CSG HOLDING CO., LTD.
SEMI-ANNUAL REPORT 2009
Chairman of the Board:
ZENG NAN
July 2009CSG HOLDING CO., LTD. Semi-Annual Report 2009
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IMPORTANT NOTICE
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 jointly and severally, for
the truthfulness, accuracy and completeness of the whole contents.
Mr. Zeng Nan, Chairman of the Board & CEO of the Company, CFO Mr. Luo Youming and
principle of the financial department Mr. Huang Yanbin confirm that the Financial Report
enclosed in this report is true and complete.
The semi-annual financial report of the Company had not been audited.
This report is prepared both in Chinese and in English. Should there be any difference in
interpretation of the text between the two versions, the Chinese version shall prevail.
CONTENTS
IMPORTANT NOTICE___________________________________________________ 1
I Company Profile _______________________________________________________ 2
II Change in Share Capital and Particulars about the Shareholders_______________ 4
IV Directors, Supervisors and Senior Executives ______________________________ 6
V Report of the Board of Director___________________________________________ 7
VI Significant Events____________________________________________________ 12
VII Financial Report (Not Audited) ________________________________________ 18
VIII Documents for Reference ____________________________________________ 67CSG HOLDING CO., LTD. Semi-Annual Report 2009
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I Company Profile
i Basic Information of the Company
(i) Registered name of the Company
In Chinese: 中国南玻集团股份有限公司 (Abbr: 南玻集团)
In English: CSG Holding Co., Ltd. (Abbr: CSG )
(ii) Legal representative: Zeng Nan
(iii) Secretary of the board of directors: Wu Guobin
Securities affairs representative: Li Tao
Address: CSG Building, No.1, 6th Industrial Road, Shekou, Shenzhen, China.
Tel: (86) 755-26860666
Fax: (86) 755-26692755
E-mail: securities@csgholding.com
(iv) Registered office address: CSG Building, No.1, 6th Industrial Road, Shekou,
Shenzhen, P.R.C.
Post code: 518067
Internet website: http://www.csgholding.com
E-mail: csg@csgholding.com
(v) Newspapers for disclosing the information: Securities Times, China Securities Journal
and Hong Kong Wen Wei Po.
Website for disclosing the information: http://www.cninfo.com.cn
The place where the Semi-Annual Report is prepared and kept: Securities
Department.
(vi) Stock exchange listed with: Shenzhen Stock Exchange
Short form of the stock and stock code (A-share): Southern Glass A (000012)
Short form of the stock and stock code (B-share): Southern Glass B (200012)CSG HOLDING CO., LTD. Semi-Annual Report 2009
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ii Financial Data Highlights
(i) Major accounting data as of the report period
Unit: RMB Yuan
30 June 2009
31 December
2008
Increase/decrease at the
end of this report period
compared with that at the
end of last year (%)
Total assets 10,610,427,433 10,376,061,066 2.26%
Shareholders’ equity 4,725,146,735 4,544,606,539 3.97%
Net assets per share (RMB) 3.86 3.67 5.18%
Jan.~Jun. 2009
Jan.~Jun.
2008
Increase/decrease in this
report period year-on-year
(%)
Operating profit 298,102,608 492,616,293 -39.49%
Total profit 311,966,965 495,964,965 -37.10%
Net profit attributable to equity holders of the
Company 261,159,985 409,853,633 -36.28%
Net profit attributable to equity holders of the
Company after extraordinary gains and losses
245,535,307 363,766,326 -32.50%
Basic earnings per share 0.21 0.35 -40.00%
Diluted earnings per share 0.21 0.35 -40.00%
Return on equity (%) 5.53 9.71 Decrease 4.18 percentage points
Net cash from operating activities 660,353,612 478,472,634 38.01%
Net cash from operating activities per share 0.54 0.40 35.00%
Items of extraordinary gains and losses Amount
Gain on disposal of non-current assets 1,201,339
Gains on disposal of available-for-sale financial assets 6,939,570
Net value of other non-operating expenses 12,663,018
Tax effects on extraordinary gain and losses (2,742,967)
Extraordinary gains and losses of minority interests (2,436,282)
Total 15,624,678
(ii) Differences in Domestic and International accounting standards (Unaudited)
Unit: RMB
Net profit attributable to
equity holders of the Company
Total equity attributable to
equity holders of the Company
As reported under CAS (2006): 261,159,985 4,725,146,735
Adjustment in goodwill - (3,039,946)
As reported under IAS: 261,159,985 4,722,106,789
(iii) Statement of return on equity and earnings per share
Unit: RMB Yuan
Jan.~Jun. 2009
Return on equity Earning per share
Item Fully diluted Weighted average Basic Diluted
Net profit attributable to equity holders of the Company 5.53% 5.56% 0.21 0.21
Net profit attributable to common shareholders of the Company
after extraordinary gains and losses
5.20% 5.23% 0.20 0.20CSG HOLDING CO., LTD. Semi-Annual Report 2009
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II Change in Share Capital and Particulars about the Shareholders
i Change in Share Capital
(i) In the report period, the total amount of share capital decreased due to buy back and
write off part restricted shares bestowed by stock incentive plans of the Company,
and the share structure changed due to the expiration on restricted tradable period of
part of restricted shares with restricted tradable conditions, the change is as follows:
Unit: Share
Before the change
Increase / Decrease (+/-)
in the report period After the change
Amount Proportion Others Sub-total Amount Proportion
Restricted shares 248,743,006 20.11% -40,364,867 -40,364,867 208,378,139 17.03%
State-owned shares 0 0 0 0
State-owned legal person’s shares 90,837,560 7.34% -10,837,560 -10,837,560 80,000,000 6.54%
Other domestic shares 157,905,446 12.76% -29,527,307 -29,527,307 128,378,139 10.49%
-Domestic legal person’s shares 108,662,277 8.78% -16,059,138 -16,059,138 92,603,139 7.57%
-Domestic natural person’s shares 49,243,169 3.98% -13,468,169 -13,468,169 35,775,000 2.92%
Foreign-o wned shares 0 0 0 0 0 0
-Foreign legal per s on’s shares 0 0 0 0 0 0
-For eign natural per son’s shares 0 0 0 0 0 0
Unrestricted shares 988,360,118 79.89% 26,999,867 26,999,867 1,015,359,985 82.97%
RMB ordinary shares 539,781,299 43.63% 26,999,867 26,999,867 566,781,166 46.32%
Domestic listed foreign shares 448,578,819 36.26% 0 0 448,578,819 36.66%
Overseas listed fo reign shares 0 0 0 0 0 0
Others 0 0 0 0 0 0
Total shares 1,237,103,124 100% -13,365,000 -13,365,000 1,223,738,124 100%
(ii) The date for the restricted shares to be unrestricted
Unit: Share
Date
Additional shares tradable after
restricted period
Balance of the restricted
shares
Balance of the unrestricted
shares
15 October 2010 172,500,000 0 1,187,859,985
Note: The shares in the statement did not include the original legal person shares which had not yet accomplish the
procedures of releasing the restriction in the Share Merger Reform, and also did not includer the shares held by
directors, supervisors and the restricted share issued by stock incentive plan.CSG HOLDING CO., LTD. Semi-Annual Report 2009
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(iii) Restricted Shares held by the top ten shareholders and restricted conditions
Unit: Share
No Name of the restricted shareholders
the
restricted
shares held
Date to be
listed
Additional
listed
shares
Restricted
condition
1 China Ping’an Trust & Investment Co., Ltd. 80,000,000 15 October 2010 80,000,000 Note 1
2 Citics Securities Co., Ltd. 80,000,000 15 October 2010 80,000,000 Note 1
3 CIL Holdings Limited 6,250,000 15 October 2010 6,250,000 Note 1
4 Zhejiang Silicon Paradise Pengcheng Venture &
Investment Co., Ltd.
6,250,000 15 October 2010 6,250,000 Note 1
5 Zeng Nan 3,000,000 - - Note 2
6 Ke Hanqi 1,200,000 - - Note 2
7 Wu Guobin 1,200,000 - - Note 2
8 Zhang Fan 1,200,000 - - Note 2
9 Luo Youming 1,200,000- - Note 2
10 Ding Jiuru 1,125,000- - Note 2
Note 1: In October 2007, the Company issued 172,500,000 A shares to specific investors, the subscriber should not take
transaction within 36 months since the date of the shares listing in the market.
Note 2: According to Restricted A Share Incentive Plan, the Company has accomplished the grant for these restricted
shares on 14 July 2008. The granted day of the restricted shares was 16 June 2008, the lockup period is 12
months since the granted day, and the 48 months afterwards are unlocking periods. If the unlocking conditions
regulated in the incentive plan are satisfied in each unlocking period, the incentive staffs could apply to unlock
25% of the total amount of restricted shares after 12 months, 24 months, 36 months and 48 months respectively
since the granted day.
ii Particulars about the Major Shareholders
(i) By the end of report period, the Company had total 154,256 shareholders, of which
114,757 held of A-shares and 39,499 held of B-shares.
(ii) Particulars about the principal shareholders ended report period
Unit: Share
Particulars about the shares held by the top ten shareholders
Name Nature
Total
amount
Proportion
Restricted
shares
shares
pledged
or frozen
① China Ping’an Trust & Investment Co., Ltd. - 80,000,000 6.54% 80,000,000 0
② Citics Securities Co., Ltd. State-funded 80,000,000 6.54% 80,000,000 0
③ Xin Tong Chan Development (Shenzhen) Co., Ltd. - 55,051,181 4.50% 0 0
④ China North Industries Corporation State-funded 54,125,492 4.42% 0 0
⑤ Yiwan Industrial Development (Shenzhen) Co., Ltd. - 52,674,700 4.30% 0 0
⑥ Guotai Junan Securies Hong Kong Limited Foreign-funded 16,555,770 1.35% 0 0
⑦ Zhongrong International Trust Co., Ltd. - Zhongrong
China Construction Bank Fortune No.4-001
- 12,290,006 1.00% 0 0
⑧ Industrial and Commercial Bank of China - China
Southern Composition Selected Stock Fund
- 7,111,263 0.58% 0 0
⑨ Industrial and Commercial Bank of China - Lion
Balanced stock Fund
- 6,690,624 0.55% 0 0
⑩ CIL Holdings Limited - 6,250,000 0.51% 6,250,000 0
⑩ Zhejiang Silicon Paradise Pengcheng Venture &
Investment Co., Ltd.
- 6,250,000 0.51% 6,250,000 0CSG HOLDING CO., LTD. Semi-Annual Report 2009
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Particulars about the shares held by the top ten unrestricted shareholders
Name Unrestricted
shares Type
① Xin Tong Chan Development (Shenzhen) Co., Ltd. 55,051,181 A-share
② China North Industries Corporation 54,125,492 A-share
③ Yiwan Industrial Development (Shenzhen) Co., Ltd. 52,674,700 A-share
④ Guotai Junan Securies Hong Kong Limited 16,555,770 B-share
⑤ Zhongrong International Trust Co., Ltd. - Zhongrong China Construction Bank Fortune No.4-001 12,290,006 A-share
⑥ Industrial and Commercial Bank of China - China Southern Composition Selected Stock Fund 7,111,263 A-share
⑦ Industrial and Commercial Bank of China - Lion Balanced stock Fund 6,690,624 A-share
⑧ Industrial and Commercial Bank of China-－BOC Sustainable Growth Stock Fund. 5,816,900 A-share
⑨ MTDL-Standard Life Pacific Basin Trust 5,167,833 B-share
⑩ China Pacific Insurance (group) Co., Ltd.－Traditional－General Insurance Products 4,999,924 A-share
Statement on associated
relationship among the
above shareholders or
consistent action
Among shareholders as listed above, Yiwan Industrial Development (Shenzhen) Co., Ltd.
and Xin Tong Chan Development (Shenzhen) Co., Ltd. are holding enterprises of Shenzhen
International Holdings Limited. Except for this, there is no associated relationship had
been found among other shareholders.
(iii) There is no change on the actual controller of the Company in the report period.
IV Directors, Supervisors and Senior Executives
i In the report period, change in shares held by directors, supervisors, and senior
executives
Unit: Share
Name Title
Shares
held at the
year-begin
Change in
the report
period
Shares held
at the end of
the report
period Reason for change
Date of
change
Zeng Nan Chairman of
the Board/
CEO
4,137,559 -1,000,000 3,137,559 Repurchased and wrote off the
restricted shares bestowed
by stock incentive plan
2009.6.18
Ke Hanqi President 1,600,000 -400,000 1,200,000 Repurchased and wrote off the
restricted shares bestowed
by stock incentive plan
2009.6.18
Luo Youming Chief Financial
Officer
1,600,000 -400,000 1,200,000 Repurchased and wrote off the
restricted shares bestowed
by stock incentive plan
2009.6.18
Wu Guobin Director/ Vice
President/
Secretary of
the Board
1,600,000 -400,000 1,200,000 Repurchased and wrote off the
restricted shares bestowed
by stock incentive plan
2009.6.18
Zhang Fan Vice President 1,600,000 -400,000 1,200,000 Repurchased and wrote off the
restricted shares bestowed
by stock incentive plan
2009.6.18
Ding Jiuru Vice President 1,500,000 -375,000 1,125,000 Repurchased and wrote off the
restricted shares bestowed
by stock incentive plan
2009.6.18
ii Changes of directors, supervisors and senior executives in the report periodCSG HOLDING CO., LTD. Semi-Annual Report 2009
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On 27 March 2009, the 7th meeting of the 5th board was held, in which Chairman of the
Board / CEO / President of the Company Mr. Zeng Nan resigned his concurrent post as
President of the Company. And according to the nomination of Mr. Zeng Nan, the board of
director appointed Ke Hanqi as President of the Company to assist CEO in managing the
routine operation.
V Report of the Board of Director
i Discussion and Analysis about the Operation
The global economy still stays in recession in the first half year of 2009. Under the effect
of a series of policies and measures adopted by the government, such as active fiscal
policy, adequate loose monetary policy, as well as programming for industry revitalization
and local development, a series of active changes occurred in domestic economies.
However, negative influence brought by the global financial crisis should not be neglected.
The market demand is not so easy to turn over in a short time, especially the persistently
weak demand from overseas, that brought a comparatively big pressure and uncertainty to
entity economy. Faced with such serious market environment, the Company had carried
out effective strategies, such as ensuring operation rate of equipments, raising market
share and diversified operation with low cost. In the first half year of 2009, the Company
realized operation income of RMB 2.066 billion and RMB 0.261 billion for net profit
(gains and losses of minority shareholders were already deducted).
Flat glass industry: After the recession in the 1st quarter, though industrial situation turned
to be better in the 2nd quarter, the business still faces comparatively great challenge, due to
the fast rising of raw material price, especially heavy oil price, the uncertainty of market
demand. Flat glass business department actively promoted lean production and further
improved production efficiency and finished product rate. Meanwhile, it took its
advantage in manufacture technics of high level float glass to reinforce R&D. The float
ultra-white glass has already made a breakthrough progress with independent R&D. The
quality of the glass has already reached or even surpassed the advanced level among the
industry of the nation; the department has already succeed to release crystal-gray and
emerald-green products with high added-value, which effectively avoided homogenized
competition in glass market.
Architectural glass industry: With influence from outer economic environment, market
demand for architecture glass had been affected to some degree. In the first half year,
architecture glass department fully took advantage of its industry layout and scale, and
advanced cost advantage through optimizing procedure. The department also actively
promoted application of energy-saving glass products in civil architecture market, grasped
firmly the opportunities brought by Asian Games, University Games and World Expo. ByCSG HOLDING CO., LTD. Semi-Annual Report 2009
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combining the advantage in industry layout to strengthen market development, the
department in obtained good results.
Fine glass and porcelain industry: Influenced by continuously-fallen price of products
and pressure of weak demand from overseas market, the display industry faced an overall
loss in the first half year, and the situation was very hard for many enterprises to get
through. In front of huge pressure from overseas market, the fine glass and porcelain
department of the Company actively explored domestic market through holding the
opportunity of domestic 3G market. Meanwhile, it took improvement of fine management
level as the material channel to response crisis and advance comprehensive competitive
ability. By doing so, utilization rate of capacity and profitable ability of the industry got
resume step by step.
Solar Energy Industry: Since polysilicon project in Yichang had been successfully put
into trial operation in 2009, its production technical index received comparatively
improvement and took the leading position in the industry through continuous
improvement and optimization in production techincs. As for the solar PV battery project,
by continuous improvement in techincs, its photoelectric coversion ratio has been
improved to exceed 17.3%, and its performance parameters and quality have already
reached the advanced level among the industry of the nation. The advantage of the
complete solar PV industry chain will be visualized gradually.
ii Operations in the Report Period
(i) Main operations scope and operation performance
Main business scope: producting, manufacturing and selling of energy-saving architecture
materials such as flat glass and architecture glass, renewable energy products such as
silicon materials and PV module, as well as new material and high-tech products such as
fine glass and structure porcelain (for projects involved in production license and
environment-protection approval document, they are declared particularly by subsidiaries).
Providing coordination and service to subsidiaries in problems relevant to operation
decision, administration consultation, market information, technical support as well as
post training..
A Main business income classified according to industry
Unit: RMB Yuan
Jan.~Jun., 2009 Jan.~Jun., 2008
Industry Income of main
business
Cost of main
business
Income of main
business
Cost of main
business
Flat glass industry 1,112,939,543 840,514,251 1,192,204,062 873,269,018
Architectural glass industry 852,949,006 554,395,287 746,749,681 504,115,904
Fine glass industry 187,473,073 123,263,915 265,247,829 146,164,535
Solar energy industry 2,593,625 2,712,603 - -
Others 33,082,675 18,860,433 18,944,504 15,606,799
- Elimination -129,562,245 -122,807,308 -97,615,084 -97,615,084
Total 2,059,475,677 1,416,939,181 2,125,530,992 1,441,541,172CSG HOLDING CO., LTD. Semi-Annual Report 2009
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Note : The Company reorganized Dongguan CSG Solar Glass Co., Ltd. to the segment of Floating Glass in the second
half year 2008. The relevant comparatives have been restated.
B Main business income classified according to location
Unit: RMB Yuan
Location Jan.~Jun., 2009 Jan.~Jun., 2008
Income of main business Proportion (%) Income of main business Proportion (%)
Mainland, P.R.C. 1,731,690,500 84.08 1,769,641,865 83.26
Hong Kong, P.R.C. 142,108,402 6.90 197,643,909 9.30
United States 30,823,575 1.50 36,504,970 1.72
Australia 10,543,385 0.51 16,995,027 0.80
Others 144,309,815 7.01 104,745,221 4.93
C Products accounting for over 10% of the main business income
Unit: RMB Yuan
Jan.~Jun., 2009 Increase/decrease in this report period compared with
the same period in last year
Product Income of
main
business
Cost of main
business
Gross
profit
ratio
Income
of main
business
Cost of
main
business Gross profit ratio
Float glass 1,112,939,543 840,514,251 24.48% -6.65% -3.75% Decrease 2.27 percentage points
Architectural glass 852,949,006 554,395,287 35.00% 14.22% 9.97% Increase 2.51 percentage points
Fine glass 187,473,073 123,263,915 34.25% -29.32% -15.67% Decrease 10.65 percentage points
(ii) There was no material change happened to profit constitution, main business or its
structure as well as its profit-making ability in the report period.
(iii) In the report period, the company had no other operation business activities that had
significant impact on the profits.
(iv) In the report period, there was no individual share-holding company whose
investment income impacted on the net profit of the Company over 10%.
(v) Problems and countermeasures in the operation
In the second half year 2009, as 900T float glass production line is going to put into
operation in Chengdu, the capability of the Company in float glass will be doubled
compared with last year. Uncertainty of market demand and fluctuation of price for raw
materials will bring huge pressure to float glass industry. For that, the Company will
improve integrated operation level of all float assembly line, promote fine management,
and continue to carry out strategy of low-cost and diversity production, aiming to
consolidate and enhance the core competency and market position in flat glass industry.
