347                     5,230,110

       Restricted share repurchase obligation                                              275,748,309                   417,349,879

       Others                                                                                 9,293,504                    6,806,782
                                                                                           476,292,122                   619,324,354


       (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.

       The ageing of other payables was substantively within 1 year.

(21)   Current portion of non-current liabilities

                                                                                    31 December 2018              31 December 2017


       Current portion of long-term borrowings

             - Guaranteed                                                                    87,800,000                    14,880,000

             - Unsecured                                                                               -                  180,000,000

       Current portion of finance lease                                                    731,648,742                    709,381,397
                                                                                           819,448,742                    904,261,397


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(22)   Long-term borrowings

                                                                                                  31 December 2018                   31 December 2017


       Medium term notes (i)                                                                            2,000,000,000                     1,200,000,000

       Guaranteed                                                                                         315,700,000                       354,120,000

                                                                                                        2,315,700,000                     1,554,120,000


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

              On 14 July 2015, the Company issued the Phase I medium term notes of RMB1,200,000,000 for 2015, with the maturity data
              of 14 July 2020 and annual rate of 4.94%.

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

              On 14 May 2018, the Company issued the Phase I medium term notes of RMB 800,000,000 for 2018, with the maturity data
              of 4 May 2021 and annual rate of 7%.

              As at 31 December 2018, the interest of long-term borrowings varied from 4.75% to 7.00% (31 December 2017: 4.75% to
              5.94%).

(23)   Long-term account payable


                                                                                                  31 December 2018                   31 December 2017


       Finance lease                                                                                      529,910,796                     1,161,794,247


       The Sale and leaseback lease of the group in this phase is a mortgage loan with a lease term of 36 months. On December 31, 2018,
       the real interest rate of financing lease loans is 4.49%-7.8%.

(24)   Deferred income

                                                                                                  31 December 2018                   31 December 2017


       Government grants                                                                                  601,825,780                       562,701,103


       Government grants are analyzed as follows:

                                                                                                      Non-operating
                                                   31 December    Increase in Other decrease in    income in current   31 December
                 Government grants                        2017   current year      current year                 year          2018    Assets/Income related


                 Tianjin CSG Golden Sun Project
                    (i)                            53,717,119             -                   -         (3,374,892)    50,342,227            Assets related
                 Dongguan CSG Golden Sun
                   Project (ii)                    43,328,250             -                   -         (2,751,000)    40,577,250            Assets related
                 Hebei CSG Golden Sun Project
                   (iii)                           44,000,000             -                   -         (2,750,000)    41,250,000            Assets related
                 Xianning CSG Golden Sun Project
                   (iv)                            47,982,917             -                   -         (3,030,500)    44,952,417            Assets related
                 Infrastructure compensation for
                   Wujiang CSG Glass Co., Ltd
                    (v)                            39,628,898             -                   -         (4,041,538)    35,587,360            Assets related




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          Qingyuan Energy-saving project
          (vi)                                   20,789,167            -             -         (2,470,000)    18,319,167           Assets related
          Yichang polysilicon products
             project (vii)                       21,796,875            -             -         (2,812,500)    18,984,375           Assets related
          Yichang CSG polysilicon slice
             auxiliary project (viii)            12,662,876     571,590    (2,384,700)         (1,235,755)     9,614,011           Assets related
          Sichuan energy-saving glass
             project (ix)                        10,475,460            -             -         (1,654,020)     8,821,440           Assets related
          Group coating film experimental
            project (x)                           7,526,280            -             -         (1,883,760)     5,642,520           Assets related

          Yichang expert silicon project (xi)     3,599,883            -             -          (272,730)      3,327,153           Assets related
          Yichang semiconductor silicon
             project (xii)                        3,400,000            -             -          (266,667)      3,133,333           Assets related

          Yichang CSG Display project (xiii)     50,836,604            -             -         (2,534,478)    48,302,126           Assets related

          Xianning Photoelectric project                               -
            (xiv)                                 7,800,000                          -                   -     7,800,000           Assets related

          Group talent fund project (xv)        171,000,000            -             -                   -   171,000,000          Income related
          Qingyuan CSG Energy-Saving
            Industry Co-construction
            support fund(xvi)                                 74,170,000             -     (11,343,456)       62,826,544          Income related
                                                                                                                           Assets related/Income
          Others                                 24,156,774    9,028,290    (175,834)          (1,663,373)    31,345,857                   related

                                                562,701,103   83,769,880   (2,560,534)     (42,084,669 )     601,825,780



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

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

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

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

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

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



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       (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 operating period committed by the
                 Group.

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

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

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

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

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

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

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

(25)   Share capital

                                                                  Movement for the year ended 31 December 2018
                                            31 December         New issues         Bonus                                        31 December
                                                2017          during the year       issue     Capitalisation      Others            2018

       RMB-denominated ordinary shares       1,509,664,303                  -           -         226,449,645     43,353,050     1,779,466,998
       Limited selling condition shares         97,511,654         9,826,580            -          14,626,748    (46,672,107)      75,292,875

       Domestically listed foreign shares      876,971,590                  -           -         131,545,738               -    1,008,517,328
                                             2,484,147,547         9,826,580            -         372,622,131     (3,319,057)    2,863,277,201


                                                                 Movement for the year ended 31 December 2017
                                            31 December       New issues during   Bonus                                         31 December
                                                2016              the year         issue     Capitalisation      Others             2017


       RMB-denominated ordinary shares       1,312,751,568                      -       -         196,912,735              -     1,509,664,303
       Limited selling condition shares                   -          97,511,654                             -                       97,511,654

       Domestically listed foreign shares      762,583,992                      -       -         114,387,598              -       876,971,590
                                             2,075,335,560           97,511,654         -         311,300,333              -     2,484,147,547




       The par value of the RMB-denominated ordinary shares is RMB1, and that of domestically listed foreign shares is HKD1.




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(26)   Capital surplus

                                                                                    Increase in       Decrease in
                                                            31 December 2017       current year       current year           31 December 2018


                      Share premium (i)                         1,353,802,562         151,633,385     (381,655,736)              1,123,780,211
                     Other capital surplus                        (47,420,797)        144,278,158     (125,298,151)               (28,440,790)
             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 (ii)                       11,006,378         144,278,158     (125,298,151)                 29,986,385
         Transfer of capital surplus recognized under the
                    previous accounting system                                                    -
                                                                   (2,250,222)                                       -             (2,250,222)

                  Disposal of fractional shares                                                   -
                                                                    1,316,208                                        -               1,316,208
                  Purchase of minority interests                  (87,197,562)                    -                  -            (87,197,562)

                 Shareholders interest-free loans                                                 -
                                                                   28,946,981                                        -              28,946,981
                                                                                                                                    -
                                                                1,306,381,765        295,911,543       (506,953,887)             1,095,339,421


                                                                                       Increase in        Decrease in
                                                            31 December 2016          current year        current year          31 December 2017


                       Share premium                            1,345,264,670         319,838,225       (311,300,333)               1,353,802,562
                     Other capital surplus                        (84,562,473)         37,141,676                        -           (47,420,797)
             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           8,194,695                        -             11,006,378
         Transfer of capital surplus recognised under the
                    previous accounting system                                                    -
                                                                   (2,250,222)                                           -            (2,250,222)

                  Disposal of fractional shares                                                   -
                                                              1,316,208                                                  -        1,316,208
                 Purchase of minority interests                   (87,197,562)                    -                      -           (87,197,562)
                 Shareholders interest-free loans                              -       28,946,981                        -             28,946,981

                                                                1,260,702,197         356,979,901       (311,300,333)               1,306,381,765


(a)    The reason for the decrease of capital reserve - other in current year was the acquisition of minority interests, with the detail as
       follows:

       (i)The Company passed the 2017 annual general meeting of shareholders held on May 14, 2018 and transferred 1.5 shares to every
       10 shares for all shareholders. The total share capital before the distribution was 2,484,147,547 shares, and the total share capital after
       the dividend was increased to 2,856,769,678 shares. Capital reserve decreased by RMB 372,622,131;

       By the 2th temporary meeting of shareholders held on 6th August 2018,the company decided to repurchase and cancel the
       still-restricted shares which have already been granted to and held by 15 recipients no longer qualified for “incentive plan” due to
       either resignation or position adjustment 3,319,057 shares were repurchased and cancelled, the capital reserve was reduced by RMB
       9,033,605. The company has finished above cancellations of the restricted shares by 1st September 2018.

       (ii)The Company held the 8th temporary meeting of Board member members on September 13, 2018 , which reviewed and approved
       September 13, 2018 to be the shares granting date and 75 recipients to be granted 9,826,580 restricted shares in total. The price of
       shares to be granted was determined as RMB 3.68 /share., the capital reserve increased by RMB 26,335,234.



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       The Company held the 8th temporary meeting of Board member members on December 12, 2018 , which reviewed and approved the
       releasing conditions on the first- time expiring trading restrictions of the initial part of the incentive plan on restricted shares from
       ordinary A . A total of 431 recipients of the incentive plan were able to fulfill the conditions. The amount of 43,353,050 shares
       could be released from restrictions. Other capital reserve and share payment was decreased by RMB 125,298,151, capital reserve and
       capital premium was decreased by RMB125,298,151. The restricted shares was released and listed by company on December 21
       2018.

