CSG HOLDING CO., LTD.
SEMI-ANNUAL REPORT 2011
Chairman of the Board:
ZENG NAN
August 2011
CSG HOLDING CO., LTD. Semi-Annual Report 2011
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.
Because director Guo Yongchun was taking a business leave, he authorized director Yan
Ganggang to vote as his behalf.
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
III Directors, Supervisors and Senior Executives ______________________________ 5
IV Report of the Board of Director __________________________________________ 6
V Significant Events ____________________________________________________ 12
VI Financial Report (Not Audited) _________________________________________ 21
VII Documents for Reference ____________________________________________ 106
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
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: Zhou Hong
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 Commercial Daily.
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)
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
ii Financial Data Highlights
Unit: RMB
Increase/decrease at the
end of this report period
31 December compared with that at the
30 June 2011 2010 end of last year (%)
Paid-in capital 2,076,143,060 2,076,721,060 -0.03%
Total assets 14,083,252,049 12,469,619,167 12.94%
Shareholders’ equity 6,514,161,319 6,384,871,209 2.02%
Net assets per share (RMB) 3.14 3.07 2.28%
Increase/decrease in this
Jan.~Jun. report period year-on-year
Jan.~Jun. 2011 2010 (%)
Revenue 4,438,534,102 3,405,068,004 30.35%
Operating profit 1,066,991,954 801,975,031 33.05%
Total profit 1,108,214,720 829,278,685 33.64%
Net profit attributable to equity holders of the 837,643,342 635,951,595 31.71%
Company
Net profit attributable to equity holders of the 799,302,509 604,644,926 32.19%
Company after extraordinary gains and losses
Basic earnings per share Note 0.40 0.31 29.03%
Diluted earnings per share Note 0.40 0.31 29.03%
Weighted average return on equity (%) 12.53% 11.40% Increase 1.13 percentage points
Weighted average return on equity after 11.95% 10.84% Increase 1.11 percentage points
deducting non-recurring gains and losses (%)
Net cash from operating activities 942,700,324 935,836,780 0.73%
Net cash from operating activities per share 0.45 0.45 0.00%
Items of extraordinary gains and losses Amount
Gain and losses on disposal of non-current assets 707,807
Government subsides recognized as gains and losses 33,235,194
Net income of share transfer 5,194,363
Net value of other non-operating expenses 7,279,765
Tax effects on extraordinary gain and losses -6,247,470
Extraordinary gains and losses of minority interests -1,828,826
Total 38,340,833
Note: The financial data in the same period last year have been adjusted as new paid-in capital.
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
II Change in Share Capital and Particulars about the Shareholders
i Change in Share Capital
In the report period, the total amount and the share structure of share capital changed due
to buy back and writing off part of restricted shares bestowed by stock incentive plans of
the Company, and release the part of incentive restricted shares, the change is as follows:
Unit: Share
Increase / Decrease (+/-)
Before the change in the report period After the change
Amount Proportion Others Sub-total Amount Proportion
Restricted shares 39,651,513 1.91% -15,924,629 -15,924,629 23,726,884 1.14%
State-owned shares 0 0 0 0 0 0
State-owned legal person’s shares 0 0 0 0 0 0
Other domestic shares 38,148,000 1.84% -19,210,000 -19,210,000 18,938,000 0.91%
-Domestic legal person’s shares 0 0 0 0 0 0
-Domestic natural person’s shares 38,148,000 1.84% -19,210,000 -19,210,000 18,938,000 0.91%
Foreign-owned shares 0 0 0 0 0 0
-Foreign legal person’s shares 0 0 0 0 0 0
-Foreign natural person’s shares 0 0 0 0 0 0
Senior executive shares 1,503,513 0.07% 3,285,371 3,285,371 4,788,884 0.23%
Unrestricted shares 2,037,069,547 98.09% 15,346,629 15,346,629 2,052,416,176 98.86%
RMB ordinary shares 1,274,485,555 61.37% 15,346,629 15,346,629 1,289,832,184 62.13%
Domestic listed foreign shares 762,583,992 36.72% 0 0 762,583,992 36.73%
Overseas listed foreign shares 0 0 0 0 0 0
Others 0 0 0 0 0 0
Total shares 2,076,721,060 100% -578,000 -578,000 2,076,143,060 100%
ii Particulars about the Major Shareholders
(i) By the end of report period, the Company had total 257,040 shareholders, of which
211,900 held of A-shares and 45,140 held of B-shares.
(ii) Particulars about the principal shareholders ended report period
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
Unit: Share
Particulars about the shares held by the top ten shareholders
shares
Total Propor- Restricted pledged
Name Nature amount tion shares or frozen
① China North Industries Corporation State-owned 75,167,934 3.62% 0 0
legal person
② Xin Tong Chan Development (Shenzhen) Co., Ltd. - 67,740,000 3.26% 0 0
③ Shenzhen International Holdings (SZ) Limited - 65,430,000 3.15% 0 0
④ China Ping’an Trust & Investment Co., Ltd. - 60,035,000 2.89% 0 0
⑤ China Construction Bank -Yinhua Core Value - 58,600,000 2.82% 0 0
Select Stock Fund
⑥ ICBC－Guangdong Development Jufeng Stock - 18,856,148 0.91% 0 0
Investment Fund
⑦ Invesco Funds Series 5 Foreign legal 14,659,658 0.71% 0 0
person
⑧ Guotai Junan Securities (Hong Kong) Limited Foreign legal 14,582,995 0.70% 0 0
person
⑨ Bank of China－Dacheng Blue Chip Steady - 12,556,347 0.60% 0 0
Securities Investment Fund
⑩ Bank of China－e-Fund Shenzhen Stock 100 Open - 12,263,551 0.59% 0 0
Index Securities Investment Fund
Statement on associated Among shareholders as listed above, Yiwan Industrial Development (Shenzhen) Co., Ltd.
relationship among the and Xin Tong Chan Development (Shenzhen) Co., Ltd. are holding enterprises of Shenzhen
above shareholders or International Holdings Limited. Except for this, there is no associated relationship had been
consistent action found among other shareholders.
Note: The shares held by the top ten unrestricted shareholders are the same as above particulars.
(iii) The Company has no actual controller at present, and Shenzhen International
Holding Co., Ltd. was the first majority shareholder of the Company. There is no
change on the first majority shareholder of the Company in the report period.
III Directors, Supervisors and Senior Executives
i In the report period, there is no change in shares held by directors, supervisors, and
senior executives.
ii Changes of directors, supervisors and senior executives in the report period
The 5th Board of Directors and Supervisory Committee expired in report period. On 15
April 2011, the new directors and supervisors had been elected in Annual Shareholders’
General Meeting 2010 of the Company. The 6th Board of Directors is made up of director
Zeng Nan, Li Jingqi, Yan Ganggang, Guo Yongchun, Zhang Liqing, Wu Guobin and
independent director Chen Chao, Wang Tianguang and Zhang Jianjun; the 6th Supervisory
Committee is made up of supervisor Long Long, Hong Guoan as well as supervisor of
Staff Representative Sun Jingyun.
On 15 April 2011, Zeng Nan was elected as the Chairman of 6th Board of Directors on 1st
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
Meeting of 6th Board of Directors. Meanwhile, the Board renewed the employment of
Zeng Nan as CEO and Chairman, Wu Guobin as Secretary of the Board. And according to
the nomination from Zeng Nan, CEO and Chairman of the Company, Luo Youmin was
appointed as CFO, Ke Hanqi, Zhang Fan, Wu Guobin, Lu Wenhui and Ding Jiuru
appointed as the Deputy Chairman of the Company.
IV Report of the Board of Director
i Discussion and Analysis about the Operation
In first half year of 2011, under the continuously influenced of new debt crisis in Europe
and Quantitative Easing Policy conducted by United States, Japan and other developed
countries, the turbulence of global financial market getting more and more serious,
inflation placed in a greater pressure and the economy slowed down in growth. China’s
economy faced a high inflation pressure as well. The Central Bank continuously raised in
interest rate and deposited reserve rates which makes the currency policy turn to be
tightening. In front of the intricate economic environment, the Company fully made use of
industry advantages and market opportunities, actively explored market and further
reinforced differential strategies. In first half of the year, sales income and profit made
historic record. The Company realized operating income of RMB4.44 billion, up 30.35%
over same period of last year; net profit of RMB0.84 billion (deducting minority
shareholders’ gains and loss), up 31.71% over same period of last year.
Flat glass industry: Under the influence of control policy in real estate from the State and
soaring prices of raw materials and fuels, the flat glass industry was confronted with a
great pressure of descending prices and ascending costs, the industry has in the edge of
deficit. Concerning the rigorous market environment, Flat Glass Industry Dept. fully
conducted the following measures as differentiation of products, energy-saving and cost
reducing, elevating the productivity and production yield. By doing so, the costs ware
reduced effectively to keep reasonable gross margin for the department. Shenzhen Float
Glass Co., Ltd. actively exploited the application market of ultra-white float, and produced
large size ultra-white float glass successfully. The production of large size ultra-white float
was the initial production in and out of China and was adopted by the flagship store of
Apple in Hong Kong.
Architecture glass industry: The architecture glass industry kept a steady growth in first
half year of 2011. Along with the decline of float glass price and rapidly growth of the
production and sales of coated products, the utilization rate of capacity and profitability
for architecture glass all obtained a promotion, the industry layout advantage and
economies of scale gradually presented. The Company actively promoted the penetration
of energy-saving glass to civilian market, and the sales volume of civilian energy-saving
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
glass has over one time of that in last year. In public construction market, usage of the 2nd
generation of Low-E coated glass has been promoted by the Company actively.
Furthermore, 3rd generation of Low-E coated glass got a breakthrough in sales, high added
value of differentiated products ware fully presented.
Fine glass industry: Driven by rapidly growth of the demand in market of touch panel
products in first half year of 2011, the industry was booming continuously. Fine Glass
Industry Dept. used the development opportunity in industries fully to improve the
productivity of capacitive touch panel, the high added value products; on the other hand,
the department lowered relevant cost effectively by lean management and kept a higher
profitability.
Solar energy industry: In first half year of 2011, photovoltaic market experienced a
situation from weakness to stronger. Under the influence of expectation on descending
subsidy for power price from Italy and other countries global, photovoltaic industry faced
a seriously challenge. Many small and medium-sized enterprises have had to stop
production, the industry encountered the challenge of restructure. Solar Energy Industry
Dept. fully made use of the advantage of integrity industry chain, controlled the
production cost of polysilicon effectively and promoted the photoelectric conversion
efficiency of solar cell continuously by improving and perfecting the production process
of industry chain in each step. Under the unfavorable market environment, solar energy
industry of the Company gained favorable performance in first half year of 2011.
ii Operations in the Report Period
(i) Main operations scope and operation performance
Main business scope: 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 (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
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
Unit: RMB
Jan.~Jun., 2011 Jan.~Jun., 2010
Industry Income of main Cost of main Income of main Cost of main
business business business business
Flat glass industry 1,684,199,242 1,323,969,469 1,589,102,680 992,207,121
Architectural glass industry 1,174,408,097 775,585,186 951,380,317 670,338,490
Fine glass industry 403,514,349 237,336,210 222,829,089 163,736,561
Solar energy industry 1,460,130,104 840,843,031 869,963,695 624,653,277
Others 12,909,604 8,080,321 24,428,149 15,207,891
- Elimination -321,880,275 -321,880,275 -269,955,084 -269,955,084
Total 4,413,281,121 2,863,933,942 3,387,748,846 2,196,188,256
B Main business income classified according to location
Unit: RMB
Jan.~Jun., 2011 Jan.~Jun., 2010
Location Income of main Proportion Income of main Proportion
business (%) business (%)
Mainland, P.R.C. 3,231,318,996 73.22% 2,786,569,504 82.25%
Hong Kong, P.R.C. 225,388,371 5.11% 137,625,155 4.06%
Asia (excluding Mainland & Hong Kong, P.R.C.) 302,871,951 6.86% 114,208,936 3.37%
Europe 541,233,739 12.26% 221,087,465 6.53%
North America 39,228,937 0.89% 9,429,389 0.28%
Australia 52,760,509 1.20% 31,966,396 0.94%
Others 20,478,618 0.46% 86,862,001 2.56%
C Products accounting for over 10% of the main business income
Unit: RMB
Jan.~Jun., 2011 Increase/decrease in this report period compared with
the same period in last year
Product Income of Gross Income Cost of
main Cost of main profit of main main
business business ratio business business Gross profit ratio
Flat glass 1,684,199,242 1,323,969,469 21.39% 5.98% 33.44% Decrease 16.17 percentage points
Architectural glass 1,174,408,097 775,585,186 33.96% 23.44% 15.70% Increase 4.42 percentage points
Solar energy product 1,460,130,104 840,843,031 42.41% 67.84% 34.61% Increase 14.22 percentage points
(ii) Particular of material change happened to profit constitution, main business or its
structure as well as its profit-making ability in the report period.
In report period, the gross profit margin of float glass in flat glass industry decreased
compared with the same period of last year due to descending price and ascending cost of
float glass. The income and profit of solar energy industry increased observably compared
with the same period of last year due to a substantial increase in volume of production and
sales as well as gross profit margin.
(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%.
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(v) Problems and countermeasures in the operation
In second half year of 2011, domestic economic situation is still not optimistic, stagflation
risks still remain. Due to the slowdown economy, soaring cost and over capacity, the
Company will face the new challenge. Therefore, the Company will take whatever it can
to faces the challenge. Facing more difficult situation that probably appears, main
management measures are following:
A Strengthening the controls in cash flow, account receivable and inventories, keep away
from the financial risk strictly;
B Further improving the utilization rate of equipment in order to consolidate and increase
market share;
C Strengthening in budget management and cost control, fully stimulating the enthusiasm
of all staffs, putting cost-saving and profit-increasing into every step of the production
and management, totally promoting the lean management standard;
D Continuously strengthening the R&D of new products, new technology and new
techniques, sticking to the strategy of differentiated products;
E Intensifing the construction of internal control, standardizing business procedures of
the Company and preventing the operation risk.
iii Investment in the Report Period
(i) Usage of raised funds
The Company did not raise and fund through share offering or used the fund raised
through previous share offering in the report period.
(ii) Investment of non-raising fund
Unit: RMB’0000
Project (A) Amount Progress of project (will be finished in 2011) Earning
Wujiang CSG float 84,563 Planning to construct two production lines of high-grade The 2nd line of project
glass project float glass with daily melting capacities of 600 tons and will be completed and
900 tons respectively in Wujiang Economic put into operation in the
Development Zone. The production lines use clean 2nd half year 2011.
energy - natural gas as the fuel and construct supporting
waste-heat generation station. The construction period
is about 18 months. The 1st line of the project has
ignited in June 2011.
Hebei Panel Glass 34,776 Planning to build a panel glass production line in Heibei, It is estimated that the
Project with 0.33-0.7mm panel glass. After completion it is project will be
predicted to produce panel glass 30,000 tons per year. completed and put into
The construction period is about 13 months. operation at the end of
2011.
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
Expansion on 13,074 Planning to increase capacities with 3 million square It is estimated that the
capacity of meters of the wide flat coated glass. project will be put into
Dongguan project commercial operation in
the 4th quarter 2011.
The Phase III of 49,893 Planning to construct a new production line of ultra-white It is estimated that the
expanding solar glass with 500T/D annual capacity. project will be
production project completed at the end of
of Solar Glass in 2011.
Dongguan CSG
Expanding 200MW 69,700 Planning to construct solar cell and module production The balance capacity will
solar cell and lines respectively in Dongguan, increased their capacity be completed in
module project in with 200MW. The 100MW capacity has been put into September 2011.
Dongguan operation.
The Phase I of 69,500 Planning to build wafer processing project with annual The project has been
160MW wafer capacity of 160MW. finished, and didn’t
processing project in calculate separately.
Yichang CSG
The Phase II of 49,650 Planning to build the 2nd phase of wafer processing It is estimated that the
140MW wafer expanding project with annual capacity of 140MW. project will be
processing When the project completes, the capacity of wafer will completed and put into
expanding project in get to 300MW. The construction period is 12 months. operation at the end of
Yichang CSG 2011.
Subtotal 371,156 - -
Project (B) Amount Progress of project (will be finished in 2012~2013) Earning
Guangzhou float glass 75,000 Planning to remove the entire Guangzhou Float Glass It is estimated that the
Removal project Company in Guangdong Province, and improve project will be
comprehensive competitiveness and profitability of completed in the middle
products by adjustment of products structure. The of 2012.
projected investment of the project is RMB 750 million.
The amount of equity transfer will basically meets the
capital requirement for construction of new plants. The
project will improve efficiency of heat transfer by
advanced natural gas burning techniques. At the same
time, the project will protect environment and increase
the recycle usage of resources by cogeneration and fume
desulfurization and dedusting technology.
Hydrochlorinate 50,000 Planning to make hydrochlorinate technology It is estimated that the
technology transformation on poly-silicon production line in project will be
transformation of Yichang, in order to reduce material consumption, power completed in 2013.
poly-silicon consumption and steam consumption substantially
production line
project in Yichang
CSG
The Phase I of panel 53,800 Planning to build CSG Wujiang panel display industry base It is estimated that the
display production in Wujiang Economy Technology Development Area by Phase I project will be
base in Wujiang the investment party -- Shenzhen CSG Display completed at the
CSG Technology Co., Ltd, controlling subsidiary of the beginning of 2013.
Company. After the completion of the 1st phase of the
project, there will get annual capacity of 4.8 million
slices of ITO glasses, 0.72 million square meters of ITO
film and 0.84 million slices of capacitance touch-panel
sensor glasses.
Total 178,800 - -
(iii) Investment planning to use fund raising
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
Unit: RMB’0000
Project Amount Progress of project Earning
Expanding of TCO 51,156 Planning to build TCO conductive glass production line It is estimated that the
conductive glass with 4 million square meters’ annual capacity. The project will be
project of Shenzhen project will be completed in two phase, and the completed and put into
float glass construction period is 2.5 years. production in stages in
2013. It plans to use
fund raising.
Expansion on 47,913 Planning to increase two coating glass production lines and It is estimated that the
energy-saving glass some support insulating glass capacity. When the project project will be
capacity of Wujiag completed, the capacities of the wide flat coated glass completed and put into
Project will add 3 million square meters, and capacities of coated operation respectively
insulating glass will add 1.2 million square meters every in 3rd quarter 2011 and
year. The construction period is 2.5 years. 2013. It plans to use
fund raising.
Expansion on 19,835 Planning to build a wide flat coated glass production line. It is estimated that the
energy-saving glass When the project is completed, the annual project will be
capacity of Chengdu deep-processing capacities of the wide flat coated completed and put into
project products will reach 3million square meters. The operation in the first
construction period is 1.5 years. half of 2013. It plans to
use fund raising.
New energy-saving 56,670 Planning to build production lines for 1.2 million square It is estimated that the
glass project in meters film coated insulating glass and 3 million square two production lines
Hubei meters wide flat coated glass, and forms a glass deep will be completed and
processing base of CSG in central China. The put into production in
construction period is 3 years. stages at the end of
2013. It plans to use
fund raising.
The Phase III of 198,000 Planning to build the 3rd phase of wafer processing It is estimated that the
700MW wafer expanding project with annual capacity of 700MW. The project will be
processing construction period is 2.5 years. When the project completed and put into
expanding project in completes, the capacity of wafer will get to 1GW of the production in stages
Yichang CSG Company. before the middle of
2013. It plans to use
fund raising.
Yichang CSG 169,330 Planning to build the solar cell production line with annual It is estimated that the
700MW solar cell capacity of 700MW. The construction period is 2.5 years. project will be
project completed and put into
production in stages
before the middle of
2013. It plans to use
fund raising.
Expanding 500MW 63,600 Planning to expand the solar module production line with It is estimated that the
solar module project annual capacity of 500MW. The construction period is 2 project will be
in Dongguan years. completed and put into
production in stages
before the middle of
2013. It plans to use
fund raising.
Subtotal 606,504 - -
iv The financial report in the semi-annual report 2011 of the Company has not been
audited.
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
V 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 report period, according to the requirement of Notice of Standardized Pilots of Internal
Control for Listed Companies in Shenzhen Areas (SZJGSZi[2011] No. 31) from Shenzhen
Securities Regulatory, Plan of the Implementation for Internal Control Standardized of
CSG has approved by the 2nd meeting of the 6th Board of Director dated 21 April 2011. In
the report period, the Company submitted monthly report and quarterly report of internal
control timely. Meanwhile, the annual internal control report has been done after the site
evaluation on internal control for 2010. The Company conducted centralized training of
internal control knowledge for internal control team. Furthermore, the Company renewed
and improved the current internal control handbook and the evaluation standard of internal
control flaw.
In the report period, according to the requirement of Notice of Works of Information
Disclosure and Investor Interview Receiving for List Companies in Shenzhen Area
(SZJGSZi[2011] No. 55, the Company organized relevant staff to studying corresponding
laws and regulations of information disclosure for listed companies, insider information
disclosure and regulation system of investor receiving. The activities improved the norm
consciousness of information disclosure, strengthened the management of investor
interview receiving and guaranteed the information was disclosed in a way of truth,
accuracy, completeness, timely and fair.
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 2010 was approved at the Shareholders’ General Meeting 2010
held on 15 April 2011, which the dividend would be distributed to shareholders in cash at
the rate of RMB 3.50 for each 10 shares (including tax). The Company published a Notice
on Dividend Distribution on China Securities Journal, Securities Times and Hong Kong
Commercial Daily dated 26 May 2011 and accomplished the distribution.
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
Neither profit would be distributed nor would capital surplus be transferred into share
capital in the semi-annual 2011.
(ii) Implementation of incentive plan
According as Restricted A Shares Incentive Plan (hereinafter referred to Incentive Plan)
approved by Shareholders’ General Meeting, the Company issued 49.14 million restricted
A-shares through private offering in total to 244 specific employees privately in July 2008,
at price of RMB 8.58 per share. The raised fund is RMB 421,621,200.
A On 18 June 2009 and 20 January 2010, the Company has bought back and wrote off
total 14,407,500 restricted A shares respectively. Among these, amount 12,062,500
restricted A shares has been bought back and wrote off because the achievement index
of the Company 2008 didn’t satisfied unlocking conditions in 2009, amount 2,345,000
restricted A shares has been bought back and wrote off because 22 former incentive
staffs resigned and didn’t accord with the qualification of incentive plan.
B On 13 May 2010, the Company implemented 2009 Annual Equity Distribution Plan,
namely sending RMB 3.50 (tax included) in cash for every 10 shares to all
shareholders, and provided share capital converted from capital reserves with 7 shares
increased for each 10 shares at the same time. The amount of invigorative restricted A
shares add from 34,732,500 shares to 59,045,250 shares
On 26 March 2010, the 13th meeting of the 5th Board of Directors examined and
considered that the Phase II restricted shares held by incentive staffs satisfied
unlocking conditions according to the regulations of Restricted A Shares Incentive
Plan. On 25 June 2010, there was total 19,035,750 restricted A shares held by 214
incentive staffs met qualification of unlock and has been listed for trading.
C On 30 July 2010 and 28 January 2011, the Company has bought back and wrote off
total 2,439,500 restricted A shares respectively because there were 14 former
incentive staffs had resigned and didn’t accord with the qualification of incentive
plan.
D On 18 March 2011, the 20th meeting of the 5th Board of Directors examined and
considered that the Phase III restricted shares held by incentive staffs satisfied
unlocking conditions according to the regulations of Restricted A Shares Incentive
Plan. On 24 June 2010, there was total 18,632,000 restricted A shares held by 206
incentive staffs met qualification of unlock and has been listed for trading.
E At present, the amount of 306,000 restricted A-shares held by 2 original incentive
staffs still are in the process of buying back and writing off.
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 19 June 2009 as well as published on China Securities Journal,
Securities Times, Hong Kong Commercial Daily and Juchao Information website
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(www.cninfo.com.cn) dated 22 January, 26 May, 24 June, 31 July 2010, and 29 January,
22 March, 16 April, 4 June and 23 June 2011.
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
Gains/
losses
Proportion Book value in Changes in
Stock Stock Initial of equity at the report Owners’ Item in
Code Abbr. Investment held period end period Equity accounting Share type
300093 Golden 23,000,000 8.33% 65,803,688 1,302,429 0 Available-for-sale Legal person
Glass financial assets share
Total - 23,000,000 8.33% 65,803,688 1,302,429 0 - -
v. Purchase and sales of assets and proceedings of the enterprise merger.
(i) Purchase equity of Shenzhen Sunlord Technology Co., Ltd
The extraordinary meeting of the 5th Board of Directors examined and considered that the
controlled subsidiary namely Shenzhen CSG Wellight Conductive Coating Co., Ltd
(hereinafter referred to Wellight Conductive Coating) purchased 100% equity of Shenzhen
Sunlord Technology Co., Ltd held by Shenzhen Sunlord Electronics Holding Co., Ltd for
its business development. The Wellight Conductive Coating paid RMB15 million of
equity transfer fee. The purchase will support the operation of Wellight Conductive
Coating in the future and promote its health develop.
