CSG HOLDING CO., LTD.
ANNUAL REPORT 2013
Chairman of the Board:
ZENG NAN
March 2014
CSG Annual Report 2013
Section I Important Notice, Contents and Paraphrase
Board of Directors and the Supervisory Committee of CSG Holding Co., Ltd. (hereinafter referred
to as the Company) and its directors, supervisors and senior executives hereby confirm that there
are no any fictitious statements, misleading statements, or important omissions carried in this report,
and shall take all responsibilities, individual and/or joint, for the reality, accuracy and completion of
the whole contents.
Mr. Zeng Nan, Chairman of the Board & CEO of the Company, CFO Mr. Luo Youming and
principle of the financial department Mr. Zhang Guoming confirm that the Financial Report
enclosed in this 2013 Annual Report is true and complete.
All the directors are present the meeting of the Board for deliberating the annual report of the
Company in person.
The deliberated and approved profit distribution plan in the Board Meeting is: taking total shares of
31 December 2013 as the radix, sending cash dividends of RMB 3.0 (tax included) per 10 shares to
its all shareholders, neither bonus shares being sent, no converting capital reserve into share capital.
Regarding to the forward-looking statements with future planning involved in the Report, they do
not constitute a substantial commitment for investors. Investors are advised to exercise caution of
investment risks.
This report is prepared both in Chinese and English. Should there be any inconsistency between the
Chinese and English versions, the Chinese version shall prevail.
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CSG Annual Report 2013
Content
Section I Important Notice, Contents and Paraphrase ......................................................................................1
Section II Company profile ...................................................................................................................................5
Section III Accounting data and summary of financial indexes ........................................................................7
Section IV Report of the Board of Directors .......................................................................................................9
Section V Important Events ................................................................................................................................29
Section VI. Changes in Shares and Particulars about Shareholders ..............................................................37
Section VII. Particulars about Directors, Supervisors and Senior Executives and Employees ....................42
Section VIII. Corporate Governance ....................................................................................................................49
Section IX. Internal control ...................................................................................................................................55
Section X. Financial Report ...................................................................................................................................57
Section XI. Documents available for Reference .................................................................................................163
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CSG Annual Report 2013
Paraphrase
Items Refers to Contents
Company, the Company, SG or the Group Refers to CSG Holding Co., Ltd.
Shenzhen CSG Display Shenzhen CSG Display Technology Co., Ltd.
Ultra-thin electronic glass Refers to The electronic glass with thickness between 0.1~1.1mm
Plating a transparent conductive oxide in face of plate glass with
TCO glass Refers to
physical or chemical coating way
A technology to forming ITO conducting film and sensor
OGS products Refers to
directly on cover glass
TP-Sensor Refers to Capacitive touch panel
3
CSG Annual Report 2013
Major risk warning
Existing policy risk, market risk and exchange rate risk have been
well-described in this report, please found details of risks and countermeasures
of future development described in Section IV Report of the Board of Directors.
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CSG Annual Report 2013
Section II Company profile
I. Company information
Code for A-share 000012 Code for B-share 200012
Short form for A-share Southern Glass A Short form for B-share Southern Glass B
Listing stock exchange Shenzhen Stock Exchange
Legal Chinese name of the Company 中国南玻集团股份有限公司
Abbr. of legal Chinese name of the Company 南玻集团
Legal English name of the Company CSG Holding Co., Ltd.
Abbr. of legal English name of the Company CSG
Legal Representative Zeng Nan
Registered Add. CSG Building, No.1, the 6th Industrial Road, Shekou, Shenzhen, P. R.C.
Post Code 518067
Office Add. CSG Building, No.1, the 6th Industrial Road, Shekou, Shenzhen, P. R.C.
Post Code 518067
Internet website www.csgholding.com
E-mail securities@csgholding.com
II. Person/Way to contact
Secretary of the Board Rep. of security affairs
Name Zhou Hong Li Tao
CSG Building, No.1 of the 6th Industrial CSG Building, No.1 of the 6th Industrial
Contacts add.
Road, Shekou, Shenzhen, P. R.C. Road, Shekou, Shenzhen, P. R.C.
Tel. (86)755-26860666 (86)755-26860666
Fax. (86)755-26860641 (86)755-26860641
E-mail securities@csgholding.com securities@csgholding.com
III. Information disclosure and preparation place
Newspapers for information disclosure China Securities Journal, Securities Times and Hong Kong Comercial Daily
Website assigned by CSRC to release the annual
www.cninfo.com.cn
report
The place for preparation of the annual report Department of Securities Affairs
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CSG Annual Report 2013
IV. Registration changes of the Company
Registration NO. for
Date for No. of taxation Organization
Place for registration enterprise legal
registration registration code
license
Shenzhen Municipal Administration
Initial registration 1984-09-10 440301501125544 440300618838577 61883857-7
of Industry & Commerce
Registration at end Shenzhen Municipal Administration
2013-06-20 440301501125544 440300618838577 61883857-7
of report period of Industry & Commerce
Changes of main business since
No changes
listing (if applicable)
Previous changes for controlling
No changes
shareholders (if applicable)
V. Other relevant information
CPA engaged by the Company
Name of CPA PricewaterhouseCoopers Zhong Tian LLP
Offices add. for CPA 11/F, Pricewaterhouse Coopers Center., 202 HuBin Road. Shanghai, P.R.C.
Signing Accountants Yao Wenping, Liu Jingping
Sponsor institute engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable √ Not applicable
Financial consultant engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable √ Not applicable
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CSG Annual Report 2013
Section III Accounting data and summary of financial indexes
I. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data for accounting policy changed and accounting
error correction or not
□Yes √ No
Changes over last
2013 2012 2011
year (%)
Operating income (RMB) 7,733,796,114 6,994,358,029 10.57% 8,270,731,730
Net profit attributable to shareholders of the listed
1,535,929,739 274,746,219 459.04% 1,178,229,197
company(RMB)
Net profit attributable to shareholders of the listed
company after deducting non-recurring gains and 605,966,975 116,098,805 421.94% 1,067,580,683
losses(RMB)
Net cash flow arising from operating activities(RMB) 1,698,867,535 1,725,795,529 -1.56% 1,688,530,164
Basic earnings per share (RMB/Share) 0.74 0.13 469.23% 0.57
Diluted earnings per share (RMB/Share) 0.74 0.13 469.23% 0.57
Return on Equity (%) 20.52% 4.04% 16.48% 17.94%
Changes over end
End of 2013 End of 2011 End of 2010
of last year (%)
Total assets (RMB) 15,078,866,777 14,335,809,746 5.18% 15,281,391,077
Net assets attributable to shareholder of listed
company (Owners’ equity attributable to shareholder 8,047,894,139 6,816,210,753 18.07% 6,911,117,984
of listed company ) (RMB)
II. Items and amounts of extraordinary profit (gains)/loss
Unit: RMB
Item Amount in 2013 Amount in 2012 Amount in 2011 Note
Gains/losses from the disposal of non-current asset (including the
-136,459,236 7,202,099 -1,940,045 --
write-off that accrued for impairment of assets)
Governmental subsidy reckoned into current gains/losses (not
including the subsidy enjoyed in quota or ration according to
115,138,161 89,424,440 120,129,140 --
national standards, which are closely relevant to enterprise’s
business)
Gains on disposal of available-for-sale financial assets, gains and
losses from change of fair values of held-for-transaction financial
432,000 360,000 0 --
assets and financial liabilities except for the effective hedge
business related to normal business of the Company, and
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CSG Annual Report 2013
investment income from disposal of transactional financial assets
and liabilities and financial assets available for sale
Other non-operating income and expenditure except for the
85,892,326 15,477,992 18,215,816 --
aforementioned items
Other gains/losses satisfied definition of extraordinary profit
926,639,137 71,306,374 4,392,843 --
(gains)/loss
Less: Impact on income tax 48,004,628 18,202,387 21,048,058 --
Impact on minority shareholders’ equity (post-tax) 13,674,996 6,921,104 9,101,182 --
Total 929,962,764 158,647,414 110,648,514 --
Explain reasons for the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for
Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss
according to the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies
Offering Their Securities to the Public --- Extraordinary Profit/loss,
√Applicable □ Not applicable
Item Amount involved (RMB) Reasons
Other gains/losses satisfied It was mainly due to the Company sold 19% equity of Shenzhen CSG
definition of extraordinary 926,639,137 Display Technology Co., Ltd, and the fair value of remaining equity
profit (gains)/loss increased.
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CSG Annual Report 2013
Section IV Report of the Board of Directors
I. Introduction
In 2013, the world economy still suffered a slow growth, the developed economies and emerging economies confronted with varying
dilemma in way of development and trade protectionism in all forms rose obviously. The Chinese economy not only encountered
challenges of insufficient demand from overseas market, frequent trade friction, imported inflation pressure and impact of hot money,
but also confronted with multi-pressures from real estate control, economic restructuring as well as over capacity in majority of the
industries. It is still a rough way for domestic real economy to revive in front of so many unfavorable factors. With a up and down
state of the economic environment, the Company made full use of its own advantages, respond actively to the adverse impact from
market environment under the right leadership of the Board, hard work from the management as well as associated efforts of the
whole personnel. The Company continues to optimize mechanism of R&D innovation, construct R&D system and ability, increase
input for R&D, further deepen differentiation management strategy with technological innovation and management innovation,
consolidate the foundation of delicacy management. Totally 84 patent applications were submitted by the Company in 2013, and new
60 patent applications were granted. Currently, the Company owes 195 authorized patents in total, 44 invention patents included,
which account for 22.6%. In 2013, CSG implemented revenue of RMB 7.734 billion with a year-on-year growth of 10.57%, net
profit attributable to equity holders of the Company of RMB 1.536 billion with a year-on-year growth of 459%.
II. Main business analysis
1. Introduction
Unit: RMB
Range of
Items 2013 2012 Reasons and Analysis
Change
Revenue increased mainly because the sales and sale price
Revenue 7,733,796,114 6,994,358,029 10.57% of part of the products were higher than the same period of
last year due to the economic situation improved
Operating cost 5,501,300,657 5,355,802,923 2.72% --
Selling and distribution Increase of selling and distribution expenses mainly due to
267,394,775 234,821,552 13.87%
expenses the increase of the sales.
General and administrative expenses increased mainly
General and
671,321,260 526,909,538 27.41% because the management performance bonus was accrued
administrative expenses
in this year.
Including: R&D Increased of R&D expenditure was mainly due to more
179,879,478 148,329,637 21.27%
expenditure investment in R&D in this year.
Financial expenses 238,321,702 248,920,054 -4.26% --
Net cash flow from
1,698,867,535 1,725,795,529 -1.56% --
operating activities
Net cash flows from
-1,052,078,756 -1,173,000,884 -10.31% Net cash flows from investing activities declined mainly
investing activities
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CSG Annual Report 2013
because more cash received relating to other investment
activities in this year.
The increase of net cash flow arising from financing
Net cash flows from
-817,587,745 -739,722,236 10.53% activities was mainly due to more bank loan had been
financing activities
repaid in this year.
Review on the previous development strategy and business plan and its progress during reporting period
During the reporting period, the Company launched the development strategy and business plan smoothly:
① In 2013, the Company successfully completed construction and management goals, the net profit achieved a great growth. In the
construction, Xianning CSG Architectural Glass and Float glass production base had successfully been built and put into production,
Chengdu architectural glass expansion project advanced as planned, Dongguan online coating project officially started, and the glass
industry layout of the Company in China had created. In terms of ultra-thin glass, Hebei Panel Glass project had put into commercial
operation in early 2013, Yichang ultra-thin glass project had been completed in February 2014, and Qingyuan high-performance
ultra-thin glass project started full swing. Technical transformation project of polysilicon had been completed and entered into the
trail production. The first period upgrade and relocation of fine glass industry had been completed basically and partially put into
production.
② The Company insisted on steady financial policy, strengthened the management of accounts receivable and inventory, and
improved the efficiency of funds use. The financial risk prevention capacity in 2013 had been further consolidated. The Company’s
average collection period was 10 days, lessing 6 days than last year; inventory turnover days were 25 days, lessing 5 days than last
year.
③ The Company constantly built its own core competitiveness with technological advances, strengthened the construction of R&D
system, making the R&D close to the market, to the production and to the industry. Totally 84 patent applications were submitted by
the Company in 2013, and new 60 patent applications were granted. At present, the Company has successfully put ultra-thin glass of
0.7 ~ 1.1 mm into mass production, whose product quality has reached the international advanced level. The Company has made very
good progress in the production and promotion of the second generation and the third generation energy saving glass, the sales of
which was over 60% in the Company’s coated insulating glass. The Company has smoothly undergone the mass production of 250W
high efficient modules in the field of solar photovoltaic which laid a foundation for subsequent development of photovoltaic industry.
In the field of fine glass, OGS products have also been successfully produced, and the yield achieved a higher level in the industry.
④ In 2013, the Company enhanced refined management while developing the potential of cost decreasing and benefit increasing,
furthermore, strengthened complex management of energy. The comprehensive energy consumption for every 10,000 Yuan output
was reduced by 11.07% as compared with that in 2012, production costs of each industry had declined. In particular, after ignition of
line-3 solar energy glass, profitability was maintained due to the costs were sharply down over 30% compared with line-1 and line-2
through continuous efforts of the Company.
⑤ The Company has obtained certain achievement in human resources management and internal control construction. In human
resources management, the Company attached great importance to the stability of staff team, and opened channels for promoting
professional and technical personnel. In the aspect of internal control construction, the Company constantly strengthened the
implementation of internal control system through strict appraisal, and constantly perfected internal control system via analyzing and
solving problems encountered during the implementation of it.
Reasons for difference of actual operation performance has 20% lower or higher than profit forecast of the Year disclosed
□ Applicable √ Not applicable
2. Revenue
Explanation
In reporting period, operation revenue increased compared with the same period of last year. It’s mainly because float glass market
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CSG Annual Report 2013
demand had a recovery and the price of float glass increased. Meanwhile, the solar energy industry recovered benefited from a series
of national policies, and the price of both polysilicon and photovoltaic modules increased.
Whether income from physical sales larger than income from labors or not
√ Yes □ No
Unit: RMB
Industries Item 2013 2012 Increase/decrease y-o-y (%)
Sales 3,958,217,805 3,267,115,428 21.15%
Flat glass industry Output 3,112,857,799 2,850,882,794 9.19%
Inventory 90,253,902 81,678,153 10.50%
Sales 2,854,745,532 2,606,282,367 9.53%
Architectural glass
Output 1,972,836,273 1,744,662,768 13.08%
industry
Inventory 59,892,430 44,013,499 36.08%
Sales 945,054,866 821,145,144 15.09%
Solar energy industry Output 752,874,808 838,659,138 -10.23%
Inventory 9,661,010 71,459,809 -86.48%
Sales 794,643,237 913,176,044 -12.98%
Fine glass industry Output 477,051,449 574,399,215 -16.95%
Inventory 13,634,314 18,009,525 -24.29%
Reasons for y-o-y relevant data with over 30% changes
√Applicable □ Not applicable
In reporting period, inventory of architectural glass industry increased mainly because Xianning Energy-saving Substrate Project was
put into commercial operation in the year. Inventory of solar energy industry decreased because photovoltaic industry overall had a
warming trend in 2013 and the market demand increased.
Material orders in hands
□ Applicable √ Not applicable
Material changes or adjustment for products or services of the Company in reporting period
□ Applicable √ Not applicable
Major sales client of the Company
Total sales to top five clients (RMB) 1,046,478,319
Proportion in total annual sales for top five clients (%) 14%
Information of top five clients of the Company
√Applicable □Not applicable
Serial Name Sales (RMB) Proportion in total annual sales (%)
1 Client A 309,286,785 4%
2 Client B 278,493,574 4%
3 Client C 163,756,087 2%
4 Client D 152,379,163 2%
5 Client E 142,562,710 2%
Total -- 1,046,478,319 14%
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CSG Annual Report 2013
3. Cost
Industry classification
Unit: RMB
2013 2012
Industry Y-o-y changes
Item Ratio in operation Ratio in operation
classification Amount Amount (%)
cost (%) cost (%)
Raw material 1,167,991,269 37.63% 1,029,442,702 36.31% 13.46%
Labor wages 157,054,361 5.06% 146,221,205 5.16% 7.41%
Flat glass
Depreciation 283,818,813 9.14% 240,801,560 8.49% 17.86%
industry
Energy 1,304,509,562 42.02% 1,221,441,507 43.08% 6.80%
Other 190,908,044 6.15% 197,630,942 6.97% -3.40%
Raw material 1,298,813,030 66.37% 1,099,177,645 64.45% 18.16%
Labor wages 229,253,406 11.71% 218,393,700 11.42% 4.97%
Architectural
Depreciation 166,462,367 8.51% 152,301,700 8.77% 9.30%
glass industry
Energy 179,228,596 9.16% 170,613,200 9.82% 5.05%
Other 83,199,943 4.25% 96,117,100 5.53% -13.44%
Raw material 648,806,733 79.64% 472,270,784 55.61% 37.38%
Labor wages 54,258,238 6.66% 49,910,663 5.88% 8.71%
Solar energy
Depreciation 47,487,861 5.83% 86,488,626 10.18% -45.09%
industry
Energy 42,093,169 5.17% 218,992,080 25.78% -80.78%
Other 22,027,605 2.70% 21,640,660 2.55% 1.79%
Raw material 246,639,543 51.23% 288,178,359 50.40% -14.41%
Labor wages 72,720,990 15.11% 82,598,045 14.45% -11.96%
Fine glass
Depreciation 49,878,082 10.36% 58,856,300 10.29% -15.25%
industry
Energy 51,456,589 10.69% 62,127,935 10.87% -17.18%
Other 60,731,456 12.61% 80,020,627 13.99% -24.11%
Product classification
Unit: RMB
2013 2012
Product Y-o-y changes
Item Ratio in operation Ratio in operation
classification Amount Amount (%)
cost (%) cost (%)
Raw material 1,167,991,269 37.63% 1,029,442,702 36.31% 13.46%
Labor wages 157,054,361 5.06% 146,221,205 5.16% 7.41%
Flat glass Depreciation 283,818,813 9.14% 240,801,560 8.49% 17.86%
Energy 1,304,509,562 42.02% 1,221,441,507 43.08% 6.80%
Other 190,908,044 6.15% 197,630,942 6.97% -3.40%
Raw material 1,298,813,030 66.37% 1,099,177,645 64.45% 18.16%
Labor wages 229,253,406 11.71% 218,393,700 11.42% 4.97%
Architectural
Depreciation 166,462,367 8.51% 152,301,700 8.77% 9.30%
glass
Energy 179,228,596 9.16% 170,613,200 9.82% 5.05%
Other 83,199,943 4.25% 96,117,100 5.53% -13.44%
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CSG Annual Report 2013
Raw material 648,806,733 79.64% 472,270,784 55.61% 37.38%
Labor wages 54,258,238 6.66% 49,910,663 5.88% 8.71%
Solar energy
Depreciation 47,487,861 5.83% 86,488,626 10.18% -45.09%
product
Energy 42,093,169 5.17% 218,992,080 25.78% -80.78%
Other 22,027,605 2.70% 21,640,660 2.55% 1.79%
Raw material 246,639,543 51.23% 288,178,359 50.40% -14.41%
Labor wages 72,720,990 15.11% 82,598,045 14.45% -11.96%
Fine glass Depreciation 49,878,082 10.36% 58,856,300 10.29% -15.25%
Energy 51,456,589 10.69% 62,127,935 10.87% -17.18%
Other 60,731,456 12.61% 80,020,627 13.99% -24.11%
Explanation
Nil.
Main suppliers of the Company
Total purchase amount from top five suppliers (RMB) 1,066,591,197
Proportion in total annual purchase amount for top five suppliers (%) 22%
Information of top five suppliers of the Company
□Applicable √Not applicable
4. Expenses
In the report period, changes of sales expenses, administrative expenses and financial expenses have not over 30%.
5. R&D expenses
The Company always attaches importance to the research and development of new products, new technology and new craft, R&D
aims at closing to the market, production and industry. R&D expenses for year 2013 amounted as RMB190.99 million in total, and
took 2.27% and 2.47% in net assets and operation revenue of the Company respectively.
6. Cash flow
Unit: RMB
Item 2013 2012 Y-o-y changes (%)
Subtotal of cash in-flow from operation activities 9,208,299,739 8,486,161,442 8.51%
Subtotal of cash out-flow from operation activities 7,509,432,204 6,760,365,913 11.08%
Net cash flow from operation activities 1,698,867,535 1,725,795,529 -1.56%
Subtotal of cash in-flow from investment activities 1,215,295,555 434,344,657 179.80%
Subtotal of cash out-flow from investment activities 2,267,374,311 1,607,345,541 41.06%
Net cash flow from investment activities -1,052,078,756 -1,173,000,884 -10.31%
Subtotal of cash in-flow from financing activities 3,627,868,640 3,489,202,143 3.97%
Subtotal of cash out-flow from financing activities 4,445,456,385 4,228,924,379 5.12%
Net cash flow from financing activities -817,587,745 -739,722,236 10.53%
Net increased of cash and cash equivalent -171,285,668 -186,680,039 -8.25%
Reasons for y-o-y relevant data with over 30% changes
√Applicable □Not applicable
Cash in-flow from investment activities has increased 179.8% mainly because the cash received from disposal of CSG Display shares
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CSG Annual Report 2013
and payment received in advance of share transfer for Shenzhen CSG Float Glass.
Cash out-flow from investment activities has increased 41.06% mainly because expenses for fixed assets purchasing increased
dramatically over that of last year.
Reasons of major difference between the cash flow from operation activities in report period and net profit of the Company
□Applicable √Not applicable
III. Composition of main business
Unit: RMB
Increase/decrease Increase/decrease Increase/decrease
Operating Gross profit
Operating cost of operating of operating cost of gross profit
revenue ratio (%)
revenue y-o-y (%) y-o-y (%) ratio y-o-y (%)
According to industries
Flat glass industry 3,958,217,805 3,104,282,050 21.57% 21.15% 9.48% 8.36%
Architectural glass industry 2,854,745,532 1,956,957,342 31.45% 9.53% 12.69% -1.92%
Solar energy industry 945,054,866 814,673,607 13.80% 15.09% -4.08% 17.23%
Fine glass industry 794,643,237 481,426,660 39.42% -12.98% -15.80% 2.03%
Off-setting between
-889,481,892 -886,542,719 -- -- -- --
divisions
According to products
Flat glass 3,958,217,805 3,104,282,050 21.57% 21.15% 9.48% 8.36%
Architectural glass 2,854,745,532 1,956,957,342 31.45% 9.53% 12.69% -1.92%
Solar energy products 945,054,866 814,673,607 13.80% 15.09% -4.08% 17.23%
Fine glass 794,643,237 481,426,660 39.42% -12.98% -15.80% 2.03%
Off-setting between
-889,481,892 -886,542,719 -- -- -- --
divisions
According to region
Mainland China 6,620,467,506 4,744,948,478 28.33% 18.85% 10.95% 5.10%
H.K. China 293,460,515 167,150,258 43.04% -30.35% -33.95% 3.10%
Europe 302,596,199 246,359,207 18.58% -45.47% -50.97% 9.14%
Asia (excluding Mainland
277,198,638 195,707,502 29.40% 28.72% 24.76% 2.24%
China and H.K.)
North America 55,770,796 39,972,044 28.33% -25.02% -29.54% 4.61%
Australia 93,580,675 59,827,480 36.07% 8.44% 6.92% 0.91%
Other region 20,105,219 16,831,971 16.28% 24.26% 32.82% -5.39%
Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based on
latest one year’s scope of period-end
□ Applicable √ Not applicable
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CSG Annual Report 2013
IV. Assets and liability analysis
1. Major changes of assets
Unit: RMB
End of 2013 End of 2012
Ratio in Ratio in Ratio
total total changes Notes of major changes
Amount Amount
assets assets (%)
(%) (%)
Cash at bank and on hand decreased mainly because
Cash at bank
279,672,523 1.85% 474,421,278 3.31% -1.45% the shares transfer of Shenzhen CSG Display led to
and on hand
change of consolidation scope of financial statements.