       In addition, according to the Group’s performance in 2018, the unlocking conditions for the second post lock-up period for the
       ordinary A restricted shares incentive plan for 2017 In addition, according to the Group’s performance in 2018, the unlocking
       conditions for the second post lock-up period for the restricted shares incentive plan for 2017 and for the second post lock-up period
       for the restricted shares incentive plan for 2018 were not met. Therefore, by December 31 2018, expenses for the second post lock-up
       period for the ordinary A restricted shares was reduced by RMB 41,856,285.

       This year, due to the equity incentive plan, the share payment fee of RMB144,278,158 was confirmed

(27)   Treasury shares

                                                                                  Increase in       Decrease in
                                                       31 December 2017          current year       current year     31 December 2018


          Obligations of restricted share buybacks          417,349,879         37,594,488       (177,763,384))         277,180,983

                                                            417,349,879         37,594,488       (177,763,384))         277,180,983


       Explanation on changes in treasury stocks: The company confirms liabilities and treasury shares at the same time, based on the
       number of restricted shares issued and the corresponding repurchase price.




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(28)    Other comprehensive income

                                                             Other comprehensive income in Balance Sheet                 Other comprehensive income in Income Statement for the year ended 31 December 2018
                                                                                                                                       Less: Reclassification
                                                                             Attributable to                                               of previous other                                             Attributable to
                                                                                     parent                     Actual amount                 comprehensive                       Attributable to              minority
                                                                             company after                       before tax for          income to profit or     Less: Income    parent company       shareholders after
                                                       31 December 2017                  tax 31 December 2018     current year           loss in current year    tax expenses            after tax                   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                     (601,057)          3,131,291          2,530,234        3,131,291                                -              -         3,131,291                        -

                                                            1,948,943           3,131,291          5,080,234        3,131,291                                -              -         3,131,291                        -


                                                               Other comprehensive income in Balance Sheet               Other comprehensive income in Income Statement for the year ended 31 December 2017
                                                                                                                                       Less: Reclassification
                                                                                 Attributable                                              of previous other                                             Attributable to
                                                                                    to parent                   Actual amount         comprehensive income                        Attributable to              minority
                                                               31 December          company       31 December    before tax for           to profit or loss in   Less: Income    parent company       shareholders after
                                                                      2016           after tax           2017     current year                  current year     tax expenses            after tax                   tax


         Other comprehensive income items which will be
           reclassified subsequently to profit or loss
            Financial rewards for energy-saving technical
              retrofits                                          2,550,000                    -    2,550,000                  -                              -              -                   -                      -
            Difference on translation of foreign currency
              financial statements                               2,103,971      (2,705,028)        (601,057)     (2,705,028)                                 -              -       (2,705,028)                        -
                                                                 4,653,971      (2,705,028)        1,948,943     (2,705,028)                                 -              -       (2,705,028)                        -




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(29)   Special reserve

                                                                   Increase in current            Decrease in
                                              31 December 2017            year                    current year   31 December 2018


              Safety production costs                 3,224,938              8,319,885           (5,476,223)            6,068,600

       The subsidiary Yichang CSG Polysilicon is a high risk chemical production enterprise. Therefore, the Company appropriated such
       reserve in accordance with relevant regulations.

(30)   Surplus reserve

                                                                    Increase in current           Decrease in
                                              31 December 2017                     year           current year   31 December 2018


       Statutory surplus reserve                    792,739,764             3,713,043                        -         796,452,807
       Discretionary surplus reserve                127,852,568                      -                       -         127,852,568
                                                    920,592,332             3,713,043                        -         924,305,375


                                                                    Increase in current           Decrease in
                                              31 December 2016                     year           current year   31 December 2017


       Statutory surplus reserve                    760,655,662             32,084,102                       -         792,739,764
       Discretionary surplus reserve                127,852,568                       -                      -         127,852,568
                                                    888,508,230             32,084,102                       -         920,592,332


       In accordance with the Company Law of the People’s Republic of China and the Company’s Articles of Association, the Company
       should appropriate 10% of net profit for the year to the statutory surplus reserve, and the Company can cease appropriation when the
       statutory surplus reserve accumulated to more than 50% of the registered capital. The statutory surplus reserve can be used to make
       up for the loss or increase the paid-in capital after approval from the appropriate authorities. The Company accrued statutory surplus
       reserve at the amount of RMB3,713,043 based on 10% of the net profit, in 2018 (2017: RMB32,084,102, accrued at 10% of the net
       profit).

       The Company appropriates for the discretionary surplus reserve after the shareholders’ meeting approves the proposal from the Board
       of Directors. The discretionary surplus reserve can be used to make up for the loss or increase the share capital after approval from
       the appropriate authorities. The Company did not appropriate to discretionary surplus reserve during the year.

(31)   Undistributed profits

                                                                                                  2018                        2017


       Undistributed profits at beginning of year                                         4,159,642,227               3,573,871,573
       Add:    Net profits attributable to shareholders of parent company                  452,965,935                 825,388,312
       Less: Appropriation for statutory surplus reserve                                    (3,713,043)                (32,084,102)
              Ordinary share dividends payable (a)                                        (122,630,396)               (207,533,556)
       Undistributed profits at end of year                                               4,486,264,723               4,159,642,227


(a)     Pursuant to the resolution of Board of Directors of the Company on 14 May 2018, the Company paid cash dividends of RMB0.5 (tax
       inclusive) for each 10 shares based on total shares of 2,484,147,547, with the total cash dividends distributed of RMB124,207,377.

       Recipients resigned were expected to be decreased revocable cash dividends of RMB 1,576,981 in current year.



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(32)   Revenue and cost of sales

                                                                                              2018                           2017


       Revenue from main operations                                                10,536,501,926                   10,786,756,657

       Revenue from other operations                                                    73,461,085                     92,644,089

                                                                                   10,609,963,011                   10,879,400,746


                                                                                              2018                           2017


       Cost of sales from main operations                                             8,112,012,841                  8,183,862,835

       Cost of sales from other operations                                               8,469,053                     32,495,537

                                                                                      8,120,481,894                  8,216,358,372


(a)    Revenue and cost of sales from main operations

       Revenue and cost of sales from main operations analyzed by industry and product are set out below:

                                                             2018                                           2017
                                                     Revenue                   Cost               Revenue                    Cost


       Glass industry                           7,385,946,431         5,375,433,121          6,975,512,082          5,179,173,783

       Solar energy industry                    2,296,917,214         2,170,991,475          3,091,397,745          2,493,891,466

       Electronic glass and display               955,864,280           666,108,617            867,223,335            652,646,493

       Elimination                              (102,225,999)         (100,520,372)          (147,376,505)           (141,848,907)

                                               10,536,501,926         8,112,012,841         10,786,756,657          8,183,862,835


(b)    Revenue and cost of sales from other operations

                                                             2018                                           2017
                                                     Revenue                   Cost               Revenue                    Cost


       Sales of raw materials and Others         73,461,085             8,469,053             92,644,089              32,495,537
                                                 73,461,085             8,469,053             92,644,089              32,495,537

(33)   Taxes and surtax

                                                                                              2018                           2017


       City maintenance and construction tax                                             37,842,081                     33,115,925

       Educational surcharge                                                             29,975,981                     26,156,521

       Housing property tax                                                              31,453,204                     29,539,408

       Land use rights                                                                   20,147,106                     21,941,304

       Stamp tax                                                                          5,492,647                      5,395,333



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       Environmental tax                          10,136,863                 -

       Others                                      5,376,969         8,375,435

                                                 140,424,851       124,523,926


(34)   Selling expenses

                                                       2018              2017


       Freight expenses                          163,197,092      159,825,411

       Employee benefits                         120,513,530      110,068,886

       Entertainment fees                         14,654,064       12,690,770

       Business travel expenses                   11,066,121       10,931,013

       Vehicle use fees                            8,480,143        7,609,882

       Rental expenses                             6,469,600        5,937,331

       Depreciation expenses                        973,181           970,739

       Others                                     29,629,728       28,097,691

                                                 354,983,459      336,131,723


(35)   Administrative expenses

                                                       2018              2017


       Employee benefits                         442,272,618      295,657,274

       Depreciation expenses                      62,737,730       65,929,139

       Amortization of intangible assets          50,567,703       43,884,166

       General office expenses                    22,933,432       25,126,422

       Labor union funds                          15,317,022       14,696,230

       Entertainment fees                         14,159,098       12,027,303

       Business travel expenses                   11,903,093       11,074,568

       Utility fees                               10,833,683       10,108,470

       Canteen costs                               8,202,537        9,357,983

       Vehicle use fees                            6,853,349        6,639,769

       Consulting advisers                        32,308,070       24,935,512

       Others                                     53,126,916       69,215,561

                                                 731,215,251      588,652,397




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(36)   Research and development expenses

                                                                                              2018                          2017


       Research and development expenses                                              338,791,891                   330,677,375