Details of the above transaction could be found in Notice on Decision of Extraordinary
Meeting of the 6th Board of Directors published on Securities Times, China Securities
Journal and Hong Kong Commercial Daily dated on 28 May 2011.
(ii) Sold the equity of Dongguan CSG Ceramics Technology Co., Ltd.
Being approved by the Extraordinary Meeting of 5th Board, 100% equity of Dongguan
CSG Ceramics Technology Co., Ltd., wholly-owned subsidiary of the Company, were sold
to Yang Bohuan, a natural person, by the Company with price of RMB 64.12 million.
Afterward, the price was adjusted to RMB 59.98 million according to assets checking.
At present, the Company has become a modernized company with advanced management
and more than 10 billion assets. Flat glass industry, Architectural glass industry, Fine glass
industry and Solar energy industry of the Company all possess their advantages and
influence in the industry. In order to concentrate superior resources to boost sustainable
development of the main business, the Company focuses on the major industry and leave
minor ones. This transfer of equity will bring the positive impact for optimizing the
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
allocation of resources, improving of assets’ quality as well as promote core competence
of the Company. The above mentioned sales event has no significant influence on the
Company.
Details of the above transaction can be found in Notice of Assets Sales published at
Securities Times, China Securities Journal and Hong Kong Commercial Daily dated 1
February 2011.
(iii) Sold the equity of Guangzhou CSG Glass Co., Ltd.
Being approved by the Extraordinary Meeting of 6th Board, 100% equity of Guangzhou
CSG Glass Co., Ltd. (hereinafter referred to Guangzhou Float), wholly-owned subsidiary
of the Company, were sold to Guangzhou Bodi Enterprises Management Co., Ltd
(hereinafter referred to Guangzhou Bodi) and Diyao Development Co., Ltd.
Consultation by the various parties, this equity transfer price was RMB403 million.
Meanwhile Guangzhou Bodi agreed to lend another RMB 370 million to Guangzhou Float
in order to repay the Guangzhou Float’s debts to its creditor (mainly referred to CSG). The
borrowing referred creditor's rights to new shareholders who purchased companies, and
previous shareholders such as CSG didn’t take liability for satisfaction. Besides,
Guangzhou Bodi agreed to pay RMB15 million for settlement compensation of dismissed
staffs to Guangzhou Float. After the equity transfer, all the facilities on the ground of
Guangzhou Float were written off by new shareholder evaluated as RMB25 million to
CSG for removal disposal. At the same time, Guangzhou Bodi will pay RMB25 million to
CSG for corresponding removal and clearing.
In recent years, Guangzhou had been developing rapidly. In the light of the overall
strategy and planning on Guangzhou city, the previous industry area Guangzhou Float
located in had been replaned to civil residence and shopping zone. Regional government
required Guangzhou Float to participate in the reconstruction of the 3 Olds in Guangzhou
and complete removal before 2012. Therefore, the board of director agreed to remove 2
float lines of Guangzhou Float to other regions of Guangdong. The composite
competitiveness and profitability will be promoted by adjusting products structure. The
project will improve efficiency of heat transfer by advanced natural gas burning
technology. Meanwhile, cogeneration technology and fume desulfurization dedusting
technology will be used to protect environment and increase the cyclic utilization of
resources. The amount of total investment was RMB0.75 billion and the Company could
meet the capital demands for construction of new plant basically with the equity transfer
fee. This equity transfer will bring a positive impact on optimizing resource allocation,
improving assets quality and core competitiveness of the Company. The sale won’t have
significant impact on the Company.
Details of the above transaction can be found in Notice of Assets Sales published at
Securities Times, China Securities Journal and Hong Kong Commercial Daily dated 14
-15-
CSG HOLDING CO., LTD. Semi-Annual Report 2011
May 2011.
vi. Daily related transactions in report period.
Unit: RMB’0000
Products sales to related party Products purchased from related party
Proportion in Proportion in
Transaction transaction amount with Transaction transaction amount
Related party amount same category (%) amount with same category (%)
Guangdong Golden-Glass 5,116.53 1.15% 728.38 0.3%
Technology Co., Ltd.
Total 5,116.53 1.15% 728.38 0.3%
The above mentioned related transaction based on the market price. There was no related
liabilities 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 2011, 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 127,665
Balance of guarantee for controlling subsidiaries at the end of the report period 106,091
Particulars about the guarantee of the Company(Including the guarantee for the controlling subsidiaries)
Total amount of guarantee 106,091
Proportion of the total guarantee in net assets of the Company (%) 16.62%
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 20,904
ratio exceeded 70%
- Total amount of guarantee in net assets of the Company exceeded 50% 0
Total amount of guarantee in aforesaid three terms 20,904
(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 2011, the situation of
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
non-operating capital occupation of the Company’s holding shareholders and other
associated parties did not exist.
Independent directors’ explanations on the Company’s external guarantee was: In the
report period, the Company did not offer any guarantee to the controlling shareholders,
related parties with share proportion less than 50%, unincorporated company or individual.
In the report period, total guarantee for the holding subsidiaries of the Company was RMB
1,060.91 million, which accounted for 8.51% of the total asset, and 16.62% of net asset
attributable to equity holders of the Company audited at the end of 31 December 2009. All
the above guarantees have been approved by board of directors’ meeting or shareholders’
meeting, and have fulfilled information disclosure responsibilities. 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
Additional commitments of the former non-tradable shareholders in the report period.
The Company has implemented share merger reform in May 2006. Till June 2008, the
share of the original non-tradable shareholders which holding over 5% total shares of the
Company had all released. Therein, the original non-tradable shareholder Shenzhen
International Holdings (SZ) Limited and 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. On 9 July 2009, Shenzhen International held the
Shareholders’ General Meeting and authorized its board of directors to sale the CSG A
share held by Shenzhen International at price of no less than RMB 8.5. 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.
By the end of the report period, the above former non-tradable shareholders of the
Company have strictly carried out their promises
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
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
administration department, and public condemnation by Shenzhen Stock Exchange.
x. Other significant events
(i) Corporate bonds
On 23 November 2009, the 2nd Extraordinary Shareholders’ General Meeting 2009 of the
Company approved Proposal on Issuing Corporate Bonds, and agreed the Company to
issue unsecured corporate bonds with the amount of RMB 2 billion, the duration lasts less
than 7 years (including 7). The bonds with single period or multiple periods both are
allowed, and the Company doesn’t plan to distribute and sell bonds to the original
shareholders preferentially. These raised funds intend to be used in paying back for
short-term bank borrowings and complementing operation capitals of the Company. On
the premise of fulfilling listed conditions, Shareholders’ General Meeting of Shareholders
authorized Board of Directors to deal with the listing issues of the corporate bonds
according to relevant regulations of Stock Exchanges.
On 11 October 2010, the bond issuance of the Company have received the approval of
Reply on Public Bond Issuance of CSG Holding Co., Ltd. (ZJXK[2010] No. 1369) issued
from CSRC.
On 18 October 2010, the Notice of Company Bond Issuance 2010 have published with
totaling amount of RMB 2 billion, RMB 100 per piece for issue price. The issuance
adopted the combination of publicly offered to social investors on net and agreement
offered to institution investor off net.
On 25 October 2010, the bond offering have been closed with the situation as: the bond
divided into two varieties with 5-year and 7-year, in which variety I was the 5-year
product with RMB 1 billion issuance scale, variety II was the 7-year product with RMB 1
billion issuance scale. At the same time, attached with option of up-regulate coupon rate of
issuer and re-sale option of investors. More details found in Notice of Issuance Results on
Company Bond 2010 published at China Securities Journal, Securities Times, Hong Kong
Commercial Daily and Juchao Website (www.cninfo.com.cn) dated 26 October 2010. The
bond listed on 10 November 2010. The short form of the stock for 5-year bond is
“10CSG01”, and the stock code is 112021; the short form of the stock for 7-year bond is
“10CSG02”, and the stock code is 112022.
(ii) Non-public issue of A stock to specific investors
The Company plans to issue less than 0.25 billion shares of A stock to no more than 10
specific investors through private placement. The total amount raised couldn’t be beyond
RMB 4 billion. This event has been approved on the 2nd extraordinary shareholders’
meeting of 2011, and still waiting for approval from CSRC. More details will be found in
relevant notices published at China Securities Journal, Securities Times, Hong Kong
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
Commercial Daily and Juchao Website (www.cninfo.com.cn) dated 19 January, 22 March
and 8 April 2011.
(iii) Short-term financing bond
On 15 April 2011, the Annual Shareholders’ General Meeting of the Company approved
the proposal of issuing short-term financing bond. The meeting agreed the Company to
apply for short-term financing bond issuance with RMB0.7 billion limit. Declaration
material has been submitted to National Association of Financial Market Institutional
Investors by the Company.
(iv) Particulars about the reception to investors in the report period
Date Place Method Name
2011.1.19 Conference room Interview Acru Asset Management, Kim Eng Securities (H.K.) Ltd.
2011.1.25 Conference room Telephone Taiwan Sino Pac Securities
2011.2.21 Conference room Telephone CLSA limited
2011.4.22 Conference room Interview AXA SPDB Investment Managers, Lordabbett China Assets Management
2011.4.25 Conference room Interview Huachuang Securities Co., Ltd.
2011.4.26 Conference room Interview Hanlun Investment Consultant (Shanghai) Co., Ltd.
2011.4.26 Conference room Telephone Unify Securities Investment Trust Co., Ltd., Prudential Securities
Investment Trust Co., Ltd.
2011.5.17 Conference room Telephone VL Asset Management
2011.5.31 Conference room Telephone Central China Securities Co., Ltd.
2011.6.2 Conference room Interview Lion Fund Management Co., Ltd.
2011.6.7 Conference room Interview J Capital Research, Aeris International S.A.
2011.6.27 Conference room Interview CICC
2011.6.30 Conference room Interview KGI Asia, Taishin Securities Investment Trust Co., Ltd., Cathay
Securities Investment Trust Co., Ltd., Prudential Securities
Investment Trust Co., Ltd., Sinolink Securities Co., Ltd., Yintai
Securities Co., Ltd., China Merchants Fund Management Co., Ltd.,
Shenzhen Flying Tiger Fund Management Co., Ltd.
Content discussed Introducing the disclosed information about operation and production of
the Company.
(v) Index of important information
In the report period, the notices have all been published in Securities Times, China
Securities Journal, Hong Kong Commercial Daily and Juchao Information website
(www.cninfo.com.cn).
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
Date No. Name
2011.1.11 2011-001 Performance Prediction 2010
2011.1.19 2011-002 Resolution of the 1st Extraordinary Shareholders’ General Meeting 2011
2011.1.19 2011-003 Resolutions of the 19th Meeting of the 5th Board of Directors
2011.1.29 2011-004 Accomplishment of Repurchase and write off of Restricted Stock Bestowed by Restricted
A-share Incentive Plan
2011.2.1 2011-005 Resolutions of the Extraordinary Meeting of the 5th Board of Directors
2011.2.1 2011-006 Notice on Asset sales
2011.2.19 2011-007 Share Decrease of Shareholders
2011.2.22 2011-008 Guarantee for Holding Subsidiaries
2011.3.22 2011-009 Annual Report and its Summary of 2010
2011.3.22 2011-010 Resolutions of the 20th Meeting of the 5th Board of Directors
2011.3.22 2011-011 Resolutions of the 13th Meeting of the 5th Supervisory Committee
2011.3.22 2011-012 Holding the 2nd Extraordinary Shareholders’ General Meeting 2011
2011.3.22 2011-013 Holding the Annual Shareholders’ General Meeting 2010
2011.3.22 2011-014 Guarantee for Holding Subsidiaries
2011.3.22 2011-015 Prediction on Daily Related Transaction for 2011
2011.3.30 2011-016 Prompt Notice of Holding the 2nd Extraordinary Shareholders’ General Meeting 2011
2011.4.8 2011-017 Resolutions of the 2nd Extraordinary Shareholders’ General Meeting 2011
2011.4.16 2011-018 Resolutions of the Annual Shareholders’ General Meeting 2010
2011.4.16 2011-019 Resolutions of the 1st Meeting of the 6th Board of Directors
2011.4.16 2011-020 Resolutions of the 1st Meeting of the 6th Supervisory Committee
2011.4.16 2011-021 Staff Supervisor Election from the Staff Representative Committee
2011.4.22 2011-022 The 1st Quarterly Report of 2011
2011.4.22 2011-023 Resolutions of the 2nd Meeting of the 6th Board of Directors
2011.4.22 2011-024 Guarantee for Holding Subsidiaries
2011.4.29 2011-025 Report of Follow-up Evaluation for Corporate Bonds 2011
2011.5.14 2011-026 Resolutions of the Extraordinary Meeting of the 6th Board of Directors
2011.5.14 2011-027 Notice on Asset sales
2011.5.26 2011-028 Profit Distributions of 2010
2011.5.28 2011-029 Resolutions of the Extraordinary Meeting of the 6th Board of Directors
2011.5.28 2011-030 Guarantee for Holding Subsidiaries
2011.6.4 2011-031 Notice of Board of the Directors
2011.6.4 2011-032 Resolutions of the Extraordinary Meeting of the 6th Board of Directors
2011.6.23 2011-033 Completion of Released for Incentive Restricted Share 2011
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
VI Financial Report (Not Audited)
CSG HOLDING CO., LTD.
CONSOLIDATED AND COMPANY BALANCE SHEETS
AS AT 30 JUNE 2011
(All amounts in RMB Yuan unless otherwise stated)
30 June 31 December 30 June 31 December
2011 2010 2011 2010
ASSETS Note Consolidated Consolidated Company Company
Current assets
Cash at bank and on hand 5(1) 817,753,586 787,481,275 241,032,010 373,901,165
Notes receivable 5(2) 404,578,807 362,674,115 - -
Accounts receivable 5(3) 498,737,381 242,201,307 - -
Advances to suppliers 5(5) 159,155,350 107,782,146 40,000 40,000
Other receivables 5(4), 14(1) 56,058,241 66,622,324 1,112,629,656 811,564,853
Dividends receivable 1,000,000 - 767,000 5,298,425
Inventories 5(6) 540,096,350 478,735,794 - -
Other current assets 5(7) 43,043,034 24,914,873 - -
Total current assets 2,520,422,749 2,070,411,834 1,354,468,666 1,190,804,443
Non-current assets
Long-term receivables 14(3) - - 2,336,923,424 2,316,038,617
Long-term equity investments 5(8), 14(2) 65,803,688 65,501,259 4,247,099,303 3,633,845,531
Fixed assets 5(10) 8,913,679,619 8,830,895,516 15,185,355 27,627,216
Construction in progress 5(11) 1,759,117,742 786,077,413 - -
Intangible assets 5(12) 491,707,217 381,276,917 3,759,133 5,600,854
Development expenditure 5(12) 8,051,607 3,142,226 - -
Goodwill 5(13) 18,404,380 18,404,380 - -
Long-term prepaid expense 1,013,682 1,002,500 - -
Deferred tax assets 5(14) 71,279,625 79,877,237 - -
Other non-current assets 5(15) 233,771,740 233,029,885 - 21,840,000
Total non-current assets 11,562,829,300 10,399,207,333 6,602,967,215 6,004,952,218
TOTAL ASSETS 14,083,252,049 12,469,619,167 7,957,435,881 7,195,756,661
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
CSG HOLDING CO., LTD.
CONSOLIDATED AND COMPANY BALANCE SHEETS
AS AT 30 JUNE 2011 (Continued)
(All amounts in RMB Yuan unless otherwise stated)
30 June 31 December 30 June 31 December
2011 2010 2011 2010
LIABILITIES AND OWNERS' EQUITY Note Consolidated Consolidated Company Company
Current liabilities
Short-term borrowings 5(17) 1,431,767,595 877,132,815 163,203,120 111,620,900
Notes payable 5(18) 290,290,777 237,891,481 - -
Accounts payable 5(19) 1,032,541,909 950,310,253 - -
Advances from customers 5(20) 121,160,227 161,127,001 - -
Employee benefits payable 5(21) 89,970,554 186,997,327 9,470,744 97,163,797
Taxes payable 5(22) 60,340,191 121,232,388 1,123,421 1,198,110
Interest payable 5(23) 80,656,171 24,589,510 4,391,471 1,314,600
Dividends payable 5(24) 8,575,442 687,627 687,627 687,627
Other payables 5(25), 14(4) 327,764,060 161,386,242 963,208,652 480,805,365
Current portion of non-current liabilities 5(26) 239,941,166 75,690,541 - -
Other current liabilities 5(27) 2,926,872 2,926,872 - -
Total current liabilities 3,685,934,964 2,799,972,057 1,142,085,035 692,790,399
Non-current liabilities
Long-term borrowings 5(28) 1,173,938,410 728,203,612 - -
Bonds payable 5(29) 1,980,438,506 1,978,479,422 1,980,438,506 1,978,479,422
Special payables 1,000,000 700,008 - -
Deferred tax liabilities 5(14) 25,820,148 29,507,743 7,937,236 8,149,616
Other non-current liabilities 5(30) 273,970,448 173,537,976 - -
Total non-current liabilities 3,455,167,512 2,910,428,761 1,988,375,742 1,986,629,038
Total liabilities 7,141,102,476 5,710,400,818 3,130,460,777 2,679,419,437
Owners' equity
Paid-in capital 5(31) 2,076,143,060 2,076,721,060 2,076,143,060 2,076,721,060
Capital surplus 5(32) 1,325,907,290 1,309,834,212 1,378,645,640 1,359,890,506
Less：Treasury shares 8 (306,000) (578,000) (306,000) (578,000)
Special reserve 5(33) 8,086,016 5,683,705 - -
Surplus reserve 5(34) 506,530,148 506,530,148 506,530,148 506,530,148
Undistributed profits 5(35) 2,595,692,336 2,484,699,065 865,962,256 573,773,510
Difference on translation of foreign
currency financial statements 2,108,469 1,981,019 - -
Total equity attributable to equity
holders of the Company 6,514,161,319 6,384,871,209 4,826,975,104 4,516,337,224
Minority interests 5(36) 427,988,254 374,347,140 - -
Total owners' equity 6,942,149,573 6,759,218,349 4,826,975,104 4,516,337,224
TOTAL LIABILITIES AND OWNER'S EQUITY 14,083,252,049 12,469,619,167 7,957,435,881 7,195,756,661
The accompanying notes form an integral part of these financial statements.
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
CSG HOLDING CO., LTD.
CONSOLIDATED AND COMPANY INCOME STATEMENTS
FOR THE FIRST HALF YEAR ENDED 30 JUNE 2011
(All amounts in RMB Yuan unless otherwise stated)
Jan.~Jun. 2011 Jan.~Jun. 2010 Jan.~Jun. 2011 Jan.~Jun. 2010
Items Note Consolidated Consolidated Company Company
Revenue 5(37) 4,438,534,102 3,405,068,004 1,413,307 -
Less: Cost of sales 5(37) (2,876,324,402) (2,205,963,565) (371,240) -
Taxes and surcharges 5(38) (27,343,805) (2,454,555) - -
Selling and distribution expenses 5(39) (139,454,241) (124,564,573) - -
General and administrative expenses 5(40) (264,759,103) (220,592,531) (34,248,907) (29,259,218)
Financial (expenses)/income - net 5(41) (65,210,104) (57,476,189) (1,703,817) 1,098,426
Asset impairment losses 5(43) (4,947,285) (1,096,604) - -
Add: Investment income 5(42), 14(5) 6,496,792 9,055,044 1,053,340,716 705,828,171
Operating profit 1,066,991,954 801,975,031 1,018,430,059 677,667,379
Add: Non-operating income 5(44) 41,905,050 30,048,303 200,000 220,000
Less: Non-operating expenses 5(45) (682,284) (2,744,649) (3,622) (17,412)
Including: Loss on disposal of
non-current assets (360,947) (553,809) (3,622) (4,944)
Total profit 1,108,214,720 829,278,685 1,018,626,437 677,869,967
Less: Income tax expenses 5(46) (189,427,287) (127,600,069) 212,380 -
Net profit 918,787,433 701,678,616 1,018,838,817 677,869,967
Attributable to equity holders of the Company 837,643,342 635,951,595
Minority interests 81,144,091 65,727,021
Earnings per share
- Basic 5(47) 0.40 0.31
- Diluted 5(47) 0.40 0.31
Other comprehensive income 5(48) 1,577,450 (4,271,127) - (9,055,044)
Total comprehensive income 920,364,883 697,407,489 1,018,838,817 668,814,923
Total comprehensive income attributable
to equity holders of the Company 839,220,792 631,680,468
Total comprehensive income attributable
to minority interests 81,144,091 65,727,021
The accompanying notes form an integral part of these financial statements.
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
CSG HOLDING CO., LTD.
CONSOLIDATED AND COMPANY CASH FLOW STATEMENTS
FOR THE FIRST HALF YEAR ENDED 30 JUNE 2011
(All amounts in RMB Yuan unless otherwise stated)
Jan.~Jun. 2011 Jan.~Jun. 2010 Jan.~Jun. 2011 Jan.~Jun. 2010
Items Notes Consolidated Consolidated Company Company
Cash flows from operating activities
Cash received from sales of goods or rendering of services 4,632,052,605 3,837,181,164 - -
Refund of taxes and surcharges 127,969,773 13,393,936 - -
Cash received relating to other operating activities 5(49) 48,874,065 25,752,999 2,523,703 1,754,526
Sub-total of cash inflows 4,808,896,443 3,876,328,099 2,523,703 1,754,526
Cash paid for goods and services (2,678,916,277) (2,073,921,416) - -
Cash paid to and on behalf of employees (482,145,788) (322,438,294) (122,863,889) (69,084,371)
Payments of taxes and surcharges (534,625,872) (366,576,042) (357,258) (798,881)
Cash paid relating to other operating activities 5(49) (170,508,182) (177,555,567) (3,833,256) (4,357,263)
Sub-total of cash outflows (3,866,196,119) (2,940,491,319) (127,054,403) (74,240,515)
Net cash flows from operating activities 5(50)、14(6) 942,700,324 935,836,780 (124,530,700) (72,485,989)
Cash flows from investing activities
Cash received from disposal of investments - 10,401,160 133,000,000 10,401,160
Cash received from returns on investments - - 991,823,922 244,489,057
Net cash received from disposal of fixed assets,
intangible assets and other long-term assets 873,720 10,428,461 - -
Cash received from disposal of subsidiaries and other companies 5(50) 182,582,884 - 150,500,000 -
Cash received relating to other investing activities 5(49) 80,502,447 - 122,766,734 161,767,878
Sub-total of cash inflows 263,959,051 20,829,621 1,398,090,656 416,658,095
Cash paid to acquire fixed assets, intangible assets
and other long-term assets (1,589,103,709) (736,904,427) (346,505) (844,493)
Cash paid to acquire investments (55,535,338) - (715,834,546) (183,126,000)
Cash paid to acquire subsidiaries and other companies - - - -
Cash paid relating to other investing activities (10,000,000) (11,523,976) (10,000,000) -
Sub-total of cash outflows (1,654,639,047) (748,428,403) (726,181,051) (183,970,493)
Net cash flows from investing activities (1,390,679,996) (727,598,782) 671,909,605 232,687,602
Cash flows from financing activities
Cash received from capital contributions 156,000,472 - - -
Including: Cash received from capital contributions by
minority shareholders of a subsidiaries 156,000,472 - - -
Cash received from borrowings 2,327,865,348 610,431,052 163,565,640 114,276,500
Cash received from issuing bonds - - - -
Cash received from other financing activities 5(49) 142,976,786 4,064,616 - -
Sub-total of cash inflows 2,626,842,606 614,495,668 163,565,640 114,276,500
Cash repayments of borrowings (1,163,245,143) (492,803,079) (111,983,420) (114,276,500)
Cash payments for interest expenses and distribution
of dividends or profits (894,331,088) (546,135,631) (728,697,705) (428,708,921)
Including: Cash payments for dividends or profit to
minority shareholders of subsidiaries (122,822,796) (80,286,898) - -
Cash payments relating to other financing activities 5(49) (9,053,915) (18,200,016) (2,762,840) (8,840,400)
Sub-total of cash outflows (2,066,630,146) (1,057,138,726) (843,443,965) (551,825,821)
Net cash flows from financing activities 560,212,460 (442,643,058) (679,878,325) (437,549,321)
Effect of foreign exchange rate changes on cash
and cash equivalents (2,618,291) (1,479,110) (369,735) (101,196)
Net increase/(decrease) in cash and cash equivalents 5(50)、14(6) 109,614,497 (235,884,170) (132,869,155) (277,448,904)
Add: Cash and cash equivalents at beginning of year 660,213,739 635,618,163 373,901,165 370,558,509
Cash and cash equivalents at end of year 5(50) 769,828,236 399,733,993 241,032,010 93,109,605
The accompanying notes form an integral part of these financial statements.