As the Phase II projects in Tianjin and Wujiang come into commercial operation with
their energy-saving glass in the second half year, the Company’s capacity scale in
energy-saving glass reaches 12 million square meters approximately. So, improving
utilization of capacity further is the problem faced by architecture glass department.CSG HOLDING CO., LTD. Semi-Annual Report 2009
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Therefore, besides promotion of diversified strategy in public architecture market, the
Company will also strengthen development of civil market for energy-saving glass.
As for fine glass industry, pressure still exists due to weak market demand. The Company
will strengthen transformation of product and business structure of fine glass industry,
reinforce internal administration and further increase the equipments’ operation rate and
market share.
iii Investment in the Report Period
(i) Usage of raised funds
In October 2007, the Company privately offered 172,500,000 A-shares which raised RMB
1.372 billion (not including issuing expense). The use of raised fund in the report period is
as follows:
Unit: RMB’0000
Total raised fund Fund used in the report period Fund used in total
137,200 12,036 137,200
Target project
Changes in
project Fund required Fund used
Profits
generated
Is it in
Schedule
1500T/Year poly-silicon project No 45,000 12,036 -871 Yes
Wujian Low-E glass project No 29,600 0 4,415 Yes
Dongguan glass processing base No 35,000 0 7,415 Yes
Tianjing Low-E glass project No 27,600 0 3,279 Yes
Total － 137,200 12,036 14,238 －
Reasons of failure in meeting the
schedule and expected return
N/A
Explanation of changing in project N/A
Usage of remaining fund N/A
The progress of the projects is as follows:
Project Project progress
1500T/Year poly-silicon project The project has put into trial operation in November 2008. The first furnace of
high-purity poly-silicon has been made out successfully in December. At present,
the system runs normally. Various techniques parameters are optimized
unceasingly in order to further improve finished-product rate and unceasingly
reduce cost. It is predicted to start commercial operation in the second half year.
Wujian Low-E glass project The 1st phase of project has been put into operation in the 2nd quarter of 2008. The
2nd phase of project started operation in the 1st half year 2009.
Dongguan glass processing base The project has been put into commercial operation in 2008.
Tianjing Low-E glass project The 1st phase of project has been put into operation in the 2nd quarter of 2008. The
2nd phase of project started operation in the 1st half year 2009.CSG HOLDING CO., LTD. Semi-Annual Report 2009
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(ii) Investment of non-raising fund
Unit: RMB’0000
Project Amount Progress of project Earning
Hebei CSG float glass
project
73,900 This first line and the second line of the project have
been successfully fired in October 2008 and March
2009 separately, and currently put into operation.
At the end of report
period, the profit of
RMB 3.58 million was
made in the project.
Chengdu CSG new
float glass
production line
45,900 Planning to build a new 900T/D production line for top
grade float glass. It mainly produces 5-12mm top grade
float glass. The construction of the production line was
basically finished and it estimated to fire in July 2009.
In the report period, the
project is in still in
construction.
Chengdu CSG
waste-heat
generation project
6,694 Planning to build a waste-heat power plant with the total
generation capacity of 12 MW used with the waste heat
emission from production line of Chengdu CSG Float
Glass, which could provide 90% electricity used in
production line of Chengdu CSG. It is predicted to
finish the project in July 2009.
In the report period, the
project is in still in
construction.
The 1st phase of
project of Jiangyou
Mine
7,000 Building a base in processing quartz in Jiangyou city. The
annual capacity of 1st phase of 300,000 tons. At present,
the overall planning and design have accomplished and
entered into the construction stage, It is predicted to put
into production at the beginning of 2010.
In the report period, the
project is in still in
construction.
Chengdu CSG new
coated glass
production line
24,800 Planning to build a production line and its supporting
facilities. It mainly produces energy saving Low-E
glass. The 1st phase of the project will be completed at
the end of year 2009. After the completion of the
project, the yearly production capacity of Low-E
compound-processed glass is 1.25 million square
meters. At present, the project is in preparation.
In the report period, the
project is in still in
construction.
Yichang CSG 160
MW silicon piece
processing project
69,500 Planning to build solar battery silicon piece processing
project with annual capacity of 160 MW. The 1st phase
of the project with 60MW will be started in June 2009.
In the report period, the
project is in preparation.
Expansion project of
solar cell
15,600 Planning to build a production line with annual capacity
of 75 MW. Due to market situation, it is planned to
invest in one polysilicon battery line of 25 MW first that
will matche another monocrystalline silicon battery line
of 25 MW which has been put into operation. At
present, the machinery equipment was reached on spot,
peripheral matched construction has been
accomplished, it is estimated to put into production at
the end of 3rd quarter.
In the report period, the
project is in still in
construction.
TCO conductive glass
project
8,577 Planning to introduce a TCO glass product line while
applied in thin film solar cell with annual capacity of
460,000 square meter (3450 tons per year). At present,
the production line was basically completed and ready
for trial production.
In the report period, the
project is in still in
construction.
Touch panel module
project
2,000 Planning to build multi-dot capacitance touch panel
module production line from 2.5’ to 5’. The capacity of
the project in the first round is 100K per month. At
present, the project has been finished and put into
operation.
In the report period, no
return has been realized
by the project.
Total 253,971 - -
iv The financial report in the semi-annual report 2009 of the Company has not been
audited.CSG HOLDING CO., LTD. Semi-Annual Report 2009
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VI Significant Events
i. Corporate Governance
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 document on corporate
governance of listed company issued by CSRS.
In the report period, according to the requirement of Notice on Filling Investigation
Questionnaire about Basic Work of Financial Accounting of Listed Company in Shenzhen
(SZJGSZ[2008]No.30) issued by China Securities Regulatory Commission Shenzhen
Bureau, the Company made an overall and deeply self-inspection to the finance system.
Through the self-inspection, the Company completely arranged the setting of financial
offices, establishment of system and usage of information system. The result shows that,
the Company has established basically standard and perfect accounting calculation system
according to laws and rules of the state and relevant regulations.
ii. Implementation of the Profit Distribution Plan and Incentive Stock Plan
(i) Implementation of profit distribution plan in the report period
The profit distribution plan 2008 was approved at the Shareholders’ General Meeting 2008
held on 5 June 2009, which the dividend would be distributed to shareholders in cash at
the rate of RMB 1.00 for each 10 shares (including tax, and B shares would not deduct tax
temporarily). The Company published a Notice on Dividend Distribution on China
Securities Journal, Securities Times and Hong Kong Wen Wei Po dated 25 June 2009. The
distribution has been accomplished basically.
Neither profit would be distributed nor would capital surplus be transferred into share
capital in the semi-annual 2009.
(ii) Implementation of incentive plan
According to Restricted A Share Incentive Plan (hereinafter Incentive Plan for short)
approved by the Shareholders’ General Meeting, the Company actually issued 49,140,000
restricted A-shares to 244 incentive staff privately in July 2008, at price of RMB 8.58 perCSG HOLDING CO., LTD. Semi-Annual Report 2009
-13-
share. The amount of raised fund is RMB 421,621,200.
Till November 2008, the following 5 incentive staff Huang Haidong, Peng Liqun, Jiang
Zhenan, Yang Wenzhong and Wang Tong had dismissed. According to relevant regulations
of incentive plan, the Company held the 6th meeting of the 5th Board of Directors on 24
December 2008 and decided to buy back and write off totally 890,000 restricted A-shares
(all has been lockup) of the 5 persons with the price of RMB 8.58 per share.
According to audited data in 2008, the weighted average return on equity and weighted
average return on equity after extraordinary gains and loses were respectively 9.77% and
8.14%, the annual average compound growth rate of the net profit after extraordinary
gains and loses was -15.10% compared with that of 2007. The achievement index of the
Company did not satisfied unlocking conditions in 2009. According to the regulations of
incentive plan, the Company held the 7th meeting of the 5th Board of Directors on 27
March 2009 and decided to buy back and write off totally 12,062,500 restricted A-shares
(all has been lockup) which were planned to unlock in 2009 from incentive staffs with the
price of RMB 8.58 per share.
From January to March 2009, the following 8 incentive staff Chen Jinlong, Gui Feiyan, Li
Linglong, Luo Li, Wang Lei, Zhang Jian, Zhang Sijin and Zhang Xiaodong had dismissed,
and hadn’t accorded with incentive condition. The Company held the 7th meeting of the 5th
Board of Directors on 27 March 2009 and decided to buy back and write off remained
412,500 restricted A-shares (all has been lockup) of the 8 persons with the price of RMB
8.58 per share.
On 18 June 2009, the Company finished the work of buying back and writing off the
aforesaid totally 13,365,000 restricted A-shares.
Details of the aforesaid could be found in relevant notices published on China Securities
Journal, Securities Times, Hong Kong Wen Wei Po and Juchao Information website
(www.cninfo.com.cn) dated 14 July 2008, 25 December 2008, 31 March 2009 and 19 June
2009.
iii. In the report period, the Company has not been involved in any significant lawsuits or
arbitrations.
iv. At the end of the report period, the equity of other companies held by the Company.
Unit: RMB
Stock
Code
Stock
Abbr.
Initial
Investment
Proportion
of equity
held
Book value
at the
period end
Gains/
losses
in 2008
Changes in
Owners’
Equity
Item in
accounting
Share
type
000504 CCID
Media
14,223,465 0.74% 15,868,069 0 8,910,001 Available-for-sale
financial assets
Legal
person
share
Total - 14,223,465 - 15,868,069 0 8,910,001- -CSG HOLDING CO., LTD. Semi-Annual Report 2009
-14-
v. In the report period, there isn’t significant purchase and sale of assets and enterprise
merger.
vi. There is no significant related transaction in the report period.
vii. Significant contract and implementation
(i) In the report period, neither has the Company entrusted, contracted or leased other
companies’ assets, nor have other companies entrusted, contracted or leased the assets
of the Company.
(ii) In the report period, the Company has not offered any guarantee to any external
parties or individuals other than the Company’s own subsidiaries. All of the
guarantees for holding companies all belonged to loans which supported their
production and operation. At the 30 June 2009, the guarantees were as follows:
Unit: RMB’0000
Guarantee of the Company for the controlling subsidiaries
Total amount of guarantee for controlling subsidiaries in the report period 57,169
Balance of guarantee for controlling subsidiaries at the end of the report period 123,460
Particulars about the guarantee of the Company(Including the guarantee for the controlling subsidiaries)
Total amount of guarantee 123,460
Proportion of the total guarantee in net assets of the Company (%) 26.13%
Including:
- Total amount of the guarantee for shareholders, actual controller and correlated parties 0
- The debts guarantee amount provided for the guarantee of which the assets-liability
ratio exceeded 70%
46,800
- Total amount of guarantee in net assets of the Company exceeded 50% 0
Total amount of guarantee in aforesaid three terms 46,800
(iii) In the report period, the Company has not entrusted others to conduct assets
management.
(iv) Special explanations and independent opinions from independent directors.
Independent directors’ explanation on capital occupation of the Company’s holding
shareholders and other associated parties is: Ended 30 June 2008, there was no capital
occupation of the Company’s holding shareholders and other associated parties.
Independent directors’ explanations on the Company’s external guarantee is: In the report
period, the Company did not offer any guarantee to the controlling shareholders, related
parties which share proportion less than 50%, unincorporated company or individual. In
the report period, total guarantee for the holding subsidiaries of the Company is RMB
1,234.60 million, which accounted for 11.90% of the total asset, and 27.17% of net asset
attributable to equity holders of the Company audited at the end of 31 December 2008. AllCSG HOLDING CO., LTD. Semi-Annual Report 2009
-15-
the above guarantee has been approved by board of directors’ meeting or shareholders’
meeting, and has fulfilled information disclosure responsibility. In a word, we think the
Company’s external guarantee is in accordance with requirements of Notice of China
Securities Regulatory Commission on Regulating Listed Companies’ Provision of
Guaranty to Other Parties(No. ZJF 120 [2005]) and other relevant regulations.
viii. Commitment Events
The Company has implemented share merger reform in May 2006. Till June 2008, the
shares of the original non-tradable shareholders which holding over 5% total shares of the
Company had all released. Therein, the original non-tradable shareholder Yiwan Industrial
Development (Shenzhen) Co., Ltd. and Xing Tong Chan Industrial Development
(Shenzhen) Co., Ltd. both are wholly-funded subsidiaries to Shenzhen International
Holdings Limited (hereinafter Shenzhen International for short) listed in Hong Kong
united stock exchange main board. Shenzhen International planed to sell A-shares of CSG
amounted above 5% of the CSG group’s total shares within six months from 16 June 2009,
the day releasing restricted condition of the stock. The price for sale is no less than 8 RMB
per share. At the same time, 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.
ix. Punishment
In the report period, the Company and its directors, supervisors, senior executives and
actual controller have not received any investigation from entitled organization, coercive
measures adopted by judicial or discipline inspection department, deportation to judicial
organ or investigated for criminal responsibility, inspection and administrative punishment
from CSRC, ban to stock market, circulating a notice of criticism, punishments by other
administration department, and public condemnation by Shenzhen Stock Exchange.
x. Other significant events
(i) Index of important information
In the report period, the notices have all been published in Securities Times, China
Securities Journal, Wen Wei Po and Juchao Information website (www.cninfo.com.cn).CSG HOLDING CO., LTD. Semi-Annual Report 2009
-16-
Date No. Name
2009.2.3 2009-001 Notice on Share Decrease of Shareholders
2009.3.31 2009-002 Annual Report and its Summary of 2008
2009.3.31 2009-003 Notice on Resolutions of the 7th Meeting of the 5th Board of Directors
2009.3.31 2009-004 Notice on Resolutions of the 5th Meeting of the 5th Supervisory Committee
2009.3.31 2009-005 Notice of Guarantee for Holding Subsidiaries
2009.3.31 2009-006 Notice on Abnormal Fluctuation of Share Trade
2009.3.31 2009-007 Notice on Share Decrease of Shareholders
2009.4.22 2009-008 The 1st Quarterly Report of 2009
2009.4.22 2009-009 Notice on Resolutions of the 8th Meeting of the 5th Board of Directors
2009.4.22 2009-010 Notice of Guarantee for Holding Subsidiaries
2009.5.9 2009-011 Notice on Share Decrease of Shareholders
2009.5.16 2009-012 Notice of Resolutions of the Extraordinary Meeting of the 5th Board of Directors
2009.5.16 2009-013 Notice of Guarantee for Holding Subsidiaries
2009.5.16 2009-014 Notice on Holding the Annual Shareholders’ General Meeting 2008
2009.6.6 2009-015 Notice on Resolutions of the Annual Shareholders’ General Meeting 2008
2009.6.13 2009-016 Suggestive Notice on Release of Restricted Share
2009.6.19 2009-017 Notice on Accomplishment of Repurchase and write off of Restricted Stock Bestowed by
Restricted A-share Incentive Plan
2008.6.17 2009-018 Notice on Profit Distributions of 2008
(ii) Particulars about the reception to investors in the report period.
Time Place Method Object Contents
2009.2.19 Conference
Room
Interview United Securities Co., Ltd., Great Wall
Securities Co., Ltd.
Introduction of business and
market situation of the Company
2009.2.20 Conference
Room
Interview Guotai Junan Securities Co.,Ltd., Everbright
Securities Co., Ltd., First Capital
Securities Co., Ltd.
Introduction of production scale of
industries, market situation and
the industry development of the
Company
2009.2.25 Conference
Room
Interview GF Securities Co., Ltd., GF Fund
Management Co., Ltd., Huafu Fund
Management Co., Ltd.
Introduction of products,
operations, marketing share and
input on new energy industry of
the Company
2009.3.3 Conference
Room
Interview Nikko Asset Management Co.,Ltd. Introduction of business and
operations of the Company
2009.4.8 Conference
Room
Interview Harvest Fund Management Co., Ltd.,
Changsheng Fund Management Co., Ltd.,
Bank of China Investment Management
Co., Ltd., Baoying Fund Management Co.,
Ltd., UBS SDIC Fund Management Co.,
Ltd., Invesco Great Wall Fund
Management Co., Ltd., China Life
Insurance Asset Management Co., Ltd.
Introduction of production and
operations of each business
department of the Company,
present market environment and
actuality of industry
development at home and
abroad
2009.4.10 Conference
Room
Interview China Southern Fund Management Co.,
Ltd., Century Securities Co., Ltd., China
Universal Asset Management Co., Ltd.,
Chang Xin Asset Management Co., Ltd.
Introduction of productivity and
marketing share of the products
and operations of Solar Energy
Business Department
2009.5.13 Conference
Room
Interview United Securities Co., Ltd., Zhong Hai Fund
Management Co., Ltd., Bank of
Communications Schroder Fund
Management Co., Ltd., Shanghai SYWG
Research & Consulting Co., Ltd.
Introduction of production and
sales of industries, and
planning for Solar Energy
Industry of the CompanyCSG HOLDING CO., LTD. Semi-Annual Report 2009
-17-
2009.5.14 Conference
Room
Interview CSC International Holdings Co., Ltd., Ping
An Securities Co., Ltd., Donghai
Securities Co., Ltd., Fortune Securities
Brokerage Co., Ltd.
Introduction of capacities of
business departments and market
situation at home and abroad of
the Company
2009.5.19 Conference
Room
Interview Guosen Security Asset Management
Headquarters
Introduction of production and
operations of the Company
2009.5.20 Conference
Room
Interview Sealand Securities Co., Ltd., Great Wall
Securities Co., Ltd., Hengmao Asset
Management Co., Ltd.
Introduction of business and
market situation of the Company
2009.6.1 Conference
Room
Interview Guojin Tongyong Fund Management Co.,
Ltd.(Preparing for foundation), Peng Yuan
(Beijing) Management Consulting Co.,
Ltd., SinoPac Securities (Asia) Ltd.
Introduction of production and
sales of products of the
CompanyCSG HOLDING CO., LTD. Semi-Annual Report 2009
-18-
VII Financial Report (Not Audited)
CSG HOLDING CO., LTD.
CONSOLIDATED AND COMPANY BALANCE SHEETS
AS AT 30 JUNE 2009
(All amounts in RMB Yuan unless otherwise stated)
30 June
2009
31 December
2008
30 June
2009
31 December
2008
ASSETS Note The Group The Group The Company The Company
Current assets
Cash at bank and on hand 7 (1) 596,750,958 1,033,779,912 313,799,050 783,242,506
Notes receivable 7 (2) 157,207,809 116,042,491 - -
Accounts receivable 7 (3) 313,357,216 236,576,669 - -
Advances to suppliers 7 (4) 83,180,847 52,940,729 3,928,858 3,257,858
Dividends receivable - - 388,946,343 120,450,718
Other receivables 7 (5), 13 (1) 45,312,247 34,964,981 781,432,406 777,038,513
Inventories 7 (6) 358,937,740 325,701,374 - -
Total current assets 1,554,746,817 1,800,006,156 1,488,106,657 1,683,989,595
Non-current assets
Available-for-sale financial assets 7 (7) 15,868,069 12,930,101 15,868,069 12,930,101
Long-term receivables 13 (3) - - 1,206,822,395 1,143,041,204
Long-term equity investments 7 (8), 13 (2) 27,200,000 27,200,000 2,939,827,978 2,791,009,616
Fixed assets 7 (9) 6,698,358,599 5,543,400,908 18,037,514 19,265,605
Construction in progress 7 (10) 1,909,103,668 2,620,093,574 - -
Intangible assets 7 (11) 340,486,768 307,948,344 1,808,405 1,841,813
Goodwill 7 (12) 3,039,946 3,039,946 - -
Deferred tax assets 7 (22) 61,623,566 61,442,037 - -
Total non-current assets 9,055,680,616 8,576,054,910 4,182,364,361 3,968,088,339
TOTAL ASSETS 10,610,427,433 10,376,061,066 5,670,471,018 5,652,077,934
The accompanying notes form an integral part of these financial statementsCSG HOLDING CO., LTD. Semi-Annual Report 2009
-19-
CSG HOLDING CO., LTD.