                                                                                      338,791,891                   330,677,375


(37)   Financial expenses

                                                                                              2018                          2017


       Interest on borrowings                                                         423,763,192                   344,459,771

       Less: Capitalized interest                                                      (22,136,125)                  (29,856,175)

       Interest expenses                                                              401,627,067                   314,603,596

       Less: Interest income                                                           (61,857,535)                  (12,606,285)

       Exchange losses                                                                  (4,955,956)                    4,780,451

       Others                                                                           14,589,911                     9,183,318

                                                                                      349,403,487                   315,961,080


(38)   Expenses by nature

       The cost of sales, selling and distribution expenses, general and administrative expenses, Research and development expenses in the
       income statement are listed as follows by nature:

                                                                                                 2018                      2017


       Changes in inventories of finished goods and work in progress                       98,883,578              (139,651,079)
       Consumed raw materials and low value consumables, etc.                           4,545,216,065              4,941,314,821
       Fuel fee                                                                         1,223,356,407              1,143,379,014
       Employee benefits                                                                1,335,584,375              1,222,510,952
       Depreciation and amortization expenses                                           1,018,151,059              1,002,432,274
       Utility fees                                                                       813,320,471               778,033,060
       Freight expenses                                                                   171,566,693                159,825,411
       General office expenses                                                             42,726,767                 43,816,479
       Canteen costs                                                                       37,952,058                 39,682,701
       Business travel expenses                                                            27,455,316                 26,904,472
       Entertainment fees                                                                  31,045,998                 26,167,761
       Vehicle use fee                                                                     16,882,396                 15,851,907
       Rental expenses                                                                     11,212,221                 10,489,299
       Others                                                                             172,119,091               201,062,795
                                                                                        9,545,472,495             9,471,819,867




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(39)   Asset impairment losses


                                                                                                  2018                      2017


       Impairment loss of fixed assets                                                   12,373,970                  36,260,304
       Bad debts                                                                             538,413                  6,187,739
       Decline in the value of inventories                                                   497,272                     68,974
       Impairment loss in construction in progress                                      102,464,495                  26,882,738
       Impairment loss in goodwill                                                       20,672,000                            -
                                                                                        136,546,150                  69,399,755


(40)   Investment income

                                                                                                  2018                      2017


       Losses from disposal of financial liabilities at fair value through
         profit or loss                                                                               -                  427,636
                                                                                                      -                  427,636


       There is no significant restriction on the remittance of investment income to the Group.

(41)   Asset disposal income

                                                                                                  2018                      2017
       Gains on disposal of non-current assets                                             (454,368)                (1,768,993)
                                                                                           (454,368)                (1,768,993)

(42)   Other income



                                                                                      2018                        2017

       Government subsidy amortization                                                   42,084,669                 47,070,175

       Industry support funds                                                            17,950,780                 16,123,793

       Research grants                                                                   10,368,881                   6,940,140

       Government incentive funds                                                        13,647,951                 12,457,123

       Others                                                                            10,565,758                   1,750,583

                                                                                         94,618,039                 84,341,814


(43)   Non-operating income

                                                                                                                      Amount of
                                                                                                             non-recurring gains
                                                                                                           and losses included in
                                                                       2018                         2017                    2018


       Government grants (a)                                        217,500                   3,533,603                  217,500



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       Default income                                                 50,400                   275,000                     50,400

       Compensation income                                          6,537,875               15,557,320                  6,537,875

       Amounts unable to pay                                        4,778,583                   27,959                  4,778,583

       Others                                                       2,274,293                1,369,160                  2,274,293

                                                                13,858,651                  20,763,042                 13,858,651


(a)    Government grants are analysed below:

                                                                        2018                      2017                    Category


       Government awards fund                                        150,000                 2,748,263              Income related

       Interest subsidy for technological renovation                       -                   600,000              Income related

       Others                                                         67,500                   185,340              Income related
                                                                     217,500                 3,533,603


(44)   Non-operating expenses

                                                                                                                       Amount of
                                                                                                              non-recurring gains
                                                                                                            and losses included in
                                                                        2018                      2017                       2018


       Compensation                                                         -                  492,228                           -

       Donation                                                      260,033                 1,118,999                    260,033

       Others                                                       1,281,438                3,541,364                  1,281,438
                                                                    1,541,471                5,152,591                  1,541,471
(45)   Income tax expenses

                                                                                               2018                           2017


       Current income tax                                                              129,842,061                    160,923,182

       Deferred income tax                                                              (57,453,770)                    6,747,809

                                                                                         72,388,291                   167,670,991


       The reconciliation from income tax calculated based on the applicable tax rates and total profit presented in the consolidated income
       statement to the income tax expenses is listed below:

                                                                                               2018                           2017


       Total profit                                                                    544,596,879                    996,307,026



       Income tax expenses calculated at applicable tax rates by company                 64,115,428                   149,078,702

       Effect of changes in tax rates                                                     1,512,060                               -

       Costs, expenses and losses not deductible for tax purposes                        19,250,051                     7,893,473




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       Income not subject to tax                                                                     -                     (33,833)
       Deductible losses for which no deferred tax asset was recognised in
        current period                                                                     36,559,709                  20,825,885

       Effect of tax incentives                                                           (32,258,314)                (13,637,793)

       Reconciliation of income tax for prior years in annual filing                      (16,790,643)                  3,544,557

       Income tax expenses                                                                 72,388,291                 167,670,991


(46)   Earnings per share

       The basic earnings per share is calculated by dividing the net profit attributable to ordinary shareholders of the company by the
       weighted average number of ordinary shares outstanding.

       The numerator of diluted earnings per share is determined based on the net profit attributable to the common 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 current period; (2) dilutive potential ordinary The income or expenses that will be generated when
       the shares are converted; (3) The above-mentioned adjustments related to income tax effects.

       The denominator of the diluted earnings per share equals the sum of: (1) the weighted average number of ordinary shares of the
       parent company in the underlying earnings per share; (2) ordinary shares that are increased assuming the dilution of potential
       ordinary shares into common shares The weighted average.

       When calculating the weighted average of the number of ordinary shares increased from diluted common stocks to ordinary shares,
       the diluted potential ordinary shares issued during the previous period are assumed to be converted at the beginning of the current
       period; diluted potential ordinary shares 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:


                                                                                                 2018                         2017



       Consolidated net profit attributable to ordinary shareholders of
                                                                                       452,965,935                  825,388,312
       parent company

       Weighted average number of outstanding ordinary                                  2,787,726,094               2,744,631,277
       Basic earnings per share                                                                   0.16                        0.30


(b)    Diluted earnings per share:

       Diluted earnings per share are calculated by dividing consolidated net profit attributable to ordinary shareholders of the parent
       company adjusted based on the dilutive potential ordinary shares by the adjusted weighted average number of outstanding ordinary
       shares of the Company. For the year ended 31 December 2018, the Company had diluted earnings per shares of RMB 0.16(2017:
       RMB 0.29 per share).

(47)   Notes to the cash flow statement

(a)    Cash generated by other operating activities
                                                                                                 2018                         2017


       Government grants                                                                  136,520,750                  40,805,242

       Interest income                                                                     61,857,535                  12,606,285

       Others                                                                              17,445,309                  18,937,040

                                                                                          215,823,594                  72,348,567



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(b)   Cash paid relating to other operating activities

                                                                             2018                   2017


      Freight expenses                                                 194,159,982            170,941,469
      Canteen costs                                                      37,952,058            39,682,701
      General office expenses                                            34,495,884            34,267,447
      Research and development expenses                                  35,304,568            31,684,954
      Business travel expenses                                           28,171,433            27,935,416
      Entertainment fees                                                 28,744,002            25,206,039
      Vehicle use fee                                                    16,882,396            15,851,907
      Maintenance fee                                                    34,453,953            25,969,168
      Rental expenses                                                    11,212,221            10,489,299
      Insurance                                                          11,942,647              8,759,738
      Bank fees                                                          14,589,911              9,183,318
      Others                                                           155,877,385            186,004,633
                                                                       603,786,440            585,976,089
(c)   Cash generated by other investing activities

                                                                             2018                   2017


      Income from trial production of construction in progress          30,517,662           124,108,255

      Government grants related to assets received                                    -       15,950,000

      Land grant funds received                                                       -       28,098,000

      Insurance claims received                                                       -       19,600,000

      Deposit                                                             537,656                       -
                                                                        31,055,318           187,756,255
(d)   Cash paid relating to other investing activities


                                                                             2018                   2017



      Trial production expenditure in construction                     118,263,080           156,543,177

      Deposit                                                                         -       43,541,859

                                                                       118,263,080           200,085,036
(e)   Cash generated by other financing activities


                                                                           2018                      2017


      Interest-free borrowing                                                     -          1,610,000,000
      Income from financing leases                                                -          1,986,000,000
      Receiving industrial production dispatch funds                              -            20,000,000
                                                                                  -          3,616,000,000




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(f)    Cash payments relating to other financing activities