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
CSG HOLDING CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN OWNER'S EQUITY
FOR THE FIRST HALF YEAR ENDED 30 JUNE 2011
(All amounts in RMB Yuan unless otherwise stated)
Attributable to equity holders of the Company
Difference on
translation of
foreign
Less: currency Total
Paid-in Capital Treasury Special Surplus Undistributed financial Minority owners'
Items capital surplus shares reserve reserves profits statements Sub-total interests equity
Note 5(32) 5(33) 8 5(34) 5(35) 5(36) 5(37)
Balanced at 1 January 2010 1,223,738,124 2,127,613,867 (1,492,500) - 437,054,602 1,526,908,861 1,700,207 5,315,523,161 295,549,871 5,611,073,032
Movement for the year 2010
Net profit - - - - - 1,455,209,218 - 1,455,209,218 141,749,130 1,596,958,348
Other comprehensive income 5(48) - (6,184,231) - - - - 280,812 (5,903,419) - (5,903,419)
Capital contribution and withdrawal by owners (2,904,000) 48,755,918 914,500 - - - - 46,766,418 5,299,647 52,066,065
- Capital contribution by owners - - - - - - - 2,500,000 2,500,000
- Share-based payments recognized in
owner’s equity 8 (2,904,000) 48,755,918 914,500 - - - 46,766,418 2,799,647 49,566,065
Profit distribution - - - - 69,475,546 (497,419,014) - (427,943,468) (89,015,914) (516,959,382)
- Appropriation to surplus reserves - - - 69,475,546 (69,475,546) - - - -
- Profit distribution to equity owners - - - - (427,943,468) - (427,943,468) (89,015,914) (516,959,382)
Internal carry-forward of owners’ equity
- Capitalized capital reserves 855,886,936 (855,886,936) - - - - - - - -
Special reserves
- Special reserve appropriated - - - 5,683,705 - - - 5,683,705 - 5,683,705
Others
- Transaction with minority interests - (4,464,406) - - - - - (4,464,406) 20,764,406 16,300,000
Balanced at 31 December 2010 2,076,721,060 1,309,834,212 (578,000) 5,683,705 506,530,148 2,484,699,065 1,981,019 6,384,871,209 374,347,140 6,759,218,349
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
CSG HOLDING CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN OWNER'S EQUITY
FOR THE FIRST HALF YEAR ENDED 30 JUNE 2011 (Continued)
(All amounts in RMB Yuan unless otherwise stated)
Attributable to equity holders of the Company
Difference on
translation of
foreign
Less: currency Total
Paid-in Capital Treasury Special Surplus Undistributed financial Minority owners'
Items capital surplus shares reserve reserves profits statements Sub-total interests equity
Note 5(31) 5(32) 8 5(33) 5(34) 5(35) 5(36)
Balanced at 1 January 2011 2,076,721,060 1,309,834,212 (578,000) 5,683,705 506,530,148 2,484,699,065 1,981,019 6,384,871,209 374,347,140 6,759,218,349
Movement for the first half year ended 30
June 2011
Net profit - - - - - 837,643,342 - 837,643,342 81,144,091 918,787,433
Other comprehensive income 5(48) - 1,087,500 - - - - 127,450 1,214,950 362,500 1,577,450
Capital contribution and withdrawal by owners (578,000) 16,878,347 272,000 - - - - 16,572,347 157,434,697 174,007,044
- Capital contribution by owners - (702,834) - - - - - (702,834) 156,260,744 155,557,910
- Share-based payments recognized in
owner’s equity 8 (578,000) 17,581,181 272,000 - - - - 17,275,181 1,173,953 18,449,134
Profit distribution - - - - - (726,650,071) - (726,650,071) (130,710,610) (857,360,681)
- Appropriation to surplus reserves - - - - - - - - - -
- Profit distribution to equity owners - - - - - (726,650,071) - (726,650,071) (130,710,610) (857,360,681)
Internal carry-forward of owners’ equity
- Capitalized capital reserves - - - - - - - - - -
Special reserves
- Special reserve appropriated - - - 2,402,311 - - - 2,402,311 518,875 2,921,186
Others
- Transaction with minority interests - (1,892,769) - - - - - (1,892,769) (55,108,439) (57,001,208)
Balanced at 30 June 2011 2,076,143,060 1,325,907,290 (306,000) 8,086,016 506,530,148 2,595,692,336 2,108,469 6,514,161,319 427,988,254 6,942,149,573
The accompanying notes form an integral part of these financial statements.
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
CSG HOLDING CO., LTD.
COMPANY STATEMENT OF CHANGES IN OWNER'S EQUITY
FOR THE FIRST HALF YEAR ENDED 30 JUNE 2011
(All amounts in RMB Yuan unless otherwise stated)
Less:
Capital Treasury Surplus Undistributed Total owners'
Items Paid-in capital surplus shares reserves profits equity
Note 5(31) 5(32) 8 5(34) 5(35)
Balanced at 1 January 2010 1,223,738,124 2,170,406,108 (1,492,500) 437,054,602 376,437,068 4,206,143,402
Movement for the year 2010
Net profit - - - 694,755,456 694,755,456
Other comprehensive income - (6,184,231) - - (6,184,231)
Capital contribution and withdrawal by owners
-Share-based payments recognized in
owner’s equity 8 (2,904,000) 51,555,565 914,500 - - 49,566,065
Capital surplus transfer to paid-in capital 855,886,936 (855,886,936) - - - -
Profit distribution - - - 69,475,546 (497,419,014) (427,943,468)
- Appropriation to surplus reserves - - - 69,475,546 (69,475,546) -
- Profit distribution to equity owners - - - - (427,943,468) (427,943,468)
Balanced at 31 December 2010 2,076,721,060 1,359,890,506 (578,000) 506,530,148 573,773,510 4,516,337,224
Balance at 1 January 2011 2,076,721,060 1,359,890,506 (578,000) 506,530,148 573,773,510 4,516,337,224
Movement for the first half year ended 30
June 2011
Net profit - - - - 1,018,838,817 1,018,838,817
Other comprehensive income - - - - - -
Capital contribution and withdrawal by owners
-Share-based payments recognized in
owner’s equity 8 (578,000) 18,755,134 272,000 - - 18,449,134
Profit distribution - - - - (726,650,071) (726,650,071)
- Appropriation to surplus reserves - - - - - -
- Profit distribution to equity owners - - - - (726,650,071) (726,650,071)
Balance at 30 June 2011 2,076,143,060 1,378,645,640 (306,000) 506,530,148 865,962,256 4,826,975,104
The accompanying notes form an integral part of these financial statements.
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
CSG HOLDING CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE FIRST HALF YEAR ENDED 30 JUNE 2011
(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 general capital was RMB
71,232,550, 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 general capital of the Company increased to RMB
107,532,550.
As approved by China Securities Regulatory Committee with document (1995) No. 16, State
Planning Committee with document JWZ (1994) No. 1748 and State Administrative of Foreign
Exchange with document HZF (95) No. 191, the Company issued USD 45 million convertible
bonds on 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 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 RMB8 per share. The general 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
RMB8.58 pre share. The general capital of the Company increased to 1,237,103,124 upon the
completion of the issuance.
As 2008 performance of the Group failed to meet the vesting conditions of the A share stock
incentive scheme and certain employees left the Group, the Company repurchased and cancelled
13,365,000 A shares in 2009. The company's registered capital was reduced to 1,223,738,124.
As some certain employees left the Group in 2009, the Company repurchased and cancelled
1,042,500 A shares on January 2010. The company’s registered capital was reduced to
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
1,222,695,624.
Pursuant to the resolutions of shareholder’s meeting on 20 April 2010, the Company paid scrip
dividend of 855,886,936 shares, on the basis of issuing 7 shares for each 10 shares by
capitalisation of capital surplus. The Company’s registered capital was increased to
2,078,582,560 thereafter.
As certain employees left the Group in 2010, the Company repurchased and cancelled 1,861,500
A shares in July 2010. The company's registered capital was reduced to 2,076,721,060.
As certain employees left the Group in 2011, the Company repurchased and cancelled 578,000 A
shares in January 2011. The company's registered capital was reduced to 2,076,143,060.
The Company and its subsidiaries (collectively referred to the “Group”) are mainly engaged in the
manufacturing and selling of floating glass, specialized glass, engineering glass, ITO glass,
energy saving glass, silicon related materials and solar panels.
The financial statements were authorized for issue by the board of directors on 5 August 2011.
2 Summary of significant accounting policies and accounting estimates
(1) 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”), and “Information Disclosure Rule No. 15 for Companies with
Public Traded Securities - Financial Reporting General Provision”(2010 Amendment) issued by
China Security Regulatory Commission.
As at 30 June 2011, the Group had net current liabilities of RMB 1,165,512,215. The directors of
the Company has assessed the following facts and conditions: a) the Group has been able to
generate positive operating cash flows in prior years and expect to do so in the year ending 31
December 2010; 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
2011, the Group had unutilized banking facilities of approximately RMB13.6 billion. The
directors are of view that the above banking facilities can meet the funding requirements of the
Group’s debt servicing and capital commitment. Accordingly, the directors of the Company had
adopted the going concern basis in the preparation of the financial statements of the Company
and the Group.
(2) Statement of compliance with the Accounting Standards for Business Enterprises.
The financial statements of the Company for the first half year ended 30 June 2011 truly and
completely present the financial position as of 30 June 2011 and the operating results, cash flows
and other information for the first half year then ended of the Group and the Company in
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
compliance with the Accounting Standards for Business Enterprises.
(3) Accounting period
The Company’s accounting year starts on 1 January and ends on 31 December.
(4) Recording currency
The recording currency is Renminbi (RMB).
(5) Business combinations
(a) Business combinations involving entities under common control
The assets and liabilities that the combining party obtains in a business combination shall be
measured on the basis of their carrying amount in the combined party. As for the balance between
the carrying amount of the net assets obtained by the combining party and the carrying amount of
the consideration paid by it, the additional paid-in capital shall be adjusted. If the additional paid-in
capital is not sufficient to be offset, the retained earnings shall be adjusted.
Costs directly attributable to business combination are recorded into the profits and losses once
incurred.
(b) Business combinations involving entities not under common control
The cost of combination and identifiable net assets obtained by the acquirer in a business
combination are measured at the fair value at the acquisition date. The excess of the cost of
acquisition over the Group’s share of the fair value of the identifiable net assets acquired is
recorded as goodwill. If the cost of acquisition is less than the Group’s share of fair value of the net
assets of the subsidiary acquired, the difference is recognised directly in the income statement.
Costs directly attributable to business combination are included in the cost of combination.
(6) Basis of preparation of consolidated financial statements
The scope of consolidation includes the Company and all of its subsidiaries.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group and
are de-consolidated from the date that control ceases. For the subsidiary being acquired under
common control, it is included in the scope of consolidation from the date it first came under the
common control with the Company, the net profit or loss of such subsidiary before the acquisition
date should also be separately disclosed in the consolidated income statement.
Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with
the policies adopted by the Group. For subsidiaries acquired in a business combination involving
entities not under common control, the individual financial statements of the subsidiaries are
adjusted based on the fair value of the identifiable assets and liabilities at the acquisition date.
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
All significant inter-group balances, transactions and unrealized profits are eliminated in the
consolidated financial statements. The portion of equity and net profits or losses of a subsidiary not
belonging to the Company is recognized as minority interests and separately presented in equity
and net profits respectively.
If the Company do not loss control of the subsidiary, the differences between any consideration paid
and the relevant share acquired of the carrying value of net assets of the subsidiary at the
transaction date are recorded in capitalisation reserve for purchase from minority interests. If the
capital surplus is not sufficient to be deducted, retained earnings should be adjusted.
(7) Cash and Cash equivalent
Cash and cash equivalents comprise cash in hand, deposits held at call with bank and short-term
and highly liquid investments that are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value.
(8) Foreign currency translation
(a) Foreign currency transactions
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 translations are recognised in profit or loss for the current period, except for those
attributable to foreign currency borrowings that have been taken out specifically for the acquisition,
construction or production of qualifying 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.
(b) Translation of foreign currency financial statements
The asset and liability items in the balance sheets for foreign operation 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.
(9) Financial Instruments
(a) Financial assets
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(i) Classification
Financial assets are classified into the following categories at initial recognition: at fair value through
profit or loss, loans and receivables available-for-sale and financial assets held to maturity. The
classification of financial assets depends on the Group’s intention and ability to hold the financial
assets. The Group has no financial assets at fair value through profit or loss.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market.
(ii) 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. Transaction costs of financial assets
carried at the fair value through profit or loss are expensed in the income statement; Transaction
costs of other financial assets are included in financial assets at initial recognition.
Available-for-sale financial assets are subsequently measured at fair value. Investments in equity
instruments are measured at cost when they do not have a quoted market price in an active
market and whose fair value cannot be reliably measured. Loans and receivables are measured
at amortised cost using the effective interest method.
A gain or loss arising from 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 income
statement. Interest on available for sale debt instrument, calculated using effective interest
method, and cash dividends declared by the investee on available-for-sale equity instruments are
recognised as investment income in income statement.
(iii) Impairment of financial assets
The Group assesses the carrying amount of financial assets other than financial assets 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
accounts.
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 can be
related objectively to an event occurring after the impairment was recognised, the previously
recognised impairment loss is reversed and the amount of reversal is recognised in income
statement.
If objective evidence shows that impairment for available-for-sale financial assets will occur, the
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
cumulative loss arising from the decline in fair value that had been recognised directly in equity is
removed from equity and recognised as impairment loss. For an available for sale debt
instrument, if there is objective evidence that the value of the financial asset recovered and the
recovery can be related objectively to an event occurring after the impairment was recognised,
the previously recognised impairment loss is reversed and the amount of reversal is recognised in
income statement. For an available for sale equity instrument, if there is objective evidence that
the value recovered and the recovery can be objectively related to an event occurring after the
impairment loss recognised, the previously recognised impairment loss is reversed and directly
recognised in equity.
(iv) Derecognition of financial assets
Financial assets are derecognized when: i) the contractual rights to receive the cash flows from
the financial assets have expired; or ii) all substantial risks and rewards of ownership of the
financial assets have been transferred; or iii) the control over the financial asset has been waived
even if the Group does not transfer or retain nearly all of the risks and rewards relating to the
ownership of a financial asset.
On derecognition of a financial asset, the difference between the carrying amount and the
aggregate of consideration received and the accumulative amount of changes of fair value
originally recorded in the owner’s equity is recognised in the income statement.
(b) Financial liabilities
Financial liabilities are classified into the following categories at initial recognition: the financial
liabilities at fair value through profit or loss and other financial liabilities. The financial liabilities in
the Group mainly comprise of other financial liabilities, including payables, borrowings and
corporate bonds.
Payables comprise accounts payable and other payables, which are recognised initially at fair
value and measured subsequently at amortised cost using the effective interest method
Borrowings are recognised initially at fair value, net of transaction costs incurred, and
subsequently carried at amortised costs using the effective interest method.
Other financial liabilities within one year is presented as current liabilities, while non-current
financial liabilities due with one year is reclassified as non-current liabilities due within one year.
Others are presented as non-current liabilities.
A financial liability (or a part of financial liability) is derecognised when and only when the
obligation specified in the contract is discharged or cancelled. The difference between the
carrying amount of a financial liability (or a part of financial liability) extinguished and the
consideration paid is recognised in the income statement.
(c) Determination of the fair value of the 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
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
is determined by using a valuation technique. Valuation techniques include using prices of recent
market transactions between knowledgeable, willing parties, reference to the current fair value of
another financial asset that is substantially the same with this instrument, and discounted cash flow
analysis. When a valuation technique is used to establish the fair value of a financial instrument,
management uses observable market data as much as possible and relies as little as possible on
the Group-specific inputs.
(10) 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.
(a) Receivables that are individually significant and provided for provision separately
Receivables that are individually significant are subject to separate impairment assessment. A
provision for impairment of the receivable is recognised if there is objective evidence that the
Group will not be able to collect the full amounts according to the original terms.
The basis or amount for individually significant receivables is individually greater than 20 million.
The method of provision for impairment of receivables that are individually significant is the
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.
(b) Receivables that are provided for provision on a basis of group
Receivables that are not impaired after separate assessment and remaining receivables not
subject to separate assessment are grouped for impairment assessment, and are provided for the
impairment, based on the Group’s historical practical loss rate caused by receivables portfolio of
similarity or with similar characteristic of credit risk, as well as current situation.
Basis on determine the portfolio is as below:
Portfolio 1 Receivables not impaired after separate assessment
Method on providing impairment according to portfolio is as below:
Portfolio 1 Percentage of balance method
The percentage of provision for the portfolio:
Percentage of provision for Percentage of provision for other
accounts receivable receivables
Portfolio 1 2% 2%
(c) Receivables that are not individually significant but provided for provision separately
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
Receivables that are provided for impairment separately because objective evidence demonstrate
that the Group will not be able to collect those receivables according to original terms.
The 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.
(d) The Group transfers receivables which have no recourse right to financial institution, the
difference between the carrying amounts which is trade amount cut the write-off receivables and
related tax expenses charged into the income statement.
(11) Inventories
(a) Classification
Inventories include manufacturing sector, presented at the lower of cost and net realisable value.
(b) Inventory costing method
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.
(c) The determination of net realisable value and the method of provision for impairment of
inventories
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.
(d) The Group adopts the perpetual inventory system.
(e) Low-value consumption goods and package material amortization method
Low-value consumption goods and package materials are applying one-off amortization method.
(12) Long-term equity investments
Long-term equity investments comprise the Company’s long-term equity investments in its
subsidiaries 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.
Subsidiaries are all investees over which the Company is able to control. Associates are all
investees that the Group has significant influence on their financial and operating policies.
Investments in subsidiaries are measured using the cost method in the Company’s financial
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
statements, and adjusted by using the equity method when preparing the consolidated financial
statements. Interests associates are accounted for using the equity method. 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 are measured using the cost method.
(a) Initial recognition
Long-term equity investments accounted for on cost method are measured at the fair value of
initial investment cost. As for long-term equity investments accounted for on the equity method,
where the initial investment cost exceeds the Group’s share of the fair value of the investee’s
identifiable net assets at the time of acquisition, the investment is initially measured at cost;
where the initial investment cost is less than the Group’s share of the fair value of the investee’s
identifiable net assets at the time of acquisition, the long-term equity investment is stated at the
Group’s share of the fair value of the investee’s identifiable net assets and the difference is
included in income statement.
If the shares granted to the employee of subsidiaries are settled in equity instruments of the
Company, the expenses, being determined at the fair value of the equity instruments on grant
date, related to the employees’ service in current period are recognised as part of the cost of
investments in subsidiaries.
(b) Subsequent measurement
When using the cost method, investment income is recognized in income statement for the
dividends declared by the investee.
When using the equity method, the Group recognised the investment income based on its share
of net profit or loss of the investee. The Group discontinues recognising its share of net losses of
an investee when the carrying amount of the long-term equity investment together with any
long-term interests that, in substance, form part of the investor’s net investment in the investee
are reduced to zero. However, if the Group has obligations for bearing additional losses and the
obligation meets the recognition criteria of provision under CAS 13 Contingency, the Group
continues to recognise the investment losses as provision. For changes in owner’s equity of the
investee other than those arising from its net profit or loss, the Group record directly in capital
surplus for its proportion, provided that the Group’s proportion of shareholding in the investee
remains unchanged. The carrying amount of the investment is reduced by the Group’s share of
the dividends declared by the investee. Unrealised gains on transactions between the Group and
the investees are eliminated to the extent of the Group’s interest in the investees. Unrealised
losses are also eliminated unless the transaction provides evidence of an impairment of the asset
transferred.
(c) Definition of control, joint control and significant influence over the investees
Control refers to the power to govern the financial and operating policies of an enterprise, so as to
obtain benefits from their operating activities. When assessing whether the Group has control
over investee, the existence and effect of potential voting rights that are currently exercisable or
convertible, such as convertible bonds and share warrants, are also taken into consideration.
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
Joint control is the contractually agreed sharing of control over an economic activity, and exists
only when the strategic financial and operating decisions relating to the activity require the
unanimous consent of all the parties sharing control.
Significant influence refers to the power to participate in making decisions on the financial and
operating policies of an enterprise, but not the power to control, or jointly control, the formulation
of such policies with other parties.
(d) Impairment of long-term equity investments
The carrying amount of long-term equity investments in subsidiaries and associates is reduced to
the recoverable amount when the recoverable amount is less than the carrying amount (Note
2(18)). Once the impairment loss is recognised, it is not allowed to be reversed for any value
recovered in the subsequent periods.
(13) Fixed assets
(a) Recognition and initial measurement
Fixed assets comprise buildings, machinery and equipment, motor vehicles, computer and
electronic equipment and office equipment.
Fixed asset is recognized 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. 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 income
statement when they are incurred.
(b) Depreciation
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, estimated residual values expressed as a percentage of cost and
annual depreciation rates are as follows:
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
Estimated Estimated Annual
useful lives residual value depreciation rate
Buildings 10-40 years 5%-10% 2.25% to 9.5%
Machinery and equipment 10-16 years 5%-10% 5.63% to 9.5%
Motor vehicles and others 3-10 years 5%-10% 9% to 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 as appropriate at least at each financial
year-end.
(c) The carrying amount of fix assets is reduced to the recoverable amount when the recoverable
amount is less than the carrying amount (Note2 (18)).
(d) Disposal
A fixed asset is derecognized on disposal or when no future economic benefits are expected from
its use or disposal. The amount of proceeds on sale, transfer, retirement or damage of a fixed
asset net of its carrying amount and related taxes and expenses is recognized in income
statement.
(14) Construction in progress
Construction in progress is measured at actual cost. Actual cost comprises construction costs,
Installation costs, borrowing costs that are eligible for capitalization incurred before the assets are
ready for their intended use and other costs necessary to bring the fixed assets ready for their
intended use. Construction in progress is transferred to fixed assets when the assets are ready
for their intended use and are depreciate from the next month. The carrying amount of
construction in progress is reduced to the recoverable amount when the recoverable amount is
less than the carrying amount (Note 2(18)).
(15) 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
income statement. Capitalization of borrowing costs is suspended when the acquisition or
construction of a fixed asset is interrupted abnormally and the interruption lasts for more than 3
months, until the acquisition or construction is resumed.
For a borrowing that is specifically for the purpose of obtaining a qualifying asset, the amounts of
borrowing costs eligible for capitalisation are the actual borrowing costs incurred on that
borrowing during the period less any investment income on the temporary investment of these
borrowings.
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
For the other borrowings related to acquisition, construction and production of a qualifying asset,
the amount of borrowing costs eligible for capitalisation shall be the lower of the actual borrowing
costs incurred and the amount of qualifying asset not financed by specific borrowings multiplying
capitalisation rate. The capitalisation rate is the weighted average interest rate of these
borrowings.
(16) Intangible assets
Intangible assets including land use rights and, patents and exploitation rights, intangible assets
are measured at cost.
(a) Land use rights
Land use rights are amortized on the straight-line basis over the period of the land use rights from
30 to 70 years. If it is impracticable 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 set out on 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.
(e) 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 standards are met:
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;
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
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 income
statement as 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.
(f) Impairment of intangible asset
The carrying amount of intangible asset is reduced to the recoverable amount when the
recoverable amount is less than the carrying amount (Note 2(18)).
(17) Long-term prepaid expenses
Long-term prepaid expenses represent prepayments that should be amortized over more than
one year. Long-term prepaid expenses are amortized on the straight-line basis over the expected
beneficial period and are presented at cost net of accumulated amortization.
(18) Impairment of long-term assets
Fixed assets, construction in progress, intangible assets with definite useful lives and long-term
equity investments in subsidiaries 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 recognised 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 is determined and recognised on an individual asset basis. If it is
not possible to estimate the recoverable amount of an individual asset, the recoverable amount of
the cash generated unit (CGU) to which the asset belongs is determined. A CGU 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 assets or CGU 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 or CGU including the allocated goodwill is lower than their carrying amount, the
corresponding impairment loss is recognized. The impairment loss is first deducted from the
carrying amount of goodwill allocated to the assets or groups of assets, and then deducted from
the carrying amount of the remaining assets or groups of assets pro rata excluding 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.
(19) Employee benefits
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
Employee benefits mainly include wages or salaries, bonuses, allowances and subsidies, staff
welfare, social security contributions, housing funds, labor union funds, employee education
funds and other expenditures incurred in exchange for service rendered by employees.