Account receivable decreased mainly because the
Accounts
136,430,683 0.90% 276,814,461 1.93% -1.03% shares transfer of Shenzhen CSG Display led to
receivable
change of consolidation scope of financial statements.
Inventories 378,684,712 2.51% 367,293,857 2.56% -0.05% N/A
Long-term equity investments increased mainly
Long-term because the shares transfer of Shenzhen CSG Display
equity 770,037,176 5.11% 0 0 -- led to lose the control of the company and its
investments subsidiaries, and accounting method was changed from
cost to equity method.
Fixed assets decreased mainly because transferred all
fixed assets of Shenzhen CSG Float to assets held
Fixed assets 7,979,937,683 52.92% 9,418,430,703 65.70% -12.78% ready-for-sale, and the shares transfer of Shenzhen
CSG Display led to change of consolidation scope of
financial statements.
The increase of construction in process was mainly
Construction due to the promotion of technical upgrading project of
2,762,418,100 18.32% 1,934,725,631 13.50% 4.82%
in progress Yichang CSG, Wujiang PV packaging project and
photoelectric glass project of Yichang CSG.
2. Major changes of liability
Unit: RMB
End of 2013 End of 2012
Ratio in Ratio in Ratio
total total changes Notes of major changes
Amount Amount
assets assets (%)
(%) (%)
Short-term borrowings decreased mainly because the
Short-term
1,424,743,800 9.45% 1,688,049,571 11.78% -2.33% shares transfer of Shenzhen CSG Display led to
borrowings
change of consolidation scope of financial statements.
Long-term borrowings decreased mainly because
Long-term
302,904,204 2.01% 711,112,961 4.96% -2.95% long-term borrowings due within one year were
borrowings
re-classified to current liabilities.
15
CSG Annual Report 2013
3. Assets and liability measured by fair value
Unit: RMB
Gains/losses Accumulative changes
Amount at Impairmen Purchased Amount Amount at
Item from changes of fair value reckoned
period-begin t accrual amount on sale period-end
of fair value into equity
Financial assets
3. Financial assets available
109,955,459 56,333,710 122,760,000
for sale
Subtotal of financial assets 109,955,459 56,333,710 122,760,000
Total 109,955,459 56,333,710 122,760,000
Financial liability 0 0
Whether measurement attribution for assets has major changes in reporting period or not
□Yes √No
V. Core Competitiveness Analysis
① The Company currently has created complete industrial chains in every industry with the advantage of industrial supplement. In
glass industry, the Company has built the industry chain as quartz sand → high quality float glass → architectural energy-saving
glass/TCO glass. In fine glass industry, based on ultra-thin glass, the Company carefully crafted industry chain as quartz sand →
ultra-thin glass → ITO conductive film products/TP-Sensor → flat-panel display/touch screen module through Shenzhen CSG
Display Technology Co., Ltd and its subordinate companies. In the solar energy industry, the Company has finished the
comprehensive construction of industry chain from high purity polycrystalline silicon materials, silicon wafer processing to cell and
modules, photovoltaic rolled glass, etc. With the improvement of technology in the chains, the industrial advantages emerged.
② The Company possesses a complete industry layout. At present, the Company has established large production bases in China
located in North, East, West, South and Central region, which help the Company be better close to the market and serve the market.
③ The Company has capability of technology innovation and product innovation. It owns independent intellectual property rights of
high-end float glass production process. The technology level of ultra-thin electronic glass is in the leading position in China. The
Company also keeps its R&D and production of energy-saving glass in line with the world advanced level, and makes its technique
and technology in the field of fine glass and solar energy leading domestic market.
④The Company possesses high anti-risk capability. It has a perfect internal control system with sound performance carried out.
Meanwhile, the management and control ability of account receivable and inventory stands in a high level within the industry.
⑤ CSG's core competitiveness also comes from the aggressive, innovative, professional, experienced management team and
technical backbone team. Based on the perfect corporate governance structure, standardized management system and business
philosophy of high-end product line and quality consciousness, the Company constantly formulates mechanism and strictly controls
the operating risk, laying a solid foundation for company’s rapid sustainable development.
During the reporting period, the Company's core competitiveness remains strong
VI. Investment analysis
1. External investment
16
CSG Annual Report 2013
external investment
Amount invested in 2013 (RMB) Amount invested in 2012 (RMB) Changes
23,000,000 23,000,000 0
Invested company
Equity proportion of listed
Name Main business
company in invested company (%)
Guangdong Golden Glass Technologies Limited R & D, production and sales of special glass 8.33%
2. Main subsidiaries and joint-stock companies
Particular about main subsidiaries and joint-stock companies
Operating Operating
Main products or Register Total assets Net Assets Net profit
Company name Type Industries revenue profit
service capital (RMB) (RMB) (RMB)
(RMB) (RMB)
Shenzhen CSG Manufacture and RMB
Float Glass Co., Subsidiary Manufacturing sales of float glass 705.74 930,006,963 609,986,207 544,000,555 -26,967,970 -16,929,758
Ltd. products million
Manufacture and
RMB
Chengdu CSG Glass sales of float glass
Subsidiary Manufacturing 246.66 1,467,593,331 622,728,531 1,342,164,659 277,626,029 222,200,154
Co., Ltd. products and deep
million
processing of glass
Tianjin CSG
Deep processing RMB 178
Architectural Glass Subsidiary Manufacturing 468,677,722 311,223,357 470,961,278 63,090,288 54,093,053
of glass million
Co., Ltd.
Development,
Tianjin CSG Energy
producing and sales RMB 128
Conservation Glass Subsidiary Manufacturing 359,727,073 242,160,442 519,566,070 71,502,382 63,634,220
of energy-saving million
Co., Ltd
special glass
Dongguan CSG
Deep processing RMB 240
Architectural Glass Subsidiary Manufacturing 984,948,554 413,271,115 806,530,967 125,965,375 108,225,392
of glass million
Co., Ltd.
Dongguan CSG Manufacture and
RMB 416
Solar Glass Co., Subsidiary Manufacturing sales of 1,165,172,922 380,723,051 676,212,598 62,322,255 2,368,924
million
Ltd. Solar-Energy Glass
Manufacture and
RMB
Yichang CSG sales of high purity
Subsidiary Manufacturing 1467.98 2,685,228,561 898,027,624 261,555,173 -111,047,848 -60,671,532
Polysilicon Co., Ltd. silicon material
million
products
Wujiang CSG East
Deep processing RMB 320
China Architectural Subsidiary Manufacturing 735,702,238 485,867,651 707,604,411 131,701,753 113,287,596
of glass million
Glass Co., Ltd.
Dongguan CSG Manufacture and RMB 516
Subsidiary Manufacturing 827,847,001 347,860,121 765,613,577 53,311,033 41,332,254
PV-tech Co., Ltd. sales of solar cells million
17
CSG Annual Report 2013
Manufacture and USD
Hebei CSG Glass
Subsidiary Manufacturing sales of vary special 48.06 788,034,766 433,114,194 605,433,064 67,962,575 48,182,327
Co., Ltd.
float glass million
Manufacture and RMB
Wujiang CSG Glass
Subsidiary Manufacturing sales of vary special 465.04 1,505,039,103 544,585,953 721,572,028 97,381,948 76,938,756
Co., Ltd.
float glass million
HKD
CSG (Hong Kong) Glass trading and
Subsidiary Trading 86.44 792,282,766 746,659,379 195,500,118 94,200,578 84,002,822
Limited investment holding
million
Manufacture and
Hebei Panel Glass sales of vary RMB 243
Subsidiary Manufacturing 387,283,014 279,175,235 182,374,625 61,266,207 47,712,643
Co., Ltd. ultra-thin electronic million
glass
Developing and
manufacture and
Xianning CSG RMB 400
Subsidiary Manufacturing sales of vary 1,291,308,803 427,657,309 360,650,554 8,160,294 35,973,353
Glass Co., Ltd. million
energy-saving
special glass
Qingyuan CSG R&D, manufacture
Energy and sales of
RMB 300
Conservation Subsidiary Manufacturing non-metal mineral 293,512,321 288,546,503 0 -4,783,923 -4,337,942
million
New-materials Co., products and
Ltd. materials
Jiangyou CSG
Manufacture and
Mining RMB 40
Subsidiary Manufacturing sales of silica sand 180,725,122 17,635,509 51,028,912 -11,205,174 -9,327,219
Development Co., million
and co-product
Ltd.
R&D, manufacture
Yichang CSG
and sales of varied RMB 120
Photoelectric Glass Subsidiary Manufacturing 305,521,888 142,383,917 56,585 -5,523,405 -3,698,881
ultra-thin electronic million
Co., Ltd.
glass
Shenzhen CSG Manufacture and
Joint-stock RMB 143
Display Technology Manufacturing sales of display 1,368,614,095 747,450,538 883,402,182 231,313,768 200,129,495
company million
Co., Ltd. device products
Notes of main subsidiaries and joint-stock companies
Because float glass market demand had a recovery, the price of float glass increased. Meanwhile, benefited from a series of national
policies, the solar energy industry recovered and the price of both polysilicon and photovoltaic module increased, therefore, the
operating subsidiaries' profits with above mentioned industries had a relatively high increase.
Particular about subsidiaries obtained or disposed in the report period
√ Applicable □Not applicable
18
CSG Annual Report 2013
The method of obtaining and
The purpose of obtaining and disposing The influence to the whole
Company Name handling subsidiaries during the
subsidiaries during the report period production and performance
report period
In order to guarantee a raw material
supplying for Yichang fine glass The Company purchased
Yichang CSG
production base, the Company plans to 73.58% shares of Yichang
Photoelectric Glass
establish the ultra-thin glass production Hejing Photoconductive The acquisition makes the
Co., Ltd.
line in Yichang. After on-the-spot Ceramics Materials Co., Ltd. Company integrate land
(former :Yichang
inspection, the land and supporting facility held by Taichang Investment resources effectively and bring
Hejing
resources of Yichang Hejing Co., Ltd and Shenzhen the managerial synergy effect
Photoconductive
Photoconductive Ceramics Materials Co., Platinumvc respectively and into full play.
Ceramics Materials
Ltd., located near the CSG Yichang became the controlling
Co., Ltd.)
polysilicon production line, meet relevant shareholder.
requirements of the Company.
There is no significant effect on
In order to motivate the sales team of CSG The Company transferred 51%
CSG (Australia) the Company’s production and
Australia, guarantee a sales ability in shares of CSG Australia to
Limited performance during the report
Australia and surrounding areas. Truly Wealth Ltd..
period.
The Company transferred 19%
The transfer brought RMB
In order to create an independent industry shares of Shenzhen CSG
Shenzhen CSG 375.56 million investment
platform and capital platform for fine glass Display to Shenzhen Xinshi
Display Technology earnings, and had a positive
industry of CSG, and promote the rapid Investment Co., Ltd., and lost
Co., Ltd. impact on Company’s income
development of the industry. the controlling right of
for the Year.
Shenzhen CSG Display.
Owing to the two aged float glass lines,
The transfer will bring RMB
Shenzhen CSG Float has defects of more
290 million investment
investment and high-energy consumption The Company transferred 100%
earnings, and will bring a
compared with other float glass lines of shares of Shenzhen CSG Float
Shenzhen CSG Float positive impact on perfecting
CSG. That made the high general cost of to GoldenTime Investment
Glass Co., Ltd. resource allocation, improving
product, and lost the competitiveness. For Consultant (Shenzhen) Co.,
assets quality and enhancing
general development of CSG flat glass Ltd..
core competitiveness of the
industry, the Company decided to transfer
Company.
equity of Shenzhen CSG Float.
3. Major investment with non-raised proceeds
19
CSG Annual Report 2013
Unit: RMB’0,000
Accumulative
Amount amount
Investment Returns from
Project invested in actually Progress of project(expected to finish in 2013-2015)
amount project
this year invested ended
as period-end
Planning to build production lines for 1.2 million
square meters coated insulating glass, 3 million
square meters wide flat coated glass and its materials
in Changjiang Industry Park of Xianning Economic In the report
Development Zone, Hubei. When the project period, part of
completed, there will form a glass deep processing the project has
Xianning CSG base of CSG in central China. At present, line 1 and been
108,670 43,607 87,527
project line 2 for the energy-saving glass substrates was completed, and
ignited respectively in April and June 2013. The the net profit
production line for 1.2 million square meters coated was 35.97
insulating glass has put into production at end of the million.
st
1 quarter, and the production line for 3 million
square meters wide flat coated glass will be put into
production in middle of 2014.
Planning to increase two coating glass production
In the report
lines and support insulating glass capacity. When the
period, part of
project completed, the capacities of wide flat coated
Expansion on the project has
products will add 3 million square meters, and
energy-saving been completed
47,913 0 21,239 capacity of coated insulating glass will add 1.2
glass capacity of and the revenue
million square meters every year. Among this, the
Wujiang Projects was not
wide flat coated glass line of 3 million square meters
calculated
has been completed, and the others will be invested
individually.
according to market situations.
Planning to implement cold hydrogenation and
Polysilicon cold
distillation system on production line of polysilicon,
hydrogenation,
technological transformation on giant energy-saving
technological Project still in
reduction furnace and new-type CDI tail recovery
transformation trial production
59,616 31,835 53,317 treatment system, reduce material consumption,
project of stage in the
power consumption and steam consumption
distillation system, report period
substantially so that the cost will be reduced with
reduction furnace
more capacity obtained. The project had been
and CDI system
completed and entered the trial production stage.
Planning to build a ultra-thin electronic glass
Yingchang CSG At present,
production line with capacity of 240T/D, the
ultra-slim there’s no
32,000 21,105 21,105 production line uses natural gas as fuel and adopts
electronic glass profit from the
float process to produce 0.7~1.1mm ultra-thin glass.
project project.
The project was ignited in February 2014.
Qingyuan 47,166 941 2,893 Planning to build a high-performance ultra-thin Project still in
20
CSG Annual Report 2013
high-performance electronic glass production line with monthly capacity construction in
ultra-thin of approximately one million square meters in the report
electronic glass Qingyuan. The production line adopts CSG’s unique period.
project technology to produce 0.55mm~1.1mm higher
performance ultra-thin electronic glass. The project
will be completed at the end of 2014.
Being considered all factors and matching the
terminal market, removed Heyuan CSG PV glass
project to Wujiang to build a production line for PV
At present,
rolled glass with capacity of 650 tons per day and a
Wujiang CSG PV there’s no
57,980 21,141 38,993 tempering deep processing production line with
Glass project profit from the
annual capacity of 16.2 million square meters.The
project.
production line used clear natural gas as the fuel.
Approximately RMB 580 million has been invested
to the project and the line ignited in March 2014.
Planning to establish an on-line coated production
line in green energy industrial park of Dongguan
CSG, achieving resource sharing through making use
of production line processing facilities of Shenzhen Project still in
Dongguan CSG
CSG Float and invigorating idle assets such as plant construction in
solar on-line 39,000 0 0
of Dongguan solar energy rolled glass project and its the report
coated project
public facilities. The Company planned to invest period.
approximately RMB 390 million, including RMB 252
million newly increased. The project plans to
complete in early 2015.
Planning to build the wafer expanding project in
Yichang CSG. Among these, 300MW project has
Project still in
700MW wafer started to construct and planned to complete in the
construction in
expanding project 198,000 0 8,306 end of 2014. At that time, CSG will own the wafer
the report
in Yichang CSG productivity of 500MW in total. The balance 400MW
period.
project will be invested according to industry
situations.
Subtotal 590,345 118,629 233,380 -- --
Accumulative
Amount amount
Investment Returns from
Project invested in actually Progress of project (projects suspension)
amount project
this year invested ended
as period-end
Planning to build the solar cell production line with
Yichang CSG
annual capacity of 700MW. The project was
700MW solar cell 169,330 0 0 --
suspended and further investment will be based on
project
actual industry situations.
21
CSG Annual Report 2013
Expanding Planning to expand the solar module production line
500MW solar with annual capacity of 500MW. The project was
63,600 0 0 --
module project in suspended due to industry situations and further
Dongguan investment will be based on actual industry situations.
Subtotal 232,930 0 0 -- --
Accumulative
Amount amount
Investment Returns from
Project invested in actually Progress of project (project of joint-stock company)
amount project
this year invested ended
as period-end
Total invested RMB 1,970 million in this project,
including equipment valued RMB 700 million
removed from three companies of fine glass division,
RMB 1,070 million as new investment and RMB 200
million as working capital.
The project will be completed in three phases within
three years:
Total RMB 730 million fixed assets invested in 1st
phase, including construction of plant and public
utilities, relocation devices from current ITO glass
and ITO Film production line; construction for new
project of module production line for double-face
Upgrade & coated shadow-free glass, small size Film Sensor and Project still in
relocation project small size G+F and its supporting production construction in
197,000 25,992 25,992
for CSG fine glass equipment. Part of the project have been completed, the report
industry the rest will be completed in December 2014. period.
Total RMB 440 million fixed assets invested in 2nd
phase, including plant construction, construction of
production line for new project, and its supporting
utilities of size OGS module, (B) TP Sensor 4-G and
ITO Film, the project plans to complete in December
2015.
Total RMB 590 million fixed assets invested in 3rd
phase, including plant construction, relocation of
production line of 2.5-G TP Sensor from CSG
Wellight and production line of small-size G+G
module from Shenzhen V-interface Technology, the
project plans to complete in December 2015.
Subtotal 197,000 25,992 25,992 -- --
Total 1,020,275 144,621 259,372 -- --
Explanation on major investment with non-raised proceeds
1. Xianning CSG projects included energy-saving glass and its materials projects. These projects have been approved in 18th
22
CSG Annual Report 2013
meeting of the 5th board of directors on 23 December 2010.
2. Yichang CSG technological transformation projects included polysilicon cold hydrogenation, technological transformation
project of distillation system, reduction furnace and CDI system. These projects have been approved in 18th meeting of the 5th
the board on 23 December 2010, 2nd meeting of the 6th board of directors on 21 April 2011 and the extraordinary meeting of the
6th board of directors on 27 September 2011 respectively.
3. Yichang CSG Ultra-thin glass project has been deliberated and approved by extraordinary meeting of the 6th board of directors
on 14 December 2013.
4. Qingyuan high-performance ultra-thin electronic glass project has been deliberated and approved by extraordinary meeting of
the 6th board of directors on 2 August 2013.
5. Wujiang CSG PV Glass project has been deliberated and approved by extraordinary meeting of 6th board of directors on 30
April 2013.
VII. Future Development Prospects
1. Development Trend of the Industry
In 2014, the domestic and international economic situation remains tough. Flat glass industry still confronts a serious overcapacity in
low-end market, and pressures from soaring fuel and raw materials costs. However, with the constant promotion of national
urbanization and more outdated capacity elimination due to strict enforcement of environmental policy, flat glass market will keep
stable relatively, and profitability of the leading enterprise who owes a cost advantage will be sustained.
Concerning the architectural glass industry, the market demand will increase in 2014 due to the enforcement of national energy
conservation policies, but the intensifying homogeneity competition will become a challenge. With the constantly pushing on
energy-saving and reducing emissions by government and requirement in better residential environment, the market space of
energy-saving glass comes more extensive.
In 2014, the competition in fine glass industry will still keep intensified and industry environment will be more complex. However,
with new-type intelligent electronic products springing up and widespread, market of Smartphone will keep fast growth to bring new
power for the industry.
Benefiting from the government’s supporting for PV industry, the market situation will be recovery in 2014. With the advanced
technology, costs of relevant products in solar industry chain will decline constantly, cost of solar power generation will drop further
and the PV market will be on the track of sound progress.
2. Development Strategy
Future development strategy of the Company will center on the energy-saving and renewable energy industry. Consolidate and
establish its technology advantages and market position in the field of energy-saving glass and solar photovoltaic through technology
innovation and economies of scale. The Company will meticulously promote its core competitiveness and sustainable development
ability in the field of glass industry, display device industry and photovoltaic solar energy industry, create independent capital and
industry platform for the fine glass industry, to ensure that CSG becoming one of the world-leading manufacturers.
3. Business Plan of 2014
① Elaborately plan, concerted supervise and elaborately operate to ensure to accomplish the development and operation targets for
2014.
② Continue to implement cautious financial policy, strengthen supervision to financial affairs, and strictly prevent financial risk.
③ Intensify R&D on new products, new technology and new technics, keep innovation advantage in aspect of technology and
products.
23
CSG Annual Report 2013
④ Strictly control all costs and expenses, put measures for energy saving and consumption reducing into practice.
⑤ Further enhance utilization rate of the equipments, consolidate and improve market share, continue to carry out differentiation
strategy to improve technology and quality of the products to keep up with international business within the industry.
⑥ Deepen job and staff design, downsize for efficiency, strengthen the training and reserving for junior/senior management
personnel and improve management quality of the leading team and comprehensive management ability.
⑦ Further standardize the operation procedures of the Company, and positively prevent various operational risks.
4. Capital Requirements, Plan and Sources
In 2014, CSG capital expenditure budget is about RMB 1.909 billion, which is mainly used in the project construction of Qingyuan
high-performance ultra-thin electronic glass project, Dongguan CSG solar on-line coated project, wafer expanding project in Yichang
CSG and other construction objects in the previous year. The capital is mainly from money owned by CSG and loans borrowed from
financial institutions.
5. Risks and Countermeasures
In 2014, because of the intricate political and economic situations, the Company will face with following risks and challenges:
① The flat glass industry continues to face the pressure of overcapacity and soaring costs, while intensifying homogeneity
competition will challenge the architectural glass industry. The situation of solar PV industry is still grim. In response to the risks,
the Company will take the following measures as:
A. The Company will take technology and management innovation as the target, further deepen differentiation operation, avoid
homogenization competition by high quality and differentiation products and advanced management idea, and maintain the
profitability of the Company.
B. Pay attention to the changes of international situation, and positively explore emerging market.
C. Strengthen financial management, especially the accounts receivable and inventory management to control operational risks.
D. Adjust investment strategy according to market change, and control the investment rhythm.
② The prices of natural gas and costs of the labor go up, and raw materials fluctuate sharply. For this purpose, the Company will
take following measures:
A. Strengthen lean management, and reduce spillage of materials.
B. Keep close watch on the market changes, and lock the prices of bulk commodity timely.
C. Make use of bulk purchasing superiority to reduce the purchase cost.
D. Promote automatic production level, and improve labor productivity.
③ Risk of exchange rate fluctuations: At present, nearly 13.5% CSG sales revenue comes from overseas, so exchange rate
fluctuation will influence the CSG operation. In response to the risk, the company will timely settle exchange and lock the
exchange rate by using effective safety tools and products.
VIII. Explanation on changes of accounting policy, estimation and calculation method as
compared with last year’s financial statement
In order to reflect an objective and fair financial status and operation results of the Company, and realize easy value evaluation and
comparative analysis for investors, according with actual condition of the Company and relevant regulation of accounting standards,
Proposal of the Accounting Estimation Changed has been approved by the 13th meeting of 6th board of directors on 18 October 2013.
And the depreciation life, yearly depreciation and residuals rate for fixed assets are changed as:
Pre-changed Post-changed
Assets
Service Residuals Yearly Service Residuals Yearly
24
CSG Annual Report 2013
life rate depreciation life rate depreciation
House 30-40 5%-10% 2.25%-3.17% 35 5% 2.71%
Buildings 10-20 5%-10% 4.5%-9.5% 20 5% 4.75%
General machining equipment 10-16 5%-10% 5.63%-9.5% 15 5% 6.33%
Industrial stoves 12-16 5%-10% 5.63%-7.92% 10 5% 9.50%
Mining and processing
12 5%-10% 7.5%-7.92% 12 5% 7.92%
equipment
Machinery Cogeneration equipment 16 5% 5.93% 15 5% 6.33%
equipment CGC relevant equipment - - - 20 5% 4.75%
Other equipment (R&D test
equipment, quality control test
10-16 5%-10% 5.63%-9.5% 8 5% 11.88%
equipment and other auxiliary
equipment mostly)
Vehicle 8-10 5%-10% 9%-11.88% 8 0% 12.50%
Computers & office facilities and Others 3-10 5%-10% 9%-31.67% 5 0% 20.00%
The changes will come into force since the date deliberated and approved by the Board. According to relevant regulations in
Accounting Standards for Enterprise No.28: Changes in Accounting Policies and Estimates and Corrections of Errors, the prospective
application will be adopted for the above mentioned changes and retroactive modulation is not necessary to the financial reports that
has released. The changes have no impact either on profit for year of 2013, or the financial status and operation results in previous
year.