                                                                                       2018                      2017


       Repay financing leases                                                    688,061,105              104,821,449
       Pay for industrial production scheduling funds                                         -            31,000,000
       Return interest-free loan                                                              -          1,610,000,000
       Deposit                                                                    10,098,279                5,030,994
       Payment of loan, security and fee for bills                                 9,613,905               32,257,231
       Entrusted loan                                                            300,000,000                            -
       Equity incentive fund                                                      12,352,662                            -
                                                                                1,020,125,951            1,783,109,674


(48)   Supplementary information to the cash flow statement

(a)    Reconciliation from net profit to cash flows from operating activities

                                                                                         2018                   2017


       Net profit                                                                 472,208,588            828,636,035
       Add: Provision for asset impairment                                        136,546,150             69,399,755
             Depreciation of fixed assets                                         965,935,450            957,475,579
             Amortization of intangible assets                                      50,567,703            43,884,166
             Net movements of safety production costs                                2,843,662            (2,618,535)
             Amortization of long-term prepaid expenses                              1,647,906              1,072,529
             Net losses/(gains) on disposal of fixed assets and intangible
                                                                                  141,486,074               8,194,695
               assets
             Employee compensation based on shares                                    454,368               1,768,993
             Financial expenses                                                   401,627,067            314,603,596
             Investment income/(loss)                                                             -         (427,636)
             Decrease/(increase) in deferred tax assets                           (58,656,656)            15,578,992
             Increase/(decrease) in deferred tax liabilities                         1,202,886            (8,833,183)
             (Increase)/decrease in inventories                                     85,267,118          (201,257,769)
             Increase in operating payables                                       (63,345,244)          (206,859,922)
             Increase in operating receivables                                     (7,406,972)           642,828,861
       Net cash flows from operating activities                                  2,130,378,100          2,463,446,156


(b)    Net increase/(decrease) in cash

                                                                                         2018                   2017


       Cash and cash equivalents at end of year                                 2,225,126,913          2,459,753,165

       Less: Cash and cash equivalents at beginning of year                     (2,459,753,165)         (584,566,990)

       Net increase in cash and cash equivalents                                 (234,626,252)         1,875,186,175




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(c)    Cash and cash equivalents

                                                                                      31 December 2018              31 December 2017


       Cash

       - Cash on hand                                                                             9,731                         36,182

       - Bank deposits that can be readily drawn on demand                                2,225,117,182                  2,409,716,983

       - Other cash balances that can be readily drawn on demand                                       -                    50,000,000

       Cash at end of year                                                               2,225,126,913                   2,459,753,165


(49)   Assets with restricted ownership or use rights


                                                                   2018                        2017                Reason



       Monetary assets                                       1,320,807                    2,852,599         Restricted deposit flow

                                                                                                           Limited finance lease and
       Property, plant and equipment                    2,381,348,551                  2,369,789,041
                                                                                                           Restricted mortage loan

                                                        2,382,669,358                  2,372,641,640


(50)   Monetary items denominated in foreign currencies
                                                                                        31 December 2018
                                                     Balances denominated in                                   Balances denominated in
                                                           foreign currencies             Exchange rates                        RMB
       Cash at bank and on hand -
          HKD                                                         1,579,085                   0.8762                       1,383,594
          USD                                                        11,853,148                   6.8632                      81,350,525
          EUR                                                              70,422                 7.8473                         552,623
          JPY                                                        12,072,746                   0.0619                         747,303
          AUD                                                               1,036                 4.8250                              4,999
                                                                                                                              84,039,044


       Accounts receivable -
          HKD                                                         1,566,848                   0.8762                       1,372,872
          USD                                                        17,294,818                   6.8632                     118,697,795
          EUR                                                             946,785                 7.8473                       7,429,706

                                                                                                                             127,500,373


       Short-term borrowings -
          HKD                                                        75,000,000                   0.8762                      65,715,000

                                                                                                                              65,715,000
       Accounts payable -
          HKD                                                                   307               0.8762                               269
          USD                                                         8,184,348                   6.8632                      56,170,817
          EUR                                                         1,372,385                   7.8473                      10,769,517
          JPY                                                        26,293,425                   0.0619                       1,627,563
                                                                                                                              68,568,166




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5     The changes of consolidation scope

      On 11 Feb 2018, the Group set up a subsidiary, Qingyuan CGS Quartz Materials co , Ltd. and the Group has invested
      RMB 6,000,000 . The Group owns 100% of its equity.

      On 30 Mar 2018, the Group set up a subsidiary, Dongguan Jingyu New material Co., Ltd. and the Group has invested
      RMB 24,000,000. The Group owns 80% of its equity.

      The Group established a subsidiary company, Changshu CSG New Energy Co., Ltd. on 22 May 2018, and the Group
      has not invested yet. The Company holds 100% of its shares.

6     Interest in other entities

(1)   Interest in subsidiaries

(a)   Structure of the enterprise group

      As at 31 December 2018, information of the Company’s major subsidiaries is set out below:

                                                                                                                                            Shareholding
                                                       Major                                                                                     (%)
                                                     business       Place of
                                                     location    registration                                    Scope of business      Direct   Indirect


                                                    Chengdu,       Chengdu,           Development, production and sales of special
      Chengdu CSG                                       PRC            PRC                                                   glass       75%        25%
                                                    Chengdu,       Chengdu,           Development, production and sales of special
      Sichuan CSG Energy Conservation                   PRC            PRC                           glass and processing of glass       75%        25%
                                                                                      Development, production and sales of special
      Tianjin Energy Conservation                Tianjin, PRC   Tianjin, PRC                                                 glass       75%        25%
                                                  Dongguan,      Dongguan,
      Dongguan CSG Engineering                         PRC            PRC                             Intensive processing of glass      75%        25%
                                                  Dongguan,      Dongguan,
      Dongguan CSG Solar                               PRC            PRC                        Production and sales of solar glass     75%        25%
                                                  Dongguan,      Dongguan,       Production and sales of hi-tech green battery and
      Dongguan CSG PV-tech                             PRC            PRC                                             components             -     100%
                                                    Yichang,       Yichang,              Production and sales of high-purity silicon
      Yichang CSG Polysilicon                           PRC            PRC                                                materials      75%        25%
                                                    Wujiang,       Wujiang,
      Wujiang CSG Engineering                          PRC            PRC                             Intensive processing of glass      75%        25%
                                                   Yongqing,      Yongqing,
      Hebei CSG                                        PRC            PRC                     Production and sales of special glass      75%        25%
                                                    Wujiang,       Wujiang,
      Wujiang CSG                                      PRC            PRC                     Production and sales of special glass      100%              -
                                                 Hong Kong,     Hong Kong,
      China Southern Glass (Hong Kong) Limited         PRC            PRC                                       Investment holding       100%              -
                                                   Yongqing,      Yongqing,
      Hebei Shichuang                                  PRC            PRC        Production and sales of ultra-thin electronic glass     100%              -
                                                   Xianning,      Xianning,
      Xianning CSG                                     PRC            PRC                     Production and sales of special glass      75%        25%
                                                   Xianning,      Xianning,
      Xianning CSG Energy-Saving                       PRC            PRC                             Intensive processing of glass      75%        25%
                                                   Qingyuan,      Qingyuan,
      Qingyuan CSG Energy-Saving                        PRC            PRC       Production and sales of ultra-thin electronic glass     100%              -
                                                   Shenzhen,      Shenzhen,
      Shenzhen CSG Financial Leasing Co., Ltd.          PRC            PRC                                     Finance leasing, etc.     75%        25%
                                                    Jiangyou,      Jiangyou,
      Jiangyou CSG Mining Development Co. Ltd.           PRC            PRC      Production and sales of silica and its by-products      100%              -
                                                   Shenzhen,      Shenzhen,
      Shenzhen CSG PV Energy Co., Ltd.                  PRC            PRC            Investment management of photovoltaic plant        100%              -
                                                   Qingyuan,      Qingyuan,        Clean energy development, photovoltaic power
      Qingyuan CSG New Energy Co., Ltd.                 PRC            PRC                                           generation              -     100%
      Suzhou CSG PV-tech Co., Ltd.                  Wujiang,       Wujiang,        Clean energy development, photovoltaic power              -     100%




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                                                              PRC               PRC                                                generation

                                                           Wujiang,         Wujiang,        Clean energy development, photovoltaic power
      Wujiang CSG New Energy Co., Ltd.                        PRC              PRC                                            generation               -      100%
                                                           Yichang,         Yichang,        Clean energy development, photovoltaic power
      Yichang CSG New Energy Co., Ltd                          PRC              PRC                                           generation               -      100%
                                                          Shenzhen,        Shenzhen,             Production and sales of display component
      Shenzhen CSG Display:                                    PRC              PRC                                                products      60.80%           -
                                                          Xianning,         Xianning,
      Xianning CSG Photoelectric                              PRC               PRC            Photoelectric glass and high aluminium glass      37.50%     62.50%


(b)   Subsidiaries with significant minority interests

                                                                       Profit or loss attributable to            Dividends distributed to              Minority interests as
                                          Shareholding of              minority shareholders for the           minority shareholders for the            at 31 December
             Subsidiaries               minority shareholders         year ended 31 December 2018             year ended 31 December 2018                     2018
      Shenzhen CSG Display                            39.20%                                  15,900,492                                          -            318,802,856


      The major financial information of the significant non-fully-owned subsidiaries of the Group is listed below:

                                                                                               31 December 2018
                                                                Non-current                                                                Non-current
                                         Current assets              assets               Total assets       Current liabilities             liabilities    Total liabilities
      Shenzhen CSG Display                 220,538,417        1,418,945,195             1,639,483,612             620,430,756             171,541,290          791,972,046


                                                                                                      2018
                                                                                                                                                Cash flows from operating
                                                     Revenue                            Net profit     Total comprehensive income                               activities

      Shenzhen CSG Display                       564,971,827                       49,063,159                              49,063,159                          143,806,892




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7   Segment information

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

    -     Glass segment, engaged in production and sales of float glass and engineering glass and the silica for the
             production thereof, etc.
    -     Solar energy segment, engaged in manufacturing and sales of polycrystalline silicon and solar battery and
             applications, etc.
    -     Electronic glass and display segment is responsible for production and sales of display components and special
             ultra-thin glass products, etc.