If the Group commits to terminate the employment with an employee before the expiry of the
labor contract or provide compensation as a result of an offer made in order to encourage
voluntary redundancy, with a formal plan for the termination or has put forward a proposal for
voluntary redundancy and is without realistic possibility of withdrawal, the Group shall recognize a
liability and a expenses for termination benefit.
Except for the termination benefits, employee benefits except for the severance pay are
recognized as a liability in the accounting period in which an employee has rendered service and
costs of assets or expenses to whichever the employee service is attributable.
(20) Profit distribution
Cash dividends distribution is recognized as a liability in the period in which the dividends are
approved by the shareholders’ meeting.
(21) Share Based Payment
(a) Type of share based payment
Share-based payment is a transaction in which the entity received services from employee or
other parties in exchange of equity instruments of the entity, or settlement based on the price of
the entity’s equity instruments. Share-based payment plan is be classified as either equity-settled
share-based payments or cash-settled share-based payments. In the report period, there is no
cash-settled share-based payment in the Group.
The Group’s restricted A share incentive scheme is equity-settled share-based payment to
receive employee service, and measured at fair value of the equity instruments granted on grant
date. The shares granted are vest after completing service in the vesting period and achieving
specified performance. The Group recognised the services received in current period as cost or
expense and credit the capital surplus correspondingly, based on the best estimate of the number
of equity instruments expected to vest and the fair value of equity instruments at grant date. If
subsequent information indicates that the number of equity instruments expected to vest differs
from previous estimate, the Group shall revise the estimate accordingly and adjust the number of
shares to actual exercised.
The Group’s restricted A share incentive scheme which is equity-settled share-based payment to
receive employee service by transferring equity instruments to employees in subsidiaries is
measured at fair value of the equity instruments granted on grant date.
(b) Method for determination of equity instrument fair value
The fair value of the restricted A share is determined on the market price of the Group’s A share on
the grant date. The fair value of equity instruments of subsidiaries is determined by the appraisal
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
institutions.
(c) The basis of determining the number of equity instruments expected to be vest
On each balance sheet date during the vesting period, the Group revise its estimates of the number
of equity instruments that are expected to vest based on the latest employee turnover rate and
other information.
On the vesting date, the actual equity instrument vested is the same with the expected number.
(d) The accounting treatment for subscription, repurchase and cancellation of granted shares.
The Group recognise share capital and capital surplus on grant date of restricted shares; The
Group recognise treasury shares and reverse capital surplus on the date when it shall repurchase
the shares. The Group cancel the share capital and treasury shares on cancellation date.
(22) Provision
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.
Provisions are not recognized for future operating losses.
A provision is initially measured at the best estimate of the expenditure required to settle the
related present obligation. Factors surrounding a contingency such as the risks, uncertainties and
the time value of money are taken into account as a whole in reaching the best estimate of a
provision. Where the effect of the time value of money is material, the best estimate is determined
by discounting the related future cash outflows. The increase in the discounted amount of the
provision arising from passage of time is recognised as interest expense.
On each balance sheet date, balances of provisions are reviewed and adjusted where necessary,
to reflect the current best estimate.
(23) 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 economic benefits associated with the transaction will flow to
the Group, the relevant revenue can be reliably measured and specific revenue recognition
criteria have been met for each of the Group’s activities as described below:
(a) Sales of goods
Revenue from sales of goods is recognized when the goods are delivered, significant risks and
rewards of ownership of the goods are transferred to the buyers, and the Group retains neither
continuing managerial involvement to the degree usually associated with the ownership nor
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
effective control over the goods sold.
(b) Rendering of services
Service income is recognised under percentage of completion method. The
percentage-of-completion is assessed on the basis of the costs incurred as a percentage of total
estimated costs.
(c) Interest income
Interest income is recognised on a time-proportion basis using the effective interest method.
(24) Government grants
Government grants are the monetary asset the Group receives from the government for free,
including tax refund, government subsidies, etc.
Grants from the government are recognized when there is a reasonable assurance that the grants
will be received and the Group will comply with all attached conditions. Government grants are
measured at the amounts received or receivable. The non-monetary government grant are
measured at fair value, if the fair value can not be reliably obtained, it is measured at nominal
amount.
Government grants relating to assets are recognized as deferred income and are credited to the
income statement on a straight-line basis over the expected lives of the related assets. The
government grants measured at nominal amount is credited to the income statement directly.
Government grants relating to income, which is used to compensate the expenses/costs incurred in
future, are recognized as deferred income and then credited to the income statement over the
period necessary to match them with the expenses that they are intended to compensate.
Government grants relating to income, which is used to compensate the expenses/costs incurred in
the past, are credited to the income statement directly.
(25) Deferred tax asset and deferred tax liability
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
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
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 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 liabilities are offset and presented on net basis when:
The deferred taxes are relate to the same taxable entity with same taxation authority, and;
That entity has a legally enforceable right to offset current tax assets against current tax
liabilities.
(26) 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. The Group has
no finance lease in the report period.
Operating lease
Lease payments under an operating lease are recognised on a straight-line basis over the period
of the lease.
(27) Held for sale and discontinued operations
The conditions for a non-current asset or disposal group to be classified as held-for-sale are as
follows: 1) The Group has determined to dispose non-current assets or part of business; 2) The
Group has signed an irrevocable transfer agreement with assignee; 3) The sale should be
completed, or expected to be so, within a year from the date of the classification.
Non-current assets or disposal groups (not including financial assets and deferred tax assets) that
are classified as held for sale are measured at the lower of carrying amount and fair value less
costs to sell. The difference between fair value less costs to sell and carrying amount, should be
presented as impairment loss.
A discontinued operation is a component of an entity that either has been disposed of or is
classified as held for sale, which is single part of operation and draw up financial statements.
(28) Segment reporting
The Group identifies operating segments based on the internal organization structure,
management requirements and the internal reporting system, and discloses segment information
of reportable segments which is determined on the basis of operating segments.
An operating segment is a component of the Group that satisfies all of the following conditions: (1)
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
the component is able to earn revenues and incur expenses from ordinary activities; (2) whose
operating results are regularly reviewed by the Group’s management to make decisions about
resources to be allocated to the segment and to assess its performance, and (3) for which the
information on financial position, operating results and cash flows is available to the Group. If two
or more operating segments have similar economic characteristics, and satisfy certain conditions,
they are aggregated into a single operating segment.
(29) Safety production reserve
According to relevant regulations of the Ministry of Finance and National Administration of Work
Safety, a subsidiary of the Group which is engaged in producing and selling polysilicon
appropriate safety production reserve on following basis:
4% for revenue below RMB10 million of the year;
2% for the revenue between RMB10 million to RMB100 million of the year;
0.5% for the revenue between RMB100 million to RMB1 billion of the year;
0.2% for the revenue above RMB1 billion of the year.
(30) Critical accounting assumptions
The Group continually evaluates the critical accounting estimates and key judgments applied 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:
(a) Tax
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.
(b) Deferred tax
Estimate on deferred tax assets is based on estimates on amount of taxable income and
applicable tax rate for every year. Vary of the future tax rate as well as the reversed time of
temporary difference might have effects on tax expense and the balance of deferred tax assets or
liabilities. Those estimates may also cause significant adjustment on deferred tax
(c) Impairment of fixed assets
Fixed assets at the balance sheet date should impairment testing if there are any indications of
impairment. Impairment test results show that the asset's recoverable amount is lower than its
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
book value, the difference between them should be written as provision and charge to impairment
loss. The recoverable amount is the higher amount which an asset's fair value less disposal
expenditure and estimates present value of future cash flows. The Company should make various
assumptions, include the future cash flows and discount rate related to non-current assets. If
these assumptions cannot be conformed, the recoverable amount should be modified. And these
modifications may affect to the Group’s business performance or financial position.
(d) The useful life of fixed assets
The administration of the Group estimates the useful life of fixed assets, based on historical
experiences to fixed assets that have similar properties and functions. When there are differences
between actually useful years and previously estimation, the Administration should adjust
estimation to useful life of fixed assets. When declared or disposal facilities of lag in technology,
fixed assets should be written off or written down. There will be difference between the results of
estimation and actual results next accounting period, so that may have significant adjustments to
fixed assets in balance sheet.
3 Taxation
(1) The types and rates of taxes applicable to the Group during the current year are set out below:
Type Taxable basis Tax rate
Enterprise income tax Taxable income 15% to 25%
Value added tax (“VAT”) Taxable value added amount (Tax payable 17%
is calculated using the taxable sales
amount multiplied by the effective tax
rate less current period’s deductible VAT
input )
Business tax Taxable turnover 5%
Urban construction tax Total VAT, Business tax and GST 5% to 7%
Educational surtax and surcharge Total VAT, Business tax and GST 3%
Resource Tax Quantities of Silica sold 3 Yuan per ton
(2) Tax incentives and approvals
Accordance with the relevant provision of the Corporate Income Tax (“CIT”) law, the income tax
rate of the company and the subsidiary located in special economic zone will transit to 25% in five
years from 2008 to 2012, the current year’s applicable income tax rate was 24%.
As approved by Tianjin Wuqing District State Tax Bureau (JSWQJM (2008) No. 317), Tianjin
Energy Conservation Glass Co., Ltd. enjoys the exemption from CIT 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 2008 and the applicable corporate income tax rate for current
year was 12.5%.
With an approval from Guangdong Dongguan State Tax Bureau, Dongguan CSG Glass Co., Ltd.
enjoys the exemption from CIT 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
and the applicable enterprise income tax rate for current year was 12.5%.
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
With an approval from Guangdong Dongguan State Tax Bureau, Dongguan CSG Architectural
Co., Ltd. enjoys the exemption from CIT 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 2008 and the applicable enterprise income tax rate for current year was 12.5%.
With an approval from Guangdong Dongguan State Tax Bureau, Dongguang CSG PV-tech Co.,
Ltd. enjoys the exemption from CIT for two years and half rate for next three years from 2008.
The income tax rate for current year was 12.5%.
With an approval from Jiangsu Suzhou State Tax Bureau, Wujiang CSG North-east Architectural
Glass Co., Ltd. enjoys the exemption from CIT for two years and half rate for next three years
from 2008. The income tax rate for current year was 12.5%.
With an approval from Hubei Yichang State Tax Bureau, Yichang CSG Silicon Co., Ltd. enjoys the
exemption from CIT for two years and half rate for next three years from 2008. The income tax
rate for current year was 12.5%.
Tianjin CSG Architectural Glass Co., Ltd. was recognised as a high and new tech enterprise in
2009, and obtained the Certificate of High and New Tech Enterprise, the period of validity is three
years. It applies to 15% tax rate in three years since 2009.
Shenzhen CSG Float Glass Co., Ltd. was recognised as a high and new tech enterprise in 2010,
and obtained the Certificate of High and New Tech Enterprise, the period of validity is three years.
It applies to 15% tax rate three years since 2009.
Shenzhen CSG Display Technology CO., Ltd. was recognised as a high and new tech enterprise
in 2010, and obtained the Certificate of High and New Tech Enterprise, the period of validity is
three years. It applies to 15% tax rate three years since 2009.
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
4 Business Combination and Consolidation
(1) Subsidiaries
(a) Subsidiaries established by the Group
Type of Type of Registered Legal
Subsidiary Place of registration Business capital Nature of business and principal activities Type of Company Representative Organization code
(in RMB ten
thousand Yuan)
Shenzhen CSG Float Glass Co., Ltd. Direct Shenzhen, the PRC Manufacturing 70,574 Floating Glass manufacturing Joint Venture Zhang Fan 618806866
Guangzhou CSG Glass Co., Ltd. (b) Direct Guangzhou, the PRC Manufacturing 26,000 Floating Glass manufacturing Joint Venture Zhang Fan 751970446
Chengdu CSG Glass Co., Ltd. Direct Chengdu, the PRC Manufacturing 24,666 Floating Glass manufacturing and Processed glass Joint Venture Zhang Fan 75878841-X
Tianjin CSG Architectural Glass Co., Ltd. Direct Tianjin, the PRC Manufacturing 17,800 Processed glass Joint Venture Wu Guobin 73847290-1
Tianjin Energy Conservation Glass Co., Ltd. Direct Tianjin, the PRC Manufacturing 12,800 Production of energy conservation glass Joint Venture Wu Guobin 79253038-3
Shenzhen CSG Display Technology Co., Ltd. Direct Shenzhen, the PRC Manufacturing USD1,620 Production of monitor display glass Joint Venture Ke Hanqi 723033463
Shenzhen CSG Wellight Conductive Coating Co., Ltd. Indirect Shenzhen, the PRC Manufacturing 14,118 Production of colorful filter glass Limited Company Lu Wenhui 61880717-2
Dongguan CSG Architectural Glass Co., Ltd. Direct Dongguan, the PRC Manufacturing 24,000 Processed glass Joint Venture Wu Guobin 78117633-1
Dongguan CSG Solar Glass Co., Ltd. Direct Dongguan, the PRC Manufacturing 40,000 Production of solar glass Joint Venture Li Weinan 78117638-2
Yichang CSG Silicon Co., Ltd. Direct Yichang, the PRC Manufacturing 65,248 Production of silicon related materials Joint Venture Ke Hanqi 790576740
Wujiang CSG North-east Architectural Glass Co., Ltd. Direct Wujiang, the PRC Manufacturing 32,000 Processed glass Joint Venture Wu Guobin 79331343-6
Dongguan CSG PV-tech Co., Ltd. Direct Dongguan, the PRC Manufacturing 51,500 Production of solar battery and applications Joint Venture Ke Hanqi 784875904
Hebei CSG Glass Co., Ltd. Direct Yongqing, the PRC Manufacturing USD4,806 Production of specialized floating glass Joint Venture Zhang Fan 66907553-0
Wujiang CSG Glass Co., Ltd. Direct Wujiang, the PRC Manufacturing USD4,000 Production of specialized floating glass Joint Venture Zhang Fan 69451657-X
China Southern Glass (Hong Kong) Limited Direct Hong Kong Trading HKD8,644 Trading and investment holding Limited Company Zeng Nan 824279
Hebei Shichuang Glass Co., Ltd. Direct Yongqing, the PRC Manufacturing 24,300 Production of ultrathin electronic glass Limited Company Zhang Fan 56485531-1
Heyuan CSG PV Encapsulation Material Co., Ltd. Direct Heyuan, the PRC Manufacturing USD3,300 Production of PV encapsulation material Joint Venture Zhang Fan 56666224-9
Xianning CSG Glass Co., Ltd. Direct Xianning, the PRC Manufacturing 18,890 Production of energy conservation glass Joint Venture Wu Guobin 568346784
Qingyuan CSG Energy Conservation New-materials Co., Ltd. Direct Qingyuan, the PRC Manufacturing 30,000 R&D and production of non-metallic mineral Joint Venture Zhang Fan 572426437
China Southern Glass (Australia) Limited Direct Australia Trading AUD50 Trading of glass Limited Company Zhang Nan A.C.N.064305639
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
Actual Capital Other Item amounts The description if the Losses shared by
amounts of the composing actual Stakes Vote right stakes are not equal minority equity
year end investment (%) (%) with the vote right Consolidate Minority interest holders
(in RMB (in RMB (in RMB (in RMB
ten thousand Yuan) ten thousand Yuan) ten thousand Yuan) ten thousand Yuan)
Shenzhen CSG Float Glass Co., Ltd. 70,574 7,500 100 100 N.A YES - -
Guangzhou CSG Glass Co., Ltd. 19,500 - 100 100 N.A YES - -
Chengdu CSG Glass Co., Ltd. 9,951 - 75 75 N.A YES 12,309 -
Tianjin CSG Architectural Glass Co., Ltd. 13,350 - 100 100 N.A YES - -
Tianjin Energy Conservation Glass Co., Ltd. 9,600 18,000 100 100 N.A YES - -
Shenzhen CSG Display Technology Co., Ltd. USD1,093 5,074 67.47 75 (i) YES 9,763 (2)
Shenzhen CSG Wellight Conductive Coating Co., Ltd. (ii) USD896 5,570 67.47 75 (i) YES 1,469 -
Dongguan CSG Architectural Glass Co., Ltd. 18,000 8,524 100 100 N.A YES - -
Dongguan CSG Solar Glass Co., Ltd. 30,000 - 100 100 N.A YES - -
Yichang CSG Silicon Co., Ltd. 45,000 - 93.97 83.3 (i) YES 5,924 -
Wujiang CSG North-east Architectural Glass Co., Ltd. 24,000 5,600 100 100 N.A YES - -
Dongguan CSG PV-tech Co., Ltd. 21,975 - 100 100 N.A YES - -
Hebei CSG Glass Co., Ltd. USD3,605 - 100 100 N.A YES - -
Wujiang CSG Glass Co., Ltd. USD3,000 - 100 100 N.A YES - -
China Southern Glass (Hong Kong) Limited HKD8,644 - 100 100 N.A YES - -
Hebei Shichuang Glass Co., Ltd. 24,300 - 100 100 N.A YES - -
Heyuan CSG PV Encapsulation Material Co., Ltd. USD2,475 75 75 N.A YES 5,365 (55)
Xianning CSG Glass Co., Ltd. 3,541 100 100 N.A YES - -
Qingyuan CSG Energy Conservation New-materials Co., Ltd. 22,000 75 75 N.A YES 7,464 (36)
China Southern Glass (Australia) Limited AUD50 - 100 100 N.A YES - -
(i) The proportion of voting power is determined on the proportion of the Company’s directors to the total directors of the subsidiary.
(ii) In the report period, the Group transferred 70% equity of Shenzhen CSG Wellight Conductive Coating Co., Ltd. to Shenzhen CSG Display
Technology Co., Ltd., wholly-owned subsidiaries of the Group, the proportion of voting power was depend on that of Shenzhen CSG Display
Technology Co., Ltd..
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(b) The subsidiary acquired through business combination not under common control
Registered Nature of business and
Type of Subsidiary Place of registration Type of Business capital principal activities Type of Company Legal Representative Organization code
(in RMB ten thousand Yuan)
Heyuan CSG Mining Indirect Heyuan, the PRC Manufacturing 1,200 Production of Silica Limited Company Zhang Fan 66989568-6
Industry Co., Ltd.
Actual Capital amounts of Other Item amounts Stakes Vote right
the report period composing actual investment (%) (%) Consolidate Minority interest Losses shared by minority interest
(in RMB ten thousand Yuan) (in RMB ten thousand Yuan) (in RMB ten thousand Yuan) (in RMB ten thousand Yuan)
Heyuan CSG Mining 2,778
Industry Co., Ltd. - 75 75 YES 282 -
(2) The new subsidiary included in the scope of the consolidation in the report period.
(a) The new subsidiaries in the consolidation scope in the report period
30 June 2011 Net Asset Net Loss
Heyuan CSG PV Encapsulation Material Co., Ltd. 214,617,832 (2,210,492)
Xianning CSG Glass Co., Ltd. 45,558,720 (1,902,423)
Qingyuan CSG Energy Conservation New-materials Co., Ltd. 298,048,482 (1,458,744)
(i) Heyuan CSG PV Encapsulation Material Co., Ltd. established on 28 December 2010 in Heyuan, Guangdong. The proportion of holding share of
the Company was 75%, which all capital was paid by cash. And the 25% share has been held by the third party.
(ii) Xianning CSG Glass Co., Ltd. established on 17 March 2011 in Xianning, Hubei. The proportion of holding share of the Company was 100%,
with all capital was paid by cash.
(iii) Qingyuan CSG Energy Conservation New-materials Co., Ltd. established on 5 May 2011 in Qingyuan, Guangdong. The proportion of holding
share of the Company was 75%, which all capital was paid by cash. And the 25% share has been held by the third party.
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(b) The subsidiary not in the consolidation scope in the report period
Net profit from
Net asset beginning of the year
on disposal date to disposal date
Dongguan CSG Ceramics Technology Co., Ltd. 53,715,580 1,571,611
The Group disposed entire equity interests in Dongguan CSG Ceramics Technology Co., Ltd.,
and it was no longer included in the consolidation scope (Note 4(3)).
(3) Loss of subsidiary resulted from disposal of equity interest
Method of profit or loss
Day of sale recognition
Dongguan CSG Ceramics Technology Co., Ltd. 31 March 2011 Calculation see Note(3)(iii)
At 31 March 2011, the Company disposed its 100% shares of Dongguan CSG Ceramics
Technology Co., Ltd. to a natural person, Yang Bohuan. The day of sale was at 31 March 2011,
the date when the shares transfer agreement was entered into.
(a) Disposal consideration and cash flow are as follows
Amount
Disposal consideration 59,975,361
Cash and cash equivalents received 38,000,000
Less: Cash and cash equivalent held by Dongguan CSG Ceramics
Technology Co., Ltd. (5,417,116)
Net cash received 32,582,884
(b) Net assets of Dongguan CSG Ceramics Technology Co., Ltd. are as follows:
Disposed date 31 December 2010
Current Asset 23,589,543 18,156,148
Non-current Asset 89,845,789 90,486,935
Current Liability (59,719,752) (56,524,739)
Total 53,715,580 52,118,344
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(c) Profit or loss from disposal are as follows:
Amount
Consideration 59,975,361
Less: Net assets of Dongguan CSG Ceramics Technology Co., Ltd. at
disposed date (53,715,580)
Investment income 6,259,781
(d) Revenue, cost and income of Dongguan CSG Ceramics Technology Co., Ltd. from 1 January
2011 to the date of disposal date are as follows:
Amount
Revenue 12,909,603
Less: Cost and expenses (10,815,948)
Total Profit 2,093,655
Less: Income tax (522,044)
Net Profit 1,571,611
(4) Exchange rate for the translation of the major foreign operations’ financial statements
Asset and Liability Items Revenue, cost, expense and
30 June 2011 31 December 2010 cash flow items
China Southern Glass The spot exchange rate on
(Hong Kong) Limited 1HKD=0.8316RMB 1HKD=0.8509RMB transaction date
China Southern Glass The spot exchange rate on
(Australia) Pty Ltd. 1AUD=6.9173RMB 1AUD=6.7139RMB transaction date
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
5 Notes to the consolidated financial statements
(1) Cash at bank and on hand
30 June 2011 31 December 2010
Original Exchange RMB Original Exchange RMB
currency rate equivalent currency rate equivalent
Cash on hand-
RMB - - 35,068 - - 26,438
HKD 5,872 0.8316 4,883 6,159 0.8509 5,241
USD 3,981 6.4716 25,763 3,981 6.6227 26,365
EUR 5 9.3612 47 5 8.8065 44
AUD 200 6.9173 1,383 200 6.7139 1,343
JPY - 0.0802 - - 0.0813 -
67,144 59,431
Cash at bank
RMB - - 617,882,123 - - 536,004,238
HKD 87,310,089 0.8316 72,607,070 5,226,465 0.8509 4,447,199
USD 10,220,401 6.4716 66,142,345 9,866,622 6.6227 65,343,680
EUR 304,702 9.3612 2,852,372 128 8.8065 1,130
AUD 1,444,663 6.9173 9,993,167 2,044,840 6.7139 13,728,849
JPY 5,549 0.0802 445 5,535 0.0813 450
769,477,522 619,525,546
Other cash balances-
RMB - - 48,132,169 - - 167,824,062
HKD 4,022 0.8316 3,345 1,129 0.8509 961
EUR - 9.3612 - 3 8.8065 27
AUD 10,612 6.9173 73,406 10,612 6.7139 71,248
48,208,920 167,896,298
817,753,586 787,481,275
Other cash balances include margin deposits for issuing letters of credit and bank acceptance
notes, amounted to RMB47,925,350 (2010: RMB127,267,536), which is restricted cash.
(2) Notes receivable
30 June 2011 31 December 2010
Trade acceptance notes 50,421,601 66,165,045
Bank acceptance notes 354,157,206 296,509,070
404,578,807 362,674,115
(3) Accounts receivable
30 June 2011 31 December 2010
Accounts receivable 508,957,818 247,322,538
Less: provision for bad debts (10,220,437) (5,121,231)
498,737,381 242,201,307
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(a) The aging of accounts receivables are analysed below:
30 June 2011 31 December 2010
Within 1 year 507,129,738 244,914,839
1 to 2 years 1,056,431 1,013,654
2 to 3 years 771,649 1,394,045
508,957,818 247,322,538
(b) Accounts receivable are analyzed by categories as follows:
30 June 2011 31 December 2010
Provision for bad
Amount debts Amount Provision for bad debts
% of % of
total Provision for Provision total Provision for Provision
Amount balance bad debts coverage Amount balance bad debts coverage
Individually significant
and provided for bad
debts separately - - - - - - - -
Provided for bad debts
by portfolio
Portfolio 1 508,957,818 100% (10,220,437) 2% 247,322,538 100% (5,121,231) 2%
Individually not
significant but
provided for bad
debts separately - - - - - - - -
508,957,818 100% (10,220,437) 2% 247,322,538 100% (5,121,231) 2%
(c) As at 30 June 2011, the Group did not have any accounts receivable individually significant and
provided for bad debts separately.