IX. Explanation on change of consolidation scope of financial statements as compared with
last year
Compared with last year (period), one unit was included in this year for the following reason:
Yichang CSG Photoelectric Glass Co., Ltd. (former: Yichang Hejing Photoconductive Ceramics Materials Co., Ltd.) is included in
the scope for obtained through combination under different control.
Compared with last year (period), three units are eliminated from consolidation this year for the following reason:
The Company lost control over CSG (Australia) Co., Ltd., Shenzhen Display Technology Co., Ltd. and its subsidiaries (including
Shenzhen CSG Wellight Conductive Coating Co., Ltd., Shenzhen New Vision PV Technology Co., Ltd., Shenzhen CSG Hongxu
Technology Co., Ltd., Yichang CSG Display Co., Ltd. and Shenzhen Nanxian Technology Co., Ltd.) by selling part of their shares.
And Shenzhen CSG Enamelled Tempered Glass Co., Ltd., has been cancelled in the year. Therefore, these subsidiaries are no longer
incorporated in consolidated financial statements.
X. Profit Distribution and Dividend Payout
Formulation, execution or adjustment of Profit distribution policy, cash dividend policy in particular, during the reporting period
√ Applicable □ Not applicable
The profit distribution plan for year of 2012 was approved in 2012 Annual General Meeting on 23 April 2013, that is, distribute
RMB 1.5 (tax included) in cash for every 10 shares to all shareholders. And the distribution announcement released in China
Securities Journal, Securities Times and Hong Kong Commercial Daily on 22 May 2013 and relevant distribution has completed.
Special explanation on cash dividend policy
25
CSG Annual Report 2013
Satisfy regulations of General Meeting or requirement of Article of Association
Y
(Y/N)
Well-defined and clearly dividend standards and proportion (Y/N) Y
Completed relevant decision-making process and mechanism (Y/N) Y
Independent directors perform duties completely and play a proper role (Y/N) Y
Minority shareholders have opportunity to express opinions and demands totally
Y
and their legal rights are fully protected (Y/N)
Condition and procedures are compliance and transparent while the cash bonus
Cash bonus policy has not changed or adjusted
policy adjusted or changed (Y/N)
Statement on profit distribution plan and capitalization of capital reserve plan of the Company in nearly three years (including the
reporting period)
Statement on profit distribution plan and capitalization of capital reserve plan of the Company in 2013: base on 2,075,335,560 shares
of the total shares while dividends will be distributed, distributing cash dividend of RMB 3.00 (tax included) for every 10 shares to
all share holders. In 2013 the Company will not transfer capital reserve into capital.
Statement on profit distribution plan and capitalization of capital reserve plan of the Company in 2012: based on 2,075,335,560
shares of the total shares while dividends were distributed, distributing cash dividend of RMB 1.50 (tax included) for every 10 shares
to all share holders. In 2012 the Company did not transfer capital reserve into capital.
Statement on profit distribution plan and capitalization of capital reserve plan of the Company in 2011: base on 2,075,335,560 shares
of the total shares while dividend were distributed, distributing cash dividend of RMB 1.80 (tax included) for every 10 shares to all
share holders. In 2011 the Company did not transfer capital reserve into capital.
Cash dividend in latest three years
Unit: RMB
Net profit attributable to shareholders Ratio in net profit attributable to
Amount for cash dividend
Year for bonus shares of listed company in consolidation shareholders of listed company contained
(tax included)
statement for bonus year in consolidation statement (%)
2013 622,600,668 1,535,929,739 40.54%
2012 311,300,334 274,746,219 113.3%
2011 373,560,401 1,178,229,197 31.71%
The Company gains profits in reporting period and the retained profit of parent company is positive but no plan of cash dividend
proposed
□ Applicable √ Not applicable
XI. Proposal of profit distribution preplan or share conversion from capital public reserve
Distributing bonus shares for every 10 shares (share) 0
Distributing cash dividend for every 10 shares (tax included) (RMB) 3
Equity base for distribution preplan (share) 2,075,335,560
Total amount distribution in cash (RMB) (tax included) 622,600,668
Profit available for distribution (RMB) 1,619,838,105
26
CSG Annual Report 2013
Cash distributing accounted for the proportion of the total amount of profit distribution (％) 100%
Cash dividend policy
Other
Details of Proposal of profit distribution preplan or share conversion from capital public reserve
According to the financial report audited by PricewaterhouseCoopers Zhong Tian LLP., the net profit attributable to equity holders
of the Company in consolidated statement is RMB 1,535,929,739 in 2013, and the net profit in company statement is RMB
868,321,430 in 2013. Since cash dividend distribution bases on the distributable profit of the company, the Company took 10% of
the net profit as stationary surplus reserve which was RMB 86,832,143 based on the net profit RMB 868,321,430 in company
statement 2013. Profit available for distribution in 2013 is RMB 1,619,838,105.
The Board of Directors proposed to distribute every shareholder RMB 3.00 (including tax) for each 10 shares based on the amount
2,075,335,560 shares, and the total amount distribution is RMB 622,600,668 (including tax). Board of directors consider that this
proposal of profit distribution meet the specification of Corporation Law, Accounting Standard for Enterprises and Articles of
Association. The above profit distribution preplan must be submitted to the 2013 Annual General Meeting of shareholders.
XII. Social responsibilities
2013 Annual Social Responsibilities Report of CSG was the 6th year the Company consecutively released social responsibilities
report, the report emphasized in 2013, systemically formulated the Company’s spirit of Factualism, Innovation, Unity and Efficiency,
the concrete actions of how to positively perform the social duties, and the efforts to implement the scientific development
perspective, build a harmonious society, and advance the sustainable development of economic society. See the full report on
www.cninfo.com.cn.
The listed company and subsidiaries is in the range of heavy pollution industry that regulated by State environment protection
departments
□Yes √ No
The listed company and subsidiaries owes other major social safety issues
□Yes √ No
Administrative penalty occurred in reporting period
□Yes √ No
27
CSG Annual Report 2013
XIII. In the report period, reception of research, communication and interview
Contents discussed and material
Time Place Way Type Reception
provided
China Merchants Securities Co., Ltd.,
GF Securities Co., Ltd., E Fund
Management Co., Ltd., Chian
Conference room of Field Southern Fund Management., Introduced the operation condition
2013-1-10 Institute
the Company research Shenzhen Capital Investment Co., of the Company disclosed.
Ltd., Guotai Junan Securities Co.,
Ltd., Happy Life Insurance Co., Ltd.,
Bosera Fund Management Co., Ltd.
Huatai Securities Co., Ltd., Sealand
Conference room of Field Introduced the operation condition
2013-5-29 Institute Securities Co., Ltd., GTJA Allianz
the Company research of the Company disclosed.
Funds, SWS Research Co., Ltd.
Essence Fund., China Asset
Conference room of Field Introduced the operation condition
2013-6-5 Institute Management Co., Ltd., Changjiang
the Company research of the Company disclosed.
Securities Co., Ltd., First Capital
Hanlun Investment Consultant
Conference room of Field Introduced the operation condition
2013-11-7 Institute (Shanghai) Co., Ltd., Huatai
the Company research of the Company disclosed.
Securities Research
28
CSG Annual Report 2013
Section V Important Events
I. Significant lawsuits and arbitrations of the Company
√Applicable □Inapplicable
Litigation,
Projected Execution of
Amounts Litigation (Arbitration)
liabilities Litigation, Date of Index of
General Statement on Litigation (Arbitration) (in (Arbitration) Trial Results
formed or (Arbitration) Disclosure Disclosure
‘0000) Progress and
not Judgment
Influence
In May 2011, Guangzhou Bodi Enterprise Management co.,
LTD. (hereinafter referred to as "Guangzhou Bodi") and Diyao
Development co., LTD. (hereinafter referred to as the "Diyao
Development") bought 100% Guangzhou CSG equity with RMB Based on
403 million. In July 2011, Guangzhou Bodi and the Diyao voluntary,
Development failed to timely pay the equity transfer Phase Ⅱ. equality, For details,
The parties, with an agreement, promised that Guangzhou Bodi consultation please refer to
and the Diyao Development pay liquidated damages of about on the Announceme
RMB 11.82 million. However, since April 2012, Guangzhou principles, the nt of Progress
Bodi and the Diyao Development have refused to pay the two parties of Significant
balance of the equity transfer, liquidated damages and reached a Lawsuit of
supervision fees, legal fees and the corresponding interest about settlement CSG (No.:
For this
RMB29 million in total. CSG Holding co., LTD. filed a lawsuit, agreement 2013-013)
recorded by Shenzhen Nanshan District People's Court lawsuit has
through published on
(hereinafter referred to as Shen Nan Court Civil 2nd Chu No. been settled,
negotiation on China
1035), whose trial date has not been determined currently. it will not
37,771 No 30 May 2013: -- 2013-5-31 Securities
In December 2012, Guangzhou Bodi and Diyao Development have an
Guangzhou News,
litigated to Guangdong High People's Court to charge the CSG’s impact on
Bodi and Securities
payment of RMB 378 million for liquidated damages the
Diyao Times, Hong
(hereinafter referred to as the Yue High People Civil 4th Chu No. Company.
Development Kong
5) with the excuse of CSG not preparing well to hand over to the
must pay Commercial
target enterprise as agreed. It is the same fact that CSG Holding
RMB Daily and
co., LTD. filed the lawsuit to Shenzhen Nanshan District
26,317,040 to Juchao
People's Court, and the later has already accepted this lawsuit.
the Group. Website
The case is undergoing its trial stage, whose trial date has not yet
Both sides (www.cninfo.
been set.
CSG’s independent third party lawyer states that CSG has the must com.cn.).
rights to sued on Guangzhou Bodi and Diyao Development with withdraw the
Shen Nan Court Civil 2nd Chu No. 1035, while Guangzhou prosecution.
Bodi and Diyao Development made malicious litigation with
fictional facts and default virtual columns of litigious means in
Yue High People Civil 4th Chu No. 5.
29
CSG Annual Report 2013
II. Assets transaction
1. Acquisition of assets
The net profits
The net profits
contributed to
contributed to the
the listed The
listed company
company proportion
from the
from the date of the net Associations
beginning of
of purchase to profits that Whether it with
Counterparty or Purchased or Transaction current period to
the end of these assets is related counterparty Date of Index of
ultimate controlling place into price (RMB Progress the end of report
report period contributed transaction (Applicable disclosure disclosure
party assets 0,000) period (RMB
(RMB 0,000) to the listed for related
0,000)
(Applicable company in transaction)
(Applicable for
for business total profits
business merger
merger under (%)
under the same
different
control)
control)
Taichang 73.58%shares The acquisition
Investment Co., of Yichang agreement was signed on
Ltd., Shenzhen Hejing 11th, Dec., 2012, and the Not Not Not Not
6,180.72 Not Applicable No --
Baoteng Hengfu Photoconducti procedures of equity Applicable Applicable Applicable Applicable
Chuangye ve Ceramics transfer were completed
Investment Co., Ltd. Co., Ltd. in Jan., 2013.
2. Assets sold
The net
profits
The
contributed
proportion
to the listed Whether
of the net The
company by The profit Whether the the
profits that association
the asset and loss Pricing ownership involved
The Transaction the assets Whether it with the
from the generated principle of involved creditor's Date of Index of
Counterparty Assets for sale date of price (RMB for sale is related counterparty
beginning by sale of assets property rights and disclosure disclosure
sale 0,000) contributed transaction (Applicable
of current (RMB for sale rights is debts are
to the listed for related
period to 0,000) transferred all
company in transaction)
the date of transferred
total profits
sale
(%)
(RMB
0,000)
Pricing
51% shares of refer to
Truly Wealth CSG 2013- Not the net Not Not Not
AUD 25.50 256.64 -- N Y Y
Ltd. (Australia) 12-13 applicable assets of applicable applicable applicable
Co., Ltd. the target
company
Refer to
19% shares of RMB the profit
Shenzhen
Shenzhen CSG 375.56 status of
Xinshi 2013- Not
Display 42,498 13,148.36 million 24.45% the target N Y Y 2013-8-21 2013-024
Investment 12-2 applicable
Technology investment company
Co., Ltd.
Co., Ltd. earnings. in last
two years
Approximat Pricing
GoldenTime
100 equity of ely RMB refer to
Investment Not
Shenzhen CSG 290 million the net Not
Consultant applic 91,800 -1,692.98 -- N N N 2013-9-28 2013-028
Float Glass investment assets of applicable
(Shenzhen) able
Co., Ltd. earnings the target
Co., Ltd.
expected company
30
CSG Annual Report 2013
III. Major related transaction
1. Related transaction with routine operation concerned
Proportion
Market
Trading in the
Related Related Related price of
Related Pricing Dealing amount (in amount of Means of Date of Index of
transaction transaction transaction similar
relationship principle price 10 thousand the same payments disclosure disclosure
parties type content transaction
Yuan) transaction
available
(%)
Shenzhen Lost Sales products
CSG controlling and Sales Refers to
Not Monthly Not Not Not
Display right due to commodities utra-thin market 44.9514 0.01%
applicable cost applicable applicable applicable
Technology part of the to related glass price
Co., Ltd. shares sold person
Lost Sales products
CSG controlling and Sales Refers to
Not Monthly Not Not Not
(Australia) right due to commodities architectural market 639.7245 0.08%
applicable cost applicable applicable applicable
Co., Ltd. part of the to related glass price
shares sold person
Total -- -- 684.6759 -- -- -- -- --
Details of major sold-out order sent back N/A
Necessity and persistence of related transaction as well The routine related transactions above mentioned are consistent with the principle of fairness, belong
as reasons of related transaction with related parties(not to the scope of regular service of the Company, not only in favor of reducing operation cost between
with other marketing dealers) two parties but also enlarge sales channel of the Company
Influence on independence of listed company from The related transactions shows harmless to the interest of minority shareholders and has no impact on
related transaction independence of the Company
The Company’s degree of dependence on related party Business of the Company has no dependence on related parties due to such transactions or being
and related countermeasures (if any) controlled by related parties
The actual implementation of routine related
transactions that is about to occurred in the Period with N/A
total amount estimated by category (if any)
Reason for the great difference between trade price and
Not applicable
market reference price (if any)
31
CSG Annual Report 2013
IV. Significant contract and implementations
1. Guarantees
Unit: RMB’0,000
Particulars about the external guarantee of the Company (Barring the guarantee for subsidiaries)
Actual date
of Complete Guarantee
Related Actual
Name of the Company Guarantee happening Guarantee Guarantee implement for related
Announcement guarantee
guaranteed limit (Date of type term ation or party (Yes
disclosure date limit
signing not or no)
agreement)
Guarantee of the Company for the subsidiaries
Actual date Guarante
of e for
Related Actual Complete
Name of the Company Guarantee happening Guarantee Guarantee related
Announcement guarantee implementat
guaranteed limit (Date of type term party
disclosure date limit ion or not
signing (Yes or
agreement) no)
Xianning CSG Glass General
2013-6-18 20,000 2013-7-19 7,108 3-years N N
Co., Ltd. guaranty
Xianning CSG Glass General
2013-6-18 20,000 2013-7-12 3,000 4-years N N
Co., Ltd. guaranty
Yichang CSG
General
Photoelectric Glass Co., 2013-7-12 5,000 2013-11-8 2,670 1-year N N
guaranty
Ltd.
Yichang CSG Display General
2013-8-2 20,000 2013-11-14 5,000 3-years N N
Technology Co., Ltd. guaranty
Tianjin CSG Energy General
2013-10-18 5,000 2013-11-15 1,500 3-years N N
Conservation Glass Co. guaranty
Total amount of actual occurred
Total amount of approving guarantee
225,855 guarantee for subsidiaries in report 60,039
for subsidiaries in report period (B1)
period (B2)
Total amount of approved guarantee for Total balance of actual guarantee for
subsidiaries at the end of reporting 624,423 subsidiaries at the end of reporting 63,567
period (B3) period (B4)
Total amount of guarantee of the Company( total of two abovementioned guarantee)
Total amount of approving guarantee in Total amount of actual occurred
225,855 60,039
report period (A1+B1) guarantee in report period (A2+B2)
Total amount of approved guarantee at Total balance of actual guarantee at the
624,423 63,567
the end of report period (A3+B3) end of report period (A4+B4)
The proportion of the total amount of actually guarantee in the net
7.9%
assets of the Company(that is A4+ B4)
Including:
Amount of guarantee for shareholders, actual controller and its
0
related parties(C)
The debts guarantee amount provided for the guaranteed parties
0
whose assets-liability ratio exceed 70% directly or indirectly(D)
32
CSG Annual Report 2013
Proportion of total amount of guarantee in net assets of the
0
Company exceed 50%(E)
Total amount of the aforesaid three guarantees(C+D+E) 0
Explanations on possibly bearing joint and several liquidating The Company bearing jointly responsibility in guarantee range if
responsibilities for undue guarantees the subsidiaries end up in default.
Explanations on external guarantee against regulated procedures N/A
Explanation on guarantee with way of complex
Nil
V. Implementation of commitments
1. Commitments made by the Company or shareholders holding above 5% shares of the Company in reporting period or extending to
reporting period.
Commit- Commit-
Implement-
Commitments Promisee Content of commitments ment ment
ation
date term
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
The original
Xin Tong Chan Industrial Development
non-tradable By the end of
(Shenzhen) Co., Ltd. both are
shareholder the report
wholly-funded subsidiaries to Shenzhen
Shenzhen period, the
International Holdings Limited
International above
(hereinafter Shenzhen International for
Commitments for Holdings (SZ) 2006-5- shareholders of
short) listed in Hong Kong united stock N/A
Share Merger Reform Limited and Xin 22 the Company
exchange main board. Shenzhen
Tong Chan had strictly
International made commitment that it
Industrial carried out
would strictly carry out related
Development their promises.
regulations of Securities Law,
(Shenzhen) Co.,
Administration of the Takeover of Listed
Ltd.
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.
Commitments in report of
acquisition or equity change
33
CSG Annual Report 2013
Commitments in assets
reorganization
Commitments in initial public
offering or re-financing
Other commitments for
medium and small
shareholders
Completed on time or not Yes
Detail reasons for
un-complement and further Not applicable
plan
VI. Appointment and non-reappointment (dismissal) of CPA
Accounting firm appointed
Name of domestic accounting firm PricewaterhouseCoopers Zhong Tian LLP
Remuneration for domestic accounting firm (RMB 0’000) 280
Continuous life of auditing service for domestic accounting firm 12 years
Name of domestic CPA Yao Wenping, Liu Jinping
Whether re-appointed accounting firms in this period or not
□Yes √No
Appointment of internal control auditing accounting firm, financial consultant or sponsor
√Applicable □ Not applicable
PricewaterhouseCoopers Zhong Tian LLP was engaged as audit institute of internal control for the Company in reporting period,
RMB 0.35 million paid for expenses (not including traveling and accommodation expenses)
VII. Statement on Other Important Matters
1. Repurchase Certain Domestic-listed Foreign Shares (B-share)
On 6 August 2012, the First Extraordinary Shareholders’ General Meeting 2012 deliberated and approved the proposal of
“repurchasing part of the domestically listed foreign shares (B-share) of the Company”. The company will repurchase no more than
200 million “B” shares with less than HKD 6 per share by centralized price bidding in Shenzhen Stock Exchange after putting on file
in relevant regulatory bureau and gaining approval from relevant of authorized commerce and State Administration of Foreign
Exchange. The repurchase term will be effective within 12 months since the approved date of shareholders’ general meeting. In
October 2010, the Company issued corporate bonds. According to Trial Measures for Bonds Issued by Company and CSG
Bondholders Meeting Regulations 2010, effective resolutions should be made in bondholders meeting when reduction of company
capital involved. As a bondholder China Merchants Securities co., LTD called the first bondholders meeting of 2012 on 11 December
2012. Because the bill failed to get approval of 1/2 or more of the total voting rights on behalf of bond holders, the meeting hasn’t
formed any effective resolution. If the Company carried out repurchasing B share plan under condition of failed to obtain the advance
debt obligations pay-off exemption from bondholders, the Company will face with the risk of being asked to pay-off debt ahead of
time which will bring larger losses to the company. The repurchasing plan hasn’t been enforced for avoiding damage to the Company
and shareholders. And up to 6th August 2013, the plan automatically terminated for invalid due to the resolution of general meeting
34
CSG Annual Report 2013
above mentioned expired. More details in relevant announcement released in China Securities Journal, Securities Times, Hong Kong
Commercial Daily and Juchao Website (www.cninfo.com.cn) on 20 July 2012, 7 August 2012, 12 December 2012 and 6 August
2013 respectively.
2. Short-term Financing Bonds
On 15 April 2011, annual shareholders’ general meeting 2010 of CSG considered and passed the proposal of publishing short-term
financing bills, agreed the Company’s application for publishing short-term financing bills with total amount of RMB 0.7 billion. On
5 August 2011, the registration committee of Chinese inter-bank market dealers association held the 34th registration meeting of 2011,
decided to accept the registration of short-term financing bills with total amount of RMB 0.7 billion and expiry on 12 August 2013.
The short-term financing bills co-lead managed by China Construction Bank Co., Ltd. and China Merchants Bank Co., Ltd., publicly
issue to institutional investors of China’s inter-bank bond market by bookkeeping, book building, centralizing and placing, and could
be issued by stages within the validity period of registration. On 15 September 2011, the Company successfully published the 1st
batch of short-term financing bills of 2011 with total amount of RMB 0.7 billion and deadline of 365 days, and cashed completed on
14 September 2012. On 23 October 2012, the Company successfully published the 1st batch of short-term financing bills of 2012
with total amount of RMB 0.7 billion and deadline of 365 days, and cashed completed on 22 October 2013.
On 6 August 2012, the First Extraordinary Shareholders’ General Meeting 2012 of CSG Holding Co., Ltd deliberated and approved
the proposal of short-term financing bills offering with application of short-term financing bill within RMB 2.2 billion limit. On 11
January 2013, National Association of Financial market Institutional Investors held its 1st registration meeting of 2013, in which
NAFMII decided to accept the Company’s short-term financing bills registration, amounting to RMB 1.1 billion, valid until January
25, 2015. China Merchants Bank Co., Ltd, and Shanghai Pudong Development Bank Co., Ltd were joint lead underwriters of these
short-term financing bills, which could be issued by stages within the validity period of registration. On 7 March 2013, the Company
issued the 1st batch of short-term financing bills with a total amount of RMB 1.1 billion and deadline of one year, and cashed
completed on 6 March 2014. On 14 January 2014, National Association of Financial market Institutional Investors held its 74th
registration meeting of 2013, in which NAFMII decided to accept the Company’s short-term financing bills registration, amounting
to RMB 1.1 billion and deadline of 2 years. China CITIC Bank Corporation Limited and Agricultural Bank of China Co., Ltd were
joint lead underwriters of these short-term financing bills, which could be issued by stages within the validity period of registration.
On 14 March 2014, the Company issued the 2nd batch of short-term financing bills with a total amount of RMB 0.5 billion and
deadline of one year. As for the remaining RMB 0.6 billion and one-year term short-term financing bonds, the issuance date is
undetermined.
On 23 April 2013, annual shareholders’ general meeting 2012 of CSG considered and passed the proposal of publishing short-term
financing bills, agreed the Company’s application for publishing short-term financing bills with amount not over the 40% of the
Company’s net assets in total (the issued short-term financing bonds included). It hasn’t been issued up to now.
For details, please refer to www.chinabond.com.cn and www.chinamoney.com.cn.