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

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

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




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(a)   Segment information as at and for the year ended 31 December 2018 is as follows:

                                                                   Electronic glass
                                                      Flat glass      and displays        Solar energy        Others     Unallocated     Elimination          Total



                                                                      959,296,761        2,300,739,737             -       1,142,377               -   10,609,963,011
      Revenue from external customers             7,348,784,136

      Inter-segment revenue                        104,770,988             778,667         41,036,737              -     57,758,560    (204,344,952)                  -

      Interest income                                 3,071,723            173,121            458,674           621      58,153,396                -       61,857,535

      Interest expenses                           (166,301,267)       (18,270,988)       ( 84,347,386 )            -   (132,907,678)        200,252     (401,627,067)

      Asset impairment losses                      (21,099,608)           (34,175)       (115,389,417)             -        (22,950)               -    (136,546,150)

      Depreciation and amortization expenses      (596,848,697)      (143,796,422)       (270,419,285)      (24,083)    ( 7,062,572)               -   (1,018,151,059)

      Total profit/(loss)                          915,309,261        163,147,030        (296,236,904)      (25,076)   (235,891,805)     (1,705,627)      544,596,879

      Income tax (expenses)/income                (113,371,067)       (20,814,888)         58,961,350              -      2,836,314                -     (72,388,291)

      Net profit/(loss)                            801,938,194        142,332,142        (237,275,554)      (25,076)   (233,055,491)     (1,705,627)      472,208,588




      Total assets                                8,463,669,998     3,209,225,123        4,665,311,805      641,334    2,775,385,924               -   19,114,234,184



      Total liabilities                           3,064,099,160       831,715,506        1,050,655,995     2,504,400   4,715,826,661               -    9,664,801,722



      Increase in non-current assets               358,628,578        170,767,439          67,224,833              -       4,861,828               -      601,482,678




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(b)   Segment information as at and for the year ended 31 December 2017 is as follows:



                                                                   Electronic glass
                                                      Flat glass      and displays       Solar energy            Others     Unallocated      Elimination               Total


      Revenue from external customers             6,954,683,103        873,166,517    3,050,921,865                   -        629,261                 -       10,879,400,746

      Inter-segment revenue                         97,227,192             701,963        74,689,369                  -     58,058,305     (230,676,829)                       -

      Interest income                                1,152,232             146,973           262,942               608      11,043,530                 -           12,606,285

      Interest expenses                           (153,982,540)       (32,003,353)       (79,797,858)                 -    (54,488,918)       5,669,073         (314,603,596)

      Asset impairment losses                      (20,109,566)          (352,808)       (48,857,162)                 -        (80,219)                -         (69,399,755)

      Depreciation and amortization expenses      (601,774,748)      (132,769,853)    (261,527,443)           (107,198)     (6,253,032)                -       (1,002,432,274)

      Total profit/(loss)                          827,335,674          80,463,836       218,437,923          (110,328)   (124,292,481)      (5,527,598)          996,307,026

      Income tax (expenses)/income                (118,701,953)       (21,223,939)       (23,950,456)                 -     (3,794,643)                -        (167,670,991)

      Net profit/(loss)                            708,633,721          59,239,897       194,487,467          (110,328)    (128,087,124)     (5,527,598)          828,636,035




      Total assets                                9,121,982,895      3,032,467,443    4,969,121,408            664,853    2,410,765,769                    -- 19,535,002,368



      Total liabilities                           3,453,100,959        856,548,520    1,640,361,900           2,502,814   4,802,865,064                    - 10,755,379,257



      Increase in non-current assets               160,029,169         459,791,787       629,473,708                  -      2,875,254                     -    1,252,169,918




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

          Revenue from external customers                                                           2018                   2017


          Mainland                                                                         9,151,411,893           9,506,249,433

          Hong Kong, PRC                                                                    196,186,618              434,551,436

          Europe                                                                              53,541,882              26,534,686

          Asia (other than Mainland and Hong Kong)                                         1,125,389,041             848,958,711

          Australia                                                                           39,605,066              37,937,222

          North America                                                                       31,189,420               6,030,936

          Other regions                                                                       12,639,091              19,138,322

                                                                                         10,609,963,011           10,879,400,746


          Total non-current assets                                                    31 December 2018         31 December 2017


          Mainland                                                                       14,033,948,714           14,505,740,522

          Hong Kong, PRC                                                                      12,647,783              12,798,642

                                                                                         14,046,596,497           14,518,539,164


          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) The associates

    On December 31, 2018, the Company has no joint venture.




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(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 group shareholders

(5)    Related party transactions

(a)    Purchase and sales of goods, provision and receiving of labor

       None

(b)    Leases

       None

(c)    Gains on equity transfer

       None

(d)    Acquisition of equity

       None

(e)    Advances paid on behalf of related parties

       None

(f)    Remuneration of key management


                                                                                                    2018                       2017

       Remuneration                                                                          23,846,000                 12,030,000

(g)     Other


       Related parties                      Related party transactions                              2018                       2017



       Shenzhen Qianhai Ruinan              Buy life insurance for
                                                                                             2,515,064                    2,416,456
           Investment LLP                      employees

       Xinjiang Qianhai United Property Buy car insurance for                                   481,505                     374,076
           & Casualty Insurance                 employees

                                                                                              2,996,569                   2,790,532




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(6)   Commitments in relation to related parties

      The commitments in relation to related parties contracted for but not yet necessary to be recognised on the balance sheet by
      the Group as at the balance sheet date are as follows:

                                                                   Restrictive terms on
      Related parties               Related party transactions              borrowings                       2018                   2017


                                       Facility of interest-free
      Shenzhen Jushenghua Co.,          loans provided for the
       Ltd. (“Jushenghua”)                          Company                        Nil            2,000,000,000         2,000,000,000

      On 22 November 2016, the Company received a letter from its shareholder, Jushenghua, stating that to support the Group’s
      steady operation and development, Jushenghua, as the shareholder of the Company, would like to offer interest-free
      borrowings with the total amount of RMB2 billion to the Company or through related parties designated by it. For any
      borrowing drawn, its repayment date is negotiated by the Company and Jushenghua upon withdrawal. When a borrowing is
      due, if an extension is needed, the Company can apply to the actual lender based on the Company’s operation; where the
      actual lender agrees with the extension application, the term of the borrowing is extended accordingly. The shareholder
      provided nil interest free loan to the group in 2018.

9     Share Payment

      1. Overall situation of share payment
      The total number of various equity instruments                                                        3,319,057 shares
      that have repurchased in the current period

      Total amount of various equity instruments that the                                                  43,353,050 shares
      company exercises during the current period


      The total number of equity instruments granted by the                                                 9,826,580 shares
      company in the current period Restricted shares


      The scope of the company’s outstanding share options                                                                  -
      and the remaining duration of the contract at the end of
      the period

      The scope of the company's exercise of other equity                                                                    -
      instruments at the end of the period and the remaining
      duration of the contract


      Note: On December 11, 2017, reviewed and approved by the Group's eighth session of the Board of Directors, the Group
      implemented the 2017 A Share Restricted Stock Incentive Plan. The incentive targets for the restricted shares granted under
      this plan include company directors and senior management personnel. The total of 454 core management teams, company
      technology members and main employees. The first grant date of this restricted stock was December 11, 2017. The company
      granted 97,511,654 restricted shares for the first time to 454 incentive targets. The initial grant price was 4.28RMB per share.
      Reserved restricted stock ending balance 17,046,869 shares, the grant price has not been determined. The shares granted of
      the first time has been registered and listed.

      By the 2th temporary meeting of shareholders held on 6th August 2018,the company decided to repurchase and cancel the
      still-restricted shares which have already been granted to and held by 15recipients no longer qualified for “incentive plan”
      due to either resignation or position adjustment 3,319,057 shares were repurchased and cancelled, The company has finished
      above cancellations of the restricted shares by 1st September 2018.