(d) Those provision for bad debts by portfolio which was provided according to the proportion of
balance is analyzed as below:
30 June 2011 31 December 2010
Provision Provision for Provision Provision for
Portfolio Name Amount coverage bad debts Amount coverage bad debts
Portfolio 1 508,957,818 2% (10,220,437) 247,322,538 2% (5,121,231)
(e) As at 30 June 2011, the Group did not have any accounts receivable not individually significant
but provided for bad debts separately
(f) Accounts receivables of RMB103,413 were written off this first half year, all of which are small
accounts receivable and none of them was created from related-party transactions. The reasons
for written off include disputes with customers and unable to contact with creditors and etc.
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(g) The Group did not have any balances due by parties having 5% or above voting rights in the
Company.
(h) As at 30 June 2011, the Group’s five largest accounts receivable balances are set out below:
Relationship Amount Aging % of total balance
Client A Independent third party 93,728,281 With 1 year 18.42%
Client B Independent third party 43,250,619 With 1 year 8.50%
Client C Independent third party 37,666,397 With 1 year 7.40%
Client D Independent third party 33,892,328 With 1 year 6.66%
Client E Independent third party 27,977,914 With 1 year 5.50%
236,515,539 46.48%
(i) Amount due to related parties of the Group is analyzed as below
30 June 2011 31 December 2010
Provision Provision for Provision Provision for
Relationship Amount coverage bad debts Amount coverage bad debts
Guangdong Golden Glass Co.,
Ltd. (hereinafter referred to as
“ Golden Glass”) Associate 3,962,837 0.78% (79,257) 83,153 0.03% (1,663)
(j) The following balances were dominated in foreign currency.
30 June 2011 31 December 2010
Original Exchange RMB Original Exchange RMB
currency rate equivalent currency rate equivalent
HKD 5,613,088 0.8316 4,667,844 4,874,830 0.8509 4,147,993
USD 34,048,882 6.4716 220,350,745 10,510,142 6.6227 69,605,518
EUR 116,306 9.3612 1,088,764 57,954 8.8065 510,372
AUD 69,911 6.9173 483,595 66,248 6.7139 444,782
JPY 2,857,743 0.0802 229,191 9,143,493 0.0813 743,366
226,820,139 75,452,031
(4) Other receivables
30 June 2011 31 December 2010
Deposits with contractors 23,693,778 16,971,211
Payments on behalf of other parties 8,411,677 7,705,219
Staff advances 4,019,423 2,779,008
Receivable of export tax rebates 290,700 38,966,530
Receivable of equity transfer 21,975,361 -
Others 1,660,999 4,450,874
60,051,938 70,872,842
Less: Provision for bad debts (3,993,697) (4,250,518)
56,058,241 66,622,324
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(a) The aging of other receivables are analysed below:
30 June 2011 31 December 2010
With 1 year 54,575,060 67,324,526
1 to 2 years 2,250,567 427,641
2 to 3 years 278,768 171,646
3 to 4 years - 3,000
4 to 5 years 50,845 1,490,277
Over 5 years 2,896,698 1,455,752
60,051,938 70,872,842
(b) As at 30 June 2011, the Group did not have any accounts receivable individually significant and
provided for bad debts separately.
(c) Other receivables are analyzed by categories as follows:
30 June 2011 31 December 2010
Provision for bad
Amount debts Amount Provision for bad debts
% of % of
total Provision for Provision total Provision for Provision
Amount balance bad debts coverage Amount balance bad debts coverage
Individually significant
and provided for bad
debts separately - - - - - - - -
Provided for bad debts
by portfolio
Portfolio 1 57,211,202 95% (1,152,961) 2% 68,032,106 96% (1,409,782) 2%
Individually not
significant but
provided for bad
debts separately 2,840,736 5% (2,840,736) 100% 2,840,736 4% (2,840,736) 100%
60,051,938 100% (3,993,697) 7% 70,872,842 100% (4,250,518) 6%
(d) Those provision for bad debts by portfolio which was provided according to the percentage of
balance is analyzed as below:
30 June 2011 31 December 2010
Provision Provision for Provision Provision for
Portfolio Name Amount coverage bad debts Amount coverage bad debts
Portfolio 1 57,211,202 2% (1,152,961) 68,032,106 2% (1,409,782)
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(e) As at 30 June 2011, the provisions for other receivables that are not individually significant but
are subject to separate impairment assessment are analysed below:
% of total
Amount Provisions balance Reasons
IANUAS.P.A 1,490,277 (1,490,277) 100% Concluded as not be recovered
Guangdong Shilian Company Limited. 810,344 (810,344) 100% Concluded as not be recovered
Chen Ji 278,767 (278,767) 100% Can not reach the debtor
Cai Dirong 261,348 (261,348) 100% Can not reach the debtor
2,840,736 (2,840,736)
(f) Other receivables of RMB1,486 were written off this year, all of which are small accounts
receivable and none of them was arisen from related-party transactions. The reasons for written
off include disputes with customers and unable to contact with creditors and etc.
(g) The Group did not have any balances which were due by parties having 5% or above voting
rights in the Company.
(h) As at 30 June 2011, the largest five balances are set out below:
% of
total
Relationship Amount Aging balance
Yang Bohuan Independent third party 21,975,361 With 1 year 37%
Shenzhen Gas Group Co., Ltd. Independent third party 10,000,000 1 to 2 years 17%
Shanghai Natural Gas Grid Company Independent third party 5,050,000 With 1 year 8%
Administrative Committee of Wujiang
Economic Development Zone Independent third party 4,728,000 With 1 year 8%
Management Office of Construction and
Installation Independent third party 2,000,000 With 1 year 3%
43,753,361 73%
(i) There is no amount due from related parties of the Group.
(j) The balances of other receivables are mainly denominated in RMB.
(5) Advance to suppliers
(a) The aging of advance to suppliers are within one year.
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(b) As at 30 June 2011, the five largest advances to supplies are set out below:
% of total Payment
Relationship Amount balance time Reason for unsettlement
Supplier A Independent third party 18,886,221 11.87% 2011 Prepayment for raw materials
Supplier B Independent third party 15,715,115 9.87% 2011 Prepayment for raw materials
Supplier C Independent third party 15,000,000 9.42% 2011 Prepayment for raw materials
Supplier D Independent third party 14,935,136 9.38% 2011 Prepayment for raw materials
Supplier E Independent third party 8,569,264 5.38% 2011 Prepayment for fuels.
73,105,736 45.92%
(c) The Group did not have any balances which were due to parties having 5% or above
shareholdings in the Company.
(d) There is no advance to related companies of the Group.
(e) The main balances of advance to suppliers are dominated in RMB.
(6) Inventories
(a) The inventory is categorised as below:
30 June 2011 31 December 2010
Provision for Provision for
declines in declines in
the value of the value of
Book Balance inventories Net book value Book Balance inventories Net book value
Raw materials 237,776,370 - 237,776,370 241,967,312 - 241,967,312
Work in progress 18,452,934 - 18,452,934 26,907,734 - 26,907,734
Finished goods 235,417,496 (5,479) 235,412,017 170,622,657 (5,479) 170,617,178
Package materials 49,233,247 (778,218) 48,455,029 40,870,900 (1,627,330) 39,243,570
540,880,047 (783,697) 540,096,350 480,368,603 (1,632,809) 478,735,794
(b) The provisions for declines in the value of inventories is analysed below:
Less
31 December 2010 Additions Reverse Written off 30 June 2011
Finished goods 5,479 - - - 5,479
Package materials 1,627,330 - - (849,112) 778,218
1,632,809 - - (849,112) 783,697
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(c) The provisions for declines in the value of inventories are below:
Basis for accrued inventory Reasons of inventory The proportion of reversal to inventory
write-down provision write-down provision reversal report period ended balance
The amount of book value
Finished goods reduce net realizable value - -
The amount of book value
Package materials reduce net realizable value - -
(7) Other current assets
30 June 2011 31 December 2009
Non-current assets held for sale (a) 43,043,034 24,914,873
43,043,034 24,914,873
(a) In May 2011, the Company entered into an irrevocable agreement to transfer all the Company’s
shares of Guangdong CSG Glass Co., Ltd. to a third party (Note 11). All fix assets excluding
those buildings that will not be disposed of according to the share transfer agreement were
reclassified as non-current assets held for sale (Note 5(10), (12)).
(8) Long-term equity investments
30 June 2011 31 December 2009
Associates-with quoted price (a) 65,803,688 65,501,259
Other long-term equity investments (b) 444,997 444,997
Less: Provision for impairment of long-term
equity investments (c) (444,997) (444,997)
65,803,688 65,501,259
The fair value of associates stated above with
quoted price: 250,020,000 328,800,000
Golden Glass, an associate of the Group was listed on 8 July 2010. The Group held 18,000,000
shares of Golden Glass, of which 13,884,840 shares was restricted in 12 month since Golden
Glass’s listing and the rest 4,115,160 shares was restricted in 36 month since its listing. Besides,
the long-term equity investments of the Group are not subject to restriction on conversion into
cash.
The fair value of associates stated with quoted price based on the stock closing price at the end
of the report period.
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(a) Associates
Movement in the year
31 Net profit or loss declared Other
December Transfer in by adjusted under cash equity 30 June
Original Cost 2010 this year equity method dividend movement 2011
Golden Glass 23,000,000 65,501,259 - 1,302,429 (1,000,000) - 65,803,688
Notes for difference Provision made
Proportion Proportion of between proportion of in the report
Method of stake voting rights stake and voting rights Provision period
Golden Glass Equity Method 8.33% 8.33% None - -
(b) Other long-term equity investments
Cash
31 dividends
Accounting Original December Movement 30 June declared
Method Cost 2010 in the year 2011 this year
Hainan Pearl River Construction Co., Ltd. Cost method 395,000 395,000 - 395,000 -
Hainan Heng Tong Industrial Co., Ltd. Cost method 49,997 49,997 - 49,997 -
444,997 444,997 - 444,997 -
(c) Provision for impairment of long-term equity investments
31 December 2010 Additions Deduction 30 June 2011
Hainan Pearl River Construction Co., Ltd. 395,000 - - 395,000
Hainan Heng Tong Industrial Co., Ltd. 49,997 - - 49,997
444,997 - - 444,997
As the Group could not contact with these companies, the Company has no related financial
information about them, and gave full of impairment to these long-term equity investment.
(9) Investment of Associates
Three months ended 31
Proportion 31 March 2011 March 2011
Proportion of voting Total
of equity rights Total Asset Liability Net Asset Income Net Income
Golden Glass 8.33% 8.33% 1,020,809,293 217,621,666 803,187,627 75,558,870 8,920,210
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(10) Fixed asset
31 December 2010 Additions Deductions 30 June 2011
Total cost 11,107,644,950 466,684,848 (106,375,276) 11,467,954,522
Buildings 2,423,251,051 18,556,742 (75,892,495) 2,365,915,298
Machinery and equipment 8,482,323,099 430,409,254 (22,109,805) 8,890,622,548
Motor vehicles and others 202,070,800 17,718,852 (8,372,976) 211,416,676
Accumulated depreciation 2,048,830,134 301,815,448 (24,289,979) 2,326,355,603
Buildings 274,952,777 39,211,288 (17,794,955) 296,369,110
Machinery and equipment 1,665,872,394 251,609,495 (1,574,469) 1,915,907,420
Motor vehicles and others 108,004,963 10,994,665 (4,920,555) 114,079,073
Total book value 9,058,814,816 - - 9,141,598,919
Buildings 2,148,298,274 - - 2,069,546,188
Machinery and equipment 6,816,450,705 - - 6,974,715,128
Motor vehicles and others 94,065,837 - - 97,337,603
Total provision for impairment loss 227,919,300 - - 227,919,300
Buildings 3,833,553 - - 3,833,553
Machinery and equipment 224,049,634 - - 224,049,634
Motor vehicles and others 36,113 - - 36,113
Net book value 8,830,895,516 - - 8,913,679,619
Buildings 2,144,464,721 - - 2,065,712,635
Machinery and equipment 6,592,401,071 - - 6,750,665,494
Motor vehicles and others 94,029,724 - - 97,301,490
As at 30 June 2011, building with net book value of RMB7,387,239 (original cost at
RMB9,045,679) (31 December 2010: net book value of RMB7,429,551, original cost at
RMB9,045,679) was pledged as security for long-term borrowings within one year of
RMB1,302,889 (31 December 2010: long-term borrowings within one year of RMB3,801,425)
(Note 5(26)).
The depreciation charged in the first half year 2011 was RMB301,815,448 (the first half year 2010:
RMB263,621,244). Among these, the depreciation charged to cost of sales, selling expenses and
administrative expenses were RMB282,586,349, RMB1,745,695 and RMB17,483,404,
respectively (In the first half year 2010: RMB248,332,028, RMB1,149,807 and RMB14,139,409).
The amount of fixed assets transferred from constructions in progress was RMB426,358,367 (In
the first half year 2010: RMB94,318,843).
(a) Fixed asset held for sale
At 30 June 2011, the fixed assets held for sale by the group are listed as below:
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
Book value
Buildings 12,393,295
12,393,295
(b) As at 30 June 2011, Buildings Ownership Certificates for certain buildings of the Group with
carrying amounts of approximately RMB1,040,636,521 (original cost of RMB1,180,035,570) (31
December 2010: carrying amount of RMB1,183,450,183, original cost of RMB1,324,528,563) had
not yet been obtained by the Group. Included were certain buildings with carrying amounts of
RMB 555,499,444 (original cost at RMB612,085,794) because the land ownership certificates of
the lands on which these buildings located had not been obtained (31 December 2010: carrying
amount of RMB601,178,793, original cost of RMB 652,067,903). 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.
Estimated date of obtaining
Reason the ownership certificate
Have submitted the required documents
and are in the process of application, or the
Building related land use right certificate pending. 2012
(11) Construction in progress
30 June 2011 31 December 2010
Impairment Net Book Impairment Net Book
Book Value Provision Value Book Value Provision Value
Yichang 100MW silicon slice project 73,536,161 - 73,536,161 43,632,950 - 43,632,950
rd
The 3 phase of Yichang 700MW silicon
- -
slice expansion project 38,474,211 38,474,211 20,205,374 20,205,374
nd
The 2 phase of Yichang life region project 19,953,854 - 19,953,854 14,688,958 - 14,688,958
Chengdu new coating production line 18,410,548 - 18,410,548 15,783,337 - 15,783,337
Wujiang energy glass expansion project 176,295,614 - 176,295,614 80,188,309 - 80,188,309
Shenzhen CSG cogeneration project 28,732,470 - 28,732,470 4,947,713 - 4,947,713
Shenzhen Float TCO project 993,156 - 993,156 7,847,824 - 7,847,824
Hebei CSG cogeneration project 38,602,345 - 38,602,345 20,312,073 - 20,312,073
Hebei Shichuang glass project 91,929,275 - 91,929,275 13,532,207 - 13,532,207
nd
The 2 phase of ITO-FILM project 30,421,787 - 30,421,787 23,528,621 - 23,528,621
Wujiang float glass project 533,104,958 - 533,104,958 192,453,529 - 192,453,529
Dongguan Solar Glass PV-tech Battery
- -
200MW Expansion project 174,856,804 174,856,804 25,099,265 25,099,265
Heyuan CSG PV Encapsulation project 41,915,676 - 41,915,676 - - -
rd
The 3 phase of Dongguan solar energy
- -
glass project 167,533,661 167,533,661 43,532,941 43,532,941
Tianjin Coating Line B upgrade project (i) 58,133,093 - 58,133,093 55,404,671 - 55,404,671
Dongguan energy glass expansion project 92,949,355 - 92,949,355 59,807,347 - 59,807,347
Jiangyou placer project 96,938,882 - 96,938,882 65,169,656 - 65,169,656
Other projects 78,358,794 (2,022,902) 76,335,892 101,965,540 (2,022,902) 99,942,638
1,761,140,644 (2,022,902) 1,759,117,742 788,100,315 (2,022,902) 786,077,413
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(a) Movement of Significant Project
Proportion
Transfer to between Amount of a Amount of
fixed assets Engineering ccumulated interest
31 December Current year during the 30 June input and interest capitalized Capitalization
Name of projects Budget 2010 additions current year 2011 budget capitalized in 2010 rate for 2010 Source of fund
Yichang 100MW silicon slice project 250,000,000 43,632,950 153,478,990 (123,575,779) 73,536,161 79% 2,673,639 2,361,529 6.58% Internal fund and loan
rd
The 3 phase of Yichang 700MW silicon
slice expansion project 1,025,000,000 20,205,374 18,268,837 - 38,474,211 4% 5,436,910 5,436,910 6.58% Internal fund and loan
nd
The 2 phase of Yichang life region project 25,500,000 14,688,958 5,264,896 - 19,953,854 78% 802,607 802,607 6.58% Internal fund and loan
Chengdu new coating production line 20,168,170 15,783,337 2,710,911 (83,700) 18,410,548 92% 833,078 469,052 5.56% Internal fund and loan
Wujiang energy glass expansion project 200,095,195 80,188,309 103,808,871 (7,701,566) 176,295,614 92% 3,092,456 2,433,459 6.71% Internal fund and loan
Shenzhen CSG cogeneration project 48,090,000 4,947,713 23,784,757 - 28,732,470 60% 452,776 452,776 4.62% Internal fund and loan
Shenzhen Float TCO project 23,705,352 7,847,824 17,375,312 (24,229,980) 993,156 100% 318,681 286,181 4.79% Internal fund and loan
Hebei CSG cogeneration project 60,181,536 20,312,073 18,290,272 - 38,602,345 64% - - - Internal fund
Hebei Shichuang glass project 375,536,452 13,532,207 78,397,068 - 91,929,275 24% - - - Internal fund
nd
The 2 phase of ITO-FILM project 30,584,450 23,528,621 7,344,172 (451,006) 30,421,787 77% 163,745 163,745 3.26% Internal fund and loan
Wujiang float glass project 970,102,952 192,453,529 340,651,429 - 533,104,958 55% 7,974,356 5,829,962 5.78% Internal fund and loan
Dongguan Solar Glass PV-tech Battery
200MW Expansion project 697,000,000 25,099,265 302,552,794 (152,795,255) 174,856,804 47% 4,241,255 3,336,581 5.51% Internal fund and loan
Heyuan CSG PV Encapsulation project 602,722,803 - 41,915,676 - 41,915,676 7% - - - Internal fund and loan
rd
The 3 phase of Dongguan solar energy -
glass project 555,576,800 43,532,941 124,000,720 167,533,661 30% 2,909,588 2,909,588 6.13% Internal fund and loan
Tianjin Coating Line B upgrade project (i) 24,500,000 55,404,671 2,728,422 - 58,133,093 85% 136,343 38,384 4.76% Internal fund and loan
Dongguan energy glass expansion project 130,740,000 59,807,347 33,142,008 - 92,949,355 71% 961,892 961,892 5.50% Internal fund and loan
Jiangyou placer project 131,083,358 65,169,656 35,987,731 (4,218,505) 96,938,882 77% 528,000 528,000 7.04% Internal fund and loan
686,134,775 1,309,702,866 (313,055,791) 1,682,781,850 30,525,326 26,010,666
(i) Such projects were production line modification, the proportion of project input by the budget was determined by the proportion which was
actually incurred cost by modification budget.
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(b) Provision for impairment of Construction in Progress
31
December 30 June
Name 2010 Addition Deduction 2011 Reason for provision
Equipments not suitable or
will not for use. Provision is
determined by the difference
between carrying amount
and estimated net selling
Yichang Silicon products project 2,022,902 - - 2,022,902 price.
(c) Progress analyze of significant Construction in progress
Progress Note
Yichang 100MW silicon slice project 75% Physical progress of the construction work
The 3rd phase of Yichang 700MW silicon slice expansion project 20% Physical progress of the construction work
The 2nd phase of Yichang life region project 80% Physical progress of the construction work
Chengdu new coating production line 95% Physical progress of the construction work
Wujiang energy glass expansion project 99% Physical progress of the construction work
Shenzhen CSG cogeneration project 90% Physical progress of the construction work
Hebei CSG cogeneration project 95% Physical progress of the construction work
Hebei Shichuang glass project 40% Physical progress of the construction work
The 2nd phase of ITO-FILM project 77% Physical progress of the construction work
Wujiang float glass project 70% Physical progress of the construction work
Dongguan Solar Glass PV-tech Battery 200MW Expansion project 70% Physical progress of the construction work
Heyuan CSG PV Encapsulation project 23% Physical progress of the construction work
The 3rd phase of Dongguan solar energy glass project 60% Physical progress of the construction work
Tianjin Coating Line B upgrade project (i) 86% Physical progress of the construction work
Dongguan energy glass expansion project 70% Physical progress of the construction work
Jiangyou placer project 90% Physical progress of the construction work
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(12) Intangible assets
31 December
2010 Additions Decrease 30 June 2011
Total original cost 470,662,500 151,494,447 (37,375,990) 584,780,957
Land use rights 387,866,222 149,327,757 (37,253,356) 499,940,623
Patents 62,177,280 1,580,500 - 63,757,780
Exploitation rights 4,456,536 - - 4,456,536
Others 16,162,462 586,190 (122,634) 16,626,018
Accumulated amortization 89,385,583 9,399,642 (5,711,485) 93,073,740
Land use rights 73,883,713 5,663,296 (5,653,533) 73,893,476
Patents 13,291,317 3,122,994 - 16,414,311
Exploitation rights 741,793 200,320 - 942,113
Others 1,468,760 413,032 (57,952) 1,823,840
Net book value 381,276,917 491,707,217
Land use rights 313,982,509 - - 426,047,147
Patents 48,885,963 - - 47,343,469
Exploitation rights 3,714,743 - - 3,514,423
Others 14,693,702 - - 14,802,178
In the first half year 2011, the amortization amount is RMB9,399,642 (the first half year 2010：
RMB8,382,913).
As at 30 June 2011, ownership certificates of land use right (“Land ownership Certificates”) for
certain land use rights of the Group with carrying amounts of approximately RMB161,645,522
(Original cost: RMB167,819,933) had not yet been obtained by the Group (31 December 2010,
net book value: RMB50,481,776, original cost: RMB55,597,474). The Company’s directors are
of the view that there is no legal restriction for the Group to apply for and obtain the Land
Ownership Certificates and there will not be any significant adverse impact on the operations of
the Group. The management expected that the land use right certificates can be obtained in the
period in 2011.
(a) Intangible assets for sale
Book value
Land use right 30,649,739
30,649,739
Research expenditure is analyzed below:
Decrease
Recognize
31 December Current year Recognized as as intangible
2010 additions expense asset 30 June 2011
Development expenditure 3,142,226 18,097,355 (12,635,191) (552,783) 8,051,607
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
In the first half year 2011, the total amount of research and development expenditures of the
Group is RMB51,511,351 (the first half year 2010: RMB39,243,330), including RMB46,049,187
(the first half year 2010: RMB28,983,314) recorded in income statement. In the first half year
2011, RMB18,097,355 (the first half year 2010: RMB23,835,076) was recognised as development
expenditures, RMB552,783 (the first half year 2010: RMB5,410,560) was recognised as
intangible assets. The proportion of development expenditures is 35% (the first half year 2010:
61%) of total development and research expenditures. As at 30 June 2011, the proportion of
intangible assets arisen from internal research and development accounted for 2.24% of total of
intangible assets (2010: 2.84%).
(13) Goodwill
31 December
2010 Addition Deduction 30 June 2011
Goodwill
- Tianjin CSG Architectural Glass Co., Ltd. 3,039,946 - - 3,039,946
- Heyuan CSG Mining Development Co., Ltd. 15,364,434 - - 15,364,434
18,404,380 - - 18,404,380
The management determined the recoverable amount of goodwill based on estimation of cash
flow in the next five years. The management determined the estimated value of marginal profit by
historical experiences and expected development of market. The weighted average growth rate
they used agreed with the report in the same industry. The discount rate adopted was pre-tax rate
and reflected the special risk related with operation. The directors of the company considered that
goodwill do not have impairment risk at 30 June 2011, so it is not necessary to accrued
impairment.