VIII. Issuance of corporate bonds by the Company
As approved by the Company in the second extraordinary general meeting for 2009, the Company issued corporate bonds amounting
to RMB2 billion on 20 October 2010. This batch of bonds was divided into two groups, with maturity terms being 5 years and 7
years respectively. For the bonds with maturity term of 5 years, the issuance amount was RMB1 billion; and for those of 7 years, the
issuance amount was RMB1 billion also. Besides, the bonds were attached with the option of issuer to raise additional coupon rate
and the put option of investor. The corporate bonds were listed for trading on Shenzhen Stock Exchange on 10 November 2010, with
annual interest rate of 5.33% which remained constant for the first 5 years during the duration period. The abbreviation of the bonds
with 5 years term was ‘10CSG01’, with stock code of 112021; and the abbreviation of the bonds with 7 years term was ‘10CSG02’,
with stock code of 112022. The trading termination dates were 20 October 2015 and 20 October 2017 respectively (the final
announcement issued by the Company shall prevail). For details, please refer to the Result Announcement Concerning Issuance of
35
CSG Annual Report 2013
Corporate Bonds in 2010 disclosed at China Securities Journal, Securities Times, Hong Kong Commercial Daily and
www.cninfo.com.cn on 26 October 2010.
According to the tracking rating conducted by CCXR in 2013, the credit rating of the Company’s main body was AA+, with outlook
of stable. The credit rating of the aforementioned bonds was AA+. The Company has paid the interests of the bonds for the three
interest accrual periods on 20 October 2011, 22 October 2012 and 21 October 2013. In future, the Company will continue to provide
assurance for payment of principal and interests of corporate bonds by solidly development of own business in the future.
.
36
CSG Annual Report 2013
Section VI. Changes in Shares and Particulars about Shareholders
I. Changes in Share Capital
Before the Change Increase/Decrease in the Change (+, -) After the Change
Capitalizat
Proportion New shares Bonus ion of Proportion
Amount Others Subtotal Amount
(%) issued shares public (%)
reserve
I. Restricted shares 9,109,978 0.44% 1,174,219 1,174,219 10,284,197 0.49%
1. State-owned shares 0 0% 0 0 0 0%
2. State-owned legal person’s
0 0% 0 0 0 0%
shares
3. Other domestic shares 9,109,978 0.44% 1,174,219 1,174,219 10,284,197 0.49%
Including: Domestic legal
0 0% 0 0 0 0%
person’s shares
Domestic natural
9,109,978 0.44% 1,174,219 1,174,219 10,284,197 0.49%
person’s shares
4. Foreign shares 0 0% 0 0 0 0%
Including: Foreign legal
0 0% 0 0 0 0%
person’s shares
Foreign natural person’s
0 0% 0 0 0 0%
shares
II. Unrestricted shares 2,066,225,582 99.56% -1,174,219 -1,174,219 2,065,051,363 99.49%
1. RMB Ordinary shares 1,303,641,590 62.82% -1,174,219 -1,174,219 1,302,467,371 62.76%
2. Domestically listed foreign
762,583,992 36.75% 0 0 762,583,992 36.75%
shares
3. Overseas listed foreign
0 0% 0 0 0 0%
shares
4. Others 0 0% 0 0 0 0%
III.Total shares 2,075,335,560 100% 0 0 2,075,335,560 100%
Reasons for share changed
√Applicable □ Not applicable
Removal & engagement for senior executives
Approval of share changed
□Applicable √ Not applicable
Ownership transfer for changed shares
√Applicable □ Not applicable
Mr. Ding Jiuru was appointed as vice president of the Company on 2 August 2013. Therefore, the 75% shares held by Mr. Ding Jiuru,
that was 1,030,781 shares were classified into the senior executives’ shares. On 29 November 2013, Mr. Lu Wenhui was no longer in
office of the Company as senior executive, shares held by Mr. Lu Wenhui were locked up for six months by regulation. Therefore,
143,438 shares were added in restricted senior executives’ share.
Influence on latest EPS, net assets per share and other financial index from changes in shares (if applicable)
□Applicable √ Not applicable
Other information necessary to be disclosed by the Company or should be disclosed according to requirement of securities regulators
37
CSG Annual Report 2013
□Applicable √ Not applicable
II. Securities issuance and listing
1. Securities issuance and listing over the past three years
Numbers for
Name of Stocks and Offering price The issuing
Offering date Listing date listing Dead deal date
derivative securities (RMB/Share) numbers
authorized
Stock
Convertible corporate bonds, warrant-bond and corporate bond
10 CSG 01 20 October 2010 RMB 100 /piece 10,000,000 10 November 2010 10,000,000 20 October 2015
10 CSG 02 20 October 2010 RMB 100 /piece 10,000,000 10 November 2010 10,000,000 20 October 2017
Warrant
Explanation of securities offering in previous three years (explaining those bond owes different rate in duration respectively)
Nil.
III. Particulars about shareholder and actual controller of the Company
1. Amount of shareholders of the Company and particulars about shares holding
Unit: share
Total shareholders in reporting Total shareholders ended at the day of five trading
219,171 219,597
period days before annual report disclosed
Particulars about shares held above 5% by shareholders
Total Amount Number of share
shares held Changes in of Amount of pledged/frozen
Proportion
Nature of
Full name of Shareholders of shares at the end report restricted un-restricted
shareholder
held (%) Share
of report period shares shares held Amount
status
period held
China Northern Industries State-owned
3.62% 75,167,934 0 0 75,167,934
Corporation legal person
Domestic non
Xin Tong Chan Industrial
state-owned 2.99% 62,052,845 -5,687,155 0 62,052,845
Development (Shenzhen) Co., Ltd.
legal person
Domestic non
Shenzhen International Holdings
state-owned 2.88% 59,778,813 -5,651,187 0 59,778,813
(Shenzhen) Co., Ltd.
legal person
Domestic non
ICBC-Lion Stock Investment Fund state-owned 1.23% 25,607,605 25,607,605 0 25,607,605
legal person
Domestic non
ICBC-Lion Value Growth Stock
state-owned 0.96% 20,000,000 20,000,000 0 20,000,000
Investment Fund
legal person
BBH A/C Vanguard Emerging Foreign legal 0.74% 15,370,164 4,411,655 0 15,370,164
38
CSG Annual Report 2013
Markets Stock Index Fund person
Domestic non
CMBC-Yinhua 100 Grading Stock
state-owned 0.68% 14,138,283 1,767,534 0 14,138,283
Investment Fund
legal person
Domestic non
CCB-Yinhua Rich Theme Stock
state-owned 0.63% 12,990,411 12,990,411 0 12,990,411
Investment Fund
legal person
Domestic non
BOC-Yinhua Quality Growth Stock
state-owned 0.56% 11,600,000 11,600,000 0 11,600,000
Investment Fund
legal person
Guotai Junan Securities (Hong Foreign legal
0.50% 10,439,048 871,720 0 10,439,048
Kong) Limited person
Strategic investors or general legal person becomes
top 10 shareholders due to shares issued (if N/A
applicable)
Among shareholders as listed above, Shenzhen International Holdings
(Shenzhen) Co., Ltd. and Xin Tong Chan Development (Shenzhen) Co., Ltd.
are holding enterprises and belong to controlling enterprise of Shenzhen
International Holdings Co., Ltd.. ICBC-Lion Stock Investment Fund and
ICBC-Lion Value Growth Stock Investment Fund share the same fund manager
Explanation on associated relationship among the of Lion Fund Management. CMBC-Yinhua 100 Grading Stock Investment
aforesaid shareholders Fund, CCB-Yinhua Rich Theme Stock Investment Fund and BOC-Yinhua
Quality Growth Stock Investment Fund share the same fund manager of
Yinhua Fund Management. Except for this, It is unknown whether other
shareholders belong to related party or have associated relationship regulated
by the Management Regulation of Information Disclosure on Change of
Shareholding for Listed Companies.
Particular about top ten shareholders with un-restrict shares held
Amount of un-restrict Type of shares
Shareholders’ name
shares held at year-end Type Amount
China Northern Industries Corporation 75,167,934 RMB ordinary shares 75,167,934
Xin Tong Chan Industrial Development (Shenzhen) Co., Ltd. 62,052,845 RMB ordinary shares 62,052,845
Shenzhen International Holdings (Shenzhen) Co., Ltd. 59,778,813 RMB ordinary shares 59,778,813
ICBC-Lion Stock Investment Fund 25,607,605 RMB ordinary shares 25,607,605
ICBC-Lion Value Growth Stock Investment Fund 20,000,000 RMB ordinary shares 20,000,000
Domestically listed
BBH A/C Vanguard Emerging Markets Stock Index Fund 15,370,164 15,370,164
foreign shares
CMBC-Yinhua 100 Grading Stock Investment Fund 14,138,283 RMB ordinary shares 14,138,283
CCB-Yinhua Rich Theme Stock Investment Fund 12,990,411 RMB ordinary shares 12,990,411
BOC-Yinhua Quality Growth Stock Investment Fund 11,600,000 RMB ordinary shares 11,600,000
Domestically listed
Guotai Junan Securities (Hong Kong) Limited 10,439,048 10,439,048
foreign shares
39
CSG Annual Report 2013
Among shareholders as listed above, Shenzhen International Holdings
(Shenzhen) Co., Ltd. and Xin Tong Chan Development (Shenzhen) Co., Ltd.
are holding enterprises and belong to controlling enterprise of Shenzhen
International Holdings Co., Ltd.. ICBC-Lion Stock Investment Fund and
ICBC-Lion Value Growth Stock Investment Fund share the same fund
Statement on associated relationship or consistent manager of Lion Fund Management. CMBC-Yinhua 100 Grading Stock
action among the above shareholders: Investment Fund, CCB-Yinhua Rich Theme Stock Investment Fund and
BOC-Yinhua Quality Growth Stock Investment Fund share the same fund
manager of Yinhua Fund Management. Except for this, It is unknown whether
other shareholders belong to related party or have associated relationship
regulated by the Management Regulation of Information Disclosure on
Change of Shareholding for Listed Companies.
Explanation on shareholders involving margin
N/A
business (if applicable)
Agreed to buy back deals occurred in Period from shareholders
□ Yes √ No
2. Controlling shareholder of the Company
Not exist
Explanation on the Company without controlling shareholder
The Company has no controlling shareholder so far, Shenzhen International Holdings Co., Ltd. is the first largest shareholder of the
Company, which holds 5.87% equity of the Company in total through Shenzhen International Holdings (Shenzhen) Co., Ltd. and Xin
Tong Chan Industrial Development (Shenzhen) Co., Ltd. Other shareholders of the Company hold less than 5%of total shares at the
end of reporting period.
Changes of controlling shareholders in reporting period
□ Applicable √Not applicable
3. Actual controller of the Company
Not existing
Explanation on the Company without actual controller
The Company has no actual controller so far, Shenzhen International Holdings Co., Ltd. is the first largest shareholder of the
Company, which holds 5.87% equity of the Company at present. Shenzhen International Holdings established in Bermuda in 1989,
and was listed in main board of Hong Kong Exchanges and Clearing Co., Ltd. Other shareholders of the Company hold less than
5%of total shares at the end of reporting period.
Whether the Company has shareholder who owes over 10% shares in ultimate controlling level
□ Yes √ No
Shareholders with over 5% shares held in ultimate controlling level
Legal person
Legal
rep./person in Date Organization Registered
Shareholders Main business
charge of the established code capital
unit
Shenzhen International Gao Lei 1989-11-10 Not applicable HKD 2 billion Mainly engaged in investment,
40
CSG Annual Report 2013
Holdings Co., Ltd. (authorized construction and operation of logistic
(0152.HK) capital) infrastructure; and provided vary
logistic value-added service based on
infrastructure owned
Taking Pearl river delta, Yangtze river Delta and Bohai Rim region as main strategy
regions in China, invested, constructed and operated logistic infrastructure in logistic
Operation result, financial status, cash
zone and toll roads through acquisition, reorganization and integration; provided
flow and future development strategy
high-end logistic value-add service to clients by application of supply chain management
technology and information technology, create more value for shareholders.
Equity of domestic/foreign listed
company controlled by ultimate 50.889% equity of Shenzhen Expressway Co., Ltd. (600548.SH, 0548.Hk) were held
shareholder in reporting period
Changes of actual controller in reporting period
□ Applicable √ Not applicable
Property right and controlling relationship between the largest shareholder and the Company is as follow:
State-owned Assets Supervision & Administration Commission of Shenzhen Municipality
100%
Shenzhen Investment Holdings Co., Ltd.
48.01%
Shenzhen International Holdings Co., Ltd.
100%
100%
Xin Tong Chan Industrial Development (Shenzhen) Co., Ltd. Shenzhen International Holdings (Shenzhen) Co., Ltd.
2.99% 2.88%
CSG Holding Co., Ltd.
Actual controller controlling of the Company by entrust or other assets management
□Applicable √Not applicable
41
CSG Annual Report 2013
Section VII. Particulars about Directors, Supervisors and Senior
Executives and Employees
I. Changes of shares held by directors, supervisors and senior executives
Increasing Decreasing
Shares held Shares
shares shares held
Working Start dated at held at
End date of
Name Title Gender Age of office held in in this
status office term period-begin period-end
term
this period period
(Share) (Share)
(Share) (Share)
Chairman of the Currently
Zeng Nan M 69 2011-4-15 2014-4-15 4,500,388 0 0 4,500,388
Board /CEO in office
Chen Independent Currently
M 58 2011-4-15 2014-4-15
Chao Director in office
Zhang Independent Currently
M 49 2011-4-15 2014-4-15
Jianjun Director in office
Independent Currently
Fu Qilin M 59 2012-4-17 2014-4-15
Director in office
Currently
Li Jingqi Director M 57 2011-4-15 2014-4-15
in office
Yan Currently
Director M 54 2011-4-15 2014-4-15
Ganggang in office
Guo Currently
Director M 46 2011-4-15 2014-4-15
Yongchun in office
Wu Director/ Currently
M 49 2011-4-15 2014-4-15 1,810,000 0 0 1,810,000
Guobin President in office
Director / Vice Currently
Ke Hanqi M 48 2012-12-25 2014-4-15 1,730,000 0 0 1,730,000
President in office
Chairman of the
Long Currently
Supervisory M 58 2011-4-15 2014-4-15
Long in office
Committee
Hong Currently
Supervisor M 59 2011-4-15 2014-4-15
Guo’an in office
Sun Currently
Supervisor F 48 2011-4-15 2014-4-15
Jingyun in office
Luo Chief Financial Currently
M 51 2011-4-15 2014-4-15 1,790,000 0 0 1,790,000
Youming Officer in office
Currently
Zhang Fan Vice president M 48 2012-12-3 2014-4-15 1,530,000 0 0 1,530,000
in office
Ding Jiuru Vice President Currently M 51 2013-8-2 2014-4-15 1,464,375 0 90,000 1,374,375
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CSG Annual Report 2013
in office
Lu Office
Vice president M 50 2011-4-15 2013-11-29 573,750 0 0 573,750
Wenhui leaving
Zhou Secretary of the Currently
F 48 2012-3-23 2014-4-15 212,500 0 0 212,500
Hong Board in office
Total -- -- -- -- -- -- 13,611,013 0 90,000 13,521,013
II. Post-holding
Major working experience of directors, supervisors and senior executive at the present in latest five years
Zeng Nan, took posts of Director General Manager, Director President and Vice Chairman of the Board in the Company. At present,
he is the Chairman of the Board and CEO of the Company.
Chen Chao, took posts of Chairman of the board of former Yiwan Industrial Development (Shenzhen) Co., Ltd. and Xin Tong Chan
Industrial Development (Shenzhen) Co., Ltd., Chairman and General Manager of Shenzhen Expressway Co., Ltd., Vice-chairman
and President of Shenzhen International Holdings Co., Ltd., Chairman of the board of the Company, Chairman of Shenzhen Tonge
Group, Chairman of the board of Shenzhen United Assets and Equity Exchange Co., Ltd.. At present, he is the independent director
of the Company,Director of Shenzhen Boxiong Industry Development Co., Ltd., Executive Partner of Shenzhen Balas Equity
Investment Fund Management Co., Ltd. and Independent Director of Guangxi Wuzhou Communications Co., Ltd..
Zhang Jianjun, took posts of Dean and Professor of Economy College of Shenzhen University and Independent Director of
Shenzhen Gas Corporation Ltd..At present, he is the Director and Professor of Accounting and Finance Research Institution of
Shenzhen University, Independent Director of the Company, Independent Director of Shenzhen Chiwan Wharf Holdings Limited.,
Independent Director of Tapai Group and Independent Director of Shenzhen Airport Co., Ltd..
Fu Qilin, successively served as Dean of Law School of Jinan University, Dean of Law School of Capital University of Economics
& Business, now he is the professor and doctorial adviser of China University of Political Science & Law, Independent Director of
the Company.
Li Jingqi, took posts of Vice President of Shenzhen International Holding Co., Ltd., supervisor of Shenzhen International West
Logistics Co., Ltd and Chairman of the Board in the Company. At present, he is the Executive Director, President and deputy
secretary of the Party Committee of Shenzhen International Holdings Co., Ltd. (corporate shareholder of the Company), Director of
Xin Tong Chan Industrial Development (Shenzhen) Co., Ltd. (corporate shareholder of the Company), Director of Shenzhen
International Holdings (SZ) Limited (corporate shareholder of the Company), Director of Shenzhen Expressway Co., Ltd. and
Director of Ultrarich International Limited, Director of the Company.
Yan Ganggang, took post of the Partner of Guangdong Liang and Yan Law Office. At present, he is the Partner of Guangdong
Zhongzhen Law Office, Director of the Company.
Guo Yongchun, took posts of General Manager of Investment II Division of China Northern Industries Corporation and post of
Chairman of Chengdu Yihe Dynasty Hotel Co., Ltd. as well as General Manager of investment dept. of Northern Industries
Technology Corporation. At present, he is the Deputy General Manager of Northern Industries Technology Co., Ltd. (corporate
shareholder of the Company), Director of the Company.
Wu Guobin, took posts of Assistant to the General Manager of the Company, Secretary of the Board, Vice president of the Company
and president of architectural glass division of the Company. At present, he is Director, President of the Company.
Ke Hanqi, took posts of General Manager of Fine Glass Department of the Company. At present, he is Director, Vice President of the
Company and President of Solar Energy Department in the Company.
Long Long, took posts of Vice Chief of External Development Research Department and Chief of Surrounding Region Research of
China Comprehensive Development Research Institute. At present, he is Director of Council of China Comprehensive Development
43
CSG Annual Report 2013
Research Institute (Shenzhen, China), Director of Industrial Economy Research Center, committee members of the Shenzhen Policy
Consultative Committee, chairman of supervisory of the Company, independent director of Shenzhen Jinjia Printing Group Co., Ltd.,
director of Guangdong Shirongzhaoye Co., Ltd. and independent director of Guizhou Huaneng Jiaohua Co., Ltd.
Hong Guoan, took posts of successively served as partner and senior lawyer as well as the business committee member of
management committee of Guangdong Xingchen Law Firm, Partner of Shanghai Jianwei (Shenzhen) Law Firm. At present, he is the
director/senior lawyer of Zhonglun W&D Law Firm and supervisor of the Company. .
Sun Jingyun, took posts of the Director of Foshan Pessenger Coach Station of Yangcheng Railway General Company, Guangzhou
Railway Group Co., Ltd.; vice-station master of Foshan Coach Station of Guangdong Sanmao Railway Holding Co., Ltd. and took in
charge of the whole work in the station. At present, she is the Director of CEO Office and staff supervisor of the Company.
Luo Youming, took posts of Assistant Chief Financial Officer of the Company. At present, he is Chief Financial Officer in the
Company.
Zhang Fan, took posts of General Manager of Float Glass Department of the Company and Assistant to the President of the
Company. At present, he is Vice President of the Company and President of Flat Glass Department in the Company.
Ding Jiuru, took posts of Deputy General Manager and Chief Accountant of China Northern Industries Corporation (Shen Zhen),
Director, Manager of financial dept., Chief Economist and Assistant to the General Manager of the Company. At present, he is Vice
President of the Company.
Zhou Hong, took posts of Director of Hong Kong Asia Global Security Co., Ltd, and independent director of Shenzhen Evoc
Intelligent Technology Co., Ltd.. At present, she is Secretary of the Board and Manager of securities dept. of the Company.
Post-holding in shareholder’s unit
√Applicable □ Not applicable
Received
Position in Start dated of End date of remuneration from
Name Name of shareholder’s unit
shareholder’s unit n office term office term shareholder’s unit
or not
Xin Tong Chan Industrial Development
Li Jingqi Director Sep. 2002 -- No
(Shenzhen) Co., Ltd.
Shenzhen International Holdings
Li Jingqi Director Dec. 2003 -- No
(Shenzhen) Co., Ltd.
Executive
Li Jingqi Shenzhen International Holdings Co., Ltd. Aug. 2006 -- Yes
Director&President
Deputy General
Guo Yongchun Northern Industrial Technology Co., Ltd. March 2011 -- Yes
Manager
Explanation on post-holding in shareholders’ unit N/A
Post-holding in other unit
√Applicable □Not applicable
44
CSG Annual Report 2013
Received
Position in other Start dated of End date of
Name Name of other units remuneration from
unit n office term office term
other unit or not
Shenzhen Boxiong Industrial Development
Chen Chao Director March 2011 -- No
Co., Ltd.
Shenzhen Balas Equity Investment Fund Managing
Chen Chao May 2011 -- No
Management Co., Ltd. partner
Guangxi Wuzhou Communications Co., Independent
Chen Chao Feb. 2012 -- Yes
Ltd. director
Accounting & Finance Institute of Director,
Zhang Jianjun Jan. 2007 -- Yes
Shenzhen University professor
Independent
Zhang Jianjun Shenzhen ChiwanWharf Holdings Limited May 2008 -- Yes
director
Independent
Zhang Jianjun Guangdong Tapai Group Co., Ltd. June 2008 -- Yes
director
Independent
Zhang Jianjun Shenzhen Airport Co., Ltd. Dec. 2010 -- Yes
director
China University of Political Science & Professor,
Fu Qilin Dec. 2011 -- Yes
Law doctorial advisor
Li Jingqi Shenzhen Expressway Co., Ltd. Director April 2005 -- No
Li Jingqi Ultrarich International Limited Director Nov. 1999 -- No
Yan Ganggang Guangdong Zhongzhen Laws Firm Partner July 2001 -- Yes
Long Long CDI (Shenzhen. China) council; CIE Director, chief June 1990 -- Yes
Independent
Long Long Shenzhen Jinjia Printing Group Co., Ltd. Nov. 2006 -- Yes
director
Independent
Long Long Guizhou Huaneng Jiaohua Co., Ltd. May 2008 -- Yes
director
Long Long Guangdong Shirong Zhaoye Co., Ltd. Director Dec. 2008 -- Yes
Directror/Senior
Hong Guo’an Beijing Zhonglun W&D Law Firm Aug 2012 Yes
lawyer
Explanation on post-holding in other unit N/A
III. Remuneration for directors, supervisors and senior executives
Decision-making procedures, recognition basis and payment for directors, supervisors and senior executives
1. Decision-making procedures: Allowances for independent directors and external supervisors are planed and protocoled by
Remuneration & Assessment Committee of the Board and approved by Shareholders’ General Meeting after deliberation of the
Board. Remuneration for senior executives is proposed by Remuneration & Assessment Committee of the Board and decided by
the Board after discussion.
2. Confirmation basis of remuneration: Allowances for independent directors and external supervisors are confirmed based on
industry standards and real situation of the Company. Remuneration for senior executives implements floating reward mechanism
with reference to basic salary and business performance. Bonus for performance rewards is withdrawal by proportion according
45
CSG Annual Report 2013
to annual return on equity and based on the total net profit after taxation in current year.
3. Actual remuneration payment: Allowances for independent directors and external supervisors are RMB 100,000 per year. The
total remuneration for senior executives in the report period was RMB 6.6885million.