CONSOLIDATED AND COMPANY BALANCE SHEETS
AS AT 30 JUNE 2009 (CONTINUED)
(All amounts in Rmb Yuan unless otherwise stated)
30 June
2009
31 December
2008
30 June
2009
31 December
2008
LIABILITIES AND OWNERS' EQUITY Note The Group The Group The Company The Company
Current liabilities
Short-term borrowings 7 (13) 2,609,000,930 2,797,063,550 1,354,598,900 1,603,580,700
Notes payable 7 (14) 477,242,076 289,673,653 - -
Accounts payable 7 (15) 842,081,409 743,432,885 - -
Advances from customers 7 (16) 97,397,031 94,964,995 - -
Employee benefits payable 7 (17) 45,574,471 40,005,228 15,366,122 2,710,000
Taxes payable 7 (18) 24,019,558 56,000,228 97,840 78,062
Interest payable 44,724,392 20,962,915 8,664,500 4,754,642
Dividends payable 3,695,819 3,212,152 3,695,818 3,212,152
Other payables 7(19), 13(4) 118,412,197 228,839,483 101,557,454 230,117,203
Current portion of non-current liabilities 7 (21) 68,943,414 83,968,751 - -
Other current liabilities 7 (20) 10,768,073 10,914,222 - -
Total current liabilities 4,341,859,370 4,369,038,062 1,483,980,634 1,844,452,759
Non-current liabilities
Long-term borrowings 7 (21) 1,257,956,162 1,142,128,258 - -
Special payables 1,800,000 2,100,000 - -
Deferred tax liabilities 7 (22) 4,810,757 4,777,606 - -
Other non-current liabilities 7 (23) 45,000,000 45,000,000 - -
Total non-current liabilities 1,309,566,919 1,194,005,864 - -
Total liabilities 5,651,426,289 5,563,043,926 1,483,980,634 1,844,452,759
Owners' equity
Paid-in capital 7 (24) 1,223,738,124 1,237,103,124 1,223,738,124 1,237,103,124
Capital surplus 7 (25) 2,108,542,878 2,067,761,896 2,150,576,900 2,107,751,509
Less: Treasury stock 7 (24) - (12,952,500) - (12,952,500)
Surplus reserve 7 (26) 391,040,358 391,040,358 391,040,358 391,040,358
Undistributed profits 7 (27) 1,002,138,697 863,352,524 421,135,002 84,682,684
Translation difference of foreign
currency financial statements (313,322) (1,698,863) - -
Total equity attributable to equity
holders of the Company 4,725,146,735 4,544,606,539
4,186,490,384 3,807,625,175
Minority interest 7 (28) 233,854,409 268,410,601 - -
Total owners' equity 4,959,001,144 4,813,017,140 4,186,490,384 3,807,625,175
TOTAL LIABILITIES AND OWNER'S
EQUITY 10,610,427,433 10,376,061,066 5,670,471,018 5,652,077,934
The accompanying notes form an integral part of these financial statementsCSG HOLDING CO., LTD. Semi-Annual Report 2009
-20-
CSG HOLDING CO., LTD.
CONSOLIDATED AND COMPANY INCOME STATEMENTS
FOR THE FIRST HALF YEAR ENDED 30 JUNE 2009
(All amounts in Rmb Yuan unless otherwise stated)
Jan.~Jun. 2009 Jan.~Jun. 2008 Jan.~Jun. 2009 Jan.~Jun. 2008
Items Note The Group The Group The Company The Company
Revenue 7 (29) 2,065,547,379 2,131,777,092 - -
Less: Cost of sales 7 (29) (1,419,088,769) (1,442,974,922) - -
Tax and levies on operations 7 (30) (2,788,785) (2,018,866) - -
Selling and distribution expenses (111,160,322) (106,304,531) - -
General and administrative
expenses (187,534,021) (144,777,403) (36,652,268) (18,246,677)
Finance expenses – net 7 (31) (53,691,077) 4,807,167 12,652,894 4,446,682
Asset impairment losses 7(32), 13(5) (121,367) 7,672,943 - -
Add: Investment income 7(33), 13(6) 6,939,570 44,434,813 482,826,867 362,035,351
Operating profit 298,102,608 492,616,293 458,827,493 348,235,356
Add: Non-operating income 7 (34) 15,166,527 10,359,617 2,600 2,189,913
Less: Non-operating expenses 7 (34) (1,302,170) (7,010,945) (3,963) -
Including: Loss form disposal of
non-current assets (117,061 ) (3,334,216) (3,963) -
Total profit 311,966,965 495,964,965 458,826,130 350,425,269
Less: Income tax expenses 7 (35) (22,990,603) (36,274,185) - -
Net profit 288,976,362 459,690,780 458,826,130 350,425,269
Attributable to equity holders of the
Company 261,159,985 409,853,633 - -
Minority interest 27,816,377 49,837,147 - -
Earnings per share for the profit attributable to the shareholders of
the Company during the report period
- basic 7 (36) 0.21 0.35
- diluted 7 (36) 0.21 0.35
Other general income 7 (37) 5,044,229 (21,174,340) 3,658,688 (18,758,716)
Total general income 294,020,591 438,516,440 462,484,818 331,666,553
Attributable to equity holders of the
Company 266,204,214 388,679,293 - -
Attributable to equity holders of minority 27,816,377 49,837,147 - -
The accompanying notes form an integral part of these financial statementsCSG HOLDING CO., LTD. Semi-Annual Report 2009
-21-
CSG HOLDING CO., LTD.
CONSOLIDATED AND COMPANY CASH FLOW STATEMENTS
FOR THE FIRST HALF YEAR ENDED 30 JUNE 2009
(All amounts in Rmb Yuan unless otherwise stated)
Jan.~Jun. 2009 Jan.~Jun. 2008 Jan.~Jun. 2009 Jan.~Jun. 2008
Items Notes The Group The Group The Company The Company
Cash flows from operating activities
Cash received from sales of goods or
rendering of services 2,389,527,452 2,340,791,114 - -
Refund of taxes and levies 20,925,167 6,835,548 - -
Cash received relating to other
operating activities 51,965,762 37,090,102 194,290,838 546,504,682
Sub-total of cash inflows 2,462,418,381 2,384,716,764 194,290,838 546,504,682
Cash paid for goods and services (1,275,898,522) (1,346,081,629) - -
Cash paid to and on behalf of employees (180,525,063) (206,376,486) (6,531,129) (28,084,677)
Payments of taxes and levies (193,446,268) (191,526,643) (168,572) (383,189)
Cash paid relating to other operating
activities (152,194,916) (162,259,372) (265,165,692) (399,145,155)
Sub-total of cash outflows (1,802,064,769) (1,906,244,130) (271,865,393) (427,613,021)
Net cash flows from operating activities 7 (38) 660,353,612 478,472,634 (77,574,555) 118,891,661
Cash flows from investing activities
Cash received from disposal of
investments 7,658,227 184,031,033 7,658,227 278,143,440
Cash received from returns on
investments - - 203,216,340 228,752,267
Net cash received from disposal of
fixed assets, intangible assets and
other long-term assets 1,519,647 3,714,899 - -
Cash received relating to other
investing activities 57,155,525 7,890,600 18,628,005 -
Sub-total of cash inflows 66,333,399 195,636,532 229,502,572 506,895,707
Cash paid to acquire fixed assets,
intangible assets and other long-term
assets (669,513,362) (1,253,190,922) (1,259,618) (708,533)
Cash paid to acquire investments - (23,000,000) (120,360,000) (368,325,573)
Cash paid relating to other investing
activities (21,345,370) (6,946,210) - -
Sub-total of cash outflows (690,858,732) (1,283,137,132) (121,619,618) (369,034,106)
Net cash flows for investing activities (624,525,333) (1,087,500,600) 107,882,954 137,861,601
Cash flows from financing activities
Cash received from capital contributions - 18,560,000 - -
Including: Cash received from capital
contributions by minority
shareholders of subsidiaries - 18,560,000 - -
Cash received from borrowings 1,945,542,226 3,885,233,279 437,513,800 1,263,767,440
Cash received form other financing
activities 356,800,907 - 375,340,000 -
Sub-total of cash inflows 2,302,343,133 3,903,793,279 812,853,800 1,263,767,440
Cash repayments of borrowings (2,031,815,467) (2,867,311,676) (686,504,000) (1,372,419,740)
Cash payments for interest expenses
and distribution of dividends or profits (259,685,948) (313,744,698) (136,106,917) (188,241,785)
Including: Cash payments for dividends
or profit to minority shareholders of
subsidiaries (64,416,978) (54,088,127) - -
Cash payments relating to other
financing activities (131,026,601) (589,349,077) (114,671,700) (389,880,000)
Sub-total of cash outflows (2,422,528,016) (3,770,405,451) (937,282,617) (1,950,541,525)
Net cash flows from financing activities (120,184,883) 133,387,828 (124,428,817) (686,774,085)
Effect of foreign exchange rate changes
on cash and cash equivalents 6,618,182 (9,059,882) 16,962 (25,266)
Net increase in cash and cash equivalents 7 (38) (77,738,422) (484,700,020) (94,103,456) (430,046,089)
Add: Cash and cash equivalents at
beginning of year 394,923,631 1,259,606,553 168,142,506 607,076,960
Cash and cash equivalent at end of year 7 (38) 317,185,209 774,906,533 74,039,050 177,030,871
The accompanying notes form an integral part of these financial statementsCSG HOLDING CO., LTD. Semi-Annual Report 2009
-22-
CSG HOLDING CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN OWNER'S EQUITY
FOR THE FIRST HALF YEAR ENDED 30 JUNE 2009
(All amounts in Rmb Yuan unless otherwise stated)
Attributable to equity holders of the Company
Items Paid-in capital Capital surplus
Less:
Treasury
stock
Surplus
reserves
Undistributed
profits
Translation
difference of
foreign
currency
financial
statements Sub-total
Minority
interest
Total owners'
equity
Note 7 (24) 7 (25) 7 (24) 7 (26) 7 (27) 7 (28)
Balance at 1 January 2008 1,187,963,124 1,802,280,532 - 359,176,856 653,330,647 4,262,959 4,007,014,118 278,599,753 4,285,613,871
Movement for the first half year ended 30 June 2008
Net profit - - - - 409,853,633 - 409,853,633 49,837,147 459,690,780
Gains or losses recognized directly in owners' equity - (18,758,716) - - - (2,415,624) (21,174,340) - (21,174,340)
- Translation difference of foreign currency financial statements - - - - - (2,415,624) (2,415,624) - (2,415,624)
- Net changes in fair value of available-for-sale financial assets - (18,758,716) - - - - (18,758,716) - (18,758,716)
Share-based payment - 3,167,484 - - - - 3,167,484 - 3,167,484
- Proceeds from restricted A share stock granted - - - - - - - - -
- Restricted A share stock cancelled or forfeited - - - - - - - - -
- Value of employee services - 3,167,484 - - - - 3,167,484 - 3,167,484
Capital contribution and withdrawal by owners - - - - - - - 18,560,000 18,560,000
- Capital contribution by owners - - - - - - - 18,560,000 18,560,000
- Acquisition of minority interests - - - - - - - - -
Profit distribution - - - - (178,194,469) - (178,194,469) (54,088,128) (232,282,597)
- Appropriation to surplus reserves - - - - - - - - -
- Profit distribution to equity owners - - - - (178,194,469) - (178,194,469) (54,088,128) (232,282,597)
Balance at 30 June 2008 1,187,963,124 1,786,689,300 - 359,176,856 884,989,811 1,847,335 4,220,666,426 292,908,772 4,513,575,198CSG HOLDING CO., LTD. Semi-Annual Report 2009
-23-
CSG HOLDING CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN OWNER'S EQUITY (CONTINUED)
FOR THE FIRST HALF YEAR ENDED 30 JUNE 2009
(All amounts in Rmb Yuan unless otherwise stated)
Attributable to equity holders of the Company
Items Paid-in capital
Capital
surplus
Less:
Treasury
stock
Surplus
reserves
Undistributed
profits
Translation
difference
of foreign
currency
financial
statements Sub-total
Minority
interest
Total owners'
equity
Note 7 (24) 7 (25) 7 (24) 7 (26) 7 (27) 7 (28)
Balance at 1 January 2009 1,237,103,124 2,067,761,896 (12,952,500) 391,040,358 863,352,524 (1,698,863) 4,544,606,539 268,410,601 4,813,017,140
Movement for the first half year ended 30 June 2009
Net profit - - - - 261,159,985 - 261,159,985 27,816,377 288,976,362
Gains or losses recognized directly in owners’ equity - 3,658,688 - - - 1,385,541 5,044,229 - 5,044,229
- Translation difference of foreign currency financial statements - - - - - 1,385,541 1,385,541 - 1,385,541
- Net changes in fair value of available-for-sale financial assets - 3,658,688 - - - - 3,658,688 - 3,658,688
Share-based payment (13,365,000) 37,122,294 12,952,500 - - - 36,709,794 2,044,409 38,754,203
- Proceeds from restricted A share stock granted - - - - - - - - -
- Restricted A share stock cancelled or forfeited - (3,126,750) (412,500) - - - (3,539,250) - (3,539,250)
- Treasury stock cancelled (13,365,000) - 13,365,000 - - - - - -
- Value of employee services - 40,249,044 - - - - 40,249,044 2,044,409 42,293,453
Capital contribution and withdrawal by owners - - - - - - - - -
- Capital contribution by owners - - - - - - - - -
- Acquisition of minority interests - - - - - - - - -
Profit distribution - - - - (122,373,812) - (122,373,812) (64,416,978) (186,790,790)
- Appropriation to surplus reserves - - - - - - - - -
- Profit distribution to equity owners - - - - (122,373,812) - (122,373,812) (64,416,978) (186,790,790)
Balance at 30 June 2009 1,223,738,124 2,108,542,878 - 391,040,358 1,002,138,697 (313,322) 4,725,146,735 233,854,409 4,959,001,144
The accompanying notes form an integral part of these financial statements.CSG HOLDING CO., LTD. Semi-Annual Report 2008
-24-
CSG HOLDING CO., LTD.
COMPANY STATEMENT OF CHANGES IN OWNER'S EQUITY
FOR THE FIRST HALF YEAR ENDED 30 JUNE 2009
(All amounts in Rmb Yuan unless otherwise stated)
Items Paid-in capital
Capital
surplus
Less:
Treasury
stock
Surplus
reserves
Undistribute
d profits
Total owners'
equity
Note 7 (24) 7 (25) 7 (24) 7 (26)
Balance at 1 January 2008 1,187,963,124 1,812,007,435 - 359,176,856 (23,894,365) 3,335,253,050
Movement for the first half year ended 30
June 2008
Net profit - - - - 350,425,269 350,425,269
Gains or losses recognized directly in
owners’ equity - (18,758,716) - - - (18,758,716)
- Net changes in fair value of
available-for-sale financial
assets - (18,758,716) - - - (18,758,716)
Share-based payment 3,167,484 - - - 3,167,484
- Proceeds from restricted A share
stock granted - - - - - -
- Restricted A share stock cancelled
or forfeited - - - - - -
- Value of employee services - 3,167,484 - - - 3,167,484
Profit distribution - - - (178,194,469) (178,194,469)
- Appropriation to surplus reserves - - - - - -
- Profit distribution to equity owners - - - - (178,194,469) (178,194,469)
Balance at 30 June 2008 1,187,963,124 1,796,416,203 - 359,176,856 148,336,435 3,491,892,618
Balance at 1 January 2009 1,237,103,124 2,107,751,509 (12,952,500) 391,040,358 84,682,684 3,807,625,175
Movement for the first half year ended 30
June 2009
Net profit - - - - 458,826,130 458,826,130
Gains or losses recognized directly in
owners’ equity - 3,658,688 - - - 3,658,688
- Net changes in fair value of
available-for-sale financial assets - 3,658,688 - - - 3,658,688
Share-based payment (13,365,000) 39,166,703 12,952,500 - - 38,754,203
- Proceeds from restricted A share
stock granted - -
-
- - -
- Restricted A share stock cancelled or
forfeited - (3,126,750) (412,500) - - (3,539,250)
- Treasury stock cancelled (13,365,000) - 13,365,000 - - -
- Value of employee services - 42,293,453 - - - 42,293,453
Profit distribution - - - - (122,373,812) (122,373,812)
- Appropriation to surplus reserves - - - - - -
- Profit distribution to equity owners - - - - (122,373,812) (122,373,812)
Balance at 30 June 2009 1,223,738,124 2,150,576,900 - 391,040,358 421,135,002 4,186,490,384
The accompanying notes form an integral part of these financial statementsCSG HOLDING CO., LTD. Semi-Annual Report 2008
-25-
CSG HOLDING CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE FIRST HALF YEAR ENDED 30 JUNE 2009
(All amounts in RMB unless otherwise stated)
1 General information
CSG Holding Co Ltd (the “Company”) was incorporated in 1984 in Shenzhen, the People’s Republic of China (the
“PRC”), known as China South Glass Company, as a joint venture enterprise by 香港招商局轮船股份有限公司、深
圳建筑材料工业集团公司、中国北方工业深圳公司 and 广东国际信托投资公司, with a registered capital of US dollar
500,000. In October 1991, as approved by the Shenzhen municipal government with document SFBF (1991)
828, China South Glass Company was reorganized as joint stock limited company, the registered capital was
RMB71,232,550, with nominal value of RMB 1 per share.
As approved by People’s Bank of China Shenzhen Branch with document No. SRYFZ (1991)087 and SRYFZ
(1992) 010, the Company issued, by public offering, the domestic shares (“A shares”) of 20,300,000 shares and
domestically listed foreign shares (“B shares) of 16,000,000, in October 1991 and January 1992, respectively.
Both shares were listed in Shenzhen Stock Exchange in February 1992. The registered capital of the Company
increased to RMB 107,532,550.
As approved by China Security Regulatory Committee with document No. (1995) 16, State Planning Committee
with document No. JWZ (1994) 1748 and State Administrative of Foreign Exchange with document No. (95)
HZF191, the Company issued USD 45 million convertible bonds in Swiss between June and July 1995, of which
convertible bonds amounting to USD 44 million had been converted into 75,411,268 B shares, the remaining
balances were repaid upon maturity.
The Company issued new capital of RMB 832,519,306 during the period from 1993 to 2005 by the means of
warrants, bonus issue and capitalization of capital reserve.
As approved by Shenzhen Municipal State Owned Assets Management and Supervisory Committee with
document No. (2006) 190 “the Approval over the Share Restructuring Scheme by CSG Holding Co Ltd”, the
Company went the share restructuring scheme. The shareholders of the non tradable shares offered to the
tradable shareholders 57,065,893 of A shares, being 3.55 per 10 tradable A shares, in return for the conversion of
the non tradable shares into tradable A shares. Since 24 May 2006, the non tradable shares have converted into
tradable A shares according to the commitment on Shenzhen Stock Exchange.
As approved by China Security Regulatory Committee with document ZJFX (2007) No. 231, the Company issued,
by private placement, 172,500,000 A shares during the period from 20 September to 27 September 2007, at
subscription price of RMB 8 per share. The registered capital of the Company increased to 1,187,963,124 upon
the completion of the placement.
According to the Company’s restricted A share stock incentive scheme, the Company granted 49,140,000 A
shares to employees through a non-public placement on 16 June 2008, at price of RMB 8.58 pre share. The
registered capital of the Company increased to 1,237,103,124 upon the completion of the issuance.
On 18 June 2009, the Company has cancelled 13,365,000 restricted A shares because the unlocking conditions
regulated in incentive plan didn’t been satisfied. The registered capital of the Company decreased to
1,223,738,124 upon the completion of the cancellation.