      The Company held the 8th temporary meeting of Board member members on December 12, 2018 , which reviewed and
      approved the releasing conditions on the first- time expiring trading restrictions of the initial part of the incentive plan on
      restricted shares from ordinary A . A total of 431 recipients of the incentive plan were able to fullfil the conditions. The
      amount of 43,353,050 shares could be released from restrictions.

      The Company held the 8th temporary meeting of Board member members on September 13, 2018 , which reviewed and
      approved September 13, 2018 to be the shares granting date and 75 recipients to be granted 9,826,580 restricted shares in
      total.
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This incentive plan is valid for 48 months from the date of grant of the restricted stock to the date of unlocking of all
restricted stocks or the completion of repurchase and cancellation. During the unlocking/exercise period, if the
unlocking/exercise condition specified in the incentive plan is reached, the restricted stock granted is unlocked in three
phases after 12 months from the grant date.

The unlock period is shown in the following table:
Unlock Schedule              Unlock Time                                                       Unlock Ratio

First unlock                 from the date of the first transaction 12 months after the                       40%
                             award date to the date of the last transaction within 24
                             months from the grant date.
Second unlock                from the date of the first trading day 24 months after the                       30%
                             grant date to the date of the last trading day within 36
                             months from the grant date
Third unlock                 from the date of the first trading day 36 months after the                       30%
                             grant date to the day of the last trading day within 48
                             months from the grant date


2. Equity-settled share payment
Method for Determining the Fair Value of Equity                           Black-Scholes Model
Instruments on the Grant Date
Determination of the best estimate of the number of       Based on the latest information on the change in the
vesting equity instruments                                number of exercisable rights and the completion of
                                                          performance indicators, the number of equity
                                                          instruments that are expected to be exercised is
                                                          revised.
Reasons for significant differences between current                           Not applicable
estimates and previous estimates
Cumulative amount of equity-settled share-based
payment in capital reserves                                                    152,472,853
Total equity confirmed by equity-settled share-based
payment in this period                                                         144,278,158


According to the relevant provisions of Accounting Standards for Business Enterprises No. 11 - Share Payment and
Enterprise Accounting Standard No. 22 - Recognition and Measurement of Financial Instruments, the Group uses the
Black-Scholes model (BS model) as a pricing model, deducting incentive objects. The fair value of the restricted stock will
be used after the lock-in costs that are required to obtain the rational expected return from the sales restriction period are
lifted in the future. The Group will, on each balance sheet date of the lock-in period, revise the number of restricted stocks
that are expected to be unlikable based on the newly obtained changes in the number of unlockable persons and performance
indicators, and follow the fair value of the restricted stock grant date. The services obtained during the current period are
included in the relevant costs or expenses and capital reserves.

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

By the 2th temporary meeting of shareholders held on 6th August 2018,the company decided to repurchase and cancel the
still-restricted shares which have already been granted to and held by 15 recipients no longer qualified for “incentive plan”
due to either resignation or position adjustment 3,319,057 shares were repurchased and cancelled, The company has finished
above cancellations of the restricted shares by 1st September 2018.

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

The Company held the 8th temporary meeting of Board member members on December 12, 2018, which reviewed and
approved the releasing conditions on the first- time expiring trading restrictions of the initial part of the incentive plan on
restricted shares from ordinary A . A total of 431 recipients of the incentive plan were able to fulfill the conditions. The

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      amount of 43,353,050 shares could be released from restrictions. The restricted shares was released and listed by
      company on December 21 2018.

      In addition, according to the Group’s performance in 2018, the unlocking conditions for the second post lock-up period for
      the ordinary A restricted shares incentive plan for 2017 In addition, according to the Group’s performance in 2018, the
      unlocking conditions for the second post lock-up period for the restricted shares incentive plan for 2017 and for the second
      post lock-up period for the restricted shares incentive plan for 2018 were not met. Therefore, by December 31 2018 ,expenses
      for the second post lock-up period for the ordinary A restricted shares was reduced by RMB 41,856,285.

      In 2018, the Group achieved conditions for unlocking restricted stocks. In the current period, the relevant cost sharing amount
      of the incentive plan was recognized as RMB 144,278,158.

10    Contingencies

      Nil.

11    Commitments

(1)   Capital commitments

      Capital expenditures contracted for by the Group at the balance sheet date but are not yet necessary to be recognized on the
      balance sheet are as follows:

                                                                                 31 December 2018                31 December 2017


      Buildings, machinery and equipment                                                130,748,435                     150,418,893

(2)   Operating lease commitments

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

                                                                              31 December 2018                   31 December 2017


      Within 1 year                                                               19,016,297                               3,675,748

      1 to 2 years                                                                16,993,654                               1,914,948

      2 to 3 years                                                                16,654,854                               1,472,224

      Over 3 years                                                                  1,093,859                              3,443,641

                                                                                  53,758,664                             10,506,561




12     Events after the balance sheet date

      Statement of profit distribution after balance sheet date

                                                                                                                            Amount


      Proposed distribution of cash dividends                                                                           143,163,860


      Pursuant to the resolution of the board of directors dated April 16, 2019, the board of directors proposed that the company
      distribute cash dividends of RMB 143,163,860 to all shareholders, which has not yet been recognized as a liability in the
      financial statements. In addition, the board of directors proposes to use the capital of 2,863,277,201 as the base to transfer 1
      shares for every 10 shares to all shareholders in a total of 286,327,720 shares, which has not yet been reclassified as capital in
      the financial statements.


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13     Other significant events

(1)   171 million special funds for the introduction of talents was follow-up progress.

(a)   Matter description

      On December 10, 2012, the People's Government of Yichang City and the Company signed the Cooperation Agreement on
      Fine Glass and Ultrathin Electronic Glass Project ;The management committee of Yichang High-tech Industrial Development
      Zone agreed to establish a RMB 171 million talent fund as a special fund subsidy for the introduction of talents and the
      placement of talented people. The company of Yichang CSG Polysilicon Co.Ltd. is responsible for formulating the housing
      resettlement subsidy program and supervising the use of this special fund.The funds were subsidized by the government to the
      company, but Yichang CSG Polysilicon Co., Ltd. received this amount and transferred it to Yichang Hongtai Real Estate Co.,
      Ltd. in full amount without proper approval from the company's board of directors and other relevant authorities. ( Yichang
      Hongtai Real Estate Co.,Ltd. is a company jointly indirect controlled by part of the former natural executives of the company.
      The company has no equity relationship with the company ) .Yichang CSG Polysilicon Co., Ltd. received the above fund and
      transferred it to Yichang Hongtai Real Estate Co., Ltd. in full and also handled the accounting treatment according to the
      collecting and paying. In 2017, Prior period accounting error from above matters was corrected by company.

(b)   Subsequent progress

      The company learned from bureau of the Shenzhen Economic Crime Investigation in January 2019. According to the criminal
      clues handed over by the Shenzhen Securities Regulatory Commission and Some suggestions provided by People ‘s
      Procuratorate of Shenzhen, then bureau of the Shenzhen Economic Crime Investigation decide and censored that Some of the
      former senior management ( Zeng nan, etc) damaged the interests of listed companies and have taken criminal enforcement
      measures. By 31 December 2018, the investigation of the case was still in progress.

(c)   Receivable talent fund from Yichang Hongtai Real Estate Co., Ltd.


                                                           December 31, 2018                           December 31, 2017

                                                                        Bad               debt                   Bad             debt
                                                      Book balance            preparation        Book balance          preparation


      Other            Yichang Hongtai Real
      receivables      Estate Company(i)               171,000,000            (3,420,000)        171,000,000           (3,420,000)

      (i)Yichang Hongtai Real Estate Co., Ltd. was no longer associated with the Group since 2018.

14    Financial instrument and risk

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



(1)    Market risk

(a)    Foreign exchange risk

      The Group’s major operational activities are carried out in Mainland China and a majority of the transactions are
      denominated in RMB. Some export business, however, is denominated in foreign currencies. In addition, the Group is
      exposed to foreign exchange risk arising from the recognized assets and liabilities, and future transactions denominated in
      foreign currencies, primarily with respect to 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 furthest
      reduce the currency risk.




      As at 31 December 2018, book values in RMB equivalent of the Group’s assets and liabilities denominated in foreign
      currencies are summarized below:


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                                                                                                                CSG Annual Report 2018

                                                                              31 December 2018
                                                          USD                  HKD                   Others                 Total


      Financial assets denominated in
        foreign currency -

         Cash at bank and on hand                   81,350,525               1,383,594           1,304,925            84,039,044

         Receivables                              118,697,795                1,372,872           7,429,706           127,500,373

                                                  200,048,320                2,756,466           8,734,631           211,539,417
      Financial liabilities denominated in
        foreign currency -

         Short-term borrowings                                -           65,715,000                       -          65,715,000

         Payables                                   56,170,817                    269           12,397,080            68,568,166

                                                    56,170,817            65,715,269            12,397,080           134,283,166


                                                                              31 December 2017
                                                          USD                    HKD                 Others                 Total


      Financial assets denominated in
        foreign currency -

         Cash at bank and on hand                   74,120,750               6,114,383             112,007            80,347,140

         Receivables                              127,354,518                9,654,366           7,387,101           144,395,985

                                                  201,475,268             15,768,749             7,499,108           224,743,125
      Financial liabilities denominated in
        foreign currency -

         Short-term borrowings                                -           62,692,500                       -          62,692,500

         Payables                                 104,040,185                     257           36,939,407           140,979,849

                                                  104,040,185             62,692,757            36,939,407           203,672,349


      As at 31 December 2018, if the currency had strengthened/weakened by 10% against the USD while all other variables had
      been held constant, the Group’s net profit for the year would have been approximately RMB12,229,588 lower/higher (31
      December 2017: approximately RMB8,281,982 lower/higher) for various financial assets and liabilities denominated in USD.