Remuneration for directors, supervisors and senior executives in reporting period
Total
Total Remuneration
remuneration
remuneration actually
obtained from
Name Title Gender Age Post-holding status obtained from obtained at
shareholder’s
the Company period-end
unit
(RMB 0,000) (RMB 0,000)
(RMB 0,000)
Chairman of the Board
Zeng Nan M 69 Currently in office 114.98 0 114.98
/CEO
Chen Chao Independent Director M 58 Currently in office 10 0 10
Zhang Jianjun Independent Director M 49 Currently in office 10 0 10
Fu Qilin Independent Director M 59 Currently in office 10 0 10
Li Jingqi Director M 57 Currently in office 0 0 0
Yan Ganggang Director M 54 Currently in office 10 0 10
Guo Yongchun Director M 46 Currently in office 0 0 0
Wu Guobin Director / president M 49 Currently in office 91.54 0 91.54
Ke Hanqi Director /vice president M 48 Currently in office 86.12 0 86.12
Chariman of Supervisory
Long Long M 58 Currently in office 10 0 10
Committee
Hong Guoan Supervisor M 59 Currently in office 10 0 10
Sun Jingyun Supervisor F 48 Currently in office 42.87 0 42.87
Luo Youming CFO M 51 Currently in office 88.27 0 88.27
Zhang Fan Vice president M 48 Currently in office 83.09 0 83.09
Ding Jiuru Vice president M 51 Currently in office 77.13 0 77.13
Lu Wenhui Vice president M 50 Office leaving 83.12 0 83.12
Zhou Hong Secretary of the Board F 48 Currently in office 44.60 0 44.60
Total -- -- -- -- 771.72 0 771.72
Delegated equity incentive for directors, supervisors and senior executives in reporting period
□ Applicable √ Not applicable
IV. Post-leaving and dismissals for directors, supervisors and senior executives
Name Title Type Date Reasons
Board of the Directors agrees to nominate Mr. Ding Jiuru as vice
Ding Jiuru Vice president Service 2013-8-2
president of the Company in light of the development needs of business.
Lu Wenhui Vice president Demission 2013-11-29 Resigned to the Board for career moves
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CSG Annual Report 2013
V. Changes of core technology team or key technicians in reporting period (not including
directors, supervisors and senior executives)
The Company has no changes of core technology team or key technicians in reporting period. Therefore there is no major influence
on operation.
VI. Particulars of workforce
1. Number of employees and constitution
Ended as 31 December 2013, totally 9,956 employees in the Company and its subsidiaries, including 5,595 production personnel,
573 salesman, 1,502 technicians, 143 financial personnel and 2,143 administrative personnel. Education background as: 4 people
with doctor’s degree, 125 people with master degree, 1,804 people undergraduate, 2,284 from junior college and 5,739 with college
and below
Administrative
21.52%
Financial
1.44%
Production
Technical 56.20%
15.09%
Marketing
5.76%
Doctor
Master
0.04%
1.26%
College
18.12%
Others
57.64% Junior College
22.94%
2. Staff remuneration policy
The Company adopted the salary management of basic pay plus performance pay, encouraged the staff to reach their employment
objectives and obtain high performance payment through their endeavor. Realize the salary system of linking the salary and
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CSG Annual Report 2013
assessment results together via effective performance appraisal, and stimulate the positiveness of to strive to realize the enterprise
objectives by adjusting the income of staff with good and bad performance.
3. Staff training plan
The Company attached great importance to the team construction, thought highly of the training, allocated training fee for cultivating
employee’s skill, developing capabilities and promoting quality. The Company overall implemented training program for senior
management so as to offer a strong support for improving levels of education and skills for employees. As for the senior management,
middle management and junior employees, the Company formulated a personalized training plan for the purpose of adapting and
promoting the business development of CSG. Training and development will be the normalized important work of HR in the future,
which will receive more support from the Company.
4. During the report period, the retired staff and workers, were brought into the social security system for enjoying the retired
treatment according to relevant regulations of social security, the Company didn’t need to assume the costs.
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CSG Annual Report 2013
Section VIII. Corporate Governance
I. Corporate governance of the Company
In strict compliance with the requirements of the relevant laws and regulation including The Company Law, Securities Law and Rule
of Governance for Listed Company, the Company has been putting efforts in improving the corporate governance, strengthening
management of information disclosure, regulating operation activities and establishing a modern corporate system. At present, the
system for corporate governance of the Company is basically perfect, operation is regulated, corporate governance is consummated,
which accord with the requirements of relevant document on corporate governance of listed company issued by CSRS.
During the report period, it does not exist that the company provides the undisclosed information to the largest shareholder and actual
controller. And it does not exist that non-operating fund of listed company is occupied by the largest shareholder and its affiliated
enterprises.
Is there any difference between the corporate governance and the requirements of the Company Law and the relevant regulations of
CSRC
□ Yes √ No
There is no difference between the corporate governance and the requirements of the Company Law and the relevant regulations of
CSRC.
Progress of special activity in relation to corporate governance and determination and implementation of insider registration
management system
1. To strengthen education of insider trading prevention
In the report period, the Company participated in the Meeting of Insider Trading Prevention for Listed Company in Shenzhen held by
securities regulatory bureau of Shenzhen. After the meeting, the Company offered a special training on Insider Trading Prevention for
all directors, supervisor, senior executives and other staffs who are likely to contact with the insider information. Relevant staffs
further awared the perniciousness of insider trading through the special training, and fully recognized the significance of crackdown
on insider trading.
2. Implementation of the relevant requirements of cash dividends
In order to make the scientific, lasting, stable and transparent dividend policy and supervision system of the Company and bring
satisfactory return to investors, the Company formulated the Argumentation Report in Respect of Planning for Shareholders’ Return
and Shareholders’ Return Plan for the Future 3 Years (2012-2014) according to the requirements of the Circular concerning
Implementation of the Notice on Further Implementation of Cash Dividend Issues of Listed Company (SZJGSZ(2012)No.43) issued
by the securities regulatory bureau of Shenzhen. Accordingly, the Company made certain amendments to its Articles of Association
(more details could be found in relevant announcement released on Juchao Website (www.cninfo.com.cn) dated 20 July 2012). In
detail, it improved the profit distribution related decision-making procedure and system by general meeting and the board of directors,
increased transparency for information disclosure of cash dividends. In addition, the Company, based on the requirements of the
Circular, provided investors opportunities to share economic growth achievements of the Company, thus to help investors make
long-term and rational investments.
3. Establishment and implementation of management system on external information user
The Company established Management System of Information Disclosure (more details could be found in relevant announcement
released on Juchao Website (www.cninfo.com.cn) on 30 May 2007, 25 September 2007 and 20 October 2009) and perfected it
according to the newly-promulgated laws and rules timely, defined the standards for inside information, built registration & record
49
CSG Annual Report 2013
system and file management system of information insiders. The Company put strict information confidentiality provisions in the
system and expressed that the external related personnel must fill in the Registration Form of Internal Information Insiders if the
statistical statements and other information submitting to the outside according to the law involved like unrevealed profit index. And
the Company must point to the external information insiders that abide by related laws and rules.
In the report period, the Company also submitted the Registration Form of Internal Information Insiders to Shenzhen Stock Exchange
when submitting every periodic report. Concerning significant sensitive information with influence on stock price of the Company,
insiders did not make use of inside information for stock dealings before information disclosed.
II. Annual shareholders’ general meeting and extraordinary shareholders’ general meeting
convened in the report period
1. Annual Shareholders’ General Meeting in the report period
Convening Date of Index of
Session of meeting Name of meeting motion Situation
Date disclosure disclosure
Work Report of the Board 2012 of CSG, Work
Report of Supervisory Committee 2012 of CSG,
Annual Report and Summary 2012 of CSG, All proposals
Annual Shareholder
Financial Result Report 2012 of CSG, Profit have been
General Meeting of 2013-4-23 2013-4-24 No. 2013-006
Distribution Plan of 2012 of CSG, Engagement of deliberated and
2012
Audit Institute for year of 2013 and Application passed
for Registration and Issuance of Short-term
Financing Bills
2. Extraordinary shareholders’ general meeting in the report period
Convening Date of Index of
Session of meeting Name of meeting motion Situation
Date disclosure disclosure
All proposals
1st extraordinary
Transfer Part of the Shares of Shenzhen CSG have been
shareholders general 2013-9-6 2013-9-7 No. 2013-026
Display Technology Co., Ltd. deliberated and
meeting of 2013
passed
All proposals
2nd extraordinary
Transfer shares of Shenzhen CSG Float Glass have been
shareholders general 2013-10-18 2013-10-19 No.: 2013-033
Co., Ltd. deliberated and
meeting of 2013
passed
III. Responsibility performance of independent directors in the report period
1. The attending of independent directors to Board meetings and shareholders’ general meeting
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CSG Annual Report 2013
The attending of independent directors
Name of Times of Board meeting Times of Times of Whether absent the
Times of Times of
independent supposed to attend in the attending by entrusted Meeting for the second
Presence Absence
director report period communication presence time in a row or not
Chen Chao 8 3 4 1 0 No
Zhang Jianjun 8 4 4 0 0 No
Fu Qilin 8 4 4 0 0 No
Times for attending shareholders general
3
meeting from independent directors
Explanation of absent the Board Meeting twice in a row
Inapplicable
2. Objection for relevant events from independent directors
Whether independent directors come up with objection about company’s relevant matters or not
□ Yes √ No
Independent directors has no objections for relevant events in reporting period
3. Other explanation about responsibility performance of independent directors
Whether the opinions from independent directors have been adopted or not
√Yes □ No
Explanation on advice that accepted/not accepted from independent directors
In the report period, according to requirements of Working System of Independent Directors and Working System on Annual Report
of Independent Directors, independent directors actively communicated with accountants, urged works of annual report to progress
on schedule. They investigated headquarters of the Company and subsidiaries including Dongguan CSG Architectural Glass Co., Ltd.,
CSG PV Tech Co., Ltd. Dongguan CSG Solar Glass Co., Ltd., further understood the progress condition of production operation and
project construction. During the report period, all independent directors audited every proposal of Board of Directors cautiously, and
declared independent opinions on significant management matters, engagement of senior management, assets for sale and internal
control construction. Suggestions of independent directors related to the Company had been adopted which played a positive role in
maintaining the interests for the medium and small shareholders.
IV. Duty performance of the special committees under the board during the reporting period
1. Performance of the audit committee of the Board
The Audit Committee of the Board of Directors of the Company is constituted with 5 directors, and 3 of them are independent
directors. The convoker is independent director. During the report period, according to demands of CSRC and Shenzhen Stock
Exchange, and regulations of Rules of Procedure of the Audit Committee of the Board of Directors, Procedure for Annual Report
Work of the Audit Committee, the committee paid attention to the construction of corporate internal control system, audited the
internal audit report and financial report periodically, diligently and faithfully. They performed the following duties:
①Review the financial reports and issue relevant opinions
In accordance with the requirements of CSRC, the Audit Committee presented two audit opinions for the annual financial report of
the Company in the report period. Before the entrance of the certified public accountants for annual audit, the Audit Committee
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CSG Annual Report 2013
issued the initial written opinion for the unaudited financial report. The committee agreed the report fairly reflected the significant
financial situation and operation achievement of the Company. After the certified public accountants presented their initial audit
opinion, the Audit Committee re-examined the financial report of the Company and presented a written opinion which agreed that the
basis, conditions, principles and methods used in the report were in line with the regulations and laws and fairly reflected the
financial situation on 31 December 2013 and operation achievement in 2013 of the Company in significant aspects.
②Supervise the audit works conducted by the accountant firm
Through negotiation with the certified public accountant, the Audit Committee arranged the audit work for the annual financial report
in advance, and made the audit schedule. After the entrance of the registered accountants, the committee met the persons in charge of
the audit. After communicating with the accountants, the committee realized the audit process and requirements from the accountants,
and quickly feedback the information to the relevant departments of the Company, in order to ensure the annual audit and relevant
information disclosure could be promoted according to the scheduled process.
③ Summarize report on the audit works conducted by the accountant firm in previous year
PricewaterhouseCoopers Zhong Tian LLP conducted their work in strict accordance to Chinese audit standards; with attitude of
earnest and responsibility, paid attention to communication with the management level and the Audit Committee; embodied strong
specialty knowledge, professional nature and risk awareness. The CPAs successfully finished the 2013 annual audit work of financial
reports of the Company and the audit quality is worthy of trust.
④ Opinions on reengagement of the accountant firm
It is proposed to reengage PricewaterhouseCoopers Zhong Tian LLP as the auditor of the Company for 2014.
2. Performance of the remuneration and examination committee of the Board
The remuneration and examination committee of the Board of Directors of the Company is constituted with 5 directors, and 3 of
them are independent directors. The convoker is independent director.
According to regulations of Rules of Procedure of The Remuneration and Appraisal Committee, the Remuneration and Appraisal
Committee makes examination on the disclosed remuneration of the directors, supervisors and senior executives and thought it
accorded with the relevant laws and regulations of the remuneration and appraisal system of the Company.
3. Performance of the nomination committee of the Board
The nomination committee of the Board of Directors of the Company is constituted with 5 directors, and 3 of them are independent
directors. The convoker is independent director.
Nomination committee of the Board performed evaluation on the work of the Board, and believed that the directors of 6th session of
the Board abided by the State laws, administrative rules and regulation of Article of Association since they took office. They attended
or delegated to attend the Board Meeting and general meeting on time, performed voting rights based on relevant regulations,
actively kept eyes on the management situation of the Company, and performed the duty of Directors diligently.
4. Performance of the strategy committee of the Board
The strategy committee of the Board of Directors of the Company is constituted with 5 directors, and 1 of them is independent
directors.
As the special institution responsible for the long-term development strategy and significant investment decision-making, the strategy
committee made earnest research on the significant decisions affecting the Company’s development and issued relevant
recommendations according to the procedure rules of the strategy committee. During the reporting period, the committee considered
the profit distribution plan, and held the view that the profit distribution plan conformed to the requirements of the Company Law,
the Enterprise Accounting Principles and the Articles of Association, and agreed to submitted the same to the board and general
meeting for consideration. At the same time, the strategy committee considered issues concerning significant operation management,
disposal of assets, withdrawal of asset impairment provision and guarantee for controlling subsidiary, and submitted the same to the
board for consideration.
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CSG Annual Report 2013
V. Works from Supervisory Committee
Whether the Company has risks or not in reporting period that found in supervisory activity from supervisory committee
□ Yes √ No
Supervisory committee has no objection about supervision events in reporting period
VI. Independency of the Company relative to controlling shareholders’ in aspect of businesses,
personnel, assets, organization and finance
The Company has been absolutely independent in business, personal, assets, organization and financial from its substantial
shareholders ever since its establishment. The Company had an independent and complete business system and independent
management capability.
1. In terms of business: The Company owns independent purchase and supply system of the raw resources, complete production
systems, independent sale system and customers. The Company is completely independent from the substantial shareholders in
business. The substantial shareholders and their subsidiaries do not engage any identical business or similar business as the
Company.
2. In terms of personnel: The Company established integrated management system of labor, personnel, salaries and the social security,
which were absolutely independent from its holding shareholder’s. Personnel of the managers, person in charge of the financial
and other executive managers are obtained remuneration from the Company since on duty in the Company, and never received
remuneration or take part-time jobs in large shareholders’ company and other enterprises controlled by large shareholders. The
recruitment and dismissal of Directors are conducted through legal procedure since the Company was listed and the manager has
been appointed or dismissed by Board of Directors. The Board of Directors and the Shareholders’ General Meeting have not
received any interference of decisions on personnel appointment and removal from the largest shareholders.
3. In terms of asset, the Company is able to operate business independently and enjoys full control over the production system,
auxiliary production system and facilities, land use right, industry property and non-patent technology owned or used by the
Company. The investments to the Company from largest shareholder are monetary assets, and the largest shareholder has never
occupy, damage or intervene to operation on these assets.
4. In terms of organization: The Company possessed sound corporate governance structure, established Shareholders’ General
Meeting, Board of Directors, Supervisory Committee, appointed general manager, and fixed related function departments. The
Company had been totally independent from its large shareholders in organization structure. The Company has its own office and
production sites that are different from those of the large shareholders. The largest shareholder and its related parties didn’t deliver
any operation plan and order to the Company, neither influence the independence on management of the Company by any forms.
5. In terms of finance: The Company has set up independent financial department, established independent accounting calculation
system and financial management system (included management system of its subsidiaries). The financial personnel of the
Company didn’t take part-time jobs in units of large shareholder or its subordinate units. The Company had independent bank
accounts, separated from the large shareholders. The Company is independent taxpayer, paid taxes independently according the
laws and didn’t pay mixed taxes with the large shareholders. The financial decision-making of the Company was independent, and
the large shareholders never interfered the usage of company’s capital. The Company never offered guarantee to their large
shareholders and its subordinate units and other related party. The largest shareholder and its related has never occupy or occupy
disguised the capital.
VII. Examination and incentives of senior management
The Board of Directors approved the incentive measure for outstanding achievement of management team based on total net profit
53
CSG Annual Report 2013
after tax in the current year and annual return on equity as assessment basis. Namely, the management team could obtain the award
only when the annual return on equity reached 8%. Otherwise, they could not take incentives of outstanding achievement. When the
return on equity reached 8%, the management team would take the proportion of 6% based on the total net profit after tax as bonus.
While the return on equity exceeded 8%, for every 1 percentage point increased over 8%, the proportion of bonus of outstanding
achievement would increase by 0.2 percentage points accordingly based on proportion of 6%.
54
CSG Annual Report 2013
Section IX. Internal control
I. Construction of internal control system
The Company set up internal control department in 2008 to begin construction of the internal control management system. In 2013,
with the process optimization continuous move forward, the Company further improves the standard of IC manual, amend and
perfect the most important Doc. of IC system construction – permission guidelines. Evaluation and assessment of IC was enhanced,
and the training and publication of IC was reinforced further. At the same time, self-evaluation was made for IC of the Company with
self-evaluation report carried out. And the accounting firms, who in charge of the IC auditing, was engaged by the Company with IC
auditing report completed.
Self-evaluation report in relation to internal control: under the Basic Internal Control Standards of Enterprise issued by the ministry
of finance and other four ministries and the Guidance on Standardized Operation of Company Listed on Main Board issued by
Shenzhen Stock Exchange which have been deemed by the Company as action guidance to establish sound internal control system,
the Company formed its 2013 Self-evaluation Report on Internal Control. HQ of the Group and all wholly-owned and controlling
subsidiaries are included in the report, and the evaluation not only covered the organization structure, development strategy, HR,
corporate culture and social responsibility that related with IC environment, but also included nine business processes of sales &
collection, purchase & payment, inventory management, fixed assets management (engineering projects included), monetary funds &
investment and financing management, R&D and intangible assets management, financial report, H&R dept. management and
information system. During the report period, the IC of the Company ran systematically. Its businesses at corporate governance level
and specific business process have been carried out in an orderly manner with risks being controlled. The IC system provided a
reasonable guarantee for legal operation management, asset safety, truthfulness and completeness of financial report and related
information as well as operation efficiency. For details of 2013 Self-evaluation Report on Internal Control, please refer to the Juchao
website.
II. Responsibility representation of the Board on internal control
Board of directors hereby confirm that there are no any fictitious statements, misleading statements, or important omissions carried in
the Self-Evaluation Report of Internal Control 2013, and the information disclosed is truthfulness, accuracy and completeness.
III. Bases of establishment of financial report internal control
The Company has established the perfected financial management system, which covered the aspects of various regulations including
accounting calculation, financial processes, budget management, expenses control and monetary capital management. With purpose
of guarantee the effective implementation of various financial management policies of the Company, the Company formulated the
financial report internal control manual including six contents related to financial report directly which were ‘Preparation of
Accounting Policy and Items Maintenance, Processes of General Accounting, Preparation and Approval of Financial Report,
Guarantee Management, Related Transaction Management and Taxation Management’.
In the report period, the Company carried out a specific self-evaluation on internal control of financial report. And there has no
significant defects in internal control related to financial report of the Company.
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CSG Annual Report 2013
IV. Self-evaluation report of internal control
Details of major defects in self-evaluation report that found in reporting period
No major defects were found in the report period
Date of self-evaluation report of
2014-3-25
internal control disclosed (full-text)
Index of self-evaluation report of More details can be found in Self-evaluation Report of Internal Control 2013 released on
internal control disclosed(full-text) www.cninfo.com.cn
V. Audit report of internal control
√Applicable □ Not applicable
Deliberations in Internal Control Audit Report
According to Enterprise Internal Control Audit Guidelines and the relevant requirements of CICPA practice standards,
PricewaterhouseCoopers Zhong Tian LLP (hereinafter referred to as PwC) has audited the effectiveness of internal control over
financial statements of the Company up to 31 December 2013, issued PwC Zhong Tian (2014) No. 0904 Internal Control Audit
Report and made the following opinions: PwC thinks that CSG Holding Co., Ltd. has maintained effective internal control over
financial statements in all major aspects according to the Fundamental Norms of Enterprise Internal Control and relevant rules.
Date of disclosing the internal
25 March 2014
control audit reports
Disclosure index of internal control More details can be found in 2013 Internal Control Audit Report of CSG released on
audit report www.cninfo.com.cn
Carried out modified opinion for internal control audit report from CPA
□Yes √ No
Whether internal control audit report issued by CPA, has concerted opinion with self-evaluation report issued by the Board
√ Yes □ No
VI. Establishment and implementation of accountability system for major errors in annual
report
In order to perfect corporate governance and improve quality and transparency of annual report disclosure, being approved in 13th
Meeting of 5th Board of Directors, the Accountability System of Fundamental Errors in Annual Report Disclosure was formulated
and implemented by the Company. In report period, no situations of correction on fundamental accounting errors, supplementation of
fundamental omission information and modification of performance prediction had been found.
56
CSG Annual Report 2013
Section X. Financial Report
I. Report of the Auditors
Type of Auditor’s Opinion Standard and unqualified
Issue date of Report of the Auditors 22 March 2014
Name of Auditor’s organization PricewaterhouseCoopers Zhong Tian LLP
Reference number of Report of the Auditors PwC ZT Shen Zi (2014) No. 10061
To the shareholders of CSG Holding Co., Ltd.
We have audited the accompanying financial statements of CSG Holding Co., Ltd (hereinafter “CSG Company”), which comprise
the consolidated and company balance sheets as at 31 December 2013, and the consolidated and company income statements, the
consolidated and company statements of changes in shareholders’ equity and the consolidated and company cash flow statements for
the year then ended, and the notes to the financial statements.
Management’s Responsibility for the Financial Statements
Management of CSG Company is responsible for the preparation and fair presentation of these financial statements in accordance
with the requirements of Accounting Standards for Business Enterprises, and for such internal control as management determines is
necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance
with China Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the
entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the accompanying financial statements present fairly, in all material respects, the consolidated and company’s
financial position of CSG Company as at 31 December 2013, and their financial performance and cash flows for the year then ended
in accordance with the requirements of Accounting Standards for Business Enterprises.
PricewaterhouseCoopers Zhong Tian Certified Public Accountant Yao Wenping
LLP
Shanghai, the PRC Certified Public Accountant Liu Jingping
22 March 2014
57
CSG Annual Report 2013
CSG HOLDING CO., LTD.