(14) Deferred income tax assets and liabilities
(a) Deferred income tax assets before offset
30 June 2011 31 December 2010
Deferred income The temporary Deferred income The temporary
tax assets differences tax assets differences
Provisions for impairment of assets 49,557,545 226,728,880 52,076,731 241,391,757
Start-up cost 452,328 3,618,622 561,422 4,267,525
Accrued expense 1,843,954 13,748,828 2,148,025 15,788,741
Tax loss 13,669,068 68,379,232 20,286,588 106,520,834
Provisions 394,031 2,626,872 510,000 3,400,000
Special payables 5,306,647 21,226,590 5,332,153 22,053,600
Accumulated depreciation 2,430,607 12,856,302 2,167,204 9,131,292
73,654,180 349,185,326 83,082,123 402,553,749
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(b) Deferred income tax liabilities before offset
30 June 2011 31 December 2010
Deferred income The temporary Deferred income The temporary
tax liabilities differences tax liabilities differences
Accumulated depreciations 2,991,090 19,504,637 3,204,886 13,749,631
Investment income 9,528,616 41,393,672 9,783,577 42,501,259
Withholding income tax (i) 15,674,997 297,408,834 19,724,166 380,548,330
28,194,703 358,307,143 32,712,629 436,799,220
(i) In accordance with CIT, if the subsidiaries in China Mainland remit dividends to those
subsidiaries overseas, the overseas subsidiaries should pay the certain income tax for their
dividends.
(c) The temporary differences and tax loss not recognized as deferred income tax assets are
analyzed below:
30 June 2011 31 December 2010
Temporary differences 810,344 810,344
Deductible tax loss (i) 150,168,650 146,162,355
150,978,994 146,972,699
(i) The deductible tax losses not recognized as deferred tax assets mainly represented the tax
losses of the Company and some closed subsidiaries. The management expected that it is
not probable that taxable profit will be available in the future against which these deductible
tax losses can be utilized, and accordingly, did not recognize the deferred tax assets.
(d) The tax losses for which deferred tax assets are not recognized will expire in the following years:
30 June 2011 31 December 2010
2011 11,467,004 11,699,296
2012 37,940,082 37,940,082
2013 22,935,008 23,009,645
2014 7,032,836 8,933,973
2015 37,492,881 64,579,359
2016 33,300,839 -
150,168,650 146,162,355
(e) The offsetting amount between deferred income tax assets and deferred income tax liabilities
30 June 2011 31 December 2010
Deferred income tax assets 2,374,555 3,204,886
Deferred income tax liabilities 2,374,555 3,204,886
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
Net deferred income tax assets and deferred income tax liabilities after offsetting:
30 June 2011 31 December 2010
Net deferred Temporary Net deferred Temporary
income tax assets differences and income tax assets differences and
or liabilities deductable tax loss or liabilities deductable tax loss
Deferred income tax assets 71,279,625 334,612,962 79,877,237 388,804,118
Deferred income tax liabilities 25,820,148 343,734,779 29,507,743 423,049,589
(15) Other non-current asset
Other non-current assets are the prepayment of land premium.
(16) Asset of impairment
31 December Deductions
2010 Additions Reverse Written-off 30 June 2011
Provisions for bad debts 9,371,749 5,555,438 (608,154) (104,899) 14,214,134
-accounts receivables 5,121,231 4,926,451 276,168 (103,413) 10,220,437
-other receivables 4,250,518 628,987 (884,322) (1,486) 3,993,697
Provisions for impairment of inventories 1,632,809 - - (849,112) 783,697
Provisions for impairment of long-term
444,997
investment 444,997 - - -
Provisions for impairment of fixed assets 227,919,300 - - - 227,919,300
Provisions for constructions in progress 2,022,902 - - - 2,022,902
241,391,757 5,555,438 (608,154) (954,011) 245,385,030
(17) Short-term borrowings
(a) Categorization of short-term borrowings
30 June 2011 31 December 2010
Guaranteed 661,856,204 197,753,478
Unsecured 769,911,391 679,379,337
1,431,767,595 877,132,815
As at 30 June 2011, loans of certain subsidiaries of the Company amounting to RMB661,856,204
(31 December 2010: RMB197,753,478) were guaranteed by the Company, of which, the minority
shareholders provided a back to back guarantee to the Company amounting to RMB48,568,835
(31 December 2010: RMB13,112,410).
In the first half year 2011, the weighted average interest rate of short-term borrowings was 4.50%
per annum (2010: 2.47%).
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(b) The following balances were dominated in foreign currency.
30 June 2011 31 December 2010
Original Exchange RMB Original Exchange RMB
currency rate equivalent currency rate equivalent
HKD 116,002,789 0.8316 96,467,919 190,000,000 0.8509 161,676,700
USD 70,994,186 6.4716 459,445,974 97,755,344 6.6227 647,404,316
EUR 2,120,850 9.3612 19,853,701 153,500 8.8065 1,351,798
575,767,594 810,432,814
(18) Notes payable
30 June 2011 31 December 2010
Trade acceptance notes 2,239,799 6,997,365
Bank acceptance notes 288,050,978 230,894,116
290,290,777 237,891,481
All notes payable are due within one year.
(19) Accounts payable
30 June 2011 31 December 2010
Account payable for materials 609,689,824 459,037,907
Account payable for equipments 268,272,390 279,339,619
Account payable for constructions 82,968,219 157,282,139
Account payable for freight 38,263,286 28,642,006
Others 33,348,190 26,008,582
1,032,541,909 950,310,253
(a) The Group did not have any balances which were due to parties having 5% or above
shareholdings in the Company.
(b) Accounts payable due to related parties.
30 June 2011 31 December 2010
Golden Glass 3,686,820 3,334,469
(c) As at 30 June 2011, accounts payable over 1 year is approximately RMB174,736,835 (31
December 2011: RMB181,368,593), which mainly comprised of payables for construction works.
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(d) The following balances were dominated in foreign currency
30 June 2011 31 December 2010
Original Exchange RMB Original Exchange RMB
currency rate equivalent currency rate equivalent
HKD 673,812 0.8316 560,342 618,730 0.8509 526,477
USD 7,585,602 6.4716 49,090,982 6,184,037 6.6227 40,955,022
EUR 4,276,467 9.3612 40,032,863 2,589,239 8.8065 22,802,131
JPY 80,660,973 0.0802 6,469,010 60,221,501 0.0813 4,896,008
AUD 17,970 6.9173 124,304 350,429 6.7139 2,352,745
96,277,501 71,532,383
(20) Advances from customers
30 June 2011 31 December 2010
Advances from customers 121,160,227 161,127,001
The Group did not have any balances which were due to parties having 5% or above voting rights
in the Company.
The Group did not have any balances which were due to related parties.
The balances were substantively dominated in RMB and with the aging within 1 year.
(21) Employee benefits payable
31 December 2010 Additions Decrease 30 June 2011
Wages and salaries, bonuses,
allowances and subsidies 85,131,990 319,857,955 (330,912,066) 74,077,879
Social security contributions 299,764 36,134,509 (35,357,098) 1,077,175
Included: Pension 81,013 25,542,774 (25,033,307) 590,480
Medical 85,557 7,704,957 (7,546,365) 244,149
Unemployment 72,569 1,605,660 (1,541,871) 136,358
Injury 33,072 807,001 (775,994) 64,079
Maternity 27,553 474,117 (459,561) 42,109
Housing funds 528,174 12,823,363 (12,969,802) 381,735
Labor union and employee
education funds 8,489,517 5,283,246 (5,161,319) 8,611,444
Management bonus (a) 92,547,882 37,500,000 (124,225,561) 5,822,321
186,997,327 411,599,073 (508,625,846) 89,970,554
(a) Pursuant to the resolution in the 15th 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 RMB37,500,000 (the first half year 2010: RMB30,000,000)
were accrued and charged to income statements.
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
As at 30 June 2011, there was no overdue payroll and welfare expense. The balances will be
settled in 2011.
In the first half year 2011, the staff costs recognized relating to share based payment amounted to
RMB19,804,713 (the first half year 2010: RMB36,227,271) (Note 8).
(22) Taxes payable
30 June 2011 31 December 2010
Credited Value-added-tax (67,194,276) (490,279)
Corporate income tax payable 112,171,842 106,418,318
Business tax payable 79,699 257,657
Others 15,282,926 15,046,692
60,340,191 121,232,388
(23) Interest payable
30 June 2011 31 December 2010
Interest payable for long-term borrowings 2,112,318 1,637,717
Interest for corporate bonds (Note5(29)) 74,505,379 21,205,379
Interest payable for short-term borrowings 4,038,474 1,746,414
80,656,171 24,589,510
(24) Dividends payable
As at 30 June 2011, the balance of the dividends payable included minority dividends declared
but not yet to pay of Yichang CSG Silicon Co., Ltd., subsidiary company, and those declared
before the Share Merger Reform of the Company but not yet able to pay to the shareholders.
(25) Other payables
30 June 2011 31 December 2010
Repurchase of shares 1,355,580 2,762,840
Guarantee deposits received from fixed assets vendors 87,378,706 83,051,187
Temporary receipts 23,994,304 20,512,763
Accrued operating expenses (i) 35,419,544 25,442,916
Contracted labor costs 3,951,793 1,271,174
Earnest of equity transfer 150,000,000 -
Others 25,664,133 28,345,362
327,764,060 161,386,242
(i) Accrued operating expenses include expenses that has incurred but not received invoices,
including utilities expenses, service charges, travelling expenses, etc.
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
The Groups did not have any balances which were due to parties holding 5% or above voting
rights of the Company.
The Groups did not have any balances which were due to related parties
Most of the other payables are due within 1 year. The balances are substantively dominated in
RMB.
(26) Non-current liabilities due within 1 year
30 June 2011 31 December 2010
Long-term borrowing due within 1year
- pledged (i) 1,302,889 3,801,425
- guaranteed (ii) 164,214,845 71,889,116
- unsecured 74,423,432 -
239,941,166 75,690,541
(i) Certain fixed assets with the net book value of RMB7,387,239 (2010: RMB7,429,551) (cost
of RMB9,045,679 (2010: RMB9,045,679)) were pledged (Note5 (10)). The interest is payable
every month and the principals will be repaid by monthly installments in 2011.
(ii) The loans are guaranteed by the Company in favor of the subsidiaries, of which RMB
8,913,900 (31 December 2010: RMB3,125,000) were back to back guaranteed by the
minority shareholders of the subsidiaries of the Company.
(a) The top 5 long-term borrowings due within 1 year:
30 June 2011 31 December 2010
Beginning Maturity Foreign Currency
date date Currency Interest rate (%) amount RMB amount RMB
Bank A 2010-03-25 2012-03-12 USD 1 month LIBOR + 1.55% 10,000,000 64,716,000 - -
Bank B 2009-10-13 2011-10-12 USD 1 month LIBOR + 1.55% 5,975,000 38,667,810 - -
Bank C 2011-05-31 2012-06-29 USD 3 months LIBOR + 5.8% 4,200,000 27,180,720 - -
Bank D 2010-04-27 2012-04-26 RMB Benchmark interest rate - 20,000,000 - -
Benchmark interest rate
Bank C 2009-06-22 2012-06-21 RMB with 10% off - 13,500,000 - -
164,064,530 -
(b) The following balances of long-term borrowings due within 1 year are dominated in foreign
currency:
30 June 2011 31 December 2010
Original Exchange RMB Original Exchange RMB
Currency rate Equivalent Currency rate Equivalent
HKD 1,566,726 0.8316 1,302,889 4,467,377 0.8509 3,801,425
USD 24,667,513 6.4716 159,638,277 8,967,508 6.6227 59,389,116
160,941,166 63,190,541
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(27) Other current liabilities
31 December Current year Current year
2010 additions reductions 30 June 2011
Provision
- Warranty 2,626,872 - - 2,626,872
- Others 300,000 - - 300,000
2,926,872 - - 2,926,872
(28) Long-term borrowings
30 June 2011 31 December 2010
Guarantee (i) 317,120,890 264,424,940
Unsecured 856,817,520 463,778,672
1,173,938,410 728,203,612
(i) As at 30 June 2011, loans of certain subsidiaries of the Company were guaranteed by the
Company, of which, the minority shareholders provided a back to back guarantee to the
Company amounting to RMB24,803,406 (31 December 2010: RMB30,392,664). The
interest should be paid monthly or quarterly. The principals will be repaid between July 2012
and May 2019.
(a) The top 5 long-term borrowings:
30 June 2011 31 December 2010
Beginning Maturity Foreign Currency
Date date Currency Interest rate (%) amount RMB amount RMB
Bank E 2011-03-10 2013-02-15 USD 3 months LIBOR + 3.0% 32,000,000 207,091,200 - -
Benchmark interest rate
Bank F 2011-05-31 2014-05-31 RMB with 10% off - 100,000,000 - -
Bank E 2011-04-14 2013-03-22 USD 3 months LIBOR + 2.9% 12,200,000 78,953,520 - -
Benchmark interest rate
Bank G 2011-04-28 2014-04-27 RMB with 10% off - 50,000,000 - -
Benchmark interest rate
Bank F 2011-04-21 2014-04-21 RMB with 10% off - 50,000,000 - -
486,044,720 -
(b) The maturity of long-term borrowings is :
30 June 2011 31 December 2010
Between 1 to 2 years 369,387,240 195,585,990
Between 2 to 5 years 768,772,800 532,617,622
Over 5 years 35,778,370 -
1,173,938,410 728,203,612
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(c) The following balances were dominated in foreign currency.
30 June 2011 31 December 2010
Original Exchange RMB Original Exchange RMB
currency rate equivalent currency rate equivalent
USD 59,928,520 6.4716 387,833,410 22,400,020 6.6227 148,348,612
387,833,410 148,348,612
The weighted average interest rate of long-term borrowings was 4.82% per annum as at 30 June
2011 (2010: 4.68%).
(29) Bonds Payable
31 December
2010 Addition Deduction 30 June 2011
Corporate Bonds 1,978,479,422 1,959,084 - 1,980,438,506
Related information on bonds is as below:
Issuing
Par value Issuing date Bond maturity amount
Corporate Bonds 1,000,000,000 20 October, 2010 5 Years 989,100,000
Corporate Bonds 1,000,000,000 20 October, 2010 7 Years 989,100,000
Accrued interest of bonds this year analyzed below:
31 December Accrued Paid
2009 interest interest 30 June 2011
Corporate bonds (Note5(23)) 21,205,379 53,300,000 - 74,505,379
According to the China Securities Regulatory Commission license [2010] No 1369 published by
the China Securities Regulatory Commission, the Company issued the corporate bonds on 20
October 2010, with a par value of 2 billion. The Corporate Bonds include 1 billion that will mature
in 5 years and another 1 billion that will mature in 7 years (“7 year Bonds”). The 7 year Bonds
holders have a put option over the Company to repurchase at the end of the fifth year. The
Corporate Bonds carried at fixed interest rate of 5.33% per year, the interests are paid annually,
and the effective interest rate is 5.59%.
(30) Other non-current liabilities
30 June 2011 31 December 2010
Deferred income (a) 120,335,848 83,537,976
Government interest-free loans (b) 153,634,600 90,000,000
273,970,448 173,537,976
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(a) Deferred income related to governmental grants
30 June 2011 31 December 2010
- Yichang Silicon products project(i) 40,078,125 41,484,376
- Chengdu Float Cogeneration project(ii) 21,226,590 22,053,600
- Shenzhen Float TCO Glass project (iii) 20,000,000 20,000,000
- Wujiang CSG Glass Co., Ltd. (iv) 39,031,133 -
120,335,848 83,537,976
(i) As at 31 December 2010, the balance represented amounts paid to Yi Chang CSG Silicon
Materials Co., Ltd. (“Yichang Silicon”) by Yichang City Dongshan Development Corporation
under the provisions of the investment contract signed between the Group and the Municipal
Government of Yi Chang. The proceeds were designed for the construction of electricity
transformer and the pipelines. Yichang Silicon is entitled to the ownership of the facilities.
(ii) It represented the assistance granted by Chengdu local government for energy glass project.
It will be amortised and credited to income statement in 15 years, in accordance with the
minimum operating period committed.
(iii) It represented the special funds granted by Shenzhen City Development and Reform
Commission for new energy development. It should be invested in constructing “TCO” glass
production base, TCO glass laboratory and experimental analysis centre. Shenzhen CSG
Float Glass Co., Ltd is entitled to the ownership of the facilities. They will be amortised and
credited to income statement in 15 years, in accordance with the useful life of related fixed
assets.
(iv) It represented the compensation fund by Wujiang municipal government for infrastructure. It
will be amortized and credited to income statement in 15 years, in accordance with the
minimum operating period committed.
(b) It represented loan from Yichang local financial department borrowed by Yichang CSG. It should
be used for the infrastructure construction. The loan is interest free and repayable on 20
December, 2013.
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(31) Share capital
Movement
New issues
31 December during the Bonus Capitalisa
2010 year issue -tion Others Subtotal 30 June 2011
Shares with restriction on disposals
- State shares - - - - - - -
- PRC legal person shares - - - - - - -
- Others 39,651,513 - - - (15,924,629) (15,924,629) 23,726,884
Included: Domestic no-state shares - - - - - - -
Domestic person shares 39,651,513 - - - (15,924,629) (15,924,629) 23,726,884
39,651,513 - - - (15,924,629) (15,924,629) 23,726,884
Shares without restriction on disposals
- PRC public shares 1,274,485,555 - - - 15,346,629 15,346,629 1,289,832,184
- Domestically listed foreign shares 762,583,992 - - - - - 762,583,992
2,037,069,547 - - - 15,346,629 15,346,629 2,052,416,176
2,076,721,060 - - - (578,000) (578,000) 2,076,143,060
Movement
New
issues
31 December during the Bonus
2009 year issue Capitalisation Others Subtotal 30 June 2010
Shares with restriction on disposals
- State shares - - - - - - -
- PRC legal person shares 80,000,000 - - 56,000,000 - 56,000,000 136,000,000
- Others 128,275,000 - - 89,062,750 (18,574,737) 70,488,013 198,763,013
Included: Domestic no-state shares 92,500,000 - - 64,750,000 - 64,750,000 157,250,000
Domestic person shares 35,775,000 - - 24,312,750 (18,574,737) 5,738,013 41,513,013
208,275,000 - - 145,062,750 (18,574,737) 126,488,013 334,763,013
Shares without restriction on disposals
- PRC public shares 566,884,305 - - 396,819,013 17,532,237 414,351,250 981,235,555
- Domestically listed foreign shares 448,578,819 - - 314,005,173 - 314,005,173 762,583,992
1,015,463,124 - - 710,824,186 17,532,237 728,356,423 1,743,819,547
1,223,738,124 - - 855,886,936 (1,042,500) 854,844,436 2,078,582,560
The nominal value of the Domestic is RMB1, and that of domestically listed foreign shares is HKD
1.
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(32) Capital reserve
Current year Current year
31 December 2010 additions reductions 30 June 2011
Capital premium 1,024,106,464 158,798,226 (9,348,981) 1,173,555,709
Other reserve 285,727,748 19,718,261 (153,094,428) 152,351,581
Change in fair value of
available-for-sale financial assets - - - -
Share based payment (Note 8) 286,515,470 18,630,761 (153,094,428) 152,051,803
Acquisition of minority interest - - - -
Finance incentives for energy and
technical transformation 1,462,500 1,087,500 - 2,550,000
Transfer from the balance of
capital surplus recognized under
previous accounting system (2,250,222) - - (2,250,222)
1,309,834,212 178,516,487 (162,443,409) 1,325,907,290
Current year Current year
31 December 2009 additions reductions 30 June 2010
Capital premium 1,777,902,326 142,728,409 (855,886,936) 1,064,743,799
Other reserve 349,711,541 34,470,256 (152,872,280) 231,309,517
Change in fair value of
available-for-sale financial assets 6,184,231 - (6,184,231) -
Share based payment (Note 8) 380,487,961 34,470,256 (146,688,049) 268,270,168
Acquisition of minority interest (36,172,929) - - (36,172,929)
Finance incentives for energy and
technical transformation 1,462,500 - - 1,462,500
Transfer from the balance of
capital surplus recognized under
previous accounting system (2,250,222) - - (2,250,222)
2,127,613,867 177,198,665 (1,008,759,216) 1,296,053,316
(33) Special Reserve
31 December
2009 Addition Deduction 30 June 2011
Safety production cost 5,683,705 3,182,915 (780,604) 8,086,016
Yichang CSG is a high risk chemical production enterprise and appropriates such reserve in
accordance with relevant regulations.
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(34) Surplus reserve
31 December Current year Current year
2010 additions reductions 30 June 2011
Statutory surplus reserve 378,677,580 - - 378,677,580
Discretionary surplus reserve 127,852,568 - - 127,852,568
506,530,148 - - 506,530,148
31 December Current year Current year
2009 additions reductions 30 June 2010
Statutory surplus reserve 309,202,034 - - 309,202,034
Discretionary surplus reserve 127,852,568 - - 127,852,568
437,054,602 - - 437,054,602
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. The Company did not
appropriate to the statutory surplus reserve during the report period.
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.
(35) Undistributed profit
Jan. ~ Jun. 2011 Jan. ~ Jun. 2010
Appropriation Appropriation
Amount rate Amount rate
Undistributed profit at the beginning 2,484,699,065 1,526,908,861
Add: net profits belonging to parent shareholders 837,643,342 635,951,595
Less: Appropriation of statutory surplus reserve - - - -
Dividends payable (726,650,071) 50% (427,943,468) 51%
Undistributed profits in the end 2,595,692,336 1,734,916,988
As at 30 June 2011, undistributed profit of the Group included the surplus reserve of the
subsidiaries attributable to the Group amounting to RMB545,112,810 (31 December 2010:
RMB545,112,810). The Company and its subsidiary companies did not appropriate to statutory
surplus reserve during the report period (the first half year 2010: Nil).
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
Pursuant to the resolution of board of directors of the Company on 15 April 2010, the Company
will distribute a dividend of RMB 3.50 （including tax） for each 10 shares based on the total
2,076,143,060 shares, totaling RMB726,650,071.
(36) Minority interests
Minority interests are analyzed as follows:
31 December
30 June 2011 2010
Shenzhen CSG Display Technology Co., Ltd. 112,295,597 125,690,888
Chengdu CSG Glass Co., Ltd. 123,091,347 195,754,131
Yichang CSG Silicon Co., Ltd. 59,240,909 48,089,961
Heyuan CSG Mining Development Co., Ltd. 2,824,907 2,316,244
Yingde Hongsheng Silica Sand Mine. Co., Ltd 2,237,840 2,495,916
Qingyuan CSG Energy Conservation New-materials Co., Ltd. 74,643,196 -
Heyuan CSG PV Encapsulation Material Co., Ltd. 53,654,458 -
427,988,254 374,347,140
(37) Revenue and cost of sales
Jan. ~ Jun. 2011 Jan. ~ Jun. 2010
Revenue from main operations 4,413,281,121 3,387,748,846
Revenue from other operations 25,252,981 17,319,158
4,438,534,102 3,405,068,004
Jan. ~ Jun. 2011 Jan. ~ Jun. 2010
Cost of sales from main operations 2,863,933,942 2,196,188,256
Cost of sales from other operations 12,390,460 9,775,309
2,876,324,402 2,205,963,565
(a) Revenue and cost of main operations.
Revenue and cost of main operations analyzed by product are set out below:
Jan. ~ Jun. 2011 Jan. ~ Jun. 2010
Revenue Cost Revenue Cost
Floating glass 1,684,199,242 1,323,969,469 1,589,102,680 992,207,121
Engineering glass 1,174,408,097 775,585,186 951,380,317 670,338,490
ITO glass 403,514,349 237,336,210 222,829,089 163,736,561
Solar panel and parts 1,460,130,104 840,843,031 869,963,695 624,653,277
Others 12,909,604 8,080,321 24,428,149 15,207,891
Elimination (321,880,275) (321,880,275) (269,955,084) (269,955,084)
4,413,281,121 2,863,933,942 3,387,748,846 2,196,188,256
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
Revenue and cost of main operations analyzed by geographical location are set out below:
Jan. ~ Jun. 2011 Jan. ~ Jun. 2010
Revenue Cost Revenue Cost
Mainland, P.R.C. 3,231,318,996 2,004,214,327 2,786,569,504 1,774,070,302
Hong Kong, P.R.C. 225,388,371 114,263,366 137,625,155 91,354,826
Europe 541,233,739 466,637,195 221,087,465 176,927,282
North America 39,228,937 25,032,972 9,429,389 6,180,310
Australia 52,760,509 33,621,607 31,966,396 17,792,892
Asia (excluding Mainland
& Hong Kong, P.R.C.) 302,871,951 205,300,410 114,208,936 69,709,549
Others 20,478,618 14,864,065 86,862,001 60,153,095
4,413,281,121 2,863,933,942 3,387,748,846 2,196,188,256
(b) Other revenue and cost
Jan. ~ Jun. 2011 Jan. ~ Jun. 2010
Revenue Cost Revenue Cost
Sale of raw materials 19,409,296 9,885,798 5,836,522 4,820,131
Others 5,843,685 2,504,662 11,482,636 4,955,178
25,252,981 12,390,460 17,319,158 9,775,309
(c) Top five customers are analyzed as follows:
The sales to the Group’s top five customers were amounting to RMB724,490,447 (the first half
year 2010: RMB521,479,711), account for 16% of the Group’s total sales (the first half year 2010:
16%).