      As at 31 December 2018, if the currency had strengthened/weakened by 10% against the HKD while all other variables had
      been held constant, the Group’s net profit for the year would have been approximately RMB5,351,498 higher/lower (31
      December 2017: approximately RMB3,988,541higher/lower ) for various financial assets and liabilities denominated in
      HKD.

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



(b)   interest rate risk
      The Group's interest rate risk arises from long-term interest bearing debts including long-term borrowings and bonds payable.
      Financial liabilities issued at floating rates expose the Group to cash flow interest rate risk. Financial liabilities issued at fixed
      rates expose the Group to fair value interest rate risk. The Group determines the relative proportions of its fixed rate and
      floating rate contracts depending on the prevailing market conditions. As at 31 December 2018, the Group’s long-term
      interest-bearing debts at and fixed rates and floating rates are illustrated below:




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                                                                                                              CSG Annual Report 2018

                                                                                    31 December 2018                  31 December 2017


      Debt at fixed rates                                                               2,258,325,000                    1,425,000,000
      Debt at floating rates                                                                57,375,000                     129,120,000
                                                                                        2,315,700,000                    1,554,120,000

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

(2)   Credit risk

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

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

      In addition, the Group has policies to limit the credit exposure on accounts receivable, other receivables and trade acceptance
      notes receivable. The Group assesses the credit quality of and sets credit limits on its customers by taking into account their
      financial position, the availability of guarantee from third parties, their credit history and other factors such as current market
      conditions. The credit history of the customers is regularly monitored by the Group. In respect of customers with a poor
      credit history, the Group will use written payment reminders, or shorten or cancel credit periods, to ensure the overall credit
      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’s finance department in its
      headquarters. The Group’s finance department at its headquarters monitors rolling forecasts of the Group's short-term and
      long-term liquidity requirements to ensure it has sufficient cash reserve, while maintaining sufficient headroom on its
      undrawn committed borrowing facilities from major financial institutions so that the Group does not breach borrowing limits
      or covenants on any of its borrowing facilities to meet the short-term and long-term liquidity requirements.

      As stated in Note 2(1) above, as at 31 December 2018, the Group had net current liabilities of approximately RMB1.267
      billion and committed capital expenditures of approximately RMB0.131 billion. Management will implement the following
      measures to ensure the liquidation risk limited to a controllable extent:

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

      The financial liabilities of the Group at the balance sheet date are analyzed by their maturity date below at their undiscounted
      contractual cash flows:
                                                                             31 December 2018

                                        Within 1 year        1 to 2 years          2 to 5years       Over 5 years                 Total



      Short-term borrowings              2,991,136,478                   -                   -                    -        2,991,136,478

      Notes payable/Accounts payable     1,315,009,263                   -                   -                    -        1,315,009,263

      Other payables                       552,751,187                   -                   -                    -          552,751,187

      Other current liabilities                300,000                   -                   -                    -              300,000
      Current portion of non-Current
                                           821,135,376                   -                   -                    -          821,135,376
      liabilities

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                                                                                                                      CSG Annual Report 2018

      Long-term payables                                 -        529,910,796                          -                   -      529,910,796

      Long-term borrowings                 134,337,188           1,403,773,698        1,044,119,211                        -     2,582,230,097

                                          5,814,669,492          1,933,684,494        1,044,119,211                        -     8,792,473,197


                                                                                  31 December 2017
                                         Within 1 year            1 to 2 years          2 to 5 years            Over 5 years            Total


      Short-term borrowings               3,810,013,826                       -                    -                       -     3,810,013,826
      Notes payable/Accounts payable      1,613,567,664                       -                    -                       -     1,613,567,664
      Other payables                        653,357,094                       -                    -                       -       653,357,094
      Other current liabilities                 300,000                       -                    -                       -           300,000
      Current portion of non-current
                                            911,348,902                                                                            911,348,902
       liabilities                                                            -                    -                       -
      Long-term payables                                 -         600,436,759          561,357,488                              1,161,794,247
      Long-term borrowings                   80,169,450            117,889,436        1,580,649,809                        -     1,778,708,695
                                          7,068,756,936            718,326,195        2,142,007,297                        -     9,929,090,428


15     Fair value estimates

      Based on the lowest level input that is significant to the fair value measurement in its entirety, the fair value 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 or liability, either directly or
      indirectly.

      Level 3: Unobservable inputs for the asset or liability.

(a)   Financial instruments measured at fair value

      As of 31 December 2018, the group has no assets measured at fair value.

(b)   Financial instruments 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 not measured at fair value is
      a reasonable approximation of their fair value.



                                                             31 December 2018                                      31 December 2017
                                               Carrying amount                    Fair value       Carrying amount                Fair value
      Financial liabilities

          Medium term notes                       2,000,000,000             2,028,614,800                  1,200,000,000       1,171,444,800

                                                  2,000,000,000             2,028,614,800                  1,200,000,000       1,171,444,800


      The fair values of medium-term notes are the present value of the contractually determined stream of future cash flows at the
      rate of interest applied at that time by the market to instruments of comparable credit status and providing substantially the
      same cash flows on the same terms, there into medium term notes belong to Level 2.




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16    Capital management

      The Group’s capital management policies aim to safeguard the Group’s ability to continue as a going concern in order to
      provide returns for shareholders and benefits for other stakeholders, and to maintain an optimal capital structure to reduce the
      cost of capital.

      In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to 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 basis of gearing ratio.


      As at 31 December 2018 and 31 December 2017, the Group's gearing ratio is as follows:
                                                                                           31 December 2018               31 December 2017



      Total liabilities                                                                        9,664,801,722                    10,755,379,257

      Total assets                                                                            19,114,234,184                    19,535,002,368

      Gearing ratio                                                                                     51%                                     55%


17    Notes to the Company’s financial statements

(1)   Other receivables


                                                                                           31 December 2018               31 December 2017



      Receivables from related parties                                                         2,739,449,549                     2,399,392,648
      Others                                                                                    176,598,669                           4,451,192

                                                                                              2,916,048,218                     2,403,843,840

      Less: Provision for bad debts                                                              (3,531,973)                        (3,509,024)

                                                                                              2,912,516,245                     2,400,334,816


(a)   The ageing of other receivables is analysed as follows:

                                                                                           31 December 2018               31 December 2017

      Within 1 year                                                                           2,744,831,250                     2,232,668,334

      Over 1year                                                                                171,216,968                        171,175,506

                                                                                              2,916,048,218                     2,403,843,840


      As at 31 December 2018, the Company had no overdue but not impaired other receivables (31 December 2017: Nil).

(b)   Other receivables are analysed by categories as follows:

                                                    31 December 2018                                         31 December 2017
                                                                       Provision for bad
                                         Carrying amount                     debts               Carrying amount          Provision for bad debts
                                                       % of total Provision for bad                          % of total         Provision for
                                           Amount       balance               debts    %          Amount      balance              bad debts      %


      Provision for bad debts by
       groupings


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                                                                                                                     CSG Annual Report 2018

          - Group 1                    176,598,669          6%       (3,531,973) 2%             4,451,192            -             (89,024)    2%

          - Group 2                   2,739,449,549        94%                   -     -    2,399,392,648        100%           (3,420,000)        -

                                      2,916,048,218       100%       (3,531,973)       -    2,403,843,840        100%           (3,509,024)        -


(c)   Or other receivables provided for bad debts by portfolio, the percentage of provision for the portfolio is as follows:

                                             31 December 2018                                           31 December 2017
                                  Carrying amount      Provision for bad debts              Carrying amount        Provision for bad debts
                                          Amount          Amount                 %                   Amount                 Amount            %



       Portfolio 1                   176,598,669      (3,531,973)            2%                  4,451,192                 (89,024)           2%

       Portfolio 2                 2,739,449,549                 -               -          2,399,392,648                (3,420,000)           -

                                   2,916,048,218      (3,531,973)                -          2,403,843,840                (3,509,024)           -


(d)    As at 31 December 2018, the Group’s top five entities with the largest other receivables balances are summarised as below:

                                                     Relationship                                                                         % of
                                                with the Group                        Amount                     Ageing           total balance


        Yichang CSG Polysilicon                          Subsidiary                  1,640,114,921              Within 1 year                 56%
        Yichang CSG Display                              Subsidiary                   294,484,589               Within 1 year                 10%
        Qingyuan CSG Energy-Saving                       Subsidiary                   192,435,333               Within 1 year                 7%
        Yichang Hongtai Real Estate Co. Independent third p
        Ltd                                             arty                          171,000,000                4 to 5 years                 6%
        Shenzhen CSG PV Energy Co.,
        Ltd.                                             Subsidiary                   137,714,602               Within 1 year                 5%
                                                                                     2,435,749,445                                            84%