CONSOLIDATED AND COMPANY BALANCE SHEETS
AS AT 31 DECEMBER 2013
(All amounts in Rmb Yuan unless otherwise stated)
31 Dec 2013 31 Dec 2012 31 Dec 2013 31 Dec 2012
ASSETS Note Consolidated Consolidated Company Company
Current assets
Cash at bank and on hand 5(1) 279,672,523 474,421,278 129,337,516 139,915,851
Notes receivable 5(2) 323,889,490 299,804,348 - -
Accounts receivable 5(3) 136,430,683 276,814,461 - -
Advances to suppliers 5(5) 73,378,329 70,007,569 - -
Other receivables 5(4),16(1) 109,366,023 63,047,384 3,082,240,537 1,753,686,199
Inventories 5(6) 378,684,712 367,293,857 - -
Other current assets 5(7) 1,021,464,095 167,499,349 - -
Total current assets 2,322,885,855 1,718,888,246 3,211,578,053 1,893,602,050
Non-current assets
Available-for-sale financial assets 5(8) 122,760,000 109,955,459 94,156,920 84,335,860
Long-term receivables 16(3) - - 1,953,745,783 2,281,424,431
Long-term equity investments 5(9),16(2) 770,037,176 - 4,966,621,199 4,635,634,350
Fixed assets 5(10) 7,979,937,683 9,418,430,703 38,163,267 13,311,942
Construction in progress 5(11) 2,762,418,100 1,934,725,631 - 10,254,145
Intangible assets 5(12) 933,329,528 929,486,926 2,649,635 3,093,435
Development expenditure 5(12) 9,881,310 3,610,292 - 134,999
Goodwill 5(13) 3,039,946 3,039,946 - -
Long-term prepaid expense 3,280,021 2,713,907 2,424,621 -
Deferred tax assets 5(14) 164,787,158 163,100,004 - -
Other non-current assets 5(15) 6,510,000 51,858,632 - 22,806,000
Total non-current assets 12,755,980,922 12,616,921,500 7,057,761,425 7,050,995,162
TOTAL ASSETS 15,078,866,777 14,335,809,746 10,269,339,478 8,944,597,212
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CSG Annual Report 2013
CSG HOLDING CO., LTD.
CONSOLIDATED AND COMPANY BALANCE SHEETS
AS AT 31 DECEMBER 2013
(All amounts in Rmb Yuan unless otherwise stated)
31 Dec 2013 31 Dec 2012 31 Dec 2013 31 Dec 2012
LIABILITIES AND OWNERS' EQUITY Note Consolidated Consolidated Company Company
Current liabilities
Short-term borrowings 5(17) 1,424,743,800 1,688,049,571 1,255,000,000 750,000,000
Notes payable 5(18) 4,429,188 183,487,216 - -
Accounts payable 5(19) 981,616,449 1,120,003,975 923,245 29,790
Advances from customers 5(20) 160,689,070 135,413,065 - -
Employee benefits payable 5(21) 166,377,238 104,895,290 55,932,331 4,833,381
Taxes payable 5(22) 160,754,703 134,645,371 26,978,661 72,283
Interest payable 5(23) 60,767,534 35,091,990 18,800,998 3,115,745
Dividends payable 5(24) 687,627 687,627 687,627 687,627
Other payables 5(25),16(4) 557,130,583 165,969,155 829,844,788 842,603,141
Current portion of non-current liabilities 5(26) 399,849,715 481,687,841 150,000,000 -
Other current liabilities 5(27) 300,000 526,872 - -
Total current liabilities 3,917,345,907 4,050,457,973 2,338,167,650 1,601,341,967
Non-current liabilities
Long-term borrowings 5(28) 302,904,204 711,112,961 - 140,000,000
Bonds payable 5(29) 1,991,041,175 1,986,624,288 1,991,041,175 1,986,624,288
Deferred tax liabilities 5(16) 34,298,029 32,046,701 19,128,980 16,673,715
Other non-current liabilities 5(30) 432,364,880 287,373,063 11,792,800 8,897,000
Total non-current liabilities 2,760,608,288 3,017,157,013 2,021,962,955 2,152,195,003
Total liabilities 6,677,954,195 7,067,614,986 4,360,130,605 3,753,536,970
Owners' equity
Paid-in capital 5(31) 2,075,335,560 2,075,335,560 2,075,335,560 2,075,335,560
Capital surplus 5(32) 1,391,366,888 1,381,031,988 1,434,441,128 1,418,767,193
Special reserve 5(33) 14,503,860 14,831,266 - -
Surplus reserve 5(34) 765,048,720 678,216,577 779,594,080 678,216,577
Undistributed profits 5(35) 3,803,574,842 2,665,777,580 1,619,838,105 1,018,740,912
Difference on translation of foreign currency
financial statements (1,935,731) 1,017,782 - -
Total equity attributable to equity holders of
the Company 8,047,894,139 6,816,210,753 5,909,208,873 5,191,060,242
Minority interests 5(36) 353,018,443 451,984,007 - -
Total owners' equity 8,400,912,582 7,268,194,760 5,909,208,873 5,191,060,242
TOTAL LIABILITIES AND OWNER'S EQUITY 15,078,866,777 14,335,809,746 10,269,339,478 8,944,597,212
The accompanying notes form an integral part of these financial statements.
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CSG Annual Report 2013
CSG HOLDING CO., LTD.
CONSOLIDATED AND COMPANY INCOME STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2013
(All amounts in Rmb Yuan unless otherwise stated)
2013 2012 2013 2012
Items Note Consolidated Consolidated Company Company
Revenue 5(37) 7,733,796,114 6,994,358,029 741,079 1,257,853
Less: Cost of sales 5(37) (5,501,300,657) (5,355,802,923) (41,575) (70,566)
Taxes and surcharges 5(38) (47,859,995) (46,876,446) - -
Selling and distribution expenses 5(39) (267,394,775) (234,821,552) - -
General and administrative expenses 5(40) (671,321,260) (526,909,538) (101,223,533) (24,277,823)
Financial expenses - net 5(41) (238,321,702) (248,920,054) (42,888,856) (15,113,830)
Asset impairment losses 5(43) (64,366,228) (306,225,525) 781,149 (758,050)
Add: Investment income 5(42)、16(5) 927,376,139 71,666,374 1,027,318,851 814,818,639
Including: investment income from
associates 305,002 - 97,355,619 -
Operating profit 1,870,607,636 346,468,365 884,687,115 775,856,223
Add: Non-operating income 5(44) 216,687,514 115,574,538 9,471,403 6,974,000
Less: Non-operating expenses 5(45) (152,116,263) (3,470,007) (232,408) (15,414)
Including: Loss on disposal of
non-current assets (140,789,846) (2,088,853) (232,408) (15,414)
Total profit 1,935,178,887 458,572,896 893,926,110 782,814,809
Less: Income tax expenses 5(46) (259,864,490) (88,766,140) (25,604,680) -
Net profit 1,675,314,397 369,806,756 868,321,430 782,814,809
Attributable to equity holders of the Company 1,535,929,739 274,746,219
Minority interests 139,384,658 95,060,537
Earnings per share
- Basic 5(47) 0.74 0.13 N/A N/A
- Diluted 5(47) 0.74 0.13 N/A N/A
Other comprehensive income 5(48) 6,903,489 (5,981,466) 7,365,795 (4,566,016)
Total comprehensive income 1,682,217,886 363,825,290 875,687,225 778,248,793
Total comprehensive income attributable to
equity holders of the Company 1,542,833,228 268,767,444
Total comprehensive income attributable to
minority interests 139,384,658 95,057,846
The accompanying notes form an integral part of these financial statements.
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CSG Annual Report 2013
CSG HOLDING CO., LTD.
CONSOLIDATED AND COMPANY CASH FLOW STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2013
(All amounts in Rmb Yuan unless otherwise stated)
2013 2012 2013 2012
Items Notes Consolidated Consolidated Company Company
1. Cash flows from operating activities
Cash received from sales of goods or rendering of
services 9,039,929,465 8,209,834,370 - -
Refund of taxes and surcharges 85,359,790 163,468,279 - -
Cash received relating to other operating activities 5(49)(a) 83,010,484 112,858,793 2,438,207 3,176,441
Sub-total of cash inflows 9,208,299,739 8,486,161,442 2,438,207 3,176,441
Cash paid for goods and services (5,406,427,033) (4,952,896,187) - -
Cash paid to and on behalf of employees (868,915,933) (771,999,139) (36,355,290) (44,956,481)
Payments of taxes and surcharges (859,338,552) (719,851,459) (352,467) (537,605)
Cash paid relating to other operating activities 5(49)(b) (374,750,686) (315,619,128) (12,881,879) (12,244,869)
Sub-total of cash outflows (7,509,432,204) (6,760,365,913) (49,589,636) (57,738,955)
Net cash flows from operating activities 5(50)、16(6) 1,698,867,535 1,725,795,529 (47,151,429) (54,562,514)
2. Cash flows from investing activities
Cash received from returns on investments 432,000 360,000 645,056,913 647,575,203
Net cash received from disposal of fixed assets,
intangible assets and other long-term assets 19,606,532 12,332,515 7,341 450
Cash received from disposal of subsidiaries and other
companies 5(50)(d) 301,426,705 186,967,288 426,413,663 110,455,482
Cash received relating to other investing activities 5(49)(c) 893,830,318 234,684,854 459,317,040 37,320,000
Sub-total of cash inflows 1,215,295,555 434,344,657 1,530,794,957 795,351,135
Cash paid to acquire fixed assets, intangible assets
and other long-term assets (2,142,386,726) (1,390,762,633) (20,261,376) (15,243,836)
Cash paid to acquire investments - (27,068,998) (144,409,932) (203,105,620)
Cash paid to acquire subsidiary 4(3)(b) 5,345,928 - (39,001,200) -
Cash paid relating to other investing activities 5(49)(d) (130,333,513) (189,513,910) (21,800,000) (37,806,000)
Sub-total of cash outflows (2,267,374,311) (1,607,345,541) (225,472,508) (256,155,456)
Net cash flows from investing activities (1,052,078,756) (1,173,000,884) 1,305,322,449 539,195,679
3. Cash flows from financing activities
Cash received from capital contributions 13,210,000 52,855,285 -
Including: Cash received from capital contributions by
minority interests of subsidiaries 13,210,000 52,855,285 - -
Cash received from borrowings 3,154,582,320 3,400,346,858 3,394,288,942 1,590,000,000
Cash received from other financing activities 5(49)(e) 460,076,320 36,000,000 - 36,000,000
Sub-total of cash inflows 3,627,868,640 3,489,202,143 3,394,288,942 1,626,000,000
Cash repayments of borrowings (3,675,399,977) (3,402,629,279) (2,879,288,942) (1,461,613,200)
Cash payments for interest expenses and distribution
of dividends or profits (699,429,159) (778,646,771) (336,712,054) (388,754,111)
Including: Cash payments for dividends or profit to
minority interests of a subsidiaries (145,358,190) (123,764,085) - -
Cash payments relating to other financing activities 5(49)(f) (70,627,249) (47,648,329) (1,447,029,709) (350,248,537)
Sub-total of cash outflows (4,445,456,385) (4,228,924,379) (4,663,030,705) (2,200,615,848)
Net cash flows from financing activities (817,587,745) (739,722,236) (1,268,741,763) (574,615,848)
4. Effect of foreign exchange rate changes on cash
and cash equivalents (486,702) 247,552 (7,592) (34)
5. Net decrease in cash and cash equivalents 5(50)、16(6) (171,285,668) (186,680,039) (10,578,335) (89,982,717)
Add: Cash and cash equivalents at beginning of year 447,736,536 634,416,575 139,915,851 229,898,568
6. Cash and cash equivalents at end of year 5(50) 276,450,868 447,736,536 129,337,516 139,915,851
The accompanying notes form an integral part of these financial statements.
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CSG Annual Report 2013
CSG HOLDING CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN OWNER'S EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2013
(All amounts in Rmb Yuan unless otherwise stated)
Attributable to equity holders of the Company
Difference on
translation of
Less: foreign currency Total
Paid-in Capital Treasury Surplus Undistributed financial Minority owners'
Items capital surplus shares Special 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 year ended 31
December 2011
Net profit - - - - - 1,178,229,197 - 1,178,229,197 159,287,088 1,337,516,285
Other comprehensive income 5(48) - 40,706,691 - - - - (1,094,683) 39,612,008 362,500 39,974,508
Capital contribution and withdrawal by
owners (884,000) 26,394,368 578,000 - - - - 26,088,368 178,892,323 204,980,691
- Capital contribution by owners - - - - - - - - 177,085,402 177,085,402
-Share repurchase 8 (884,000) (1,049,580) 578,000 - - - - (1,355,580) - (1,355,580)
- Share-based payments recognised in
owner’s equity 8 - 27,443,948 - - - - - 27,443,948 1,806,921 29,250,869
Profit distribution - - - - 93,404,949 (820,055,020) - (726,650,071) (130,710,610) (857,360,681)
- Appropriation to surplus reserves - - - - 93,404,949 (93,404,949) - - - -
- Profit distribution to equity owners - - - - - (726,650,071) - (726,650,071) (130,710,610) (857,360,681)
Special reserve -
- Special reserve appropriated - - - 4,908,139 - - - 4,908,139 679,672 5,587,811
Others - 4,059,134 4,059,134 (188,041,558) (183,982,424)
- Transaction with minority interests 4,059,134 - - - - - 4,059,134 (188,041,558) (183,982,424)
Balanced at 31 December 2011 2,075,837,060 1,380,994,405 - 10,591,844 599,935,097 2,842,873,242 886,336 6,911,117,984 394,816,555 7,305,934,539
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CSG Annual Report 2013
Items Attributable to equity holders of the Company
Difference on
translation of
foreign currency Total
Paid-in Capital Surplus Undistributed financial Minority owners'
capital surplus Special reserve reserves profits statements Sub-total interests equity
Note 5(31) 5(32) 5(33) 5(34) 5(35) 5(36)
Balanced at 1 January 2012 2,075,837,060 1,380,994,405 10,591,844 599,935,097 2,842,873,242 886,336 6,911,117,984 394,816,555 7,305,934,539
Movement for the year ended 31
December 2012
Net profit - - - - 274,746,219 - 274,746,219 95,060,537 369,806,756
Other comprehensive income 5(48) - (6,110,221) - - - 131,446 (5,978,775) (2,691) (5,981,466)
Capital contribution and withdrawal by
owners (501,500) 5,686,000 - - - - 5,184,500 52,804,512 57,989,012
- Capital contribution by owners - 343,547 - - - - 343,547 52,511,738 52,855,285
- Share repurchase 8 (501,500) (1,720,145) - - - - (2,221,645) - (2,221,645)
- Share-based payments recognised in
owner’s equity 8 - 7,062,598 - - - - 7,062,598 292,774 7,355,372
Profit distribution - - - 78,281,480 (451,841,881) - (373,560,401) (123,764,085) (497,324,486)
- Appropriation to surplus reserves - - - 78,281,480 (78,281,480) - - - -
- Profit distribution to equity owners - - - - (373,560,401) - (373,560,401) (123,764,085) (497,324,486)
Special reserves - - 4,239,422 - - - 4,239,422 272,041 4,511,463
- Special reserve appropriated - - 6,561,710 - - - 6,561,710 421,061 6,982,771
- Special reserve used - - (2,322,288) - - - (2,322,288) (149,020) (2,471,308)
Others - 461,804 - - - - 461,804 32,797,138 33,258,942
- Transaction with minority interests 5(32) - 461,804 - - - - 461,804 35,538,196 36,000,000
- Transfer of subsidiaries 4(3) - - - - - - - (2,741,058) (2,741,058)
Balanced at 31 December 2012 2,075,335,560 1,381,031,988 14,831,266 678,216,577 2,665,777,580 1,017,782 6,816,210,753 451,984,007 7,268,194,760
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CSG Annual Report 2013
CSG HOLDING CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN OWNER'S EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2013
(All amounts in Rmb Yuan unless otherwise stated)
Items Attributable to equity holders of the Company
Difference on
translation of
foreign currency Total
Paid-in Capital Surplus Undistributed financial Minority owners'
capital surplus Special reserve reserves profits statements Sub-total interests equity
Note 5(31) 5(32) 5(33) 5(34) 5(35) 5(36)
Balanced at 1 January 2013 2,075,335,560 1,381,031,988 14,831,266 678,216,577 2,665,777,580 1,017,782 6,816,210,753 451,984,007 7,268,194,760
Movement for the year ended 31
December 2013
Net profit - - - - 1,535,929,739 - 1,535,929,739 139,384,658 1,675,314,397
Other comprehensive income 5(48) - 9,857,002 - - - (2,953,513) 6,903,489 - 6,903,489
Effects of the change in investees’ other
equity applying the equity method 5(9) 27,047 - 27,047 - 27,047
Capital contribution and withdrawal by
owners - 450,851 - - - - 450,851 13,451,793 13,902,644
- Capital contribution by owners - - - - - - 13,210,000 13,210,000
- Share-based payments recognised in
owner’s equity 8 - 450,851 - - - - 450,851 241,793 692,644
Profit distribution - - - 86,832,143 (398,132,477) - (311,300,334) (145,358,190) (456,658,524)
- Appropriation to surplus reserves - - - 86,832,143 (86,832,143) - - - -
- Profit distribution to equity owners - - - - (311,300,334) - (311,300,334) (145,358,190) (456,658,524)
Special reserves - - (327,406) - - - (327,406) (21,009) (348,415)
- Special reserve appropriated - - 3,195,497 - - - 3,195,497 205,053 3,400,550
- Special reserve used - - (3,522,903) - - - (3,522,903) (226,062) (3,748,965)
Others - - - - - - - (106,422,816) (106,422,816)
- Disposal of subsidiaries 5(32) - - - - - - - (128,615,616) (128,615,616)
- Merger of enterprises 4(3) - - - - - 22,192,800 22,192,800
Balanced at 31 December 2013 2,075,335,560 1,391,366,888 14,503,860 765,048,720 3,803,574,842 (1,935,731) 8,047,894,139 353,018,443 8,400,912,582
The accompanying notes form an integral part of these financial statements.
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CSG HOLDING CO., LTD.
COMPANY STATEMENT OF CHANGES IN OWNER'S EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2013
(All amounts in Rmb Yuan unless otherwise stated)
Items Paid-in capital Capital surplus Surplus reserves Undistributed profits Total owners' equity
Note 5(31) 5(32) 5(34) 5(35)
Balance at 1 January 2012 2,075,837,060 1,417,697,982 599,935,097 687,767,984 4,781,238,123
Movement for the year ended 31
December 2012
Net profit - - - 782,814,809 782,814,809
Other comprehensive income - (4,566,016) - - (4,566,016)
Capital contribution and withdrawal by
owners (501,500) 5,635,227 - - 5,133,727
-Share-based payments recognised in
owner’s equity 8 - 7,355,372 - - 7,355,372
- Share repurchase 8 (501,500) (1,720,145) - - (2,221,645)
Profit distribution - - 78,281,480 (451,841,881) (373,560,401)
- Appropriation to surplus reserves - - 78,281,480 (78,281,480) -
- Profit distribution to equity owners - - - (373,560,401) (373,560,401)
Balance at 31 December 2012 2,075,335,560 1,418,767,193 678,216,577 1,018,740,912 5,191,060,242
Balance at 1 January 2013
(restatement) 16(2)(a) 2,075,335,560 1,426,899,328 692,761,937 1,149,649,152 5,344,645,977
Movement for the year ended 31
December 2013
Net profit - - - 868,321,430 868,321,430
Other comprehensive income - 7,365,795 - - 7,365,795
Effects of the change in investees’ other
equity applying the equity method - 176,500 - - 176,005
Profit distribution - - 86,832,143 (398,132,477) (311,300,334)
- Appropriation to surplus reserves - - 86,832,143 (86,832,143) -
- Profit distribution to equity owners - - - (311,300,334) (311,300,334)
Balance at 31 December 2013 2,075,335,560 1,434,441,128 779,594,080 1,619,838,105 5,909,208,873
The accompanying notes form an integral part of these financial statements
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CSG HOLDING CO., LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2013
(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 Hong Kong China merchants shipping Co., LTD
(香港招商局轮船股份有限公司), Shenzhen building materials industry corporation(深圳建筑材料工业集团公司), China
North Industries Corporation (中国北方工业深圳公司) and Guangdong international trust and investment corporation (广
东国际信托投资公司), with a registered capital of US dollar 500,000. In October 1991, as approved by the Shenzhen
municipal government with document SFBF (1991) 828, China South Glass Company was reorganized as joint stock
limited company. The registered capital was RMB71,232,550, with nominal value of RMB1 per share.
As approved by People’s Bank of China Shenzhen Branch with document No. SRYFZ (1991)087 and SRYFZ (1992) 010,
the Company issued, by public offering, the domestic shares (“A shares”) of 20,300,000 shares and domestically listed
foreign shares (“B shares) of 16,000,000, in October 1991 and January 1992, respectively. Both shares were listed in
Shenzhen Stock Exchange in February 1992. The registered capital of the Company increased to RMB107,532,550.
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. The 44-million-USD
convertible bonds had been converted into 75,411,268 B shares by 31 December, 1997, and the remaining balances were
repaid upon maturity.
The Company issued new capital of RMB832,519,306 during the period from 1993 to 2005 by the means of warrants,
bonus issue and capitalisation 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 RMB 8 per share. The registered capital of the Company increased to 1,187,963,124 upon the completion of the
placement.
According to the Company’s restricted A share stock incentive scheme, the Company granted 49,140,000 A shares to
employees through a non-public placement on 16 June 2008, at price of RMB8.58 pre share. The registered capital of the
Company increased to 1,237,103,124 upon the completion of the issuance.
Since, in 2008,the Group failed to meet the vesting conditions of the A share stock incentive scheme and certain
employees resigned from 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.
Since certain employees resigned from the Group, the Company repurchased and cancelled 1,042,500 A shares in 2010.
The company's registered capital was reduced to 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
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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 resigned from the Group during 2010-2012, the Company repurchased and cancelled 3,247,000 A
shares. The company's registered capital was reduced to 2,075,335,560.
The Company and its subsidiaries (collectively referred to the “Group”) are mainly engaged in the manufacturing and
sales 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 22 March 2014.
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, 38 Specific Standards of the
Accounting standards for Business Enterprises issued by the Ministry of Finance on 15 February 2006, 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 31 December 2013, the Group had net current liabilities of approximately RMB1,600 million and commited capital
expenditure of approximately RMB 589million (Note 10(1)). The directors of the Company has assessed the following
facts and conditions: a) the Group has been able to generate positive operating cash flows in prior years and expect to do
so in the next 12 months; b) the Group has maintained good relationship with banks, so the Group has been able to
successfully renew the bank facilities upon the expiry. As at 31 December 2013, the Group had unutilised banking facilities
of approximately RMB11.3 billion, among which the long-term banking facilities is about RMB2.8 billion. In addition, the
Group has other sources of financing, such as issuing short-term bonds. The directors are of view that the banking
facilities above can meet the funding requirements of the Group’s debt servicing and capital commitment. Accordingly, the
directors of the Company had adopted the going concern basis in the preparation of the financial statements of the
Company and the Group.
(2) Statement of compliance with the Accounting Standards for Business Enterprises.
The financial statements of the Company for the year ended 31 December 2013 truly and completely present the financial
position as of 31 December 2013 and the operating results, cash flows and other information for the year then ended of
the Group and the Company in 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).
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(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. Transaction costs attributed to issue equity
securities or debt securities for business combination are recorded into initial recognition amounts of equity securities or
debt securities.
(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 profits and losses once incurred. Transaction costs attributed to issue
equity securities or debt securities for business combination are recorded into initial recognition amounts of equity
securities or debt securities.
(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.
All significant inter-group balances, transactions and unrealised 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 recognised 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 suplus is not sufficient to be deducted, retained earnings should be adjusted.
If the company loses control over a subsidiary company it originally owned due to disposal of a portion of its equity
investment or for any other reason, the relevant accounting treatment shall be effected by differentiating between individual
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financial statements and consolidated financial statements:
In individual financial statements, accounting treatment shall be effected in accordance with the Accounting Standards for
Enterprises No. 2 --- Long-term Equity Investment; meanwhile, the remaining equity shall be determined to be a long-term
equity investment or another relevant class of financial assets on the basis of its book value. If the enterprise can exert joint
control over or have a material effect on the subsidiary company it originally owned through its remaining equity interest after
the disposal, accounting treatment shall be effected in accordance with relevant provisions on transitioning from the cost
approach to the equity approach.
In consolidated financial statements, the remaining equity shall be revalued on the basis of its fair value on the date on which
control was lost. The sum of the consideration received on the disposal of equities and the fair value of the remaining equities
less the net assets of the subsidiary company calculated on the basis of the original ownership percentage and consecutively
from the purchase date shall be accounted for as investment income for the period in which control was lost. Other overall
gains relevant to the equity investment in the subsidiary company originally owned shall be included in investment income for
the period in which control was lost. The enterprise shall disclose in a note the fair value of the remaining equity on the date
on which control was lost and the amount of any relevant gain or loss recalculated on a fair value basis.