The Company and its subsidiaries (collectively referred to the “Group”) are mainly engaged in producing,
manufacturing and selling of energy-saving architecture materials such as flat glass and architecture glass,
renewable energy products such as silicon materials and PV module, as well as new material and high-tech
products such as fine glass and structure porcelain (for projects involved in production license and
environment-protection approval document, will be declared particularly by subsidiaries). Providing coordination
and service to subsidiaries in problems relevant to operation decision, administration consultation, market
information, technical support as well as post training.CSG HOLDING CO., LTD. Semi-Annual Report 2008
-26-
The financial statements were authorized for issue by the board of directors on 31 July 2009.
2 Basis of preparation
The financial statements have been prepared in accordance with the Basic Standards and 38 Specific Standards
of the Accounting standards for Business Enterprises issued by the Ministry of Finance on 15 February 2006, and
the Application Guidance for Accounting Standards for Business Enterprises, Interpretation of Accounting
Standards for Business Enterprises and other relevant regulations issued thereafter (hereafter referred to as ”the
Accounting Standards for Business enterprises” or “CAS”).
As at 30 June 2009, the Group had net current liabilities of RMB 2,787,112,553. The directors of the Company
have assessed and are confident that the Group can continue as a going concern based on 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 year ending 31 December 2009; b) the Group has maintained good relationship with banks so the
Group has been able to successfully renew the bank facilities upon the expiry. In addition, as at 30 June 2009,
the Group had unutilized banking facilities of approximately RMB 9.2 billion (Note 7(13)), which can meet its debt
servicing and capital commitment requirements. Accordingly, the directors of the Company are satisfied that it is
appropriate to prepare the consolidated financial statements of the Group on a going concern basis..
3 Statement in compliance with the Accounting Standards for Business Enterprises.
The financial statements of the Company for the first half year ended 30 June 2009 is in compliance with the
Accounting Standards for Business Enterprises truly and completely present the financial position and the
operating results as of 30 June 2009, cash flows and other information for the first half year ended of the Group
and the Company.
4 Summary of significant accounting policies and accounting estimates
(1) Accounting period
The Company’s accounting year starts on 1 January and ends on 31 December.
(2) Recording currency
The recording currency is Renminbi (RMB)
(3) Measurement basis
The Company measures at historical cost, except those measured at fair value, net realizable value and the
recoverable amount.
(4) Foreign currency translation
(a) Transactions and balances
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 currency are translated into RMB using the
spot exchange rate on the balance sheet date. Exchange differences arising from these transection are
recognised in profit or loss for the current period, except for those attributable to foreign currency borrowings that
have been taken out specifically for the, constructing or producing of qualified assets, which are capitalised as
part of the cost of those assets. Non-monetary items denominated in foreign currency that are measured in terms
of historical cost are translated at the balance sheet date using the spot exchange rate at the date of the
transaction. The effect of exchange rate changes on cash is presented separately in the cash flow statement.CSG HOLDING CO., LTD. Semi-Annual Report 2008
-27-
(b) Overseas subsidiaries
The asset and liability items in the balance sheets for overseas businesses are translated at the spot exchange
rate on the balance sheet date. Among the owner’s equity items, the items other than “undistributed profits” are
translated at the spot exchange rate of the transaction date. The income and expense items in the income
statements of overseas businesses are translated at the spot exchange rate of the transaction date. The
differences arising from the above translation are presented separately in the owner’s equities. The cash flows of
overseas businesses are translated at the spot exchange rate on the date of the cash flows. The effect of
exchange rate changes on cash is presented separately in the cash flow statement.
(5) Cash and cash equivalents
For the purpose of the cash flow statement, cash comprises cash in hand and deposits held at call with bank.
Cash equivalents refer to short-term and highly liquid investments that are readily convertible to known amounts
of cash and subjected to an insignificant risk of changes in value.
(6) 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.
(a) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for the purpose of selling in the
short term, which are presented as financial assets held for trading on the balance sheet.
(b) Receivables
Receivables, including accounts receivable and other receivables, are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market (Note 4 (7)).
(c) 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 in the balance sheet if management intends to dispose of them within 12 months of the
balance sheet date.
(d) Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets with fixed maturity and fixed or determinable
payments that management has the positive intention and ability to hold to maturity. Held-to-maturity
investments with maturities less than 12 months of the balance sheet date are included in other current assets or
current portion of non-current assets on the balance sheet.
(e) Recognition and measurement
Financial assets are recognised at fair value on the balance sheet when the Group becomes a party to the
contractual provisions of the financial instrument. In the case of financial assets at fair value through profit or loss,
the related transaction costs occurred at the time of acquisition are recognised in profit or loss for the current
period. For other financial assets, transaction costs that are attributable to the acquisition of the financial assets
are included in their initial recognition amount. Financial assets are derecognised when the contractual rights to
receive the cash flows from the financial assets have expired, or all substantial risks and rewards of ownership of
the financial assets have been transferred.
Financial assets at fair value through profit or loss and available-for-sale financial assets are subsequentlyCSG HOLDING CO., LTD. Semi-Annual Report 2008
-28-
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 and
held-to-maturity investments are measured at amortised cost using the effective interest method.
A gain or loss arising from a change in the fair value of financial assets at fair value through profit or loss is
recognized in profit or loss. Interests and cash dividends received during the period in which such financial assets
are held, as well as the gains or losses arising from the disposal of the assets are recognized in profit or loss for
the current period.
A gain or loss arising from a change in fair value of an available-for-sale financial asset is recognised directly in
equity, except for impairment losses and foreign exchange gains and losses arising from the translation of
monetary financial assets. When such financial asset is derecognised, the cumulative gain or loss previously
recognised in equity is recognised in 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 investor on available-for-sale investments in equity
instruments are recognised as investment income in profit or loss.
(f) Impairment of financial assets
The Group assesses the carrying amount of a financial asset other than that at fair value through profit or loss at
each balance sheet date. If there is objective evidence that the financial asset is impaired, the Group shall
determine the amount of any impairment loss.
If an impairment loss on a financial asset carried at amortized cost has been incurred, the amount of loss is
measured at the difference between the asset’s carrying amount and the present value of 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 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.
In the case of a significant or prolonged decline in the fair value of an available-for-sale financial asset, the
cumulative loss arising from the decline in fair value that had been recognized directly in equity is removed from
equity and recognized in 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 and recognized in 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, 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 and directly recognized in equity.
If an impairment loss incurred on an investment in an equity instrument not quoted in an active market and whose
fair value cannot be reliably measured, the amount of loss is measured as the difference between the asset’s
carrying amount and the present value of estimated future cash flows of similar financial assets, capitalized based
on the returns ratio of the market at the same time. The impairment losses are not allowed to be reversed even if
the value is recovered in a subsequent period
(7) Receivables
Receivables comprise accounts receivable and other receivables. Accounts receivable arising from sale of goods
or rendering of services are initially recognized at fair value of the contractual payments from the buyer.
Receivables are presented at amortized cost using the effective interest method net of provision for bad debts.
Receivables that are individually significant are subject to separate impairment assessment, if there is objective
evidence that the Group will not be able to collect the full amounts according to the original terms, a provision for
impairment of the receivable is established at the difference between the carrying amount of the receivable and
the present value of estimated future cash flows.CSG HOLDING CO., LTD. Semi-Annual Report 2008
-29-
Receivables that are not individually significant together with those receivables that have been individually
evaluated for impairment and found not to be impaired are grouped on the basis of similar credit risk
characteristics. The impairment losses are determined, considering the current conditions, on the basis of
historical loss experience for the groups of receivables with the similar credit risk characteristics.
When the Group transfers the accounts receivable to financial institutions without recourse, the difference
between proceeds derived from the transaction, net of the carrying amounts of the accounts receivable and
relevant taxes is recognized in profit or loss for the current period.
(8) Inventories
Inventories include manufacturing sector and real estate development sector, are stated at cost presented at the
lower of cost and net realisable value.
Manufacturing sector inventories include raw materials, work in progress, finished goods and turnover materials.
Cost is determined using the weighted average method. The cost of finished goods and work in progress
comprises raw materials, direct labour and an allocation of all production overhead expenditures incurred based
on normal operating capacity. Turnover materials include low cost consumables and packaging materials, are
expensed upon issuance.
The real estate development sector inventories are properties held for sale, the cost comprised of land and
construction costs. Cost is determined using the actual cost.
Provisions for declines in the value of inventories are determined at the carrying value of the inventories net of
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
relevant taxes.
Calculation reversal of provisions for declines in value of inventories sold should deduct cost of main operations
and other cost.
The Group adopts the perpetual inventory system..
(9) Long-term equity investments
Long-term equity investments comprise the Company’s long-term equity investments in its subsidiaries, the
Group’s long-term equity investments in its joint ventures and associates as well as the long-term equity
investments where the Group does not have control, joint control or significant influence over the investees, and
which are not quoted in an active market and whose fair value cannot be reliably measured.
(a) Subsidiaries
Subsidiaries are all investees over which the Company is able to control, i.e. has the power to govern the financial
and operating policies so as to obtain benefits from their operating activities. The existence and effect of potential
voting rights (including that derived from the convertible bonds and warrants that are currently convertible or
exercisable) is considered to determine whether the Group has control over the investee. Investments in
subsidiaries are measured using the cost method in the Company’s financial statements, and adjusted using the
equity method when preparing the consolidated financial statements.
Long-term equity investments accounted for using the cost method are measured at the initial investment cost.
Investment income is recognized in profit or loss for the cash dividends or profit declared by the investee.
Share-based payments granted to employees of the Company’s subsidiaries are settled by the Company’s equity
instrument. Fare value of related service of these employees, is recognized as an increase in the investment in
the subsidiaries within the period when employees provide their services..CSG HOLDING CO., LTD. Semi-Annual Report 2008
-30-
(b) Other long-term equity investments
Other long-term equity investments where the Group does not have control, joint control or significant influence
over the investee, and which are not quoted in an active market and whose fair value cannot be reliably measured
are accounted for using the cost method.
(10) Fixed assets
Fixed assets comprise buildings, machinery and equipment, motor vehicles, computer and electronic equipment
and office equipment. Fixed assets purchased or constructed by the Group are initially measured at cost at the
time of acquisition.
Subsequent expenditures incurred for a fixed asset are included in the cost of the fixed asset when it is probable
that the economic benefits associated with the fixed asset will flow to the Group and its cost can be reliably
measured. The carrying amount of those parts that are replaced is derecognized and all the other subsequent
expenditures are recognized in profit or loss in the period in which they are incurred.
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 being 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 residual values expressed as a percentage of cost and the annual
depreciation rates are as follows:
Estimated useful lives Estimated residual value Annual depreciation rate
Buildings 10-40 years 5%-10% 2.25%-9.5%
Machinery and equipment 10-16 years 5%-10% 5.63%-9.5%
Motor vehicles and others 3-10 years 5%-10% 9%-31.67%
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 if appropriate at least at each financial year-end.
A fixed asset classified as an asset held for sale is presented at the lower of the carrying amount and the fair
value less costs to sell. Any excess of the carrying amount over the fair value less the costs to sell is provided for
as impairment loss.
The carrying amount of a fixed asset is derecognized on disposal or when no future economic benefits are
expected from its use or disposal. The amount of proceeds 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
(11) Construction in progress
Construction in progress is measured at actual cost. The actual cost comprises construction costs and other costs
necessarily incurred to bring construction to get ready for its intended use. Borrowing costs that are eligible for
capitalization are capitalized as part of the cost of assets until the assets are ready for their intended use.
Construction in progress is transferred to fixed assets when the assets are ready for their intended use, and
depreciation begins from the following month
(12) Intangible assets
Intangible assets including land use rights and, patents and exploitation rights are measured at actual cost.
(a) Land use rights
Land use rights are amortized on the straight-line basis over the period of the land use rights. If it is impracticableCSG HOLDING CO., LTD. Semi-Annual Report 2008
-31-
to allocate the amount paid for the purchase of land use rights and buildings between the land use rights and the
buildings on a reasonable basis, the entire amount is accounted for as fixed assets.
(b) Patents
Patents are amortized on a straight-line basis over periods as stipulated by the contracts.
(c) Exploitation rights
Exploitation rights are amortized on permitted exploitation periods by the exploitation certificate.
(d) Periodical review of useful life and amortisation method
The estimated useful life and amortization method for an intangible asset with an indefinite useful life is reviewed,
and adjusted if appropriate at each financial year-end.
(13) Research and development
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 finally create an intangible asset.
Expenditure on the research phase is recognized in profit or loss in the period in which it is incurred. Expenditure
on the development phase is recognized as an intangible asset only if all of the following conditions are satisfied:
?it is technically feasible to complete the intangible asset so that it will be available for use;
?management intends to complete the intangible asset and use or sell it;
?it can be demonstrated how the intangible asset will generate economic benefits;
?adequate technical, financial and other resources to complete the development and the ability to use or sell
the intangible asset; and
?the expenditure attributable to the intangible asset during its development phase can be reliably measured.
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 an expense 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 the asset is ready for its intended use.
(14) Goodwill
Goodwill is recognized at the excess of the cost of a business combination involving enterprises not under
common control over the interest in the fair value of the acquirees’ identifiable net assets acquired in the business
combination as at the acquisition date. For purchase from minority interests occurring before 7 August 2008, the
goodwill is recognized at the excess of the consideration paid and the relevant share acquired of the fair value of
the identifiable net assets of the subsidiaries at the transaction dates.
(15) Impairment of long-term assets
Fixed assets, construction in progress, intangible assets with finite useful lives, investment properties measured
using the cost model and long-term equity investments in subsidiaries, joint ventures and associates are tested
for impairment if there is any indication that an asset may be impaired at the balance date. If the result of the
impairment test indicates that the recoverable amount of the 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. A provision for asset Impairment isCSG HOLDING CO., LTD. Semi-Annual Report 2008
-32-
determined and recognized on an individual asset basis. If it is not possible to estimate the recoverable amount of
an individual asset, the recoverable amount of the 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.
Separately recognized goodwill is tested at least annually for impairment, irrespective of whether there is any
indication that the asset may be impaired. During the test, the carrying value of goodwill is allocated to the related
asset group or groups of asset group which is 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 groups of asset group including
the goodwill allocated is lower than its carrying amount, the corresponding impairment loss is recognized. The
impairment loss is first deducted from the carrying amount of goodwill allocated to the asset group or groups of
asset group, and then deducted from the carrying amount of the remaining assets of the asset group or groups of
asset group pro rata with goodwill.
Once the asset impairment loss mentioned above is recognized, it is not allowed to be reversed for the value
recovered in the subsequent periods.
(16) Borrowing costs
The borrowing costs that are directly attributable to the acquisition and construction of a fixed asset that needs a
substantially long period of time of acquisition and construction 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, 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.
(17) Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently stated at
amortised cots using the effective interest method. Borrowings of which the period is within one year (one year
included) are classified as the short-term borrowings, and the others are classified as long-term borrowings.
(18) Employee benefits
Employee benefits mainly include wages or salaries, bonuses, allowances and subsidies, staff welfare, social
security contributions, housing funds, labour union funds, employee education funds and other expenditures
incurred in exchange for service rendered by employees.
Employee benefits are recognized as a liability in the accounting period in which an employee has rendered
service, and as costs of assets or expenses to whichever the employee service is attributable.
(19) Share Based Payment
The Group has a share based payment plan in place, under which the entity received services from employees as
consideration for equity instruments of the Group. Share-based payment plan is be classified as either
equity-settled share-based payments or cash-settled share-based payments.
For an equity-settled share-based payment, in return for employees’ services, if the right may be exercised
immediately after the grant, the fair value of the equity instruments shall, on the day of granting, be recorded as
cost or expense. Otherwise, the total amount expensed is recognized over the vesting period, which is the period
over which all of the specified vesting conditions are to be satisfied.CSG HOLDING CO., LTD. Semi-Annual Report 2008
-33-
The equity instruments will be exercised post if the equity instruments granted is been cancelled during waiting
period. The balance amount will be recognized in profit or loss for the current period immediately, and confirm
capital surplus at the same time.
(20) Provisions
Provisions for restructuring, product warranties and onerous contracts are recognized when the Group has a
present obligation, and 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 shall
be 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.
The carrying amount of provisions is reviewed at each balance sheet date and adjusted to reflect the current best
estimate.
(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 base of assets and liabilities and their carrying amount (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 law. 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, joint
ventures and associates, except where the Group is able to control the timing of the 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, joint ventures 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.
Deferred tax assets and deferred tax liabilities are offset when:
?The deferred taxes are related to the same tax payer within the Group and same fiscal authority; and
?That tax payer has a legally enforceable right to offset current tax assets against current tax liabilities.
(22) Revenue recognition
The amount of revenue is determined in accordance with the fair value of the consideration received or receivable
for the sale of goods and services in the ordinary course of the Group’s activities. Revenue is shown net of
value-added tax, rebates, discounts and returns.
Revenue is recognized when the amount of revenue can be reliably measured, it is probable that future economicCSG HOLDING CO., LTD. Semi-Annual Report 2008
-34-
benefits will flow to the Group and when specific criteria have been met for each of the Group’s activities as
described below.
(a) Sale of goods
Sales of goods are recognized when the risk and rewards of the ownership of the products are transferred,
usually occurrence with the timing when the Group has delivered products to the customers, and the Group cease
to exercise the control and managing role over the products.
(b) Rendering of services
The Group provides service to external customers. Revenue arising from provision of services is recognized using
the percentage of completion method. The Group determines the stage of completion based on the proportion of
costs incurred to date to the estimated total costs.
(c) Use by others of enterprise assets
Interest income is recognized on a time-proportion basis using the effective interest method.
(23) Leases
A finance lease is a lease that transfers substantially all the risks and rewards incidental to ownership of an asset.
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
another related assets, or charged as an expense for the current period.
(24) Profit distribution
Proposed profit distribution is recognised as a liability in the period in which it is approved by the shareholders’
meeting.
(25) Preparation of consolidated financial statements
The scope of consolidated financial statements includes the Company and its subsidiaries.
Subsidiaries
Subsidiaries are fully consolidated from the date on which the Group obtains control and are de-consolidated from
the date that such control ceases. For a subsidiary 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, came 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.
The financial statements of subsidiaries are adjusted in accordance with the accounting policies and accounting
period of the Company during the preparation of the consolidated financial statements, where the accounting
policies and the accounting periods are inconsistent between the Company and subsidiaries. For subsidiaries
acquired from a business combination 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 inter-group balances, transactions and unrealized profits are eliminated in the consolidated financial
statements. The portion of a subsidiary’s equity and the portion of a subsidiary’s net profits and losses for the
period not held by the Company are recognized as minority interests and presented separately in the consolidated
balance sheet within equity and net profits respectively.
Purchase of minority interests from minority shareholders of the subsidiariesCSG HOLDING CO., LTD. Semi-Annual Report 2008
-35-
Purchase from minority interests results in goodwill, the difference between the consideration paid and the
relevant share acquired of the carrying amount of the net assets of the subsidiary which were initially measured at
the acquisition date of that subsidiary and subsequently measures on the same basis, is recorded in capital
reserve to the extent to the zero balance of the capital reserve. The remaining balance, if any, is directly charged
to retained earnings.
(26) Segment reporting
The Group recognize the business segment according as inter-organization structure, management requirement
and internal report system, and the business segment is the base to recognize the report segment. The business
segment satisfied the following conditions: the segment can get the revenue and cost, the result of operation of
segment can be appraised termly by management in order to distribute resources and evaluate its achievements,
the Company can get the accounting information about financial standing, result of operation, cash flow and
others of the segment.
(27) Discontinued operation
Discontinued operation is a component of the Group that either has been disposed of or is classified as held for
sale, and can be distinguished from other components within the Group in business operation and in preparation
of financial statements.
A component is classified as held for sale when all of following conditions are satisfied: (1) the Group has made a
resolution on disposal of this component; (2) the Group has entered into an irrevocable agreement with the
transferee to transfer the component; (3) the transfer will be completed within one year.