% of the total revenue
Revenue of the group
The largest 226,517,675 5%
The second largest 173,253,717 4%
The third largest 133,248,329 3%
The fourth largest 98,876,368 2%
The fifth largest 92,594,358 2%
724,490,447 16%
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(38) Tax and surcharges
Jan. ~ Jun. 2011 Jan. ~ Jun. 2010
Business tax 67,261 242,063
City maintenance and construction tax 14,540,839 447,758
Educational surcharge 12,010,625 368,878
Resources duty - 604,974
Others 725,080 790,882
27,343,805 2,454,555
(39) Selling Expenses
Jan. ~ Jun. 2011 Jan. ~ Jun. 2010
Freight expenses 63,246,841 65,940,771
Employee benefit expenses 34,536,343 27,553,348
Entertainment expenses 5,568,577 4,493,217
Travelling expenses 5,750,743 5,010,069
Others 30,351,737 21,567,168
139,454,241 124,564,573
(40) Administrative expenses
Jan. ~ Jun. 2011 Jan. ~ Jun. 2010
Employee benefit expenses 118,506,020 111,650,067
Research and development expenses 46,049,187 28,983,314
Taxation Expenses 17,877,245 13,983,420
Depreciation expenses 11,230,666 12,466,911
Office expenses 10,568,186 7,540,341
Amortization of intangible assets 9,399,642 8,382,193
Board expenses 6,167,693 4,815,755
Travel expenses 4,903,322 2,990,775
Others 40,057,142 29,779,755
264,759,103 220,592,531
(41) Finance expenses
Jan. ~ Jun. 2011 Jan. ~ Jun. 2010
Interest expenses 73,611,803 55,872,898
Less: interest income (4,153,347) (2,547,175)
Exchange loss/(gain)-net (18,155,154) (1,322,503)
Others 13,906,802 5,472,969
65,210,104 57,476,189
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(42) Investment income
Jan. ~ Jun. 2011 Jan. ~ Jun. 2010
Gain from long-term investment under equity method (Note5 (8)) 1,302,429 -
Gain from disposal of available-for-sale financial assets - 9,055,044
Gain from disposal of equity interests 5,194,363 -
6,496,792 9,055,044
There is no significant restriction on the remittance of investment income to the Group.
(43) Impairment losses
Jan. ~ Jun. 2011 Jan. ~ Jun. 2010
Provision for bad debts 4,947,285 1,560,809
Provision for inventories - (464,205)
4,947,285 1,096,604
(44) Non-operating income
Amount of
non-recurring gain
and loss included
Jan. ~ Jun. 2011 Jan. ~ Jun. 2010 in report period
Gain on disposal of fixed assets 1,068,754 10,602,591 1,068,754
Gain on fine and confiscation - 2,968,813 -
Government grants (a) 33,235,194 12,605,425 33,235,194
Compensation income 1,130,806 322,800 1,130,806
Others 6,470,296 3,548,674 6,470,296
41,905,050 30,048,303 41,905,050
(a) Government grants is analyzed below:
Jan. ~ Jun. 2011 Jan. ~ Jun. 2010
Subsidy on R&D and industry support found 24,692,928 1,368,058
Government subsidies for electricity expenses - 3,750,000
Interest subsidies for technical transformation 3,460,810 677,500
VAT refunds 759,864 1,011,205
Subsidies for environment protection 1,588,216 802,509
Assistance for information technology development - 220,000
Subsidies for social security fund 400,000 50,000
others 2,333,376 4,726,153
33,235,194 12,605,425
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(45) Non-operating expenses
Amount of
non-recurring gain
and loss included
Jan. ~ Jun. 2011 Jan. ~ Jun. 2010 in report period
Loss on disposal of fixed assets 360,947 625,022 360,947
Loss on compensations - 519,480 -
Donation 228,000 1,200,000 228,000
Others 93,337 400,147 93,337
682,284 2,744,649 682,284
(46) Income tax expenses
Jan. ~ Jun. 2011 Jan. ~ Jun. 2010
Current income tax 184,517,270 109,638,087
Deferred income tax 4,910,017 17,961,982
189,427,287 127,600,069
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. 2011 Jan. ~Jun. 2010
Total profit 1,108,214,720 829,278,685
Income tax calculated at applicable tax rates 186,625,841 121,669,285
Effect of change in tax rates (1,383,058) 2,930,473
Expenses not deductable for tax purpose 2,367,932 3,457,792
Utilization of previously unrecognized tax losses (507,744) (471,233)
Tax loss for which no deferred income tax asset was recognized 2,659,142 647,096
Utilization of previously unrecognized deferred tax assets (334,826) (633,344)
Income tax expenses 189,427,287 127,600,069
(47) Earnings per share
(a) Earnings per share - basic
Basic earnings 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. 2011 Jan. ~ Jun. 2010
Consolidated profit attributable to shareholders of the Company 837,643,342 635,951,595
Weighted average number of ordinary shares in issue 2,076,058,060 2,077,749,810
Basic earnings per share 0.40 0.31
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
Including:
-Earnings per share for continuing operations 0.39 0.31
-Earnings per share for discontinued operations 0.01 -
(b) Earnings per share - diluted
Diluted earnings per share is calculated by dividing the profit attributable to shareholders of the
Company, which is adjusted according to potential dilutive shares, by the adjusted weighted
average number of ordinary shares in issue during the year. The Company had no potential
dilutive outstanding equity instruments issued as at 30 June 2011 (the first half year 2010: Nil),
accordingly the diluted earnings per share are equals as basic earnings per share.
(48) Other comprehensive income
Jan. ~Jun. 2011 Jan. ~Jun. 2010
Gain from available for sale financial assets - -
Less: effect of income tax resulted from available for sale financial assets - -
Transferred from previously recognized as other comprehensive income - (6,184,231)
Subtotal - (6,184,231)
Difference on translation of foreign currency financial statements 127,450 1,913,104
Government grant recorded directly in capital surplus according to relevant regulation 1,450,000 -
1,577,450 (4,271,127)
(49) Notes to consolidated cash flow statements
(a) Cash received relating to other operating activities
Jan. ~ Jun. 2011 Jan. ~ Jun. 2010
Interest income 4,153,347 2,546,216
Government grant 31,292,833 8,592,321
Return the pledged deposit and guarantee
money received previously 9,386,168 12,993,515
Others 4,041,717 1,620,947
48,874,065 25,752,999
(b) Cash paid relating to other operating activities
Jan. ~ Jun. 2011 Jan. ~ Jun. 2010
Delivery cost 79,802,396 81,145,396
Canteen cost 16,996,978 14,581,684
Bank fees 1,818,423 8,496,728
Travelling expenses 11,816,711 8,608,327
Office expenses 11,516,058 10,272,943
Others 48,557,616 54,450,489
170,508,182 177,555,567
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(c) Cash received relating to other investing activities
Jan. ~ Jun. 2011 Jan. ~ Jun. 2010
Receipt of pledged deposits 41,471,314 -
Government grants received relating to assets 39,031,133 -
80,502,447 -
(d) Cash received relating to other financing activities
Jan. ~ Jun. 2011 Jan. ~ Jun. 2010
Interest-free loan from government 63,634,600 -
Return of deposits for borrowings 79,342,186 4,064,616
142,976,786 4,064,616
(e) Cash paid relating to other financing activities
Jan. ~ Jun. 2011 Jan. ~ Jun. 2010
Repurchase of restricted shares 2,762,840 18,200,016
Payment of borrowings, deposits of note and charge 6,291,075 -
9,053,915 18,200,016
(50) Supplement notes of cash flow statement
(a) Reconciliation from the net profit to the cash flows from operating activities
Jan. ~ Jun. 2011 Jan. ~ Jun. 2010
Net profit 918,787,433 701,678,616
Add: Provisions for assets impairment 4,947,285 1,096,604
Depreciation of fixed assets 301,815,448 263,621,244
Amortization of intangible assets 9,399,642 8,382,913
Employee service cost relating to share
19,804,713
based payment 36,227,271
Losses on disposal of fixed assets and
(707,807)
intangible assets (9,977,569)
Finance expenses 51,626,150 56,073,883
Investment income (6,496,792) (9,055,044)
(Decrease)/increase in deferred tax assets 8,597,612 17,720,869
Increase in deferred tax liability (3,687,595) 241,113
Increase in inventories (61,360,557) (91,237,064)
Increase in operating receivables (300,636,908) (48,718,407)
Increase in operating payables 611,700 9,782,351
Net cash flows from operating activities 942,700,324 935,836,780
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
Net (decrease)/increase in cash and cash equivalents:
Jan. ~ Jun. 2011 Jan. ~ Jun. 2010
Cash at end of year 769,828,236 399,733,993
Less: cash at beginning of year (660,213,739) (635,618,163)
Net increase /(decrease) in cash and cash equivalents 109,614,497 (235,884,170)
(b) Disposal of subsidiary, net of cash received
Jan. ~ Jun. 2011 Jan. ~ Jun. 2010
Consideration 59,975,361 -
Cash and cash equivalents received from disposal of subsidiary 38,000,000 -
Less: cash and cash equivalents held by subsidiary (5,417,116) -
Net cash received from disposal of subsidiary 32,582,884 -
(c) Cash and cash equivalents
30 June 2011 31 December 2010
Cash
-Cash on hand 67,144 49,285
-Cash at bank without restriction 769,477,522 399,038,588
-Others without restriction 283,570 646,120
Cash and cash equivalents at end of the report period 769,828,236 399,733,993
6 Segment information
The Group's reportable segments are business units engaged in providing different products. As
each business unit has different technology and marketing strategies, the management evaluated
the performance of each reportable segment independently to determine the allocation of the
Group’s resources.
There are four reportable segments in the Group, which are:
- Flat Glass Segment, engaged in the production and sales of float glass.
- Architectural Glass Segment, engaged in the production and sales of architectural glass.
- Fine Glass Segment, engaged in the production and sales of fine glass.
- Solar Energy Segment, engaged in the production and sales of polycrystalline silicon chip,
solar glass and solar module.
The Inter-segment transfer prices is determined by reference to the market price.
The assets are allocated according to the segment’s business and its location; the liabilities are
allocated according to the segment’s business; the indirect costs are allocated to each segment
according to the proportion of income.
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
In the report period, the Company sold the 100% equity of Dongguan CSG Ceramics Technology Co., Ltd.. And the Company reclassified the
ceramics idustry from ITO glass segment to other segment in order to reflect the situation of operation and finance accurately. The comparative
information of the first half year 2010 also restated.
(a) Segment information as at and for the first half year ended 30 June 2011 is as follows:
Architectural Undistributed
Floating glass glass Fine glass Solar energy Others profits Elimination Total
Revenue from external customers 1,382,404,849 1,180,307,650 407,962,694 1,454,990,606 12,868,303 - - 4,438,534,102
Inter-segment revenue 305,645,509 3,200,785 19,692 11,509,282 1,505,007 - (321,880,275) -
Interest Income 525,892 402,709 64,021 813,352 13,024 2,334,349 - 4,153,347
Interest expense 22,825,812 17,416,718 5,803,255 20,974,613 - 6,591,405 - 73,611,803
Income from associates and joint
companies - - - - - 1,302,429 - 1,302,429
Asset impairment losses 269,737 1,232,884 726,861 2,707,626 10,177 - 4,947,285
Depreciation and amortisation 114,693,152 73,526,545 28,716,525 91,763,508 993,206 1,522,154 - 311,215,090
Total profit 250,736,352 226,238,969 127,166,833 531,556,814 1,118,831 (28,603,079) - 1,108,214,720
Income tax expenses 58,122,930 34,564,320 24,376,815 72,469,261 - (106,039) - 189,427,287
Net profit 192,613,422 191,674,649 102,790,018 459,087,553 1,118,831 (28,497,040) - 918,787,433
Segment assets 4,928,962,104 3,398,668,480 1,111,793,438 4,235,563,983 3,245,668 405,018,376 - 14,083,252,049
Segment liabilities 1,174,027,559 1,743,517,931 207,235,045 1,788,089,079 6,607,189 2,221,625,673 - 7,141,102,476
Non-cash expenses other than
depreciation and amortisation 3,458,766 4,391,492 1,892,171 2,718,705 - 7,343,579 - 19,804,713
Long-term equity investment in
associates - - - - - 65,803,688 - 65,803,688
The increase in non-current assets other
than Long-term equity investments 604,764,289 226,808,562 41,696,835 632,621,894 - 1,146,505 - 1,507,038,085
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(b) Segment information as at and for the first half year ended 30 June 2010 is as follows:
Architectural Undistributed
Floating glass glass Fine glass Solar energy Others profits Elimination Total
Revenue from external customers 1,327,002,977 957,693,656 221,489,063 870,703,707 28,178,601 - - 3,405,068,004
Inter-segment revenue 266,207,749 787,672 - 1,616,238 1,343,425 - (269,955,084) -
Interest Income 380,086 347,693 28,286 430,070 41,146 1,319,894 - 2,547,175
Interest expense 24,972,093 5,826,572 6,177,550 17,862,984 - 1,033,699 - 55,872,898
Income from associates and joint
companies - - - - - - - -
Asset impairment losses 344,557 1,202,925 55,580 (67,550) (438,908) - - 1,096,604
Depreciation and amortisation 101,152,995 68,562,302 31,264,005 67,510,167 3,514,688 - - 272,004,157
Total profit 498,299,078 164,660,727 25,633,624 158,498,961 5,436,265 (23,249,970) - 829,278,685
Income tax expenses 85,418,471 21,222,942 -688,824 20,974,817 394,015 278,648 - 127,600,069
Net profit 412,880,607 143,437,785 26,322,448 137,524,144 5,042,250 (23,528,618) - 701,678,616
Segment assets 3,976,096,208 3,095,216,534 963,872,676 2,675,595,769 119,137,309 220,538,832 - 11,050,457,328
Segment liabilities 899,369,218 1,271,231,691 174,509,044 1,116,359,021 26,775,292 1,739,912,295 - 5,228,156,561
Non-cash expenses other than
depreciation and amortisation 6,535,654 9,470,013 1,403,333 5,314,842 - 13,503,430 - 36,227,272
Long-term equity investment in
associates - - - - - - - -
The increase in non-current assets other
than Long-term equity investments 124,370,863 203,336,725 1,078,047 247,169,310 3,993,094 - - 579,948,039
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
Revenue from external customers derived from both mainland and other countries and the total of
non-current assets other then financial instruments and deferred tax assets are analysed below:
Revenue from external customers Jan. ~ Jun. 2011 Jan. ~ Jun. 2010
Mainland, P.R.C. 3,256,571,977 2,803,888,662
Hong Kong, P.R.C. 225,388,371 137,625,155
Europe 541,233,739 221,087,465
North America 39,228,937 9,429,389
Australia 52,760,509 31,966,396
Asia (excluding Mainland & Hong Kong, P.R.C.) 302,871,951 114,208,936
Others 20,478,618 86,862,001
4,438,534,102 3,405,068,004
Non-current assets 30 June 2011 31 December 2010
Mainland, P.R.C. 11,518,905,805 10,304,864,187
Hong Kong, P.R.C. 15,298,294 14,065,363
Australia 388,610 400,546
11,534,592,709 10,319,330,096
The Group has a large number of customers, no revenue from a customer exceed 10% or more
of the Group’s revenue.
7 Related parties and related party transactions
(1) The parent company and subsidiaries
The Company regard no entity is the parent company.
(2) Related party transactions
The condition and information of related party is analysed in Note 4.
(3) The situation of Joint venture
Place of Legal
Type of registrati Represent Nature of Registered Vote Organization
Company on ative business capital Stakes right code
Golden Corporation China Zhuang RMB120 8.33% 8.33% 61755189-X
High-tech glass
Glass Limited Dajian million
and system
manufacturing
(4) Related party transactions
In addition to the above disclosures, the significant related party transactions during the year are
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
as follows:
(a) Purchase and sale of goods, provision and receipt of services
Purchase of goods, receipt of services:
The basis for
Transaction pricing of related
Related party details party transactions Jan. ~ Jun. 2011 Jan. ~ Jun. 2010
% of Similar % of Similar
transaction transaction
Amount amount Amount amount
consigned by reference to
Golden Glass processing market price 7,283,820 0.3% 10,411,176 0.6%
Sale of goods, provision of services:
The basis for
Transaction pricing of related
Related party details party transactions Jan. ~ Jun. 2011 Jan. ~ Jun. 2010
% of Similar % of Similar
transaction transaction
Amount amount Amount amount
By reference to
Golden Glass Sale of goods market price 51,165,290 1.15% 13,768,096 0.4%
(5) The ending balance of account receivable and payable from related parties
Receivables from related parties：
30 June 2011 31 December 2010
provision for provision for
Amount bad debts Amount bad debts
Account receivable Golden Glass 3,962,837 (79,257) 83,153 (1,663)
Payable to related parties：
30 June 2011 31 December 2010
Account payable Golden Glass 3,686,820 3,334,469
8 Share-based payment
(1) Restricted A share incentive scheme
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(a) Overview
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 to certain qualified employees of the Group (“the Qualified Employee”) at a
grant price of RMB8.58 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.
(b) Restricted share stock quantity movement and related owner’s equity movement
Restricted A
share Treasure Capital Minority
Items stock(share) Equity Shares reserve equity
1 January 2010 34,282,500 35,775,000 (1,492,500) 380,487,961 5,831,590
Transfer capital surplus to capitalization 23,997,750 24,312,750 (315,000) - -
Repurchase for resignation of the
employees (1,173,000) - (1,173,000) (3,959,640) -
Repurchase and canceled shares - (1,042,500) 1,042,500 - -
Unlocked shares (19,035,750) (19,035,750) - (142,728,409) -
Expense recognized this half year - - - 34,470,256 1,757,015
30 June 2010 38,071,500 40,009,500 (1,938,000) 268,270,168 7,588,605
1 January 2011 37,570,000 38,148,000 (578,000) 285,536,707 8,631,237
Repurchase and canceled shares - (578,000) 578,000 - -
Repurchase for resignation of the
employees (306,000) - (306,000) (1,049,580) -
Unlocked shares (18,632,000) (18,632,000) - (152,044,848) -
Expense recognized this year - - - 18,389,476 1,052,185
30 June 2011 18,632,000 18,938,000 (306,000) 150,831,755 9,683,422
(c) 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.
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
Management estimated that the Group can meet the performance target in the vesting period,
and substantially all the employees can complete the required service period.
(2) Transfer of shares to the core staff
In order to motivate the management team and the core technical members of Shenzhen CSG
Display Device Technology, Co, Ltd (hereinafter referred to as “Display Device”), via the approval
of the fifth Board of Directors, the Company has signed an agreement with Zhong Fusheng
Entrepreneurship Investment Limited (hereinafter referred to as “Zhong Fu Sheng
Entrepreneurship”)on 1 November , 2010, to transfer 9.55% equity interest in Display Device held
by the Company to Zhong Fusheng at the consideration of RMB16,300,000.
Zhong Fu Sheng Entrepreneurship is a limited partnership enterprise, which is set up by the
directors, key management and core technical members of Display Device on 25 October 2010 to
hold the equity interest of Display Device. There are 2 unlimited partners in the limited partnership
enterprise, the rest of which are all limited partners. The unlimited partners include one key
management of the Company.
Above transaction have been considered as equity-settled share-based payment to the staff, with
the fair market value of RMB5,335,404 which was determined by the difference between the fair
value of stock equity (evaluated by the professional asset evaluation firms) at the transaction date
and the consideration at the date of transaction. The related cost which has been recognised
was RMB363,052 in the report period.
9 Contingencies
As at 30 June 2011, the Group has no significant contingency liability.
10 Commitments
(1) Commitments relating to capital expenditure
As at 30 June 2011, commitments relating to capital expenditure that has signed but not
recognized in the financial statement are analyzed below:
30 June 2011 31 December 2011
Property, plant and equipment 1,500,343,741 1,294,557,376
(2) Investment commitment
(a) According to the agreement between the Group and its subsidiaries, the investment commitments
are analysed below:
Company name The date of the agreement Total amount Amounts paid Amount to be paid
Dongguan CSG PV-tech Co. Ltd 1 March 2011 315,000,000 93,000,000 222,000,000
Xianning CSG Glass Co., Ltd. 1 March 2011 188,900,000 47,264,653 141,635,347
140,264,653 363,635,347
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
As at the 30 June 2011, the investments have not been paid. The investments will be paid before
2013 according to the agreement.
In May 2010, Shenzhen CSG Wellight Conductive Coating Co., Ltd., wholly owned subsidiary of
the Company, purchased 100% shares of Shenzhen Sunlord Technology Co., Ltd. from
Shenzhen Sunlord Electronics Co., Ltd.. Shenzhen CSG Wellight Conductive Coating Co., Ltd.
agreed to pay RMB15,000,000 for transfer. The transaction is expected to be completed in 2011.
(3) Fulfillment of previous commitment
The commitment relating to capital expenditures at 31 December 2010 has been fulfilled.
11 Discontinued operations
On 31 March 2011, the Company transferred its 100% shares of Dongguan CSG Ceramics
Technology Co. Ltd. to Yang Bohuan, a natural person.
On 9 May 2011, the Company entered into an irrevocable agreement to transfer all the
Company’s shares of Guangzhou CSG Glass Co. Ltd to a third party. The transaction is expected
to be completed in 2012. On 30 June 2011, the Company received the payment of transaction
RMB150,000,000.
Jan. ~ Jun. 2011 Jan. ~ Jun. 2010
Income from discontinued operations 341,036,562 425,991,839
Less: Cost and expenses from discontinued operations (323,933,214) (329,315,741)
Total profit from discontinued operations 17,103,348 96,676,098
Less: Income tax expense from discontinued operations (4,274,467) (23,178,924)
Net profit from discontinued operations 12,828,881 73,497,174
Of which: Attributable to equity holders of the Company 12,828,881 73,497,174
12 Financial risk management
The Group’s activities expose it to a variety of financial risks: market risk (mainly comprises of
currency risk and interest rate risk), credit risk, and liquidity risk. The Group’s overall risk
management programme focuses on the unpredictability of financial markets and seeks to
minimize potential adverse effects on the Group’s financial performance.
(1) Market risk
(a) Currency risk
The Group mainly operates in mainland with most of the transactions settled in RMB, although some
of the export business is settled in foreign currency. However, the recognized foreign currency assets,
liabilities and foreign transactions are still exposed to currency risk. (Those foreign currency assets
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
and liabilities are mainly USD). The Group monitor the scale of foreign currency transactions, foreign
currency assets and liabilities, and adjusts settlement currency of export business, to furthest reduce
the currency risk.
As at 30 June 2011, financial assets and liabilities denominated in foreign currency held by the Group
are as below:
30 June 2011
Other
foreign
USD currencies Total
Foreign Financial assets -
Cash at bank and on hand 66,168,108 85,536,118 151,704,226
Receivables 220,350,745 6,469,394 226,820,139
286,518,853 92,005,512 378,524,365
Foreign Financial liabilities -
Short-term borrowings 459,445,974 116,321,620 575,767,594
Payables 49,090,982 47,186,519 96,277,501
Long-term borrowings 547,471,687 1,302,889 548,774,576
1,056,008,643 164,811,028 1,220,819,671
31 December 2010
Other
foreign
USD currencies Total
Foreign financial assets -
Cash at bank and on hand 65,370,045 18,256,492 83,626,537
Receivables 69,605,518 5,846,513 75,452,031
134,975,563 24,103,005 159,078,568
Foreign financial liabilities -
Short-term borrowings 647,404,316 163,028,498 810,432,814
Payables 40,955,022 30,577,361 71,532,383
Long-term borrowings 207,737,728 3,801,425 211,539,153
896,097,066 197,407,284 1,093,504,350
At 30 June 2011, should RMB be weakened/strengthened by 10% against USD, with all other factors
remain unchanged, the profit after taxation for the year would be decrease/increase by
RMB58,684,504 (2010: RMB58,745,048)
(b) Interest rate risk
The Group’s interest rate risk arises from the long-term interest-bearing debt such as long-term bank
borrowings and Corporate Bonds. Borrowings issued at variable rates expose the Group to cash flow
interest-rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. The
Group adjusted the proportion of fixed interest rate debts and variable interest rate debts when the
market environment changed. As at 30 June 2011, the Group’s long-term interest-bearing debt at
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
variable rates and fixed rates as illustrated below:
30 June 2011 31 December 2010
Debt at fixed rates 2,225,438,506 1,978,479,422
Debt at variable rates 928,938,410 728,203,612
3,154,376,916 2,706,683,034
The Group continued to monitor the Group's interest rates. Increase of interest rates will lead to
increase of interest expenses and have significant adverse effects on the Group. Therefore, the
management monitored the latest market situation and make timely adjustments, which includes
increasing / decreasing long-term fixed rate debts at the anticipation of increasing/decreasing interest
rate.