(2)     Long-term equity investments

                                                                                           31 December 2018                  31 December 2017


        Subsidiaries (a)                                                                       4,979,696,831                     4,810,987,652

        Less: Impairment provision for investments in subsidiaries (a)                           (15,000,000)                      (15,000,000)
                                                                                               4,964,696,831                     4,795,987,652




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                                                                                                                                                                      CSG Annual Report 2018


(a)   Subsidiaries

                                                                           Movement in current year
                                                                                                    Provision for                         Provision for       Cash dividends
                                            31 December       Additional        Decrease in          impairment         31 December        impairment          declared in
                                                2017          investment        investment              loss                2018              loss             current year
                                                       (i)                                                                         (i)
      Chengdu CSG                              146,977,347         5,399,177                  -                     -      152,376,524                    -        109,907,648
      Sichuan CSG Energy Conservation          115,546,714         4,507,100                  -                     -      120,053,814                    -                    -
      Tianjin Energy Conservation              243,191,428         5,357,457                  -                     -      248,548,885                    -                    -
      Dongguan CSG Engineering                 193,916,049         5,296,789                  -                     -      199,212,838                    -                    -
      Dongguan CSG Solar                       349,801,154         6,439,022                  -                     -      356,240,176                    -         77,182,596
      Yichang CSG Polysilicon                  633,464,168         8,947,932                  -                     -      642,412,100                    -                    -
      Wujiang CSG Engineering                  251,516,189         3,525,424                  -                     -      255,041,613                    -                    -
      Hebei CSG                                262,265,341         4,788,173                  -                     -      267,053,514                    -                    -
      China Southern Glass (Hong Kong)
                                                85,802,602         1,130,027                                                86,932,629                                         -
      Limited                                                                                 -                     -                                     -
      Wujiang CSG                              562,527,754         6,221,992                  -                     -      568,749,746                    -                    -
      Hebei Shichuang                          243,271,470         3,779,667                  -                     -      247,051,137                    -                    -
      Jiangyou CSG Mining Development
                                               100,837,599         1,928,053                                               102,765,652                                         -
      Co. Ltd.                                                                                -                     -                                     -
      Xianning CSG                             177,295,494         4,614,617                  -                     -      181,910,111                    -                    -
      Xianning CSG Energy-Saving               161,543,844         4,755,349                  -                     -      166,299,193                    -         44,447,363
      Qingyuan CSG Energy-Saving               300,376,848         3,484,710                  -                     -      303,861,558                    -                    -
      Shenzhen CSG Financial Leasing Co.,
                                               133,500,000                 -                                               133,500,000                                         -
      Ltd.                                                                                    -                     -                                     -
      Shenzhen CSG PV Energy Co., Ltd.         100,052,985          309,562                   -                     -      100,362,547                    -                    -
      Shenzhen CSG Display                     542,691,888         9,825,410                  -                     -      552,517,298                    -                    -
      Xianning CSG Photoelectric                38,470,534        52,000,967                  -                     -       90,471,501                    -                    -
      Others (ii)                              167,938,244        36,397,751                  -                     -      204,335,995       (15,000,000)                      -
                                              4,810,987,652      168,709,179                  -                     -     4,979,696,831      (15,000,000)          231,537,607




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 (i)   As at 31 December 2018, included in the investments in subsidiaries were deemed investment costs of RMB 211,291,520 (31
       December 2017: RMB 114,582,341), the fair value of the equity instruments of the Company granted to the employee of the
       subsidiaries for their serviced provided to the subsidiaries for which the Company did not charge the subsidiaries.


(ii)   The operations of the subsidiaries against which provision was made were basically ceased. The Company made provision against
       the long-term investment in these subsidiaries based on their recoverable amounts in previous years.


(3)    Long-term receivables


                                                                                          31 December 2018                   31 December 2017



              Bonds payable and long-term borrowings allocated to subsidiaries                   1,200,000,000                    1,200,000,000

                                                                                                 1,200,000,000                    1,200,000,000
              Less: Provisions for impairment                                                                                                      -

                                                                                                 1,200,000,000                    1,200,000,000




                                                                                                         Provision            Reversals of
                                                                                                            for              provision for
                                                31 December       Movements in        31 December       impairment          impairment loss
                                                    2017           current year           2018              loss             in current year



          Chengdu CSG                               50,000,000                    -     50,000,000                   -                         -

          Sichuan CSG Energy Conservation           20,000,000                    -     20,000,000                   -                         -

          Dongguan CSG PV-tech                      50,000,000                    -     50,000,000                   -                         -

          Yichang CSG Polysilicon                  350,000,000                    -    350,000,000                   -                         -

          Dongguan CSG Engineering                  75,000,000                    -     75,000,000                   -                         -

          Wujiang CSG                              210,000,000                    -    210,000,000                   -                         -

          Dongguan CSG Solar                       120,000,000                    -    120,000,000                   -                         -

          Wujiang CSG Engineering                   50,000,000                    -     50,000,000                   -                         -

          Qingyuan CSG Energy-Saving                50,000,000                    -     50,000,000                   -                         -

          Xianning CSG Energy-Saving                80,000,000                    -     80,000,000                   -                         -

          Xianning CSG                              75,000,000                    -     75,000,000                   -                         -

          Hebei CSG                                 50,000,000                    -     50,000,000

          Hebei shichuang                           20,000,000                    -     20,000,000                   -                         -

                                                 1,200,000,000                    -   1,200,000,000                  -                         -




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(4)   Other payables



                                                         31 December 2018    31 December 2017



      Interest payable                                          41,572,125           3,090,735

      Dividend payable                                           2,846,362                      -

      Other payables                                         1,624,168,731         909,432,991

                                                             1,668,587,218         912,523,726



 1.   Interest payable



                                                         31 December 2018    31 December 2017



      Interest payable for medium term notes                    37,644,444                  -
      Interest payable for short-term borrowings                 3,927,681          3,090,735

                                                                41,572,125          3,090,735



 2.   Dividend payable



                                                         31 December 2018    31 December 2017




      Restricted share dividend payable                         2,846,362                       -

                                                                2,846,362                   -



 3.   Other payables



                                                         31 December 2018    31 December 2017



      Subsidiaries                                          1,339,762,543         477,067,694
      Share repurchase                                        275,748,309         417,349,879
      Others                                                    8,657,879          15,015,418

                                                            1,624,168,731         909,432,991




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(5)   Investment income



                                                                                                2018                           2017



      Investment income from long-term equity investment under cost
        method                                                                          231,537,607                     436,068,825

                                                                                        231,537,607                     436,068,825



      There is no significant restriction on the remittance of investment income to the Company.


I     Statement of non-recurring gains and losses



                                                                                                 2018                           2017



      Gains or losses on disposal of non-current assets                                      454,368                       1,768,993
      Government grants recognized in profit or loss for current period                  (94,835,539)                    (87,875,417)
      Investment losses from disposal of financial liabilities at fair value
         through profit or loss                                                                     -                       (427,636)
      Income from external entrusted loans                                                  (534,591)                               -
      Non-operating income and expenses other than aforesaid items                       (12,099,680)                    (12,076,848)

                                                                                        (107,015,442)                    (98,610,908)
      Effect of income tax                                                                16,483,870                      16,209,135
      Effect of minority interests (after tax)                                             5,145,472                       2,386,569

      Total non-recurring gains and losses                                               (85,386,100)                    (80,015,204)



(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 Offering Securities to the
      Public – Non-recurring Profit or Loss [2008] from CSRC, non-recurring profit or loss refer to those arises from transactions and
      events that are not directly relevant to ordinary activities, or that are relevant to ordinary activities, but are extraordinary and not
      expected to recur frequently that would have an influence on users of financial statements making economic decisions on the
      financial performance and profitability of an enterprise.




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II   Return on net assets and earnings per share



                                                                                             Earnings per share
                                           Weighted average return on
                                                 net assets (%)             Basic earnings per share    Diluted earnings per share

                                                 2018              2017          2018           2017          2018           2017



     Net profit attributable to ordinary
       shareholders of the Company              5.16%        10.15%               0.16           0.30             0.16       0.29

     Net profit attributable to ordinary
       shareholders of the Company
       after deducting non-recurring
       gains and losses                         4.19%             9.16%           0.13           0.27             0.13       0.26




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                 Section X. Documents Available for Reference

I. Text of the financial report carrying the signatures and seals of the legal representative, responsible person in
charge of accounting and person in charge of financial institution;

II. Original of the Auditors’ Report carrying the seal of Asia Pacific (Group) CPAs (special general partnership)
and the signatures and seals of the certified public accountants;

III. All texts of the Company’s documents and original public notices disclosed in the website and papers
appointed by CSRC in the report period.

IV. The reports which published in the other stock market.




Board of Directors of
CSG Holding Co., Ltd.
17 April 2019




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