(28) The determination of the 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 for which the market is not active is determined by using a
valuation technique. Valuation techniques include using recent market transactions between knowledgeable,
willing parties, reference to the current fair value of another instrument that is substantially the same, and
discounted cash flow analysis. When a valuation technique is used to establish the fair value of a financial
instrument, the valuation technique is whenever possible incorporate factors that market participants would
consider, and less relies on the Group’s entity-specific factors.
(29) Critical accounting estimates and judgments
The Group continually evaluates critical estimates and key assumption based on historical experience and other
factors, including expectations of future events that are believed to be reasonable under the circumstances.
The critical accounting estimates and key assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year are outlined below:
The Group is subject to income taxes in numerous jurisdictions. There are many 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 taxes in each of these jurisdictions. The Group
recognizes income taxes in each jurisdiction based on estimates. Where the final tax outcome of these matters is
different from the amounts that were initially recorded, such differences will impact the income tax and deferred
tax provisions in the period in which such determination is made.
5 Taxation
The types and rates of taxes applicable to the Group during the current year are set out below:CSG HOLDING CO., LTD. Semi-Annual Report 2008
-36-
Type Tax rate Taxable basis
Enterprise income tax 15% to 25%
Taxable income
Value added tax (“VAT”) 17%
Taxable value added amount (Tax payable is
calculated using the taxable sales amount
multiplied by the effective tax rate less current
period’s deductible VAT input )
Business tax 3% and 5% Taxable turnover
On 16 March 2007, the National People’s Congress approved the Corporate Income Tax Law of the People’s
Republic of China (the “New CIT Law”), which is effective from 1 January 2008. Under the New CIT Law, the
subsidiaries which previously applied income tax rate of 24% or 33%, are subject to enterprise income tax rate of
25% from 1 January 2008. For the Company and its subsidiaries established in a special economic zone, which
previously applied enterprise income tax rate of 15%, the enterprise income tax rate will increase gradually to
25% within 5 years and the applicable income tax rate in 2009 is 20%. Chengdu CSG Glass Co., Ltd. was
qualified as foreign investment enterprise in encouraged category and was established in western area, according
to the tax incentive measures for the extending business to operate in the western regions implemented by the
government, the applicable tax rate is 15% before 2010. The overseas subsidiaries are assessed under the
governing tax jurisdiction..
On 5 November 2008, the 34th executive meetings of the State Council approved Value-Added Tax Interim
Regulations of the People’s Republic of China (the “New VAT Interim Regulations”), which is effective from 1
January 2009. According Inform of Value-Added Tax Rate for Exploitation in Metallic and Nonmetal Ore Deposit
(CS [2008] No.171), the VAT rate come back from 13% to 17% from 1 January 2009. The VAT rate of the
subsidiary of the Company – Hainan Wen Chang CSG Silica Sand Mine Co., Ltd. adjusted from 13% to 17% from
1 January 2009.
As at 30 June 2009, the tax privilege treatment enjoyed by the subsidiaries of the Group were described as
below:
As approved by Tianjin Wuqing District State Tax Bureau (JSWQJM (2008) No. 317), Tianjin Energy Conservation
Glass Co., Ltd. enjoys the exemption from enterprise income tax for two years starting from the first profit marking
year after offset the accumulated losses, and half rate for next three years. This year was the first profit making
year and the entity was exempted from the tax.
With an approval from Guangzhou Huangpu State Tax Bureau (HGSSP (2006)2) , Guangzhou CSG Glass Co Ltd
enjoys the exemption from enterprise income tax for two years starting from the firs profit marking year after offset
the accumulated losses, and half rate for next three years and the exemption from the local enterprise income tax
during the five years. The first profit making year was 2005, the applicable enterprise income tax rate for current
year was 12.5%.
With an approval from Chengdu Shuangliu County State Tax Bureau (SGSJM (2007) No. 73) , Chengdu CSG
Glass Co., Ltd. enjoys the exemption from enterprise income tax for two years starting from the first profit marking
year after offset the accumulated losses, and half rate for next three years. According to Inform of Perform Tax
Incentive Measures “CS (2009) No. 69” and State Council Circular GF (2007) No. 39 ”Circular of the State Council
on the Implementation of Transitional Preferential Enterprise Income Tax Policies”, Chengdu CSG Glass Co., Ltd.
enjoyed both tax privilege of western area and the half rate tax. The first profit making year was 2006, and the
enterprise income tax rate applied for the entity in current year was 7.5%.
With an approval from Guangdong Dongguan State Tax Bureau, Dongguan CSG Glass Co., Ltd. enjoys the
exemption from enterprise income tax for two years starting from the first profit marking year after offset the
accumulated losses, and half rate for next three years. The first profit making year was 2007, the applicable
enterprise income tax rate for current year was 12.5%.
With an approval from Guangdong Dongguan State Tax Bureau, Dongguan CSG Architectural Co., Ltd. enjoys the
exemption from enterprise income tax for two years starting from the first profit marking year after offset theCSG HOLDING CO., LTD. Semi-Annual Report 2008
-37-
accumulated losses, and half rate for next three years. This year was the second profit making year and the
entity was exempted from the tax.
With an approval from Guangdong Dongguan State Tax Bureau, Dongguang CSG PV-tech Co., Ltd. enjoys the
exemption from enterprise income tax for two years and half rate for next three years. This year was the second
year exempted from the tax.
With an approval from Jiangsu Suzhou State Tax Bureau, Wujiang CSG North-east Architectural Glass Co., Ltd.
enjoys the exemption from enterprise income tax for two years and half rate for next three years. This year was
the second year exempted from the tax.
6 Subsidiaries
The principal subsidiaries of the Company in consolidation scope form 30 June 2009.
Registered
capital
% voting right held by
the Company
Place of registration
(in ten
thousand Yuan)
Nature of business and
principal activities Direct Indirect
Shenzhen CSG Float Glass Co., Ltd. Shenzhen, the PRC 60,574 Floating Glass manufacturing 100% -
Guangzhou CSG Glass Co., Ltd.
Guangzhou, the
PRC 26,000 Floating Glass manufacturing 75% 25%
Chengdu CSG Glass Co., Ltd. Chengdu, the PRC 24,666 Floating Glass manufacturing 75% -
Hainan Wen Chang CSG Silica Sand
Mine Co., Ltd. Hainan, the PRC 4,000 Mining of silica sand 100% -
Sichuan Luxian CSG Silica Sand Mine
Co Ltd Luxian, the PRC 1,400 Floating Glass manufacturing 98% 1.5%
Jiangyou CSG Mining Development
Co., Ltd. Shenzhen, the PRC 2,800 Mining of silica sand 100% -
Shenzhen CSG Wellight Coating Glass
Co., Ltd. Shenzhen, the PRC 6,912
Production and selling of
coated glass 90% 10%
Shenzhen CSG Southern Star Glass
Processing Co., Ltd. Shenzhen, the PRC 2,310 Processed glass 100% -
Shenzhen CSG Architectural Glass
Co., Ltd. Shenzhen, the PRC 3,200 Processed glass 100% -
CSG Spandrel And Tempered glass
Co., Ltd. Shenzhen, the PRC 1,500 Production of processed glass 100% -
Tianjin CSG Architectural Glass Co.,
Ltd. Tianjin, the PRC 17,800 Processed glass 75% 25%
China Southern Glass (Hong Kong)
Limited Hong Kong HKD8,644
Trading and investment
holding 100% -
China Southern Glass (Australia) Pty
Ltd. Australia AUD50 Glass product trading 100% -
Shenzhen CSG Display Technology
Co., Ltd. Shenzhen, the PRC USD900
Production of monitor display
glass 75% -
Shenzhen CSG Wellight Conductive
Coating Co., Ltd. Shenzhen, the PRC USD1,780
Production of colorful filter
glass 70% -
Shenzhen V-Interface Technology Co.,
Ltd Shenzhen, the PRC 2,000
Development and production
of moulds - 72%
Shenzhen CSG Structure Ceramics
Co., Ltd. Shenzhen, the PRC 3,000
Production of structural
ceramic products 100% -
Dongguan CSG Architectural Glass
Co., Ltd.
Dongguan, the
PRC 24,000 Processed glass 75% 25%
Dongguan CSG Solar Glass Co., Ltd.
Dongguan, the
PRC 20,000 Production of solar glass 75% 25%
Yichang CSG Silicon Co., Ltd. (a) Yichang, the PRC 65,248
Production of silicon related
materials 68.97% 25%
Wujiang CSG North-east Architectural
Glass Co., Ltd. Wujiang, the PRC 32,000 Processed glass 75% 25%
Tianjin Energy Conservation Glass
Co., Ltd. Tianjin, the PRC 12,800
Production of specialized
glass 75% 25%
Dongguan CSG PV-tech Co., Ltd.(d) Dongguan, the PRC 10,000
Production of solar battery
and applications 75% 25%
Hebei CSG Glass Co., Ltd. (Note (a)) Yongqing, the PRC USD3,306
Production of specialized
glass 75% 25%
Dongguan CSG Ceramics Technology
Co., Ltd.(b)
Dongguan, the
PRC 5,000
Production of ceramics
products 100% -
Tianjin CSG Industrial Development
Co., Ltd. Tianjin, the PRC 2,000 Real estate development 75% 25%
Sichuan CSG Industrial Development
Co., Ltd. Chengdu, the PRC 4,000 Real estate development 100% -
Hainan CSG Industrial Development
Co., Ltd. Haikou, the PRC 3,000 Real estate development 100% -
Beihai CSG Industrial Development
Co., Ltd. Beihai, the PRC 2,000 Real estate development 65% 35%CSG HOLDING CO., LTD. Semi-Annual Report 2008
-38-
(a) The registered capital of Yichang CSG Silicon Materials Co Ltd (“YC CSG”) was RMB 492 million. The Company
and China Southern Glass (Hong Kong) Limited (CSG HK), one subsidiary of the Company, held 67% and 25%
share separately. On 22 May 2009, the Company and CSG HK increased investment of RMB 160.48 million as a
proportion of 75:25. Its minority Shareholder didn’t increased investment. On 30 June 2009, the registered capital of
YC CSG was RMB 652.48 million, the Company and CSG HK held 68.97% and 25% share separately.
7 Notes to the consolidated and the Company’s financial statements
(1) Cash at bank and at hand
30 June 2009 31 December 2008
Cash on hand 86,714 62,510
Cash at bank 556,378,229 987,289,241
Other cash balances 40,286,015 46,428,161
596,750,958 1,033,779,912
Other cash balances include guarantee deposits for bank acceptance notes, mortgage loans, letter of credits,
performance letters, credit card accounts, guarantee letter and pledge loan.
The cash and bank balances foreign currency portfolio is as follows:
30 June 2009 31 December 2008
Original currency Exchange rate RMB equivalent Original currency Exchange rate RMB equivalent
HKD 43,572,560 0.88153 38,410,519 4,224,561 0.8819 3,725,640
USD 2,892,739 6.83190 19,762,905 7,108,860 6.8346 48,586,215
EUR 1,466 9.64080 14,131 21,561 9.6590 208,258
AUD 1,706,137 5.54260 9,456,434 1,740,819 4.7135 8,205,350
JPY 372,125 0.07112 26,464 234,167 0.0757 17,726
67,670,453 60,743,189
As at 30 June 2009 included in other cash balances are RMB 239,760,000 restricted cash (at 31 December
2008：486,400,000). (Note 7 (13))
(2) Notes receivable
30 June 2009 31 December 2008
Trade acceptance notes 39,859,627 21,251,812
Bank acceptance notes 117,348,182 94,790,679
157,207,809 116,042,491
(3) Accounts receivable
31 December 2008 30 June 2009
Accounts receivable 241,405,351 319,868,268
Current year
(additions)/
reversal
Current year
write-off
Less: provision for bad debts (4,828,682) (1,682,370) (6,511,052)
236,576,669 313,357,216CSG HOLDING CO., LTD. Semi-Annual Report 2008
-39-
The ageing of accounts receivable and related provisions for bad debts are analysed below:
30 June 2009 31 December 2008
Amount
% of total
balance
Provision for
bad debts Amount
% of total
balance
Provision for
bad debts
Within 1 year 315,969,165 99% (6,433,071) 238,626,946 99% (4,776,058)
1 to 2 years 2,599,974 1% (51,999) 2,041,433 1% (37,885)
2 to 3 years 628,427 0% (12,568) 474,027 0% (9,480)
Over 3 year 670,702 0% (13,414) 262,945 0% (5,259)
319,868,268 100% (6,511,052) 241,405,351 100% (4,828,682)
Accounts receivable are analysed by customers categories as follows:
30 June 2009 31 December 2008
Amount
% of tota
balance
Provision for
bad debts
Provision
ratio Amount
% of total
balance
Provision for
bad debts
Provision
ratio
Receivables that are individually
significant - - - - - - - -
Receivables not individually
significant but with high risk
in groups 319,868,268 100% (6,511,052) 2% 241,405,351 100% (4,828,682) 2%
319,868,268 100% (6,511,052) 2% 241,405,351 100% (4,828,682) 2%
As at 30 June 2009, no balances included in above accounts receivable are due to the shareholders of the
Company who hold over 5% shares with voting right.
As at 30 June 2009, the aggregate amount of the Group’s five largest accounts receivable balances was RMB
108,116,101 (at 31 December 2008: RMB 57,947,143), being 34% (at 31 December 2008: 24%) of the total
accounts receivable balances, all aged within one year.
The following balances were dominated in foreign currency.
30 June 2009 31 December 2008
Original
currency
Exchange
rate
RMB
equivalent
Original
currency
Exchange
rate
RMB
equivalent
HKD 9,752,320 0.88153 8,596,963 12,264,562 0.8819 10,816,117
USD 9,504,068 6.83190 64,930,842 9,403,425 6.8346 64,268,649
EUR 262,946 9.64080 2,535,010 803,593 9.6590 7,761,905
AUD 47,751 5.54260 264,665 112,784 4.7135 531,607
JPY 12,251,252 0.07112 871,309 7,293,000 0.0757 552,080
77,198,789 83,930,358
(4) Advance to suppliers
The aging of advance to suppliers are within one year and substantively denominated in RMB.
The group did not have any balances which were due to parties having 5% or above shareholdings in the
Company.CSG HOLDING CO., LTD. Semi-Annual Report 2008
-40-
(5) Other receivable
31 December 2008 30 June 2009
Deposit to contractors 25,971,532 32,041,790
Payment on behalf of other parties 2,279,763 4,335,778
Staff advances 2,615,200 4,227,209
Others 8,440,532 9,305,098
39,307,027 49,909,875
Current year
(addition)/
reversal
Current year
Write-off
Less: Provision for bad debts (4,342,046) (255,582) - (4,597,628)
34,964,981 45,312,247
The ageing of other receivable and the related bad debts provision are analysed below:
30 June 2009 31 December 2008
Amount
% of
total
balance
Provision for
bad debts Amount
% of
total
balance
Provision for
bad debts
Within 1 year 44,725,956 90% (892,229) 33,542,366 86% (625,350)
1 to 2 years 549,888 1% (10,559) 837,892 2% (271,514)
2 to 3 years 20,088 0% (662) 1,663,937 4% (1,493,750)
Over 3 years 4,613,943 9% (3,694,178) 3,262,832 8% (1,951,432)
49,909,875 100% (4,597,628) 39,307,027 100% (4,342,046)
The group did not have any balances which were due to parties having 5% or above shareholdings in the
Company.
Other receivables are analysed by customers categories as follows:
30 June 2009 31 December 2008
Amount
% of
total
balance
Provision
for bad
debts
Provision
ratio Amount
% of total
balance
Provision
for bad
debts
Provision
ratio
Receivables that are individually
significant 3,675,738 7% (3,675,738) 100% 3,675,738 9% (3,675,738) 100%
Receivables not individually
significant but with high risk
in groups 46,234,137 93% (921,890) 2% 35,631,289 91% (666,308) 2%
49,909,875 100% (4,597,628) 9% 39,307,027 100% (4,342,046) 11%
As at 30 June 2009, the aggregate amount of the Group’s five largest accounts other receivable balances was
RMB 33,400,589 (at 31 December 2008: RMB 26,101,132), being 67% (at 31 December 2008: 66%) of the total
accounts other receivable balances, all aged within one year.
Other receivable substantively denominated in RMB.CSG HOLDING CO., LTD. Semi-Annual Report 2008
-41-
(6) Inventories
31 December
2008
30 June
2009
Cost -
Raw materials 104,038,310 136,691,039
Work in progress 9,699,015 10,338,983
Finished goods 181,577,507 181,064,719
Turnover materials 38,203,435 33,928,689
Properties held for sale 36,625,242 27,072,429
370,143,509 389,095,859
Less: Provision for declines in the
value of inventories
Current year
(addition)/
reversal
Current year
write-off
Raw materials (73,384) - - (73,384)
Finished goods (18,476,825) 922,428 7,953,206 (9,601,191)
Turnover materials (392,709) - - (392,709)
Properties held for sale (25,499,217) 894,157 4,514,225 (20,090,835)
(44,442,135) 1,816,585 12,467,431 (30,158,119)
325,701,374 358,937,740
(7) Available-for-sale financial assets
30 June 2009 31 December 2008
Available-for-sale equity instruments 15,868,069 12,930,101
The equity instruments were all domestic shares listed in PRC. They have measured at market price at the trading
date closest to the balance sheet date. The relevant changes in fair value have been recognized in capital surplus
(Note 7(25)).
(8) Long-term equity investments
30 June 2009 31 December 2008
Other long-term equity investments (a) 27,644,997 27,644,997
Less: Provision for impairment of long-term equity
investments (b) (444,997) (444,997)
27,200,000 27,200,000
The long-term equity investments of the Group are not subject to restriction on conversion into cash or restriction
on remittance of investment income.
(a) Other long-term equity investmentCSG HOLDING CO., LTD. Semi-Annual Report 2008
-42-
Name of investees 30 June 2009 31 December 2008
Guangdong Golden Glass Technologies Ltd. (i) 23,000,000 23,000,000
Beijing Wan Tong Industrial Co Ltd 4,200,000 4,200,000
Hai Nan Pearl River Construction Co Ltd 395,000 395,000
Hai Nan Heng Tong Industrial Co Ltd 49,997 49,997
27,644,997 27,644,997
(i) The Group owns 11.11% of equity interest in this entity. There is no significant assets impairment exposure as at
30 June 2009.
(b) Provision for impairment of long-term equity investments
30 June 2009 31 December 2008
Hai Nan Pearl River Construction Co Ltd (395,000) (395,000)
Hai Nan Heng Tong Industrial Co Ltd (49,997) (49,997)
(444,997) (444,997)
(9) Fixed assets
Buildings
Machinery and
equipment
Motor vehicles
and others
Total
Cost
31 December 2008 1,734,320,569 5,200,498,064 195,232,769 7,130,051,402
Transfer from construction in
progress 150,883,668 1,185,325,698 4,868,281 1,341,077,647
Other current year additions 11,372,070 8,870,936 4,570,030 24,813,036
Current year disposals (589,531) (15,593,341) (2,570,764) (18,753,636)
30 June 2009 1,895,986,776 6,379,101,357 202,100,316 8,477,188,449
Accumulated depreciation
31 December 2008 167,397,673 1,096,806,464 95,413,365 1,359,617,502
Current year depreciation 28,639,052 158,775,047 9,745,980 197,160,079
Current year disposals (523,944) (2,391,288) (2,065,491) (4,980,723)
30 June 2009 195,512,781 1,253,190,223 103,093,854 1,551,796,858
Provision for impairment loss
31 December 2008 8,124,640 218,740,834 167,518 227,032,992
Current year additions - - - -
Current year disposals - - - -
30 June 2009 8,124,640 218,740,834 167,518 227,032,992
Net book value
30 June 2009 1,692,349,355 4,907,170,300 98,838,944 6,698,358,599
31 December 2008 1,558,798,256 3,884,950,766 99,651,886 5,543,400,908
As at 30 June 2009, buildings with a net book value of RMB 9,288,011 (cost of RMB 10,084,311) (at 31 December
2008: net book value of RMB 9,447,679, cost of RMB 10,084,311) had been pledged as security for long-term
borrowings of RMB 11,544,544.