(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.
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.
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(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
(i) Classification
Financial assets are classified into the following categories at initial recognition: at fair value through profit or loss, loans and
receivables and financial assets available-for-sale. 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 and financial
assets held to maturity in the year 2013.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market. Such assets includes notes receivable , accounts receivable and other receivable (notes 2(10)) .
Available for sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either designated in this category or not
classified in any of the other categories at initial recognition. Available-for-sale financial assets are included in other
current assets on the balance sheet if management intends to dispose of them within 12 months after the balance sheet
date.
(ii) Recognition basisi and measurement of financial instruments
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,
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CSG Annual Report 2013
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 at 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.
Objective evidence which indicates the occurrence of impairment for available-for-sale equity instruments includes
significant or non-temporary decrease of fair value of equity instruments investment. The Group conducts individual
inspection on each available-for-sale equity instruments investment at balance sheet date, if the fair value of the
available-for-sale equity instrument is less than its initial investment cost for more than 50% (including 50%) or less than
its initial investment cost continually for more than 1 year, that means impairment incurred; if the fair value of the
available-for-sale equity instrument is less than its initial investment cost for more than 20% (including 20%) but has not
reached 50%, the Group will comprehensively consider other factors such as price volatility to determine whether the
equity instrument investment has been impaired.
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 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 derecognised 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
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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 (including one year) is presented as current liabilities, while non-current financial
liabilities due with one year (including 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 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 recognised at fair value of the contractual payments from the buyer.
(a) Receivables that are individually significant and provided for provision seperately
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.
(b) The method of provision for impairment of receivables that are individually significant
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.
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(c) 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 is 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 from third parties not impaired after separate assessment
Portfolio 2 Receivables from related parties
The percentage of provision for the portfolio:
Percentage of provision for Percentage of provision for other
accounts receivable receivables
Portfolio 1 2% 2%
Portfolio 2 0% 0%
(c) The Group transfers receivables which have no recourse right to financial institution, the difference between the carrying
amount 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.
(c) Low-value consumption goods and package material amortisation method
Low-value consumption goods and package materials are applying one-off amortisation method.
(d) 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
realisable value. Net realisable value is determined based on the estimated selling price in the ordinary course of
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business, less the estimated costs to completion and estimated costs necessary to make the sale and relevant taxes.
(e) The Group adopts the perpetual inventory system.
(12) Long-term equity investments
Long-term equity investments comprise the Company’s long-term equity investments in its subsidiaries 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 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) Definition of control, joint control and significant influence over the investees
The term "control" refers to the power to govern the financial and/or operating decisions of an enterprise, to obtain benefits
from its business activities.
The term "joint control" refers to the contractually agreed sharing of control over an economic activity. The joint control
cannot exist without the unanimous consent of the investors who share the control, and unanimous consent is required
when making important financial and operating decisions that relate to the above-mentioned economic activity.
The term "significant influence" refers to the power to participate in the formulation of financial and operating policies of an
enterprise, but not the power to control, or jointly control, the formulation of such policies with other parties.
(b) Initial recognition
For long-term equity investments formed in business combination: when obtained from business combinations involving
entities under common control, the long-term equity investment is stated at book value of equity for the combined parties at
the time of merger; when the long-term equity investment obtained from business combinations involving entities not under
common control, the investment is measured at combination cost
For long-term equity investments not formed in business combination:the one paid by cash is initially measured at actual
purchase price; the long-term investment obtained by issuing equity securities is stated at fair value of equity securities as
initial investment cost.
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CSG Annual Report 2013
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.
(c) Subsequent measurement
When using the cost method, investment income is recognised in income statement for the dividends declared by the
investee.
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.
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.
(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 recognised 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
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CSG Annual Report 2013
carrying amount of those parts that are replaced is derecognised and all the other subsequent expenditures are
recognised 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.
Considering the convention of the industry and the maintenance of the fixed assets, the management adjusted the
estimated useful lives and estimated residual values (Note(2)(31)). The estimated useful lives, estimated residual values
expressed as a percentage of cost and annual depreciation rates are as follows:
Estimated Estimated residual Annual
useful lives value depreciation rate
Buildings 20-35 years 5% 2.71% to 4.75%
Machinery and equipment 8-15 years 5% 6.33% to 11.88%
Motor vehicles and others 5-8 years 0% 12.5% to 20%
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 derecognised 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 recognised 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 capitalisation incurred before the assets are ready for their intended use and other
costs necessary to bring the fixed assets ready for their intended use. Actual cost also includes net of trial production cost
and trial production income before construction in progress is put into production.
Construction in progress is transferred to fixed assets when the assets are ready for their intended use and 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)).
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CSG Annual Report 2013
(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 capitalisation of borrowing costs ceases when the asset under acquisition or construction becomes
ready for its intended use, the borrowing costs incurred thereafter are recognised in income statement. Capitalisation 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.
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 include land use rights, 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 amortisation method for an intangible asset with an indefinite useful life is reviewed, and
adjusted if appropriate at each financial year-end.
(e) Impairment of intangible asset
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CSG Annual Report 2013
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)).
(f) Research and development cost
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 recognised in profit or loss in the period in which it is incurred. Expenditure on the
development phase is recognised 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;
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 recognised in income statement as incurred.
Development costs previously recognised as an expense are not recognised 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.
(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 amortisation.
(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 recognised 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
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CSG Annual Report 2013
corresponding impairment loss is recognised. 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 recognised, it is not allowed to be reversed for the value recovered in
the subsequent periods.
(19) Employee benefits
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 recognise a liability and a expenses for termination benefit.
Except for the termination benefits, employee benefits except for the severance pay are recognised 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) Dividend distribution
Cash dividends distribution is recognised 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 this 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
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CSG Annual Report 2013
granted on grant date.
(b) Method for determination of equity instrument fair value
The fair value of equity instruments of subsidiaries is determined by the appraisal 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.
(22) Deferred tax asset and deferred tax liability
Deferred tax assets and deferred tax liabilities are calculated and recognised based on the differences arising between the
tax base of assets and liabilities and their carrying amount (temporary differences). Deferred tax asset is recognised 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 recognised for a temporary difference arising from the initial recognition of goodwill. No
deferred tax asset or deferred tax liability is recognised 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 realised or the liability is settled.
Deferred tax assets are only recognised for deductible temporary differences, deductible losses and tax credits to the extent
that it is probable that taxable profit will be available in the future against which the deductible temporary differences,
deductible losses and tax credits can be utilized.
Deferred tax liabilities are recognised 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 recognised.
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.
(23) Provisions
Provisions for restructuring, product warranties and onerous contracts are recognised 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 recognised for future operating losses.
Provisions are 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
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CSG Annual Report 2013
a whole in reaching the best estimate of an estimated liability. 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 estimated liability 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.
(24) 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 recognised 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
The Group mainly sells flat and engineer glass, ITO glass, and products related to solar energy. For domestic sales, the
Group delivers the products to a certain place specified in the contract. When the buyer takes over the goods, the Group
recognizes revenue. For export sales, the Group recognizes the revenue when it finished clearing goods for export and
deliver the goods on board the vessel, or when the goods are delivered to a certain place speicified in the contract. For
above sales, when the buyer takes over the goods, the buyer has the right to sell the products, and should bear the risk of
price fluctuation or goods damage.
(b) Rendering of services
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.
(25) 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 recognised when there is a reasonable assurance that the grants will be received and the
Group will comply with all attached conditions. Monetary government grants are measured at the amounts received or
receivable. The non-monetary government grant are measured at fair value, if the fair value cannot be reliably obtained, it
is measured at nominal amount.
Government grants relating to assets are those granted by the government for the purchase of long-term assets.
Government grants relating to income are those other than the government grants relating to assets .
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CSG Annual Report 2013
Government grants relating to assets are recognised 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 recognised 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.
(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 this year.
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
Non-current assets or disposal group would be classified as held-for-sale when: 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.
(28) 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:
(a) 4% for revenue below RMB10 million of the year;
(b) 2% for the revenue between RMB10 million to RMB100 million of the year;
(c) 0.5% for the revenue between RMB100 million to RMB1 billion of the year;
(d) 0.2% for the revenue above RMB1 billion of the year
The safety production reserve is mainly used for the overhall and maintenance of safety facilities. The safety production
costs are charged to profit and loss when appropriated, and safety production reserve in equity account are credited
correspondingly. When use the special reserve, if the expenditures are expenses in nature, the expenses incurred are
offset against the special reserve directly when incurred. If the expenditures are capital expenditures, when projects are
completed and transferred to fixed assets, the special reserve should be offset against the cost of fixed assets, and a
corresponding accumulated depreciation are recognised. The fixed assets are no longer be depreciated in future.
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CSG Annual Report 2013
(29) 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) 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.
(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) Corporate income 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
Estimates on deferred tax assets are based on estimates on amount of taxable income and applicable tax rate for every
year. Change of the future tax rate as well as the reversed time of temporary difference might have effects on tax expense
(income) and the balance of deferred tax assets or liabilities. Those estimates may also cause significant adjustment on
deferred tax.
(c) Impairment of long-term assets (excluding goodwill)
Long-term assets at the balance sheet date should be subject to impairment testing if there are any indications of
impairment. The management determines whether the long-term assets impaired or not by evaluating and analysing
following aspects: (1) whether the event affecting assets impairment occurs; (2) whether the expected obtainable present
value of future cash flows is lower than the asset’s book value by continually using the assets or disposal; and (3) whether
the assumptions used in expected obtainable present value of future cash flows are appropriate.
The Company made various assumptions, including the future cash flows and discount rate related to non-current assets.
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CSG Annual Report 2013
If these assumptions cannot be conformed, the recoverable amount should be modified, and the long-term assets may be
impaired accordingly.
(d) The useful life of fixed assets
The management estimates the useful life of fixed assets, based on historical experiences on using fixed assets that have
similar properties and functions. When there are differences between actually useful life and previously estimation, the
management will adjust estimation to useful life of fixed assets. The fixed assets would be written off or written down when
fixed assets been disposed or became redundant. 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.
(31) Critical changes in accounting estimates
After taking an assessment , the management changes the accounting estimates of the depreciation period of fixed assets
and the net residual value rate in October 2013.The details are as follows:
Before the change After the change
Estimated Annual Estimated
Estimated Estimated Annual
residual depreciation residual
useful lives useful lives depreciation rate
value rate value
Buildings 10 – 40years 5%-10% 2.25% to 9.5% 20 – 35years 5% 2.71% to 4.75%
Machinery and 10 – 16years 5%-10% 5.63% to 9.5% 8 – 15years 5% 6.33% to 11.88%
equipment
Motor vehicles 3 - 10years 5%-10% 9% to 31.67% 5 – 8years 0% 12.50% to 20%
and others
Influence of net
Reason for the change of accounting profit of current Influence after
estimate Approval preocedure Affected accounts year 2013
In order to reflect the financial condition The 6th meeting of Fixed Asset, Decrease net Due to the shorter
th
and results of operations and to evaluate the 13 board of Inventory profit of RMB depreciation
the value and comparative analysis more directors voted for the Cost of Sales, 36,463,661 period ,depreciati
objectively and fairly, the management bill “change of Operating expense, on expense is
changed the accounting estimate of the accounting estimates” Income tax expected to
th
fix asset’s useful lives, depreciation rate, on 18 Oct. 2013. increase in the
and the residual rate. The change of initial years, and
accounting estimated is applied will be reduced
prospectively. gradully in the
subsequent
years.
3 Taxation
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CSG Annual Report 2013
(1) The types and rates of taxes applicable to the Group during the current year are set out below:
Type Taxable basis Tax rate
Corporate income tax (“CIT”) Taxable income 15% to 25%
Value added tax (“VAT”) Taxable value added amount (Tax payable is 17%
calculated using the taxable sales amount
multiplied by the effective tax rate less current
period’s deductible VAT input )
Urban construction tax Total VAT, Business tax and GST 1% to 7%
Educational surtax and surcharge Total VAT, Business tax and GST 3% to 5%
Resource Tax Quantities of Silica sold 3 Yuan per ton
The Company has used the “exempt, credit, refund” method on goods exported and the refund rate is 5%-17%.
(2) Tax incentives and approvals
Dongguan Solar Glass Co., Ltd. was recognised as a high and new tech enterprise in 2011, and obtained the Certificate of
High and New Tech Enterprise. It enjoys 15% preferential tax rate from 2011 to 2013.
Tianjin CSG Energy Conservation Glass Co., Ltd was recognised as a high and new tech enterprise in 2012, and
obtained the Certificate of High and New Tech Enterprise. It enjoys 15% preferential tax rate from 2011 to 2013.
Tianjin CSG Architectural Co., Ltd was continuously recognised as a high and new tech enterprise in 2012, and obtained
the Certificate of High and New Tech Enterprise. It enjoys 15% preferential tax rate from 2011 to 2013.
Wujiang CSG North-east Architectural Glass Co., Ltd was recognised as a high and new tech enterprise in 2011, and
obtained the Certificate of High and New Tech Enterprise. It enjoys 15% preferential tax rate from 2011 to 2013.
Yichang CSG Silicon Co., Ltd was recognised as a high and new tech enterprise in 2011, and obtained the Certificate of
High and New Tech Enterprise. It enjoys 15% preferential tax rate from 2011 to 2013.
Dongguan CSG Architectural Co., Ltd. was recognised as a high and new tech enterprise in 2010, valid up to 2012. The
review of its high and new tech enterprise status was approved. Corporate income tax rate of 15% was applied for
calculation of corporate income tax in 2013.
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CSG Annual Report 2013
4 Business Combination and Consolidation
(1) Subsidiaries
(a) Subsidiaries established by the group
Type of Registered Legal
Subsidiary Place of registration Type of 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
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 specialized glass Joint Venture Wu Guobin 79253038-3
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 41,600 Production of solar glass Joint Venture Zhang Fan 78117638-2
Yichang CSG Silicon Co., Ltd. Direct Yichang, the PRC Manufacturing 146,798 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 51,600 Production of solar battery and applications Limited Company Ke Hanqi 784875904
Hebei CSG Glass Co., Ltd. Direct Yongqing, the PRC Manufacturing USD 4,806 Production of specialized floating glass Joint Venture Zhang Fan 66907553-0
Wujiang CSG Glass Co., Ltd. Direct Wujiang, the PRC Manufacturing 46,504 Production of specialized floating glass Limited Company Zhang Fan 69451657-X
China Southern Glass (Hong Kong) Limited Direct Hong Kong Trading HKD 8,644 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
Xianning CSG Glass Co Ltd(i) Direct Xianning,the PRC Manufacturing 40,000 Production of specialized glass Joint Venture Wu Guobin 568346784
Qingyuan CSG enery saving new materials Co.,Ltd(i) Direct Qingyuan,the PRC Manufacturing 30,000 Production of Nonmetallic mineral products Limited Company Zhang Fan 57246437
Jiangyou CSG mining develop Co.Ltd Direct Jiangyou,the PRC Manufacturing 4,000 Production of silicon and Limited Company Meng Yinglong 68043280-X
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CSG Annual Report 2013
Actual Capital Other Item amounts The description if the Losses shared by
amounts of the year composing actual Stakes Vote right stakes are not equal minority equity
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 - -
Chengdu CSG Glass Co., Ltd. 18,500 - 75 75 N.A YES 15,568 -
Tianjin CSG Architectural Glass Co., Ltd. 17,800 - 100 100 N.A YES - -
Tianjin Energy Conservation Glass Co., Ltd. 12,800 - 100 100 N.A YES - -
Dongguan CSG Architectural Glass Co., Ltd. 24,000 17,000 100 100 N.A YES - -
Dongguan CSG Solar Glass Co., Ltd. 41,600 - 100 100 N.A YES - -
Yichang CSG Silicon Co., Ltd. (i) 76,639 - 93.97 83.3 (i) YES 5,415 (366)
Wujiang CSG North-east Architectural Glass Co., Ltd. 32,000 5,600 100 100 N.A YES - -
Dongguan CSG PV-tech Co., Ltd. 29,400 - 100 100 N.A YES - -
Hebei CSG Glass Co., Ltd. USD 4,806 - 100 100 N.A YES - -
Wujiang CSG Glass Co., Ltd. 46,504 - 100 100 N.A YES - -
China Southern Glass (Hong Kong) Limited HKD 8,644 - 100 100 N.A YES - -
Hebei Shichuang Glass Co., Ltd. 24,300 - 100 100 N.A YES - -
Xianning CSG Glass Co Ltd 30,000 - 75 75 N.A YES 10,700 -
Qingyuan CSG enery saving new materials Co.,Ltd 30,000 - 100 100 N.A YES - -
Jiangyou CSG Mining Develop Co.Ltd 4,000 - 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.
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CSG Annual Report 2013
(b) Subsidiary acquired through business combination involving entites not under common control
Subsidiary Registration Nature of Registered Type of Legal Organization
type place business capital Scope of business enterprise representative code
(in RMB
ten thousand
Yuan)
Sino
Production and sales of foreign
Yichang CSG photoelectric Yichang, the Manufacturing various ultra-thin joint
Glass Co, Ltd (i) Direct PRC industry 12,000 electronic glass venture Zhang fan 56273783-X
The
description if
Actual capital Other item amounts the stakes are Losses shared
amounts at year composing actual Vote not equal to Minority by minority
end ivestment Stakes right the vote right Consolidate interest equity holders
(in RMB
ten (in RMB
(in RMB (in RMB thousand ten thousand
ten thousand Yuan) ten thousand Yuan) (%) (%) Yuan) Yuan)
Yichang CSG
photoelectric Glass Co,
Ltd (i) 9,860 - 73.58 66.7 (ii) YES 3,442 (98)
(i) It was acquired from third parties in 2013. (Notes 4(2)(a))
(ii) The proportion of voting power is determined on the proportion of the Company’s directors to the total directors of the
subsdiary.
(2) The new subsidiaries in the scope of the consolidation and the subsidiaries not in the scope of consolidation this
year
(a) The subsidiary newly brought into the consolidation scope this year
Net asset
on 31 December 2013 Net loss in current period
Yichang CSG photoelectric Glass Co, Ltd 142,383,917 (3,698,881)
On 11 December 2012, the Group entered into an agreement to acquire 46.43% and 27.15% equity interests in Yichang
Hejing Photoconductive Ceramics Co., Ltd. from Tai Chang Investment Co., Ltd. (“Tai Chang investment”) and Shenzhen
Bao Teng Heng Fu Venture Investment Enterprises (limited partnership) (“Bao Teng Heng Fu”) at consideration of
RMB39,001,200 and RMB22,806,000, respectively. As at 31 December 2013, the Group has already paid all the
consideration. The transaction was completed on 18 January 2013.
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CSG Annual Report 2013
(b) The subsidiary not in the consolidation scope this year
Net profit/(loss) from
Net asset beginning of the year to
on disposal date disposal date
Shenzhen CSG Display Technology Co., Ltd. (i) 396,569,777 200,428,388
China Southern Glass (Australia) Limited (ii) 2,844,294 2,566,359
(i) The Group disposed part of the equity interests in Shenzhen CSG Display Technology Co., Ltd. , and the Group lost
control of Shenzhen CSG Display Technology Co., Ltd. and its subsidiaries (including CSG Shenzhen Wellight
Conductive Coating Co., Ltd. , Shenzhen V-interface Technology Co., Ltd. , Shenzhen CSG Hongxu Technology Co.,
Ltd. , Yichang CSG Display Co., Ltd. , Shenzhen Nanxian Technology Co., Ltd.). Therefore, these entities are not in
the consolidation scope this year.
(ii) The Group disposed part of the equity interests in China Southern Glass (Australia) Limited, and the Group lost
control of it. Therefore, it is not in the consolidation scope this year.
(3) Business combination involving entities not under common control
On 18 January 2013, the Group acquired 46.43% and 27.15% equity interests in Yichang Hejing Photoconductive
Ceramics Co., Ltd. from Tai Chang Investment and Bao Teng Heng Fu. The acquisition date was 18 January 2013, when
the Group obtained the control of Yichang CSG photoelectric Glass Co, Ltd.
(a) Recognition of consideration and goodwill are shown as follows:
Consideration -
Cash paid for the acquisition 61,807,200
Less: Share of net indentifiable assets acquired (61,807,200)
Goodwill -
(b) The asset, liability, and cash flow related to acquisition are shown as follows:
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CSG Annual Report 2013
Carrying
Fair value amount Carrying amount
on acquisition on acquisition on 31 December
date date 2012
Cash at bank and on hand 44,347,128 44,347,128 44,341,945
Accounts receivable 4,245,154 4,245,154 4,245,154
Inventories 911,377 911,377 911,377
Other current assets 3,000 3,000 3,000
Property, plant, and equipment 76,804 76,804 76,804
Construction in progress 12,866,716 24,949,514 24,949,514
Intangible assets 22,397,839 22,397,839 22,397,839
Less: Accounts payable (825,943) (825,943) (825,943)
Employee benefits payable (241,643) (241,643) (241,643)
Taxes payable 323,512 323,512 323,512
Other liabilities (103,944) (98,760) (98,760)
Net assets 84,000,000 96,087,982 96,082,799
Less: Minority interest (22,192,800)
Net assets acquired 61,807,200
Cash paid for the acquisition (61,807,200)
Add: Payment paid in the year 2012 22,806,000
Add: Cash of the subsidiary acquired 44,347,128
Net amount of cash received from the
acquisition 5,345,928
The Group recognized the fair value on the consolidated date of assets and liabilities of Yichang CSG photoelectric Glass
Co, Ltd via valuation. The property, plant, and equipment, construction in progress, and intangible assets were valued by
replacement cost. The replacement cost was recognized at the market price, assuming that the scale and usage
remained the same.
(c) Revenue, net loss, and cash flow from acquisition date to 31 December 2013 are shown as follows:
Revenue 56,585
Net loss (3,698,881)
Cash flow from operating activities (5,530,235)
Net cash outflow (37,124,806)
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CSG Annual Report 2013
(4) Loss of subsidiary resulted from disposal of equity interest
Disposal date Method of profit or loss recognition
Shenzhen CSG Display Technology Co., Ltd. (i)
(“Display Glass”) 2 December 2013 Calculation referred to Note 4(4)(c)
China Southern Glass (Australia) Limited (ii) 13 December 2013 Calculation referred to Note 4(4)(c)
(i) On 16 August 2013, the Group signed an irrevocable equity transfer agreement with third party, Shenzhen Xin Shi
Investment Co., Limited. (“Xin Shi Investment”), to dispose its 19% shares of Shenzhen CSG Display Technology Co.,
Ltd at RMB424,980,000. The disposal was completed on 8 October 2013.
Meanwhile, according to the agreement above, the board of directors of Display Glass resolved to increase the capital
of Display Glass at RMB402,586,699. Among the contributied capital, RMB21,810,194 related to the registered capital.
The difference between the contributed capital and the registered capital above would be recognized as capital surplus.
The Group contributed capital at RMB95,619,932, and other shareholders contributed capital at RMB 306,966,767. On
2 December 2013, the injection was completed, and the proportion of shares of the Group decreased to 44.70%. The
Group lost control of Display Glass after the transaction. Display Glass became the associate of the Group.