In the first half year 2011, if the floating interest rates had been 10% higher/lower with all other
variables held constant, net profit for the year would have been RMB1,584,869 (the first half year 2010:
RMB1,838,046) lower/higher.
(2) Credit risk
Credit risk is managed on group basis. Credit risk arises from deposits in banks, notes receivable,
accounts receivable and other receivables.
As the Group's bank deposits are mainly placed in the state-owned banks and other large and
medium listed banks, the management believed the credit risk should be limited and that no loss
will occur due to event of default cause by those banks. Furthermore, as the Group’s notes
receivable are accepted by the state-owned banks and other large and medium listed banks, the
management believed the credit risk should be limited.
Besides, the Group has set relevant policies to control the credit risk exposure for accounts
receivable, other receivables and trade acceptance notes. The Group evaluates clients’ credit
aptitude and sets relevant credit periods based on client’s financial position, possibility of
guaranty from the third party, credit records and other factors like the current situation of the
market. The Group supervises the clients’ credit records at regular intervals. For the clients who
have a rotten record, the Group will send payment reminders in written, shorten or cancel the
credit period, etc. to ensure the Group’s entire credit risk are under control.
(3) Liquidity risk
Cash flow forecasting is performed by each subsidiary of the Group and aggregated by the
Group’s finance department in its headquarters. The Group’s finance department at its
headquarters monitors rolling forecasts of the Group's short-term and long-term liquidity
requirements to ensure it has sufficient cash and securities that are readily convertible to cash to
meet operational needs, while maintaining sufficient headroom on its undrawn committed
borrowing facilities from major financial institution so that the Group does not breach borrowing
limits or covenants on any of its borrowing facilities to meet the short-term and long-term liquidity
requirements.
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
The financial assets and liabilities of the Group at the balance sheet date are analysed by their
maturity date below at their undiscounted contractual cash flows:
30 June 2011
Within 1 year 1 to 2 years 2 to 5 years Over 5 years Total
Financial Assets
Cash at bank and on hand 817,753,586 - - - 817,753,586
Receivables 960,374,429 - - - 960,374,429
1,778,128,015 - - - 1,778,128,015
Financial liabilities -
Short-term borrowings 1,465,120,124 - - - 1,465,120,124
Payables 1,739,828,359 - - - 1,739,828,359
Long-term borrowing due
246,408,338 - - - 246,408,338
within 1year
Long-term borrowing 63,623,263 427,776,893 812,852,685 39,732,939 1,343,985,780
Bonds payable 106,600,000 106,600,000 2,298,772,055 - 2,511,972,055
3,621,580,084 534,376,893 3,111,624,740 39,732,939 7,307,314,656
31 December 2010
Within 1 year 1 to 2 years 2 to 5 years Over 5 years Total
Financial Assets
Cash at bank and on hand 787,481,275 - - - 787,481,275
Receivables 671,497,746 - - - 671,497,746
1,458,979,021 - - - 1,458,979,021
Financial liabilities - 882,999,158 - - - 882,999,158
Short-term borrowings 1,374,177,486 - - - 1,374,177,486
Payables 76,934,035 - - - 76,934,035
Long-term borrowing due
within 1year 34,007,885 224,823,985 565,036,499 - 823,868,369
Long-term borrowing 106,600,000 106,600,000 2,298,772,055 - 2,511,972,055
2,474,718,564 331,423,985 2,863,808,554 - 5,669,951,103
(4) Fair value estimation
(a) Financial instruments measured at fair value
In the report period, the Group’s financial assets and liabilities was not measured at fair value.
The carrying amount of the Group’s financial assets and liabilities approximate their fair value
except the financial liabilities as below:
30 June 2011 31 December 2010
carrying amount fair value carrying amount fair value
Corporate Bonds 1,980,438,506 1,975,000,000 1,978,479,422 1,950,000,000
The fair value of Corporate Bonds traded in active markets is determined on quoted market prices
at the balance sheet date.
(b) Financial instruments measured at fair value
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
At the 30 June 2011, the Group’s financial instruments was not measured at fair value
13 Financial asset and liabilities dominated in foreign currency
Profits and losses Changes in fair Impairment
31 December 2 on the changes value recognized recognized in the
010 in fair value in the equity first half year 30 June 2011
Financial assets
- Foreign currency
and receivables 159,078,568 - - 3,027,362 378,524,365
Financial liabilities
- borrowing and
payables 1,093,504,349 - - - 1,220,819,671
14 Notes to the Company’s financial statements
(1) Other receivables
30 June 2011 31 December 2010
Other receivables due by subsidiaries 1,090,263,582 810,045,330
Other receivables due by transfer equity 21,975,361 -
Other receivables 1,201,057 2,329,867
1,113,440,000 812,375,197
Less: provision for bad debts (810,344) (810,344)
1,112,629,656 811,564,853
(a) The aging of receivables is analyzed below:
30 June 2011 31 December 2010
Within 1 year 1,112,629,656 811,564,853
Over 3 years 810,344 810,344
1,113,440,000 812,375,197
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(b) The other receivables are analyzed by categories as follows:
30 June 2011 31 December 2010
% of total Provision for Provision % of total Provision for Provision
Amount balance bad debts ratio Amount balance bad debts ratio
Individually significant and
provided for bad debts
separately - - - - - - - -
Provision for bad debts on
a portfolio
- Related parties 1,090,263,582 98% - - 810,045,330 100% - -
- Non-related parties 22,366,074 2% - - 1,519,523 0.01% - -
Individually not significant
but provided for bad
debts separately 810,344 0.01% (810,344) 100% 810,344 0.01% (810,344) 100%
1,113,440,000 100% (810,344) 0.07% 812,375,197 100% (810,344) 0.1%
(c) The impairment provision for impairment evaluated individually is analyzed as bellows:
Book value Impairment provision Provision ratio Reason
Guangdong Shilian
Company Limited 810,344 (810,344) 100% Unlikely to be recovered
(d) Other receivables are not due by the shareholders have more than 5% (include 5%) of the
company’s shares.
(e) The biggest five of other receivables at 30 June 2011 are analyzed as below:
Relationship with
the Group Amount Aging Proportion
Chengdu CSG Glass Co. Ltd. subsidiary 289,727,657 With one year 26%
Shenzhen CSG Display Technology Co., Ltd. subsidiary 179,126,993 With one year 16%
Shenzhen CSG Float Glass Co. Ltd. subsidiary 148,768,065 With one year 13%
Wujiang CSG Glass Co., Ltd. subsidiary 132,380,298 With one year 12%
Guangzhou CSG Glass Co. Ltd subsidiary 119,538,980 With one year 11%
869,541,993 78%
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(f) Other receivable due by related parties are analyzed as below:
30 June 2011 31 December 2010
Relationship
with the Impairment Impairment
Related Party Name company Amount Proportion provision Amount Proportion provision
Chengdu CSG Glass Co. Ltd. subsidiary 289,727,657 26% - 171,680,259 21% -
Shenzhen CSG Display
Technology Co., Ltd. subsidiary 179,126,993 16% - 30,780,719 4% -
Shenzhen CSG Float Glass Co. Ltd. subsidiary 148,768,065 13% - 188,136,967 23% -
Wujiang CSG Glass Co., Ltd. subsidiary 132,380,298 12% - - - -
Guangzhou CSG Glass Co. Ltd subsidiary 119,538,980 11% - 108,961,528 14% -
Shenzhen CSG Wellight
Conductive Coating Co. Ltd. subsidiary 86,203,790 8% - 88,315,339 11% -
Dongguan CSG PV-tech Co., Ltd. subsidiary 49,652,984 5% - - - -
Wujiang CSG North-east
Architectural Glass Co., Ltd. subsidiary 49,511,724 4% - 22,454,853 3% -
Tianjin CSG Architectural Co., Ltd. subsidiary 1,773,454 0.01% - 10,117,734 1% -
Yichang CSG Silicon Co. Ltd subsidiary - - - 106,767,475 13% -
Dongguan CSG Solar Glass Co. Ltd subsidiary - - - 41,409,837 5% -
Others subsidiary 33,579,637 3% - 41,420,619 5% -
1,090,263,582 98% - 810,045,330 100% -
(2) Long-term equity investments
31 December 2010 31 December 2009
Subsidiaries (a) 4,283,502,347 3,670,480,538
Associate－with quoted price (b) 50,471,428 50,239,465
4,333,973,775 3,720,720,003
Less: Impairment provision for investments
in subsidiaries (a) (86,874,472) (86,874,472)
4,247,099,303 3,633,845,531
The fair value of investments in associates
with quoted price 191,765,340 252,189,600
Golden Glass, an associate of the Group was listed on 8 July 2010. The Group held 13,806,000
shares of Golden Glass, of which 10,649,700 shares was restricted in 12 month since Golden
Glass’s listing and the rest 3,156,300 shares was restricted in 36 month since its listing. Besides,
the long-term equity investments of the Group are not subject to restriction on conversion into
cash.
The fair value of associates with quoted price was determined by the quoted price as at 30 June
2011。
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(a) Subsidiaries
Impairment Cash dividend
Accounting Initial investment Addition/ Impairment provision for this declared to
method cost 31 December 2010 (Deduction) 30 June 2011 provision half year distribution
(i)
Shenzhen CSG Float Glass Co., Ltd Cost method 705,736,250 713,073,973 1,005,826 714,079,799 - - -
Guangzhou CSG Glass Co., Ltd. Cost method 195,000,000 200,588,129 389,142 200,977,271 - - 72,495,694
Chengdu CSG Glass Co., Ltd. Cost method 99,514,360 114,166,166 1,503,167 115,669,333 - - 300,330,948
Tianjin CSG Architectural Glass Co., Ltd Cost method 133,500,000 143,409,348 545,792 143,955,140 - - 13,392,307
Tianjin Energy Conservation Glass Co., Ltd Cost method 96,000,000 97,413,156 545,792 97,958,948 - - 61,503,353
Shenzhen CSG Display Technology Co., Ltd. Cost method 55,867,928 58,063,281 16,732,977 74,796,258 - - 43,025,523
Shenzhen CSG Wellight Conductive Coating Co., Ltd. Cost method 73,624,561 78,710,599 (78,710,599) - - - -
Dongguan CSG Architectural Glass Co., Ltd Cost method 180,000,000 192,189,298 743,300 192,932,598 - - 38,238,543
Dongguan CSG Solar Glass Co., Ltd Cost method 128,753,465 137,149,544 150,582,449 287,731,993 - - 180,510,419
Yichang CSG Silicon Co., Ltd Cost method 450,000,000 462,055,142 1,413,118 463,468,260 - - 90,219,333
Wujiang CSG North-east Architectural Glass Co., Ltd. Cost method 240,000,000 249,213,595 1,165,330 250,378,925 - - 58,441,421
Dongguan CSG PV-tech Co., Ltd Cost method 187,500,000 193,298,732 32,880,642 226,179,374 - - -
Hebei CSG Glass Co., Ltd. Cost method 253,354,574 261,073,653 598,588 261,672,241 - - 128,195,332
Dongguan CSG Ceramics Technology Co., Ltd Cost method 50,000,000 51,529,630 (51,529,630) - - - -
CSG (Hong Kong) Co., Ltd. Cost method 81,664,761 85,036,837 378,800 85,415,637 - - -
Wujiang CSG Glass Co., Ltd. Cost method 102,126,000 102,556,259 98,922,677 201,478,936 - - -
Hebei Shichuang Glass Co., Ltd. Cost method 243,000,000 243,000,000 - 243,000,000 - - -
China Southern Glass (Australia) Limited Cost method 3,200,555 4,639,856 84,602 4,724,458 - - 4,935,600
Jiangyou CSG Mining Industry Developing Co., Ltd. Cost method 28,000,000 28,327,679 12,108,290 40,435,969 - - -
Heyuan CSG PV Encapsulation Material Co., Ltd. Cost method 162,490,000 - 162,582,498 162,582,498 - - -
Xianning CSG Glass Co., Ltd. Cost method 35,418,750 - 35,615,240 35,615,240 - - -
Qingyuan CSG Energy Conservation New-materials Co., Ltd. Cost method 225,000,000 - 225,026,697 225,026,697 - - -
Others (ii) Cost method 246,036,469 254,985,661 437,111 255,422,772 (86,874,472) - 535,450
3,975,787,673 3,670,480,538 613,021,809 4,283,502,347 (86,874,472) - 991,823,923
(i) As at 30 June 2011, included in the investments in subsidiaries were deemed investment costs of RMB130,062,752, being the fair value of the
equity instruments of the Company granted to the employee of the subsidiaries for their serviced provided to the subsidiaries for which the
Company did not charge the subsidiaries. (31 December 2010: RMB117,601,615).
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(ii) Others mainly included the subsidiaries in real estate segment and subsidiaries of
architectural segment, which located in Shenzhen but the production lines have moved to
Dong guan. The operations of there subsidiaries have discontinued. The Company has made
provision against the long term investment in these subsidiaries.
(b) Associates
Movement in the year
Net profit or
loss by
31 adjusted declared
December Transfer in under equity cash Other equity
Original Cost 2010 this year method dividend movement 30 June 2011
Golden Glass 17,641,000 50,239,465 - 998,963 (767,000) - 50,471,428
Notes for difference
Proportion of Proportion of between proportion Provision accrual
Method stake rights of stake and rights Provision in this year
Golden Glass Equity 6.39% 6.39% None - -
(3) Long term receivables
30 June 2011 31 December 2010
Substantive long-term investments in subsidiaries 2,481,558,099 2,459,547,032
Less: impairment provision (144,634,675) (143,508,415)
2,336,923,424 2,316,038,617
31 December Addition/ Addition of Deduction of
2010 (Deduction) 30 June 2011 Impairment Impairment
Shenzhen CSG Wellight Conductive Coating Co., Ltd. 275,314,030 - 275,314,030 - -
Yichang CSG Silicon Co., Ltd 244,960,000 - 244,960,000 - -
Dongguan CSG PV-tech Co., Ltd 220,210,000 - 220,210,000 - -
Shenzhen CSG Float Glass Co., Ltd 216,000,000 - 216,000,000 - -
Wujiang CSG Glass Co., Ltd. 200,000,000 - 200,000,000 - -
Chengdu CSG Glass Co., Ltd. 319,330,000 - 319,330,000 - -
Guangzhou CSG Glass Co., Ltd. 159,670,000 - 159,670,000 - -
Dongguan CSG Solar Glass Co., Ltd 147,560,000 - 147,560,000 - -
Dongguan CSG Architectural Glass Co., Ltd 134,906,420 58,070,242 192,976,662 - -
Tianjin CSG Energy Conservation Glass Co., Ltd 118,928,293 (33,059,176) 85,869,117 - -
Wujiang CSG North-east Architectural Glass Co., Ltd. 95,780,000 - 95,780,000 - -
Shenzhen CSG Display Technology Co., Ltd. 50,743,944 - 50,743,944 - -
Heyuan CSG Mining Industry Co., Ltd. 50,000,000 - 50,000,000 - -
Hebei CSG Glass Co., Ltd. 39,780,000 - 39,780,000 - -
Jiangyou CSG Mining Industry Developing Co., Ltd. 37,350,000 - 37,350,000 - -
Others 149,014,345 (2,999,999) 146,014,346 (144,634,675) -
2,459,547,032 22,011,067 2,481,558,099 (144,634,675) -
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
The company recognizes impairment provisions on the long term receivables based on the
subsidiaries’ net liabilities.
(4) Other payables
30 June 2011 31 December 2010
Subsidiaries 802,530,032 466,772,089
Liabilities relating to stock withdrawn 1,355,580 2,762,840
Deposit of equity transfer 150,000,000 -
Others 9,323,040 11,270,436
963,208,652 480,805,365
(5) Investment income
Jan.~Jun. 2011 Jan.~Jun. 2010
Cash dividends of investment stated at cost (a) 990,697,664 696,773,127
Investment income on disposal of equity interest 61,644,089 -
Gain on disposal of available-for-sale financial assets - 9,055,044
Share of profit of investee under equity method 998,963 -
1,053,340,716 705,828,171
(a) Cash dividends of investment stated at cost
There is no significant restriction on the investment income remittance to the Company.
Investment incomes from top five investees or amounted to over 5% of total profit are analyzed
as below:
Jan.~Jun. 2011 Jan.~Jun. 2010 Reason for the movement
Chengdu CSG Glass Co., Ltd. 300,330,948 239,482,427 Profit increased and dividend distribution
Dongguan CSG Solar Glass Co., Ltd 180,510,419 78,078,792 Profit increased and dividend distribution
Hebei CSG Glass Co., Ltd. 128,195,332 65,459,955 Profit increased and dividend distribution
Yichang CSG Silicon Co., Ltd 90,219,333 - Dividend distribution in 2011
Guangzhou CSG Glass Co., Ltd. 72,495,694 64,949,236 Profit increased
771,751,726 447,970,410
(6) Notes to the Company’s cash flow statements
Reconciliation from the net profit to the cash flows from operating activities
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
Jan.~Jun. 2011 Jan.~Jun. 2010
Net profit 1,018,838,817 677,869,967
Add: Depreciation of fixed assets 1,272,486 1,481,428
Amortization of intangible assets 249,668 233,000
Value of employee service relating to share
based payment 7,343,577 13,503,429
Losses on disposal of fixed assets and
intangible assets 3,622 1,932
Finance expenses 3,837,320 134,952
Investment income (1,053,340,716) (705,828,171)
Decrease in deferred income tax liabilities (212,380) -
Increase in operating receivables (16,532,960) (25,972,359)
Decrease in operating payables (85,990,134) (33,910,167)
Net cash flows from operating activities (124,530,700) (72,485,989)
Movement of the cash and cash equivalent
Jan.~Jun. 2011 Jan.~Jun. 2010
Cash at the end of the report period 241,032,010 93,109,605
Less: Cash at the beginning of the report period (373,901,165) (370,558,509)
Net decrease in cash and cash equivalent (132,869,155) (277,448,904)
SUPPLEMENTAL INFORMATION
1 Breakdown of Non-recurring gains and losses
Jan.~Jun. 2011 Jan.~Jun. 2010
Gains and losses of disposal of non-current asset (707,807) (9,977,569)
Government subsidy recognized as gains and losses (33,235,194) (12,605,425)
Gain from disposal of available for sales financial assets - (9,055,044)
Net gains from disposal of the equity interest (5,194,363) -
Other non-operating gains and losses (7,279,765) (4,720,660)
(46,417,129) (36,358,698)
Affect of enterprise income tax 6,247,470 3,903,597
Affect of minority interest (after tax) 1,828,826 1,148,432
(38,340,833) (31,306,669)
(1) The basis of preparation of extraordinary gains and losses schedule
According to the Q&A on Disclosure of Information by Public Companies No1-Extraordinary gains
and losses [2008], extraordinary gains and losses are the gains and losses being resulted from
transactions/events which are not incurred by the operation of the entity, or, though incurred by
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
the operation, the nature, amounts or the frequently of such transactions/events will lead to a
misleading presentation of the normal performance and profitability of the operation of the entity.
2 Return on equity and earnings per share
Earning per share
Weighted average Basic earning per Dilute earning per
ROE (%) share share
Jan.~Jun. Jan.~Jun. Jan.~Jun. Jan.~Jun. Jan.~Jun. Jan.~Jun.
2011 2010 2011 2010 2011 2010
Net profit attributable to common stock shareholders 12.53% 11.40% 0.40 0.31 0.40 0.31
Net profit less Non-recurring gains and losses
attributable to common stock shareholders 11.95% 10.84% 0.39 0.29 0.39 0.29
3 Description of significant movement of the main financial statement data of the Group
The items which variation in the financial statement data is up to 30% (30% containing) above, or
proportion of the whole asset on 30 June 2011 is up to 5%(5% containing) or proportion of the
whole profit up to 10%(10% containing) are analyzed as below:
Items of balance sheet：
30 June 2011 31 December 2010 Addition / (Deduction) Fluctuation Note
Accounts receivable 498,737,381 242,201,307 256,536,074 106% (1)
Advances to suppliers 159,155,350 107,782,146 51,373,204 48% (2)
Other current assets 43,043,034 24,914,873 18,128,161 73% (3)
Construction in progress 1,759,117,742 786,077,413 973,040,329 124% (4)
Research and development expenditure 8,051,607 3,142,226 4,909,381 156% (5)
Short-term borrowings 1,431,767,595 877,132,815 554,634,780 63% (6)
Employee benefits payable 89,970,554 186,997,327 (97,026,773) (52%) (7)
Taxes payable 60,340,191 121,232,388 (60,892,197) (50%) (8)
Interest payable 80,656,171 24,589,510 56,066,661 228% (9)
Dividends payable 8,575,442 687,627 7,887,815 1147% (10)
Other payables 327,764,060 161,386,242 166,377,818 103% (11)
Current portion of non-current liabilities 239,941,166 75,690,541 164,250,625 217% (12)
Long-term borrowings 1,173,938,410 728,203,612 445,734,798 61% (13)
Special payable 1,000,000 700,008 299,992 43% (14)
Other non-current liabilities 273,970,448 173,537,976 100,432,472 58% (15)
Special reserve 8,086,016 5,683,705 2,402,311 42% (16)
Notes:
(1) The increase of accounts receivable was mainly due to increase of sales, especially sales
in foreign countries calculated with letter of credit.
(2) The increase of advances to suppliers was mainly due to increase of advance payment
for material and land.
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(3) The increase of other current assets was mainly due to increase of assets held for sale.
(4) The increase of Construction in progress was mainly due to the construction in process at
year-begin of the Group has been constructed according the plan this year.
(5) The increase of Research and development expenditure was mainly due to some items of
R&D expenditure of the Group met with condition of capitalization and has been listed as
research and development expenditure in sheets according to accounting policy.
(6) The increase of short-term borrowings was mainly due to increase of bank loans.
(7) The decrease of employee benefits payable was mainly due to the award fund for
management team of the Group accrued at the end of last year has been paid in the
report period.
(8) The decrease of taxes payable was mainly due to increase of input tax retained at the end
of the report period.
(9) The increase of interest payable was mainly due to the bond interest payable accrued by
the Group was still not due to be paid.
(10) The increase of dividends payable was mainly due to minority shareholders’ dividend
payable increased which has been declared by Yijing CSG Silicon Materials Co., Ltd., the
subsidiary of the Group.
(11) The increase of other payables was mainly due to share buyback payable and deposit of
equity transfer received in advance of Guangzhou CSG Glass Co., Ltd..
(12) The increase of current portion of non-current liabilities was mainly due to partial
long-term loan will be due within one year..
(13) The increase of long-term borrowings was mainly due to borrowings for construction in
process increased..
(14) The increase of special payable was mainly due to subsidiaries of the Group received
special grants from local government.
(15) The increase of other non-current liabilities was mainly due to the local government gave
interest-free loan to subsidiary of the Group namely Yichang CSG Silicon Materials Co.,
Ltd..
(16) The increase of special reserve was mainly due to subsidiary of the Group namely
Yichang CSG Silicon Materials Co., Ltd accrued annual expenses for safe production.
Items of Income statement:
Jan.~Jun. 2011 Jan.~Jun. 2010 Addition/(Deduction)) Fluctuation Note
Revenue 4,438,534,102 3,405,068,004 1,033,466,098 30% (17)
Cost of sales 2,876,324,402 2,205,963,565 670,360,837 30% (18)
Taxes and surcharges 27,343,805 2,454,555 24,889,250 1014% (19)
Selling and distribution 139,454,241 124,564,573 14,889,668 12%
expense (20)
General and 264,759,103 220,592,531 44,166,572 20%
administrative expense (21)
Asset impairment losses 4,947,285 1,096,604 3,850,681 351% (22)
Non-operating income 41,905,050 30,048,303 11,856,747 39% (23)
Income tax expense 189,427,287 127,600,069 61,827,218 48% (24)
Note:
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CSG HOLDING CO., LTD. Semi-Annual Report 2011
(17) The increase of revenue was mainly due to production and sales of main products of all
the industries of the Group increased on the same period of last year.
(18) The increase of cost of sales was mainly due to operation scale enlarged.
(19) The increase of taxes and surcharges was mainly due to foreign investment enterprise of
the Group didn’t share the privilege to decrease amount of city planning tax and
education tax additional anymore according to relevant policy..
(20) The increase of selling and distribution expense was mainly due to expenses increased
with sales scale expended..
(21) The increase of general and administrative expense was mainly due to the Group put
more investment in R&D and operating scale, expenses increased accordingly.
(22) The increase of asset impairment losses was mainly due to balance of accounts
receivable increased, and the bad debts increased with the same percentage.
(23) The increase of non-operating income was mainly due to governmental subsidies
increased.
(24) The increase of income tax expense was mainly due to profit before tax of the Group
increased in the report period, and the rate of income tax increased.
VII 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.
5 August 2011
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