As at 30 June 2009, ownership certificates of buildings (“Buildings ownership Certificates”) for certain buildings of
the Group with carrying amounts of approximately RMB 365,138,431 (cost of RMB 406,333,868) (at 31 December
2008: carrying amount of RMB 523,097,256, cost of RMB 583,525,650) had yet been obtained by the Group.
The Company’s directors are of the view that there is no legal restriction for the Group to apply for and obtain the
Buildings Ownership Certificates and there will not be any significant adverse impact on the operations of the
Group.CSG HOLDING CO., LTD. Semi-Annual Report 2008
-43-
As at 30 June 2009, Buildings Ownership Certificates for certain buildings of the Group with carrying amounts of
approximately RMB 778,352,827 (cost of RMB 831,185,579) (at 31 December 2008: carrying amount of RMB
774,999,186, cost of RMB 812,517,184) had yet been obtained by the Group because the land ownership
certificates of the lands on which these buildings located had not been obtained (Note 7 (11)).
At 30 June 2009, the fixed assets with net book value of approximately RMB 1,472,842, (cost of approximately
RMB 27,327,571) (at 31 December 2008: Net book value of RMB 2,251,270, cost of RMB 28,912,891) were fully
depreciated but still in use.
In the first half year 2009, depreciation expense of RMB 182,460,818 (the first half year 2008: 156,600,036) were
charged in cost of sales, RMB 750,856 (the first half year 2008: RMB 604,577) in selling expenses and RMB
13,948,405 (the first half year 2008: RMB 7,762,437) in general and administrative expenses, respectively.
(10) Construction in progress
Name of projects
Budget
31 December
2008
Current year
additions
Transfer to fixed
assets during
the current year
30 June
2009
Sources of fund
Percentage
of
completion
Yichang Silicon
products project
1,341,000,000 943,304,368 290,966,829 - 1,234,271,197
Internally generated fund and
borrowing from financing institution 92%
Hebei Float glass
project
835,281,704 713,736,428 42,790,280 (756,225,578) 301,130
Internally generated fund and
borrowing from financing institution 100%
Dongguan Solar glass
project (Phase II)
363,395,000 224,117,502 7,856,320 (231,973,822) -
Internally generated fund and
borrowing from financing institution 100%
Wujiang Energy-saving
Glass
559,211,840 184,095,661 15,163,404 (186,561,599) 12,697,466
Internally generated fund and
borrowing from financing institution 98%
Tiianjin Energy-saving
Glass
469,066,500 163,406,159 13,258,289 (36,027,401) 140,637,047
Internally generated fund and
borrowing from financing institution 95%
Dongguan architecture
glass project
677,764,053 103,916,234 12,511,744 (61,704,100) 54,723,878
Internally generated fund and
borrowing from financing institution 98%
Chengdu Float glass
project
423,043,944 117,554,737 227,279,032 - 344,833,769
Internally generated fund and
borrowing from financing institution 82%
Others - 169,962,485 20,261,843 (68,585,147) 121,639,181
2,620,093,574 630,087,741 (1,341,077,647) 1,909,103,668
Including: capitalized
borrowing costs
35,782,704 29,928,174 (23,469,431) 42,241,447
Borrowing costs have been capitalized in first half year 2009 at an average interest rate of 5.11% (2008: 6.42%).
(11) Intangible assets
Original cost
31 December
2008
Current year
additions
Current year
transfer out
Current year
amortization
30 June
2009
Accumulative
amortization
Land use rights 389,110,856 296,186,833 37,965,669 - (4,822,095) 329,330,407 59,780,449
Patents 11,245,596 6,267,138 30,000 - (554,333) 5,742,805 5,502,791
Exploitation rights 3,722,076 3,540,136 173,576 - (154,141) 3,559,571 162,505
Others 2,069,678 1,954,237 43,753 - (144,005) 1,853,985 215,693
406,148,206 307,948,344 38,212,998 - (5,674,574) 340,486,768 65,661,438
As at 30 June 2009, ownership certificates of land use right (“Land ownership Certificates”) for certain land use
rights of the Group with carrying amounts of approximately RMB 82,274,997 （at 31 December 2008: RMB
83,749,919） had not yet been obtained by the Group. The Company’s directors are of the view that there is no
legal restriction for the Group to apply for and obtain the Buildings Ownership Certificates and there will not be
any significant adverse impact on the operations of the Group, except one piece of land as described below.CSG HOLDING CO., LTD. Semi-Annual Report 2008
-44-
The Group has not yet obtained the Land Ownership Certificates for one piece of land which is located in
Huangpu, Guangzhou, because the relevant permission for the change the land to industry purpose has not been
obtained by local government. The carrying amounts of operating facilities located on that piece of land were
approximately RMB 12,150,000. The board of directors is of view that the amount involved is not material, and all
these facilities are not core production facilities, accordingly, this condition will not bring any significant adverse
effect on the Group’s operating or financial positions.
During the report period, research expenditure amounting to RMB 27,961,387 (the first half year 2008: RMB
23,185,777) charged to general and administrative expenses in income statements.
(12) Goodwill
30 June 2009 31 December 2008
Goodwill 3,039,946 3,039,946
(13) Short-term borrowings
30 June 2009 31 December 2008
Bank loans - unsecured 1,196,305,943 901,292,785
Bank loans – guaranteed (a) 383,317,817 322,656,911
Bank loans – pledged (b) 29,377,170 573,113,854
Short term finance bonds (c) 1,000,000,000 1,000,000,000
2,609,000,930 2,797,063,550
(a) As at 30 June 2009, loans of certain subsidiaries of the Company amounting to RMB 383,317,817 (at 31
December 2008: RMB 322,656,911) were guaranteed by the Company, of which, the minority shareholders
provided a back to back guarantee to the Company amounting to RMB 31,564,660 (at 31 December 2008: RMB
12,124,007).
(b) As at 30 June 2009, bank short term loans of USD borrowed by CSG HK is secured with pledge by the
Company’s deposit of RMB 239,760,000 (at 31 December 2008: RMB 486,400,000) (Note 7(1)).
(c) As registered in by National Association of Financial Market Institutional Investors with document ZSXZ (2008) No,
CP59, the Company is authorized to issue short term finance bond with a nominal amount of RMB 1,600,000,000,
with the maturity of 21 August 2010. The Company has issued short term finance bonds with a nominal amount
of RMB 1,000,000,000 on 10 September 2008, with an annual interest rate of 5.18% and maturity of 11
September 2010.
The following balances were dominated in foreign currency.
30 June 2009 31 December 2008
Original
currency
Exchange
rate
RMB
equivalent
Original
currency
Exchange
rate
RMB
equivalent
HKD 202,000,000 0.88153 178,069,060 130,000,000 0.8819 114,647,000
USD 87,959,699 6.83190 600,931,870 84,317,972 6.8346 576,279,611
779,000,930 690,926,611
The weighted average interest rate of short-term bank borrowings in the report period is 4.11% per annum (2008:
5.80%).
As of 30 June 2009, the Group had unutilized balance of approximately RMB 9,226,600,000 (including RMB 0.6
billion facility of short term finance bond) (at 31 December 2008: approximately RMB 7,099,300,000) out of theCSG HOLDING CO., LTD. Semi-Annual Report 2008
-45-
available facilities out of the available banking facilities granted from certain banks.
(14) Notes payable
30 June 2009 31 December 2008
Trade acceptance notes 40,345,731 30,948,668
Bank acceptance notes 436,896,345 258,724,985
477,242,076 289,673,653
(15) Accounts payable
The Group did not have any balances which were due to parties having 5% or above shareholdings in the
Company.
The following balances were dominated in foreign currency.
30 June 2009 31 December 2008
Original
currency
Exchange
rate
RMB
equivalent
Original
currency
Exchange
rate
RMB
equivalent
HKD 1,549,313 0.88153 1,365,766 109,655 0.8819 96,704
USD 8,396,128 6.83190 57,361,507 5,817,090 6.8346 39,757,483
EUR 3,103,296 9.64080 29,918,256 2,199,440 9.6590 21,244,391
JPY 175,912,078 0.07112 12,510,867 387,118,200 0.0757 29,304,848
AUD 76,470 5.54260 423,843 44,440 4.7135 209,468
101,580,239 90,612,894
(16) Advances from customers
The Group did not have any balances which were due to parties having 5% or above shareholdings in the
Company.
The balances were substantively dominated in RMB.
(17) Employee benefits payable
31 December
2008
Current year
additions
Current year
reductions
30 June
2009
Wages and salaries,
bonuses, allowances and
subsidies 33,551,703 156,491,312 (164,926,806) 25,116,209
Social security contributions 420,704 19,237,459 (19,136,853) 521,310
Housing funds - 3,440,207 (3,230,379) 209,828
Defined contribution pension
scheme 14,933 - (14,933) -
Labor union and employee
education funds 3,807,888 4,007,760 (3,358,524) 4,457,124
Management bonus(a) 2,210,000 15,000,000 (1,940,000) 15,270,000
40,005,228 198,176,738 (192,607,495) 45,574,471
(a) Pursuant to the resolution in the 18th meeting of the third session board of directors of the Company on 28 January
2005, the board of directors adopted a management bonus scheme which is based on the annual return on net
assets and the net profit for the year. During the year, a management bonus amounting to RMB 15,000,000 (the
first half year 2008: RMB 23,307,430) were accrued and charged to income statements.CSG HOLDING CO., LTD. Semi-Annual Report 2008
-46-
(18) Taxes payable
30 June 2009 31 December 2008
Value-added-tax payable 2,466,634 25,705,477
Enterprise income tax payable 15,318,352 20,621,726
Business tax payable 1,593,074 1,154,943
Others 4,641,498 8,518,082
24,019,558 56,000,228
(19) Other payables
30 June 2009 31 December 2008
Share to be withdrawn - 111,132,450
Guarantee deposits received from fixed assets vendors 49,475,483 46,666,516
Accrued utilities expenses 18,434,548 18,374,403
Professional services 3,300,000 4,456,836
Temporary receipts 5,595,819 4,069,696
Accrued sales commissions 1,201,376 3,089,159
Contracted labour costs 1,991,594 2,076,473
Others 38,413,377 38,973,950
118,412,197 228,839,483
The Groups did not have any balances which were due to parties holding 5% or above shareholdings of the
Company.
The balances were substantively dominated in RMB.
(20) Other current liabilities
30 June 2009 31 December 2008
Provision 10,768,073 10,914,222
The movement of the provisions during the year were as follows:
31 December
2008
Current year
additions
Current year
reductions
30 June
2009
Restructuring (a) 5,545,496 1,067 (147,216) 5,399,347
Warranty (b) 5,368,726 - - 5,368,726
10,914,222 1,067 (147,216) 10,768,073
(a) As certain engineering glass and ceramics production lines of the Group were relocated from Shenzhen to
Dongguan, the Group made the provision for the compensation to the staff who would be affected, in accordance
with relevant regulations and the announced compensation program of the Group. The amount was reviewed at
the year end.
(b) The Group granted warranty for the products sold under certain contracts. As at 30 June 2009, certain claims
were brought forward by the customers regarding the products quality faults. The Group has made the provision
based on the historical claims and compensation data and the amounts were included in selling expenses.
(21) Long-term borrowingsCSG HOLDING CO., LTD. Semi-Annual Report 2008
-47-
30 June 2009 31 December 2008
Bank borrowings
- Unsecured 364,058,120 348,715,059
- Guarantee (a) 951,296,912 863,326,275
- Pledge (b) 11,544,544 14,055,675
1,326,899,576 1,226,097,009
Less: current portion of long term borrowings (68,943,414) (83,968,751)
- unsecured - -
- Guarantee (a) (63,925,138) (78,948,425)
- Pledge (b) (5,018,276) (5,020,326)
1,257,956,162 1,142,128,258
(a) The loans were borrowed by subsidiaries and guaranteed by the Company, repayable between July 2010 and
September 2014, of which, RMB 68,448,200 (at 31 December 2008: 55,205,000) were back to back guaranteed
by the minority shareholders of the subsidiaries to the Company.
(b) Long-term pledged borrowings were secured with pledge by the Group’s fixed assets with a net book value of
RMB 9,288,011 (original cost of RMB 10,084,311) (2008: net book value of RMB 9,447,679, original cost of RMB
10,084,311) (Note 7 (9)). The principal is due for repayment during July 2009 to November 2011.
The analysis of the long term bank loans by the banker is as follows:
30 June 2009 31 December 2008
China Construction Bank 583,558,120 563,715,059
China Merchants Bank 300,000,000 322,000,000
Agriculture Bank of China 146,976,310 137,989,540
Industrial Bank 144,000,000 144,000,000
Bank of communications 50,000,000 -
China CITIC bank 50,000,000 -
Nanyang Commercial Bank 40,820,602 40,836,735
Bank of China 11,544,544 14,055,675
Industrial and Commercial Bank of China - 3,500,000
1,326,899,576 1,226,097,009
The long-term borrowings are repayable as follows
30 June 2009 31 December 2008
Between 1 to 2 years 272,371,775 188,969,136
Between 2 to 5 years 935,584,387 705,659,122
Over 5 years 50,000,000 247,500,000
1,257,956,162 1,142,128,258
The following balances were dominated in foreign currency.
30 June 2009 31 December 2008
Original
currency
Exchange
rate
RMB
equivalent
Original
currency
Exchange
rate
RMB
equivalent
HKD 13,096,030 0.88153 11,544,544 15,938,127 0.8819 14,055,834
USD 13,445,020 6.83190 91,855,032 13,445,020 6.8346 91,891,334
103,399,576 105,947,168CSG HOLDING CO., LTD. Semi-Annual Report 2008
-48-
The weighted average interest rate of long-term borrowings in the report period is 5.32% per annum (2008:
6.17%).
(22) Deferred tax assets and Deferred tax liabilities
(a) Deferred tax assets
30 June 2009 31 December 2008
Deferred tax
assets
Deductible
temporary
difference
Deferred tax
assets
Deductible
temporary
difference
Provision for asset impairment 47,607,994 206,947,246 48,330,484 222,778,257
Pre-operating expenses 1,370,717 12,267,253 1,560,697 15,258,618
Accrued expenses 4,963,807 19,855,228 4,963,807 19,855,228
Tax losses 7,511,633 35,001,329 6,417,634 27,926,589
Contingent liabilities 169,415 941,196 169,415 941,196
61,623,566 275,012,252 61,442,037 286,759,888
(b) Deferred tax liabilities
30 June 2009 31 December 2008
Deferred tax
liabilities
Taxable
temporary
difference
Deferred tax
liabilities
Taxable
temporary
difference
Withholding Income tax (i) 4,810,757 96,122,732 4,777,606 95,552,120
i) According to new CIT law, when the subsidiaries established in mainland China distributed profit to the
subsidiaries established outside mainland China ,the subsidiaries in mainland China need to withhold Income tax
according to the proportion of distributed profit.
As at 30 June 2009, the Group did not recognize deferred tax assets amounting to approximately RMB
48,620,000 (at 31 December 2008: approximately RMB 45,900,000) in respect of tax losses amounting to
approximately RMB 205,720,000 (at 31 December 2008: approximately RMB 192,810,000). The unused tax loss
will expire from 2009 to 2013.
(23) Other non-current liabilities
30 June 2009 31 December 2008
Deferred income 45,000,000 45,000,000
As at 30 June 2009, the amount of deferred income were paid to Yi Chang CSG Silicon Materials Co Ltd (“YI
Chang Silicon”) by 宜昌市东山建设发展总公司 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 etc. Yi Chang Silicon is entitled to the ownership of the facilities.CSG HOLDING CO., LTD. Semi-Annual Report 2008
-49-
(24) Share capital
31 December
2008
New issues
during the year
Other
movements
during the year 30 June 2009
Shares with restriction on disposals
- State and PRC legal person shares 199,499,837 - (26,896,698) 172,603,139
- Others (Note (a)) 49,243,169 - (13,468,169) 35,775,000
248,743,006 - (40,364,867) 208,378,139
Shares without restriction on disposals
- PRC public shares 539,781,299 - 26,999,867 566,781,166
- Domestically listed foreign shares 448,578,819 - - 448,578,819
988,360,118 - 26,999,867 1,015,359,985
Total 1,237,103,124 - (13,365,000) 1,223,738,124
31 December
2007
New issues
during the year
Other
movements
during the year 30 June 2009
Shares with restriction on disposals
- State and PRC legal person shares 352,884,817 - (153,384,980) 199,499,837
- Others 103,169 - - 103,169
352,987,986 - (153,384,980) 199,603,006
Shares without restriction on disposals
- PRC public shares 386,396,319 - 153,384,980 539,781,299
- Domestically listed foreign shares 448,578,819 - - 448,578,819
834,975,138 - 153,384,980 988,360,118
Total 1,187,963,124 - - 1,187,963,124
The nominal value of the Domestic is RMB 1 and that of domestically listed foreign shares is HKD 1.
(a) Shared based payment
Item
Quantity of
A restricted
shares (share)
Share
capital
Treasury
Stock
Capital
Reserve
Balance at 1 January 2009 36,187,500 49,140,000 (12,952,500) 318,668,911
Shares to be withdrawn due to
resignation of employees (412,500) - (412,500) (3,126,750)
Cancellation of treasury stock - (13,365,000) 13,365,000 -
Value of employee service - - - 40,249,044
Balance at 30 June 2009 35,775,000 35,775,000 - 355,791,205
Pursuant to the restricted A share incentive scheme approved by the first special general meeting of the
shareholders on 13 June 2008, the Company granted 49,140,000 share of restricted A share of the Company toCSG HOLDING CO., LTD. Semi-Annual Report 2008
-50-
certain qualified employees of the Group (“the Qualified Employee”) at a grant price of RMB 8.58 per share on 16
June 2008.
The scheme will open for 60 months after the grant date of the restricted A share (“Grant Date”). The first twelve
months following the Grant Date will be lock out period, in which the restricted A shares received by the Qualified
Employees will be locked and cannot be transferred. The next 48 months are unlock period, the restricted A share
can be transferred if certain vesting conditions are meet, by four batches of 25% each, starting at the end of first
twelve months after the Grant Date.
The vesting conditions under the Company’s restricted A share incentive scheme performance appraisal policy
include: a) the lower of the weighted average returns on net assets and the pre-exceptional item weighed average
returns on net assets is 10% higher or same in the preceding year; b) the average annualized growth rate of the
net profit of the Group from 2007 is 10% higher or same; and c) the Qualified Employees remains in service and
performance is satisfied.
At the Grant Date, the fair value of the restricted A-share is 6.63 per share, being determined on the market price
of the Group’s A share on the Grant Date after deducting the considerations paid by the employees. The fair value
of the share based payments will be recognised as the expenses over the vesting period. At the balance sheet
date, correct the amount of restricted A-share which could be unlock according as change of incentive staff,
satisfaction of performance index and others up to date information. The employee benefits in every accounting
period will be recognized on that basis. If the expense for incentive plan span multiple accounting period, it will be
apportioned as a proportion which waiting period in the accounting period account the whole waiting period.
The follow shares was be recognized treasury stock: restricted A-share of 890,000 shares which will be buy back
for the incentive staffs dismission in 2008, restricted A-share of 12,062,500 shares which will be buy back for
achievement index of the Company unsatisified unlocking condition in the incentive plan and restricted A-share of
412,500 shares which will be buy back for incentive staffs dismissed from January to June 2009. The above
treasury stock had been bought back and wrote off on 18 June 2009. The price of buying back is RMB 8.58 per
share, and the total amount for buying bank is RMB 114,671,700.
Total employee compensation expense recognised under restricted A share incentive scheme for the first half
year 2009 was RMB 42,293,453, the corresponding amount was credited to equity, of which RMB 40,249,044
were attributed to the Company capital reserve, RMB 2,044,409 to monitory interests.
(25) Capital surplus
31 December 2008
Current year
additions
Current year
reductions 30 June 2009
Capital premium 1,777,902,326 - - 1,777,902,326
Change in fair value of
available-for-sale financial assets
- Gross 8,859,189 8,910,001 (5,251,313) 12,517,877
- Deferred tax liability - - - -
Share based payment (Note 7(24))
- Proceeds from restricted A share
stock granted 372,481,200 - - 372,481,200
- Value of employee services 44,367,661 40,249,044 - 84,616,705
- Restricted A share stock cancelled
and forfeited (98,179,950) - (3,126,750) (101,306,700)
Acquisition of minority interest (35,418,308) - - (35,418,308)
Transfer from the balance of capital
surplus recognized under previous
accounting system (2,250,222) - - (2,250,222)
2,067,761,896 49,159,045 (8,378,063) 2,108,542,878CSG HOLDING CO., LTD. Semi-Annual Report 2008
-51-
31 December 2007
Current year
additions
Current year
reductions 30 June 2008
Capital premium 1,777,902,326 - - 1,777,902,326
Change in fair value of
available-for-sale financial assets
- Gross 38,748,323 - (22,575,622) 16,172,701
- Deferred tax liability (4,643,214) 3,816,906 - (826,308)
Share based payment (Note 7(24))
- Proceeds from restricted A share
stock granted - - - -
- Value of employee services - 3,167,484 - 3,167,484
- Restricted A share stock cancelled
and forfeited - - - -
Acquisition of minority interest (7,476,681) - - (7,476,681)
Transfer from the balance of capital
surplus recognized under previous
accounting system (2,250,222) - - (2,250,222)
1,802,280,532 6,984,390 (22,575,622) 1,786,689,300
(26) Surplus reserve
31 December
2008
Current year
additions
Current year
utilised
30 June
2009
Reserve fund 263,187,790 - - 263,187,790
Enterprise Expansion Fund 127,852,568 - - 127,852,568
391,040,358 - - 391,040,358
31 December
2007
Current year
additions
Current year
utilised
30 June
2008
Reserve fund 231,324,288 - - 231,324,288
Enterprise Expansion Fund 127,852,568 - - 127,852,568
359,176,856 - - 359,176,856
According to the Articles of Association of the Company and the Company Law of PRC, the Company has to
appropriate 10% of its net profit after making good of the deficit of prior years to the statutory surplus reserve, until
where the reserve balance has reached 50% of the paid in share capital of the Company. With the approval
obtained form the relevant government authorities, the statutory surplus reserve can be utilized to offset any
deficit or to increase the share capital of the Company, provided that the remaining balance of the reserve, after
such utilizations, does not fall below 25% of the issued share capital balance. During the report period, the
Company did not appropriate to statutory surplus reserve.
The appropriation to discretion surplus reserve is to be proposed by the board of the directors of the Company
and approved by the annual general meeting of the shareholders. The discretion can be utilized to offset the
deficit or increase the share capital. The Company did not appropriate to discretion surplus reserve during the
report period.
(27) Undistributed profit
The shareholder resolved on 5 June 2009 that a dividend of RMB 1.00 for each 10 shares of outstanding shares
as 1,223,738,124 in total, deducting the restricted A shares for incentive plan to be cancelled (note 7 (24)), with an
aggregated amount of 122,373,812 is distributed.
Undistributed profit of the Group includes the surplus reserve of the subsidiaries attributable to the GroupCSG HOLDING CO., LTD. Semi-Annual Report 2008
-52-
amounting to RMB 304,715,177 (at 31 December 2008: RMB 304,715,177).
(28) Minority Interests
Each company’s minority interests disclosed as follows:
30 June 2009 31 December 2008
Shenzhen CSG Wellight Conductive Coating Co., Ltd. 55,485,155 70,733,783
Shenzhen CSG Display Technology Co., Ltd. 36,601,189 45,594,004
Chengdu CSG Glass Co., Ltd. 105,654,518 115,550,246
Yichang CSG Silicon Co., Ltd. 36,113,547 36,532,568
233,854,409 268,410,601
(29) Revenue and cost of sales
Jan.~Jun. 2009 Jan.~Jun. 2008
Revenue from main operations 2,059,475,677 2,125,530,992
Revenue from other operations 6,071,702 6,246,100
2,065,547,379 2,131,777,092
Jan.~Jun. 2009 Jan.~Jun. 2008
Cost of sales from main operations 1,416,939,181 1,441,541,172
Cost of sales from other operations 2,149,588 1,433,750
1,419,088,769 1,442,974,922
(a) Revenue from main operations and cost of goods sold
Jan.~Jun. 2009 Jan.~Jun. 2008 (Restated)
Revenue Cost Revenue Cost
Flat glass industry 1,112,939,543 840,514,251 1,192,204,062 873,269,018
Architectural glass industry 852,949,006 554,395,287 746,749,681 504,115,904
Fine glass industry 187,473,073 123,263,915 265,247,829 146,164,535
Solar energy industry 2,593,625 2,712,603 - -
Others 33,082,675 18,860,433 18,944,504 15,606,799
Elimination (129,562,245) (122,807,308) (97,615,084) (97,615,084)
2,059,475,677 1,416,939,181 2,125,530,992 1,441,541,172
The Group reorganized Dongguan CSG Solar Glass Co., Ltd. to the segment of Floating Glass in the second half
year 2008. The relevant comparatives have been restated.
(b) Other revenue and cost
Jan.~Jun. 2009 Jan.~Jun. 2008
Revenue Cost Revenue Cost
Sale of raw materials 2,024,776 1,929,865 3,820,667 1,385,791
Others 4,046,926 219,723 2,425,433 47,959
6,071,702 2,149,588 6,246,100 1,433,750
(30) Tax and levies on operationsCSG HOLDING CO., LTD. Semi-Annual Report 2008
-53-
Jan.~Jun. 2009 Jan.~Jun. 2008
Business tax 721,665 64,647
City maintenance and construction tax 450,555 429,485
Educational surcharge 345,513 219,076
Resources duty 655,065 714,164
Others 615,987 591,494
2,788,785 2,018,866
(31) Finance expenses – net
Jan.~Jun. 2009 Jan.~Jun. 2008
Interest expenses
- Interests on borrowings 42,842,546 77,006,658
- Interests on short term finance bonds 21,561,142 4,601,667
- Interests on discounting bank acceptance notes 2,523,757 3,506,557
66,927,445 85,114,882
Less: interest income (19,591,697) (4,479,597)
Add: net exchange loss / (Less: gains) 477,352 (91,237,342)
Others 5,877,977 5,794,890
53,691,077 (4,807,167)
(32) Impairment losses
Jan.~Jun. 2009 Jan.~Jun. 2009
Impairment losses for bad debts provision 1,937,952 895,433
Impairment losses for declines in the value of inventories (1,816,585) (4,424,582)
Impairment losses for fixed asset - (4,143,794)
121,367 (7,672,943)
(33) Investment income
Jan.~Jun. 2009 Jan.~Jun. 2008
Gain from available-for-sale financial assets 6,939,570 7,485,292
Gain from disposal of a subsidiary - 36,949,521
6,939,570 44,434,813
(34) Non-operating income and expenses
(a) Non-operating income
Jan.~Jun. 2009 Jan.~Jun. 2008
Gain on disposal of fixed assets 1,318,400 575,289
Government grant (i) 13,717,224 9,453,400
Others 130,903 330,928
15,166,527 10,359,617
i) Government grants include tax refund, compensation on interest of bank borrowings and other supporting funds
received from the local government by certain subsidiaries.
(b) Non-operating expensesCSG HOLDING CO., LTD. Semi-Annual Report 2008
-54-
Jan.~Jun. 2009 Jan.~Jun. 2008
Loss on disposal of fixed assets 117,061 3,334,216
Insurance claim 1,073,752 -
Others 111,357 3,676,729
1,302,170 7,010,945
(35) Income tax expenses
Jan.~Jun. 2009 Jan.~Jun. 2008
Current income tax 23,138,981 43,546,381
Deferred income tax (148,378) (7,272,196)
22,990,603 36,274,185
The reconciliation from income tax calculated based on applicable tax rate and total profit presented in the
consolidated financial statements to the income tax expenses is as follows:
Jan.~Jun. 2009 Jan.~Jun. 2008
Total profit 311,966,965 495,964,965
Income tax expenses calculated at applicable tax rates 24,202,278 39,118,165
Effect of change in tax rates (73,151) 172,154
Expenses not deductable for tax purpose 3,894,997 570,147
Utilization of previously unrecognized tax losses (2,116,274) (931,980)
Tax loss for which no deferred income tax asset was recognized 601,651 1,428,399
Utilization of previously unrecognized deferred tax assets (1,487,872) (3,161,955)
Deduction of R&D expenses in audit for income tax (2,031,026) (920,745)
Income tax expenses 22,990,603 36,274,185
(36) Earning per share
(a) Earnings per share - basic
Basic earning’s per share is calculated by dividing the profit attributable to shareholders of the Company by the
weighted average number of ordinary shares in issue during the year.
Jan.~Jun. 2009 Jan.~Jun. 2008
Consolidated profit attributable to shareholders of the Company 261,159,985 409,853,633
Weighted average number of ordinary shares in issue 1,237,103,124 1,187,963,124
Basic earnings per share 0.21 0.35
(b) Earnings per share - diluted
The Company had not potential dilutive outstanding equity instruments issued as at 30 June 2009 and report
period, accordingly the diluted earnings per share are the same as basic ones.
(37) Other general income
(a) Other general income in current period
Jan.~Jun. 2009 Jan.~Jun. 2008
Profit or loss from fair value of available-for-sale financial assets 8,910,001 (10,812,770)
Difference on translation of foreign currency financial statements 1,385,541 (2,415,624)
Tax effects - -
10,295,542 (13,228,394)CSG HOLDING CO., LTD. Semi-Annual Report 2008
-55-
(b) The cumulative gain or loss previously recognized in other general income is recognized in profit or loss for the
current period
Jan.~Jun. 2009 Jan.~Jun. 2008
Sold available-for-sale financial assets, and the fair value
previously recognized in capital reserved is recognized in profit
or loss for the current period 5,251,313 7,945,946
(38) Notes to consolidated cash flow statements
(a) Reconciliation from the net profit to the cash flows from operating activities
Jan.~Jun. 2009 Jan.~Jun. 2008
Net profit 288,976,362 459,690,780
Add: Provisions for assets impairment 121,367 (7,672,943)
Depreciation of fixed assets 197,160,079 164,967,050
Amortization of intangible assets 5,674,574 5,401,659
Losses / (Gain) on disposal of fixed assets and intangible assets (1,201,339) 2,758,927
Finance expenses (gain) 58,678,652 (10,824,359)
Investment losses / (gain) (6,939,570) (44,434,813)
Value of employee service relating to share based payment 42,293,453 3,167,484
Decrease / (increase) in deferred tax assets (181,529) (4,356,815)
Increase / (decrease) in deferred tax liabilities 33,151 (2,915,381)
Increase in inventories (33,236,366) (19,996,075)
Increase in operating receivables (102,869,656) (135,172,598)
Increase in operating payables 211,844,434 67,859,718
Net cash flows from operating activities 660,353,612 478,472,634
(b) Net increase in cash and cash equivalents
Jan.~Jun. 2009 Jan.~Jun. 2008
Cash at end of year 317,185,209 774,906,533
Less: cash at beginning of year (394,923,631) (1,259,606,553)
Net increase in cash and cash equivalents (77,738,422) (484,700,020)
(c) Cash and cash equivalents
30 June 2009 30 June 2008
Cash in bank and on hand
- Cash on hand 86,714 191,233
- Cash in bank 556,378,229 1,366,065,862
- Other 40,286,015 18,817,946
596,750,958 1,385,075,041
Less: restricted cash at bank (279,565,749) (610,168,508)
317,185,209 774,906,533CSG HOLDING CO., LTD. Semi-Annual Report 2008
-56-
(d) Cash received relating to other operating activities
Jan.~Jun. 2009 Jan.~Jun. 2008
Freight expenses 70,896,689 73,376,507
Research and development expenses 12,184,000 18,548,622
Eatery expenses 10,787,431 9,587,419
Office expenses 9,137,541 7,194,904
Communication, repair and vehicle operation expenses 8,571,996 8,208,411
Advertising expenses 8,057,464 3,678,965
Traveling expenses 7,779,007 7,253,716
Entertainment expenses 5,782,079 5,127,975
Others 18,998,709 29,282,853
152,194,916 162,259,372
8 Segment information
The Group recognize the business segment according as inter-organization structure, management requirement
and internal report system, and the business segment is the base to recognize the report segment.
Segment information as at and for the period ended 30 June 2009 is as follows:
Flat glass
Architectural
glass Fine glass
Solar energy
industry Others Elimination Total
Revenue from external
customers 994,279,979 855,634,811 187,387,435 2,593,625 25,651,529
- 2,065,547,379
Inter-segment revenue 120,297,011 1,600,516 94,718
- 7,570,000 (129,562,245)
-
Revenue 1,114,576,990 857,235,327 187,482,153 2,593,625 33,221,529 (129,562,245) 2,065,547,379
Less: Operating expenses (946,316,649) (669,687,313) (145,060,523) (20,834,869) (24,992,373) 122,807,308 (1,684,084,419)
Segment results 168,260,341 187,548,014 42,421,630 (18,241,244) 8,229,156 (6,754,937) 381,462,960
Less: unallocated expenses (83,360,352)
Operating profit 298,102,608
Segment assets 4,682,763,837 2,895,449,906 977,383,019 1,492,754,851 121,300,500 10,169,652,113
Including: non-current
assets 4,107,976,742 2,448,437,498 837,879,076 1,459,011,079 85,721,000 8,939,025,395
Add: unallocated assets 440,775,320
Total assets 10,610,427,433
Segment liabilities 715,382,759 569,508,891 111,844,289 239,611,866 33,581,020 1,669,928,825
Add: unallocated liabilities 3,981,497,464
Total liabilities 5,651,426,289
Depreciation and
amortization 101,976,008 63,959,945 29,948,664 3,800,568 3,149,468 202,834,653
Provisions / (gain) for
asset impairment (5,582) 72,401 51,608 2,940
- 121,367
Capital expenditures 265,999,470 91,098,791 18,510,690 316,303,848 1,200,976 693,113,775CSG HOLDING CO., LTD. Semi-Annual Report 2008
-57-
Segment information as at and for the period ended 30 June 2008 (restated) is as follows:
Flat glass
Architectural
glass Fine glass
Solar energy
industry Others Elimination Total
Revenue from external
customers 1,100,273,958 747,232,201 265,247,829
- 19,023,104 - 2,131,777,092
Inter-segment revenue 93,614,780 4,000,304
-
-
- (97,615,084)
-
Revenue 1,193,888,738 751,232,505 265,247,829
- 19,023,104 (97,615,084) 2,131,777,092
Less: Operating expenses (966,524,702) (598,585,247) (176,046,916) (9,556,841) (17,057,480) 97,615,084 (1,670,156,102)
Segment results 227,364,036 152,647,258 89,200,913 (9,556,841) 1,965,624 - 461,620,990
unallocated expenses or
profit 30,995,303
Operating profit 492,616,293
Segment assets 4,106,237,856 2,799,851,656 1,013,726,988 853,798,038 83,831,286 8,857,445,824
Including: non-current
assets 3,380,800,227 2,183,967,392 804,930,603 749,081,901 50,343,049 7,169,123,172
Add: unallocated assets 686,481,416
Total assets 9,543,927,240
Segment liabilities 574,095,488 477,005,255 81,357,974 76,594,908 16,514,789 1,225,568,414
Add: unallocated liabilities 3,804,783,627
Total liabilities 5,030,352,041
Depreciation and
amortization 90,735,015 47,999,102 27,376,586 2,157,463 2,100,543 170,368,709
Provisions / (gain) for
asset impairment (3,675,764) 345,122 65,091
- (4,407,392) (7,672,943)
Capital expenditures 352,301,644 316,523,724 81,505,838 423,824,795 12,756,183 1,186,912,184
(a) Inter-segment transfers are measured by reference to the market price. As holding company, the Company have
not substantiality business, and its main function is management of development strategy, programming of
investment, optimizing the distribution (allocation ) of resources and supervising management. Expense, loan and
its interest of the Company didn’t distribute to the segment.
The Group manage operation according as product category, including: 1) Flat glass segment, produce and sell
flat glass. 2) Architecture glass segment, produce and sell processing glass such as coated glass, insulating glass
and so on. 3) Fine glass, produce and sell conductive glass such as ITO, CF applied to display product. 4) Solar
energy industry, produce and sell high-purity poly-silicon, PV solar cell, thereinto, poly-silicon project is trial
operation, and didn’t realize income temporary. The Group also produce and sell ceramic product and deal with
real estate, these industry were be ranged to Others for its less business.
(b) The Group reorganized Dongguan CSG Solar Glass Co., Ltd. to the segment of Floating Glass in the second half
year 2008. The relevant comparatives have been restated.
Main subsidiary company of the Company registered in Mainland P.R.C. Income of external trade in the Group is
RMB 1,737,762,202 (the first half year 2008: RMB 1,775,887,965). Income of external trade from other countries
and regions except Mainland P.R.C. is RMB 327,785,177 (the first half year 2008: RMB355,889,127). The
non-current assets (ex financial assets, deferred tax assets) of the Group located in Mainland P.R.C. is RMB
8,967,687,832 (as at 30 June 2008: RMB 7,210,899,436). The non-current assets (ex financial assets, deferred
tax assets) of the Group located in other countries and regions is RMB 10,501,149 (as at 30 June 2008: RMB
10,253,824).
The sales to the Group’s top five customers were amounting to RMB 329,348,532 (the first half year 2008: RMBCSG HOLDING CO., LTD. Semi-Annual Report 2008
-58-
336,560,667), account for 16% of the Group’s total sales (the first half year 2008:16%).
9 Related parties and related party transactions
(1) The parent company and subsidiaries
The general information of the subsidiaries is set out in Note 6.
The Company regard no entity is the parent company.
(2) Related party transactions
Except for those mentioned in former sections, the significant transactions between the Company and the
subsidiaries are as below:
(a) Interest charged to subsidiaries
Jan.~Jun. 2009 Jan.~Jun. 2008
Chengdu CSG Glass Co., Ltd. 5,950,000 2,082,600
Guangzhou CSG Glass Co., Ltd. 5,208,700 1,865,500
Shenzhen CSG Float Glass Co., Ltd. 579,000 790,833
China Southern Glass (Hong Kong) Limited 273,835 923,849
12,011,535 5,662,782
The interest charged to subsidiaries is measured by reference to bank loan interest rate at corresponding period.
(b) Interest expense and surcharges of short term finance bonds allocated to subsidiaries
Jan.~Jun. 2009 Jan.~Jun. 2008
Chengdu CSG Glass Co., Ltd. 2,580,000 1,277,500
Guangzhou CSG Glass Co., Ltd. 3,096,000 1,581,667
Shenzhen CSG Float Glass Co., Ltd. 5,160,000 790,833
Shenzhen CSG Wellight Conductive Coating Co., Ltd. 4,386,000 -
Tianjin CSG Architectural Glass Co., Ltd. 1,548,000 365,000
Dongguan CSG Solar Glass Co., Ltd. 2,322,000 -
Shenzhen CSG Display Technology Co., Ltd. 1,290,000 -
Wujiang CSG Glass Co. Ltd. 129,000 -
20,511,000 4,015,000
The Company allotted the proceeds from issuance of short term finance bonds to certain subsidiaries according to
the circular and related interest expenses and surcharges were allocated to these subsidiaries based on the
effective interest rate accordingly.
(c) Guarantee provided for subsidiaries
The guarantee information of the company is listed as below:CSG HOLDING CO., LTD. Semi-Annual Report 2008
-59-
30 June 2009 31 December 2008
Hebei CSG Glass Co., Ltd. 468,000,000 400,000,000
Yichang CSG Silicon Co., Ltd. 194,000,000 254,000,000
Wujiang CSG North-east Architectural Glass Co., Ltd. 95,476,310 121,489,540
Chengdu CSG Glass Co., Ltd. 251,258,640 82,036,026
Shenzhen CSG Wellight Conductive Coating Co., Ltd. 85,000,000 80,000,000
Guangzhou CSG Glass Co., Ltd. 55,000,000 64,000,000
Tianjin Energy Conservation Glass Co., Ltd. 37,731,576 53,944,085
Tianjin CSG Architectural Glass Co., Ltd. 15,000,000 52,338,400
Shenzhen CSG Float Glass Co., Ltd. 40,820,603 40,836,735
Dongguan CSG Architectural Glass Co., Ltd. 27,327,600 27,338,400
Shenzhen CSG Display Technology Co., Ltd. - 10,000,000
Dongguan CSG PV-tech Co., Ltd. 30,000,000 -
Dongguan CSG Solar Glass Co., Ltd. 35,000,000 -
1,334,614,729 1,185,983,186
(3) Receivables from and payables to related parties
(a) Other receivables
30 June 2009 31 December 2008
Shenzhen CSG Float Glass Co., Ltd. 9,528,486 212,142,286
Shenzhen CSG Wellight Conductive Coating Co., Ltd. 172,163,880 171,895,039
Guangzhou CSG Glass Co., Ltd. 127,376,643 127,092,765
Chengdu CSG Glass Co., Ltd. 256,402,078 108,476,010
Dongguan CSG Solar Glass Co., Ltd. 92,848,984 92,489,908
Shenzhen CSG Display Technology Co., Ltd. 51,127,060 37,772,279
Tianjin CSG Architectural Glass Co., Ltd. 55,778,657 13,336,463
Dongguan CSG Architectural Glass Co., Ltd. 5,992,802 5,582,896
Wujiang CSG North-east Architectural Glass Co., Ltd. 4,853,282 4,688,620
Dongguan CSG PV-tech Co., Ltd. 1,806,081 1,752,710
Hebei CSG Glass Co., Ltd. 1,621,547 1,423,236
Sichuan Luxian CSG Silica Sand Mine Co., Ltd. 575,029 575,029
Tianjin Energy Conservation Glass Co., Ltd. 557,158 441,695
Dongguan CSG Ceramics Technology Co., Ltd. 239,162 142,117
Sichuan CSG Industrial Development Co., Ltd. 90,000 90,000
Hainan CSG Industrial Development Co., Ltd. 31,400 31,400
China Southern Glass (Hong Kong) Limited (355,573) (904,838)
Hainan Wen Chang CSG Silica Sand Mine Co., Ltd. 12,500 -
Jiangyou CSG Mining Development Co., Ltd. 1,320 -
Shenzhen CSG Structure Ceramics Co., Ltd. 757,797 -
781,408,293 777,027,615
The ending balance includes proceeds from issuance of short term finance bonds allocated to certain subsidiaries
totaling RMB 791,820,000 (at 31 December 2008: RMB 791,820,000).CSG HOLDING CO., LTD. Semi-Annual Report 2008
-60-
(b) Long term receivables
30 June 2009 31 December 2008
Chengdu CSG Glass Co., Ltd. 93,708,372 250,455,159
Guangzhou CSG Glass Co., Ltd. 206,122,765 190,154,676
Tianjin Energy Conservation Glass Co., Ltd. 179,486,861 179,900,000
Dongguan CSG Architectural Glass Co., Ltd. 127,601,200 168,601,200
Shenzhen CSG Float Glass Co., Ltd. 321,916,964 121,086,538
Hainan CSG Industrial Development Co., Ltd. 105,858,697 105,858,697
Dongguan CSG Solar Glass Co., Ltd. 117,854,237 68,890,024
Wujiang CSG North-East Architectural Glass Co., Ltd. 51,900,000 55,900,000
Sichuan CSG Industrial Development Co., Ltd. 44,684,003 48,684,003
Sichuan Luxian CSG Silica Sand Mine Co., Ltd. 36,060,000 36,060,000
Dongguan CSG PV-tech Co., Ltd. 26,861,195 34,104,099
China Southern Glass (Hong Kong) Limited 29,186,350 29,197,885
Shenzhen CSG Wellight Conductive Coating Co., Ltd. 23,920,768 22,266,726
Tianjin CSG Industrial Development Co., Ltd. - 4,277,283
China Southern Glass (Australia) Pty Ltd. 1,379,671 1,379,671
Hebei CSG Glass Co., Ltd. 9,881,079 -
1,376,422,162 1,316,815,961
Less: Provision for bad debts (169,599,767) (173,774,757)
1,206,822,395 1,143,041,204
(c) Other payables
30 June 2009 31 December 2008
Shenzhen CSG Architectural Glass Co., Ltd. 69,727,946 71,217,734
Shenzhen CSG Southern Star Glass Processing Co., Ltd. 9,416,567 10,671,211
Shenzhen CSG Structure Ceramics Co., Ltd. - 8,644,736
Jiangyou CSG Mining Development CO., Ltd. - 5,000,000
Hainan Wen Chang CSG Silica Sand Mine Co., Ltd. - 2,942,309
Beihai CSG Industrial Development Co., Ltd. 2,041,468 2,041,468
Shenzhen CSG Wellight Coating Glass Co., Ltd. 616,885 685,429
Yichang CSG Silicon Co., Ltd. 398,667 564,196
Shenzhen CSG Spandrel And Tempglass Co., Ltd. 15,209 33,855
Tianjin CSG Industrial Development Co., Ltd. 2,842,717 -
Shenzhen V-Interface Technology Co., Ltd. 525,322 -
85,584,781 101,800,938
10 Commitments
Capital commitments
As at 30 June 2008, capital expenditures contracted for at the balance sheet date but not recognized in the
financial statements are as follows:
30 June 2009 31 December 2008
Buildings, machinery and equipment 244,324,175 839,819,471
Investment 28,560,000
244,324,175 868,379,471CSG HOLDING CO., LTD. Semi-Annual Report 2008
-61-
11 Contingencies
As at 30 June 2009, the Group has no significant contingency liability.
12 Net profit after extra ordinary gains and losses
Jan.~Jun. 2009 Jan.~Jun. 2008
Net profit 288,976,362 459,690,780
Plus/(Less): losses/(gains) on disposal of non-current assets (1,201,339) 2,758,927
Net gain on disposal of subsidiary - (36,949,521)
Net gain from available-for-sale financial assets (6,939,570) (7,485,292)
Other non-operating expenses-net (12,663,018) (6,107,599)
Tax effects on extraordinary gain and losses 2,742,967 786,442
Net profit before extraordinary gain to losses 270,915,402 412,693,737
- Attributable to Shareholder of the company 245,535,307 363,766,326
- Minority interests 25,380,095 48,927,411
The basis of preparation of net profit before extraordinary gains and losses reconciliation
According to the Q&A on Disclosure of Information by Public Companies No 1 – Extraordinary gains and losses
[2008], extraordinary gains and losses are the gains and losses being resulted from the transactions/events which
are not incurred by the operation of the entity, or, though incurred by the operation, the nature, amounts or the
frequency of such transactions/events will lead to a misleading presentation of the normal performance and
profitability of the operation of the entity.
13 Notes to the Company’s financial statements
(1) Other receivables
30 June 2009 31 December 2008
Other receivables 782,242,750 777,848,857
Less: provision for bad debts (810,344) (810,344)
781,432,406 777,038,513
The ageing of receivables and related provisions for bad debts are analysed below:
30 June 2009 31 December 2008
Amount
% of
total
balance
Provision for
bad debts
Amount
% of
total
balance
Provision
for bad
debts
Within 1 year 781,432,406 - - 777,038,513 100% -
Over 3 year 810,344 0% (810,344) 810,344 0% (810,344)
782,242,750 (810,344) 777,848,857 100% (810,344)CSG HOLDING CO., LTD. Semi-Annual Report 2008
-62-
The other receivables are analysed by categories as follows:
30 June 2009 31 December 2008
Amount
% of
total
balance
Provision
for bad
debts
Provision
ratio Amount
% of
total
balance
Provision
for bad
debts
Provision
ratio
Receivables that are individually
significant 810,344 0% (810,344) 100% 810,344 0% (810,344) 100%
Receivables not individually significant
but with high risk in groups 781,432,406 100% - - 777,038,513 100% - -
782,242,750 100% (810,344) 0% 777,848,857 100% (810,344) 0%
As at 30 June 2009, included in the balances were the loans to subsidiary of RMB 781,408,293 (2008: RMB
777,027,615).
(2) Long-term equity investments
30 June 2009 31 December 2008
Subsidiaries (a) 3,029,539,982 2,880,721,620
Other long-term equity investments (c) 21,841,000 21,841,000
3,051,380,982 2,902,562,620
Less: Provision for impairment of long-term equity
investments (b) (111,553,004) (111,553,004)
2,939,827,978 2,791,009,616
The long-term equity investments of the Group are not subject to restriction on conversion into cash or restriction
on remittance of investment income.CSG HOLDING CO., LTD. Semi-Annual Report 2008
-63-
(a) Subsidiaries
Name of subsidiaries
31 December
2008
Current year
addition
Current year
disposal
30 June
2009
Shenzhen CSG Southern Star Glass Processing Co., Ltd. 23,104,499 - - 23,104,499
Shenzhen CSG Architectural Glass Co., Ltd. 32,000,000 - - 32,000,000
Hainan CSG Industrial Development Co., Ltd. 31,874,472 - - 31,874,472
China Southern Glass (Australia) Pty Ltd. 3,539,230 314,234 - 3,853,464
CSG Spandrel And Tempglass Co., Ltd. 15,000,000 - - 15,000,000
Shenzhen CSG Structure Ceramics Co., Ltd. 30,000,000 - - 30,000,000
Shenzhen CSG Float Glass Co., Ltd. 607,554,740 1,628,003 - 609,182,743
Sichuan CSG Industrial Development Co., Ltd. 40,000,000 - - 40,000,000
Hainan Wen Chang CSG Silica Sand Mine Co., Ltd. 40,557,556 522,706 - 41,080,262
Beihai CSG Industrial Development Co., Ltd. 13,000,000 - - 13,000,000
Tianjin CSG Industrial Development Co., Ltd. 15,000,000 - - 15,000,000
Shenzhen CSG Display Technology Co., Ltd. 58,440,405 2,417,959 - 60,858,364
Tianjin Energy Conservation Glass Co., Ltd. 97,421,950 1,250,503 - 98,672,453
Shenzhen CSG Wellight Coating Glass Co., Ltd. 66,171,348 - - 66,171,348
Shenzhen CSG Wellight Conductive Coating Co., Ltd. 75,152,468 1,209,203 - 76,361,671
Tianjin CSG Architectural Glass Co., Ltd. 134,921,951 1,250,503 - 136,172,454
China Southern Glass (Hong Kong) Limited 82,458,227 736,207 - 83,194,434
Guangzhou CSG Glass Co., Ltd. 196,662,313 1,289,768 - 197,952,081
Chengdu CSG Glass Co., Ltd. 103,389,477 3,431,769 - 106,821,246
Sichuan Luxian CSG Silica Sand Mine Co Ltd. 13,720,000 - - 13,720,000
Dongguan CSG Architectural Glass Co., Ltd. 183,059,685 2,934,651 - 185,994,336
Dongguan CSG Solar Glass Co., Ltd. 131,229,468 2,203,152 - 133,432,620
Yichang CSG Silicon Co., Ltd. 332,775,161 123,345,227 - 456,120,388
Wujiang CSG North-east Architectural Glass Co., Ltd. 242,136,554 2,006,312 - 244,142,866
Dongguan CSG PV-tech Co., Ltd. 76,248,259 1,328,762 - 77,577,021
Dongguan CSG Ceramics Technology Co., Ltd. 51,202,296 1,057,623 - 52,259,919
Heibei CSG Glass Co., Ltd. 178,443,502 1,837,912 - 180,281,414
Jiangyou CSG Mining Development CO., Ltd. 5,658,059 53,868 - 5,711,927
Total 2,880,721,620 148,818,362 - 3,029,539,982
(b) Impairment for investments in subsidiaries
Name of subsidiaries
31 December
2008
Current year
addition
Current year
disposal
30 June
2009
Hainan CSG Industrial Development Co., Ltd. (31,874,472) - - (31,874,472)
Sichuan CSG Industrial Development Co., Ltd. (40,000,000) - - (40,000,000)
Tianjin CSG Industrial Development Co., Ltd. (15,000,000) - - (15,000,000)
Beihai CSG Industrial Development Co., Ltd. (10,958,532) - - (10,958,532)
Sichuan Luxian CSG Silica Sand Mine Co Ltd (13,720,000) - - (13,720,000)
(111,553,004) - - (111,553,004)
(c) Other long-term equity investments
30 June 2009 31 December 2008
Beijing Wan Tong Industrial Co., Ltd. 4,200,000 4,200,000
Guangdong Golden Glass Technologies Ltd. 17,641,000 17,641,000
21,841,000 21,841,000CSG HOLDING CO., LTD. Semi-Annual Report 2008
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(3) Long term receivables
30 June 2009 31 December 2008
Part of the investments in subsidiaries 1,206,822,395 1,143,041,204
As at 30 June 2009, the balance included long term receivables due from Sichuan CSG Industrial Development
Co., Ltd., Hainan CSG Industrial Development Co., Ltd. and Sichuan Luxian Silicon Sand Mine Co., Ltd. with an
aggregation of RMB 186,602,700 (at 31 December 2008: RMB 194,879,983). As these subsidiaries had a deficit
in equity and their operations were mainly financed by the Company, the Company, when performing impairment
assessments, recognized the deficit in equity as investment losses to extent to the long term receivables which
actually constituted part of the investment costs in these subsidiaries. As at 30 June 2009, the provisions made for
the receivables due by these subsidiaries were RMB 169,599,767 (at 31 December 2008: RMB 173,774,757).
(4) Other payables
30 June 2009 31 December 2008
Subsidiaries 85,584,781 101,800,938
Liabilities relating to stock withdrawn - 111,132,450
Others 15,972,673 17,183,815
101,557,454 230,117,203
(5) Investment income
Jan.~Jun. 2009 Jan.~Jun. 2008
Dividends income 471,712,307 307,454,775
Reversing from loss of Long-term equity investments in
subsidiaries - 42,726,586
Gain from disposal of a subsidiary 6,939,570 7,485,292
Gain from available-for-sale financial assets 4,174,990 4,368,698
482,826,867 362,035,351CSG HOLDING CO., LTD. Semi-Annual Report 2008
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SUPPLEMENTAL INFORMATION
1 Major change of the financial indices
Note
30 June
2009
31 December
2008
Increase /
Decrease
% of Increase
/ Decrease
Cash at bank and on hand (1) 59,675 103,378 (43,703) -42%
Notes receivable (2) 15,721 11,604 4,117 35%
Accounts receivable (3) 31,336 23,658 7,678 32%
Advances to suppliers (4) 8,318 5,294 3,024 57%
Notes payable (2) 47,724 28,967 18,757 65%
Taxes payable (5) 2,402 5,600 (3,198) -57%
Interest payable (6) 4,472 2,096 2,376 113%
Other payables (7) 11,841 22,884 (11,043) -48%
注释Jan.~Jun.
2009
Jan.~Jun.
2008
Increase /
Decrease
% of Increase
/ Decrease
Taxes and surcharges (8) 279 202 77 38%
General and administrative expenses (9) 18,753 14,478 4,275 30%
Financial expenses (10) 5,369 -481 5,850 -
Investment income (11) 694 4,443 (3,749) -84%
Operating profit (12) 29,810 49,262 (19,452) -39%
Non-operating income (13) 1,517 1,036 481 46%
Non-operating expenses (14) 130 701 (571) -81%
Total profit (12) 31,197 49,596 (18,399) -37%
Income tax expenses (12) 2,299 3,627 (1,328) -37%
Net profit (12) 28,898 45,969 (17,071) -37%
(1) Mainly reason for decrease of Cash at bank and on hand was the guarantee money of RMB 357 million at the
year-begin was expired in the report period, and the raised special fund of RMB 120 million was put into project,
which caused the bank deposit decrease.
(2) Mainly reason for increase of notes receivable and notes payable was increase of the amount settled by notes.
(3) Mainly reason for increase of accounts receivable was changes of some clients’ account duration.
(4) Mainly reason for increase of advances to suppliers was increase of project prepayment, equipment prepayment
and material prepayment for the project construction.
(5) Mainly reason for decrease of taxes payable was increase of value-added overpaid input tax.
(6) Mainly reason for increase of interest payable was increase of interest accrued from short-term financing bond of
the Company.
(7) Mainly reason for decrease of other payables was that payment for restricted share repurchase was confirmed in
the report period.
(8) Mainly reason for increase of taxes and surcharges was increase of the sales tax for selling real estate by the
subsidiary of the Company – Tianjin CSG development Co., Ltd. compared with the same period of last year.
(9) Mainly reason for increase of general and administrative expenses was increase of employees’ salary with the bas
of shares payment which was caused by implementing incentive plan.CSG HOLDING CO., LTD. Semi-Annual Report 2008
-66-
(10) Mainly reason for increase of financial expenses was appreciation of RMB brought large amount of foreign
exchange gain at the same period of last year.
(11) Mainly reason for decrease of investment income was that the Company sold the equity of the subsidiary –
Shenzhen CSG Electronics Co., Ltd. and got investment income last year.
(12) Mainly reason for decrease of operating profit, total profit, income tax expenses and net profit was decrease of
operating income and gross profit, increase of management expenses, and decrease of investment income and
foreign exchange gain compared with the same period of last year.
(13) Mainly reason for increase of non-operating income was increase of allowance received form government.
(14) Mainly reason for decrease of non-operating expenses was that the subsidiary of the Company – Shenzhen CSG
Electronics Co., Ltd. disposed assets and caused loss on discarding at the same period of last year.
2 Asset Depreciation Sheets
Current year reduction
31 December
2008
Current year
additions
Current year
reverse
Current
year write
off Subtotal
30 June
2009
Provision for bad debt (9,170,728) (2,154,495) 216,543 - 216,543 (11,108,680)
Accounts receivable (4,828,682) (1,794,611) 112,241 - 112,241 (6,511,052)
Other receivable (4,342,046) (359,884) 104,302 - 104,302 (4,597,628)
Provision for declines in the value of
inventories (44,442,135) - 1,816,585 12,467,431 14,284,016 (30,158,119)
Manufacturing industry (18,942,918) - 922,428 7,953,206 8,875,634 (10,067,284)
Real estate (25,499,217) - 894,157 4,514,225 5,408,382 (20,090,835)
Provision for impairment of
long-term equity investments (444,997) - - - - (444,997)
Long-term equity investments (444,997) - - - - (444,997)
- -
Provision for fixed asset impairment (227,032,992) - - - - (227,032,992)
Machinery and equipment (8,124,640) - - - - (8,124,640)
Electronic equipment (218,740,834) - - - - (218,740,834)
Motor vehicles and others (167,518) - - - - (167,518)
(281,090,852) (2,154,495) 2,033,128 12,467,431 14,500,559 (268,744,788)CSG HOLDING CO., LTD. Semi-Annual Report 2008
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VIII Documents for Reference
i. Original of Semi-Annual Report with the signature of legal representative.
ii. Financial statement with the signature and seal of the legal representative, CFO and
manager of financial department.
iii. Original of the documents and public notices disclosed on the newspapers designated by
CSRC in the report period.
iv. The article of the Company.
Board of Directors of
CSG Holding Co., Ltd.
31 July 2009