(ii) On 16 July 2013, the Group signed an irrevocable equity transfer agreement with third party, Truly Wealth Limited, to
dispose its 51% shares of China Southern Glass (Australia) Limited at RMB1,433,663. The disposal was completed on
13 December 2013. China Southern Glass (Australia) Limited became the associate of the Group.
(a) Disposal consideration and cash flow are shown as follows:
Shenzhen CSG China Southern
Display Technology Glass (Australia)
Total Co., Ltd Limited
Disposal consideration 426,413,663 424,980,000 1,433,663
Cash and cash equivalents received 426,413,663 424,980,000 1,433,663
Less: Cash held by disposed company (144,986,958) (131,182,912) (13,804,046)
Net cash received in the year 2013 281,426,705 293,797,088 (12,370,383)
(b) Net assets of disposed companies are as follows:
Shenzhen CSG Display Technology Co., Ltd
Disposal date 31 December 2012
Current asset 373,347,936 246,192,762
Non-current asset 1,005,359,231 751,271,461
Current liability (721,338,890) (343,115,330)
Non-current liability (260,798,500) (229,610,000)
Total 396,569,777 424,738,893
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CSG Annual Report 2013
China Southern Glass (Australia) Limited
Disposal date 31 December 2012
Current Asset 14,163,700 23,616,144
Non-current Asset 496,174 530,651
Current Liability (11,815,580) (13,432,248)
Total 2,844,294 10,714,547
(c) Profit or loss from disposal are shown as follows:
Shenzhen CSG China Southern
Display Technology Glass (Australia)
Total Co., Ltd Limited
Consideration 426,413,663 424,980,000 1,433,663
Add: Fair value of retained equity interests on
disposal date 769,705,127 768,311,423 1,393,704
Add: Minority interest of disposed companies on
disposal date 128,615,616 128,615,616 -
Add: Other comprehensive income of disposed
companies recycled to profit and loss 1,318,802 - 1,318,802
Less: Net assets of disposed companies on disposal
date (399,414,071) (396,569,777) (2,844,294)
Investment income 926,639,137 925,337,262 1,301,875
The used valuation technique to determine the fair value of retained equity interests on the date of disposals. The
valuation adopted is income approach. The discount rate was determined according to the pre-tax rate of particular risk of
asset group. The key assumptions are shown as follows:
Key assumptions Assumed percentage
Discount rate 12%
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CSG Annual Report 2013
(d) Revenue, cost and loss from 1 January 2013 to the date of disposal date are shown as follows:
Shenzhen CSG China Southern
Display Technology Glass (Australia)
Total Co., Ltd Limited
Revenue 899,179,386 829,281,296 69,898,090
Less: Cost and expenses (661,562,157) (595,328,826) (66,233,331)
Total Loss 237,617,229 233,952,470 3,664,759
Less: Income tax (34,622,482) (33,524,082) (1,098,400)
Net Loss 202,994,747 200,428,388 2,566,359
(5) Exchange rate for the translation of the major foreign operations’ financial statements
Asset and Liability Items
31 December 2013 31 December 2012
China Southern Glass (Hong Kong) Limited 1HKD=0.7862RMB 1HKD=0.8109RMB
Shareholders’ equity items, income, expenses and cash flow items other than undistributed profit are calculated by
adopting spot exchange rate at the transaction date.
5 Notes to the consolidated financial statements
(1) Cash at bank and on hand
31 December 2013 31 December 2012
Foreign Exchange RMB Foreign Exchange RMB
currency rate equivalent currency rate equivalent
Cash on hand
RMB - - 28,169 - - 22,211
HKD 5,010 0.7862 3,939 5,728 0.8109 4,645
AUD - 5,4301 - 200 6.5363 1,307
EUR - 8.4189 - 5 8.3176 42
32,108 28,205
Cash at bank
RMB - - 257,353,099 - - 396,456,715
HKD 5,657,232 0.7862 4,447,716 1,658,738 0.8109 1,345,071
AUD - 5.4301 - 2,509,732 6.5363 16,404,361
USD 2,367,220 6.0969 14,432,704 5,225,623 6.2855 32,845,653
EUR 9,558 8.4189 80,468 47,641 8.3176 396,259
JPY - 0.0578 - 5,548 0.0730 405
276,313,987 447,448,464
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CSG Annual Report 2013
Other cash balances
RMB - - 3,326,428 - - 26,859,710
HKD - 0.7862 - 4,021 0.8109 3,261
AUD - 5.4301 - 12,490 6.5363 81,638
3,326,428 26,944,609
279,672,523 474,421,278
Other cash balances include margin deposits for issuing letters of credit and bank acceptance notes, amounted to
RMB3,221,655 (2012: RMB26,684,742), which is restricted cash.
(2) Notes receivable
31 December 2013 31 December 2012
Trade acceptance notes 25,249,258 35,005,451
Bank acceptance notes 298,640,232 264,798,897
323,889,490 299,804,348
(3) Accounts receivable
31 December 2013 31 December 2012
Accounts receivable 140,386,765 283,737,288
Less: provision for bad debts (3,956,082) (6,922,827)
136,430,683 276,814,461
(a) The aging of accounts receivables are analysed as below:
31 December 2013 31 December 2012
Within 1 year 134,535,013 279,303,596
1 to 2 years 5,774,297 3,683,996
2 to 3 years - -
3 to 4 years - 749,696
4 years or above 77,455 -
140,386,765 283,737,288
(b) Accounts receivable are analysed by categories as follows:
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CSG Annual Report 2013
31 December 2013 31 December 2012
Amount Provision for bad debts Amount Provision for bad debts
% of
total Provision for Provision % of total Provision for Provision
Amount balance bad debts coverage Amount balance bad debts coverage
Individually significant and
provided for bad debts
separately - - - - - - - -
Individually not significant but
provided for bad debts
separately 1,176,952 1% (1,176,952) 100% 1,125,701 0% (1,125,701) 100%
Provided for bad debts by portfolio
Portfolio 1 135,011,681 96% (2,779,130) 2% 282,611,587 100% (5,797,126) 2%
Portfolio 2 4,198,132 3% - 0% - - - -
140,386,765 100% (3,956,082) 3% 283,737,288 100% (6,922,827) 2%
(c) As at 31 December 2013, the Group did not have any accounts receivable individually significant and provided for bad
debts separately (31 December 2012: Nil).
(d) As at 31 December 2013, accounts receivable of RMB1,176,952 (31 December 2012: RMB1,125,701) was not
individually significant but provided for bad debts separately. It represented the trade receivables of Dongguan South
Glass Photovoltaic Technology co., LTD. (" Dongguan CSG PV "). Due to the business dispute, Dongguan South CSG PV
made full provision against this receivable.
(e) Accounts receivables of RMB190,603 (31 December 2012: RMB634,340) were written off this year, all of which are low
amount of accounts receivable and none of which was arised from related-party transactions. The reasons for the
written-off include disputes with customers and unability to contact with creditors and etc.
(f) In 2013, the Group did not have any balances due by parties having 5% or above voting rights in the Company.
(g) As at 31 December 2013, the Group’s five largest accounts receivable balances are set out as below:
% of total
Relationship Amount Aging balance
Customer A Independent third party 35,813,369 With 1 year 25.51%
Customer B Independent third party 24,322,252 With 1 year 17.33%
Customer C Independent third party 11,803,090 With 1 year 8.41%
Customer D Independent third party 7,188,844 With 1 year 5.12%
Customer E Independent third party 6,289,895 With 1 year 4.48%
85,417,450 60.85%
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CSG Annual Report 2013
(h) Accounts receivables of intercompanies are set out as below:
31 December 2013 31 December 2012
Relationship Amount % of total Provision Amount % of total Provision
with the balance for bad balance for bad
Group debts debts
Shenzhen CSG Display
Technology Co., Ltd Associate 544,391 0.39% - - - -
China Southern Glass
(Australia) Limited Associate 3,653,741 2.60% - - - -
4,198,132 2.99% - - - -
(i) The following balances were dominated in foreign currency.
31 December 2013 31 December 2012
Exchange
foreign currency rate RMB equivalent foreign currency rate RMB equivalent
USD 2,693,200 6.0969 16,420,171 12,858,232 6.2855 80,820,417
EUR 135,340 8.4189 1,139,414 1,038,834 8.3176 8,640,606
HKD 9,340 0.7862 7,343 - 0.8109 -
AUD - 5.4301 - 130,711 6.5363 854,366
JPY - 0.0578 - 138,767 0.0730 10,130
17,566,928 90,325,519
(4) Other receivables
31 December 2013 31 December 2012
Receivable from an associate 20,491,742 -
Receivable from insurance company 72,000,000 -
Deposits 11,894,550 28,747,768
Payments made on behalf of other parties 3,577,151 5,227,708
Petty Cash 1,093,081 1,239,412
Consideration receivable for dispose of subsidiary - 20,000,000
Export tax rebates receivable - 420,640
Others 668,948 9,841,508
109,725,472 65,477,036
Less: Provision for bad debts (359,449) (2,429,652)
109,366,023 63,047,384
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CSG Annual Report 2013
(a) The aging of other receivables are analysed below:
31 December 2013 31 December 2012
Within 1 year 97,843,656 52,353,701
1 to 2 years 4,066,046 11,073,432
2 to 3 years 7,110,817 1,114,100
3 to 4 years 584,295 30,100
4 to 5 years 30,000 75,045
Over 5 years 90,658 830,658
109,725,472 65,477,036
(b) Other receivables are analysed by categories as below:
31 December 2013 31 December 2012
% 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 seperately - - - - - - - -
Individually not significant but
provided for bad debts seperately - - - - 810,345 1% (810,345) 100%
Provided for bad debts by portfolio
Portfolio 1 89,233,730 81% (359,449) 0.4% 64,666,691 99% (1,619,307) 3%
Portfolio 2 20,491,742 19% - - - - - -
109,725,472 100% (359,449) 0.3% 65,477,036 100% (2,429,652) 4%
As at 31 December 2013, Portfolio 1 includes RMB72,000,000 insurance compensate from PICC Property and Casualty
Company Limited (PICCP&C). The Group received the compensate on January, 2014. Therefore there was no provision
for the receivable.
(c) As at 31 December, 2013, other receivables of RMB810,345 were written off this year. It represented the receivable from
Guangdong Shi Lian Industry (Group) Co., Ltd. The Group could not contact with debtor, so the Group made full provision
against the receivable.
(d) The Group did not have any balances which were due by parties having 5% or above voting rights in the Company.
(e) As at 31 December 2012, the largest five balances are set out as below:
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CSG Annual Report 2013
% of total
Relationship Amount Aging balance
Company A Independent third party 72,000,000 Within 1 year 66%
Company B Associate 20,491,742 1 to 2 years 19%
Company C Independent third party 5,050,000 1 to 2 years 5%
Company D Independent third party 2,000,000 1 to 2 years 2%
Company E Independent third party 1,635,119 Within 1 year 1%
101,176,861 93%
(f) The other receivables of intercompany are set out as below:
31 December 2013 31 December 2012
Relationship Amount % of total balance Provision for Amount% of total balance Provision
with the bad debts for bad
Group debts
Shenzhen CSG Display
Technology Co., Ltd Associate 20,491,742 19% - - - -
(g) The balances of other receivables are mainly denominated in RMB.
(5) Advance to suppliers
(a) The aging of advance to suppliers are analysed as below:
31 December 2013 31 December 2012
Within 1 year 64,425,812 52,735,324
1 to 2 years 1,194,891 2,975,830
2 to 3 years - 14,296,415
Over 3 years 7,757,626 -
73,378,329 70,007,569
(b) As at 31 December 2013, the five largest advances to supplies are set out as below.
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CSG Annual Report 2013
% of total
Relationship Amount balance Payment time Reason for unsettlement
Supplier A Independent third party 12,465,831 17% 2013 Prepayment for gas
Supplier B Independent third party 6,272,626 9% 2010 Prepayment for raw material
Supplier C Independent third party 5,075,899 7% 2013 Prepayment for gas
Supplier D Independent third party 3,687,735 5% 2013 Prepayment for equipment
Supplier E Independent third party 2,256,402 3% 2013 Prepayment for equipment
29,758,493 41%
(c) As at 31 December 2013, the Group did not have any balances which were due to either parties holding 5% or above
shareholdings in the Company or intercompanies.
(d) The balances of advance to suppliers are dominated in RMB.
(6) Inventories
(a) The inventory is categorised as below:
31 December 2013 31 December 2012
Provision for Provision for
declines in declines in
Book the value of Net book Book the value of Net book
Balance inventories value Balance inventories value
Raw materials 172,776,858 (3,460,876) 169,315,982 127,994,973 (1,899,711) 126,095,262
Work in progress 11,390,574 - 11,390,574 12,423,656 - 12,423,656
Finished goods 159,807,342 (674,152) 159,133,190 215,160,985 (26,587,832) 188,573,153
Package materials 38,844,966 - 38,844,966 40,201,786 - 40,201,786
382,819,740 (4,135,028) 378,684,712 395,781,400 (28,487,543) 367,293,857
(b) The provisions for declines in the value of inventories is analysed below:
31 December 2012 Additions Less 31 December 2013
Reverse Written off
Finished goods 26,587,832 574,594 - (26,488,274) 674,152
Raw materials 1,899,711 2,001,176 - (440,011) 3,460,876
28,487,543 2,575,770 - (26,928,285) 4,135,028
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CSG Annual Report 2013
(c) The provisions for declines in the value of inventories is analysed below:
Reasons of
inventory The proportion of
write-down reversal to inventory
Basis for accrued inventory write-down provision provision reversal year end balance
Finished goods The amount of book value less net realisable value - -
Raw materials The amount of book value less net realisable value - -
(7) Other current assets
31 December 2013 31 December 2012
Non-current assets held for sale 852,391,605 -
- property, plant, and equipment (Note 5(10)(a)) 714,861,781 -
- construction in progress (Note 5(11)(a)) 96,289,101 -
- intangible assets (Note 5(12)(a)) 41,240,723 -
Deductible input value-added tax 169,072,490 167,499,349
1,021,464,095 167,499,349
On 11 September 2013, the Group signed an irrevocable equity transfer agreement with third party, Jin Shi Dai Investment
(Shenzhen) Co., Limited. (“Jin Shi Dai”), to dispose its 100% shares of Shenzhen CSG Float Glass Co., Ltd. The property,
plant, and equipment, construction in progress, and intangible assets were reclassified as non-current assets held for sale.
As at 31 December 2013, the disposal was still not completed.
The management of the Group considered that the non-current assets held for sale was not impaired.
(8) Available-for-sale financial assets
31 December 2013 31 December 2012
Available-for-sale equity instrument 122,760,000 109,955,459
Less: Impairment - -
122,760,000 109,955,459
(a) Details of available-for-sale financial assets are set out as below:
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CSG Annual Report 2013
31 December 2013 31 December 2012
Available-for-sale financial assets
—Fair value 122,760,000 109,955,459
—Cost 66,426,290 66,426,290
—Accumulation of other comprehensive income 56,333,710 43,529,169
—Accumulation of impairment - -
Available-for-sale equity instrument is the Group’s investment in Guangdong Golden Glass Technologies Limited(“Golden
Glass”). The Group held 18,000,000 shares of Golden Glass and had 8.33% voting rights.
The fair value of the available for sale equity instrument was determined by reference to the quoted market price of Golden
Glass (Note 13(4)(b)). During the year, the fair value gain (net of income tax) is RMB 9,857,002 (2012: fair value loss of
RMB 6,110,221). The gain had been included in capital reserve (Note 5(32)).
(9) Long-term equity investments
31 December 2013 31 December 2012
Associates – with no fair value 770,037,176 -
Other long-term equity investments - 444,997
Less: Provision for impairment of long-term equity
investments - (444,997)
770,037,176 -
The long-term equity investments of the Company are not subject to restriction on conversion into cash.
(a) Associates
Variation in current year
31 31
Share of other
Newly increased December
December changes in
Cost 2012 in current year Share of profit equity 2013
(in ten thousand)
Shenzhen CSG Display
Technology Co., Ltd (i) 18,633 - 768,311,423 (133,605) 27,047 768,204,865
China Southern Glass
(Australia) Limited (i) AUD 24.5 - 1,393,704 438,607 - 1,832,311
- 769,705,127 305,002 27,047 770,037,176
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CSG Annual Report 2013
The description if the
stakes are not equal Provision accrued
Method Stakes (%) Vote right (%) to the vote right Provision in current year
Shenzhen CSG Display Equity
Technology Co., Ltd (i) method 44.70% 44.70% - - -
China Southern Glass Equity
(Australia) Limited (i) method 49.00% 49.00% - - -
- -
(i) Due to the disposal of shares of Display Glass and China Southern Glass (Australia) Limited, the Group lost control
over these entities, and retained significant influence. Both companies were no longer in the scope of combination
since the disposal date. The remain shares would be evaluated at fair value, and would be recognized under equity
method.
(b) Other long-term equity investments
Cash
31 31 dividends
December Movement in December declared this
Method Original Cost 2012 the year 2013 year
Cost
Hainan Pearl River Construction Co., Ltd. Method 395,000 395,000 (395,000) - -
Cost
Hainan Heng Tong Industrial Co., Ltd. Method 49,997 49,997 (49,997) - -
444,997 444,997 (444,997) - -
As the Group could not contact with above companies, the Group could not obtain related financial information from these
companies, and made full impairment to these long-term equity investment. These investments were written off in current
year.
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CSG Annual Report 2013
(10) Property, plant, and equipment
31 December 2012 Additions Deductions 31 December 2013
Original cost 12,306,368,133 1,312,312,632 (3,512,629,526) 10,106,051,239
Buildings 2,841,750,610 337,187,269 (553,756,337) 2,625,181,542
Machinery and equipment 9,233,063,497 953,478,162 (2,870,027,562) 7,316,514,097
Motor vehicles and others 231,554,026 21,647,201 (88,845,627) 164,355,600
Accumulated depreciation 2,553,133,177 666,726,289 (1,144,391,446) 2,075,468,020
Buildings 339,957,441 97,390,296 (122,121,367) 315,226,370
Machinery and equipment 2,078,200,602 543,431,376 (967,955,607) 1,653,676,371
Motor vehicles and others 134,975,134 25,904,617 (54,314,472) 106,565,279
Total book value 9,753,234,956 8,030,583,219
Buildings 2,501,793,169 2,309,955,172
Machinery and equipment 7,154,862,895 5,662,837,726
Motor vehicles and others 96,578,892 57,790,321
Total provision for impairment loss 334,804,253 7,718,170 (291,876,887) 50,645,536
Buildings - - - -
Machinery and equipment 334,776,293 7,718,170 (291,848,927) 50,645,536
Motor vehicles and others 27,960 - (27,960) -
Net book value 9,418,430,703 7,979,937,683
Buildings 2,501,793,169 2,309,955,172
Machinery and equipment 6,820,086,602 5,612,192,190
Motor vehicles and others 96,550,932 57,790,321
The depreciation charged in 2013 was RMB 666,726,289 (2012, RMB ：598,949,960). The amount charged into cost of
sale, selling expense and administrative expense was RMB 603,902,520, RMB 1,626,728 and RMB 61,197,041
(2012:RMB 538,313,364, RMB 1,576,652 and RMB 59,059,944) respectively.
The original cost of property, plant, and equipment transferred from constructions in progress was RMB 1,253,997,624
(2012: RMB 1,774,189,974).
The decrease of property, plant, and equipment during the year was mainly attributable to the transfer of shares of
Shenzhen CSG Display Technology Co., Ltd(Notes4(b)) and transfer from property, plant, and equipment to available for
sale assets in Shenzhen CSG Float Glass Co., Ltd(Notes5(7)).
(a) Asset held for sale
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CSG Annual Report 2013
As at 31 December 2013, the Group’s assets held for sale are set out as follows:
Estimated time of
Carrying amount disposal
Buildings 197,923,118 Year 2014
Machinery and equipment 513,966,139 Year 2014
Motor vehicles and others 2,972,524 Year 2014
714,861,781
(b) Property, plant, and equipment that does not obtain ownership certificate
As at 31 December 2013, Buildings Ownership Certificates for certain buildings of the Group with carrying amounts of
approximately RMB1,071,562,332 (cost of RMB1,175,670,613) (2012: carrying amount of RMB 1,063,351,649, cost of
RMB1,153,974,603) had not yet been obtained by the Group. Included were certain buildings with carrying amounts of
RMB65,318,561 (cost of RMB69,109,024) (2012: carrying amount of RMB159,523,462, cost of RMB169,935,268)
because the land ownership certificates of the lands on which these buildings located had not been obtained. The
Company’s directors consider 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.
Reason Estimated date of obtaining the
ownership certificate
Buildings Have submitted the required documents and are in the In the next two years.
process of application, or the related land use right
certificate pending
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CSG Annual Report 2013
(11) Construction in progress
31 December 2013 31 December 2012
Impairment Net Book Impairment Net Book
Book Value Provision Value Book Value Provision Value
Yichang Polycrystalline silicon
technical project 1,525,226,129 (144,480,698) 1,380,745,431 1,191,245,332 (124,667,107) 1,066,578,225
Wujiang energy glass expansion
project 389,766,964 - 389,766,964 178,517,400 - 178,517,400
Yichang ultrathin electronic glass
project 211,049,240 - 211,049,240 - - -
Dongguan PV Tech 200MV PV-tech
Battery Expansion project 198,993,042 - 198,993,042 8,097,560 - 8,097,560
Dongguan Solar Glass Phase I
and II improvement project 191,481,090 - 191,481,090 - - -
Xianning energy-saving glass
phase II project 124,719,664 - 124,719,664 - - -
Yichang 700MW silicon slice
expansion project phase III 80,510,116 - 80,510,116 83,060,022 - 83,060,022
Wujiang float glass project 58,282,399 - 58,282,399 37,532,194 - 37,532,194
Qingyuan high-performance
ultrathin electronic glass project 28,936,268 - 28,936,268 19,523,638 - 19,523,638
LED sapphire substratum project 24,763,135 - 24,763,135 - - -
Xianning energy-saving glass
project 14,152,761 - 14,152,761 157,053,302 - 157,053,302
Xianning energy-saving,
environmental friendly material
project 5,484,208 - 5,484,208 281,797,118 - 281,797,118
Yichang CSG Silicon chips
supplement project - - - 49,965,529 - 49,965,529
Others 54,285,887 (752,105) 53,533,782 54,446,053 (1,845,410) 52,600,643
389,766,964 - 389,766,964 178,517,400 - 178,517,400
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CSG Annual Report 2013
(a) Movement of Significant Project
Proportion
Amount
Transfer to between Amount of
of interest
fixed assets 31 Engineering accumulate
31 December Current year during the Other December provision for input and d interest capitalized Capitalisation
Name of projects Budget 2012 additions current year deductions 2013 impairment budget (i) capitalised in 2013 rate for 2013 Source of fund
Yichang Polycrystalline silicon technical 1,380,745,43
project 1,780,525,000 1,066,578,225 517,298,279 (58,650,375) - 1 (144,480,698) 86% 20,739,602 17,931,721 4.87% Internal fund and bank loan
Wujiang energy glass expansion project 500,000,000 178,517,400 211,408,332 (158,768) - 389,766,964 - 78% 4,282,851 2,648,752 5.00% Internal fund and bank loan
Yichang ultrathin electronic glass project 320,000,000 - 211,049,240 - - 211,049,240 - 66% 160,200 160,200 5.00% Internal fund and bank loan
Dongguan PV Tech 200MV PV-tech Battery
Expansion project 697,000,000 8,097,560 193,779,270 (2,883,788) - 198,993,042 - 93% 27,717,586 370,736 5.55% Internal fund and bank loan
Dongguan Solar Glass Phase I and II
improvement project 659,121,154 3,824,227 187,656,863 - - 191,481,090 - 10% - - - Internal fund
Xianning energy-saving glass phase II
project 237,800,000 - 124,719,664 - - 124,719,664 - 54% 2,008,753 2,008,753 6.00% Internal fund and bank loan
Shebnzhen Float Glass TCO project 93,000,000 148,974 96,318,180 (178,053) (96,289,101) - - - - - - Internal fund
Yichang 700MW silicon slice expansion
project phase III [1,980,000,000] 83,060,022 (2,549,906) - - 80,510,116 - 13% 10,538,599 - - Internal fund and bank loan
Wujiang float glass project 845,630,000 37,532,194 25,038,273 (4,288,068) - 58,282,399 - 96% 20,120,444 - - Internal fund and bank loan
Qingyuan high-performance ultrathin
electronic glass project 497,832,875 19,523,638 9,412,630 - - 28,936,268 - 17% - - - Internal fund
LED sapphire substratum project 35,000,000 - 24,763,135 - - 24,763,135 - 63% 597,941 597,941 4.87% Internal fund and bank loan
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CSG Annual Report 2013
Proportion
Transfer to between Amount of Amount of
fixed assets Engineering accumulate interest
31 December Current year during the Other 31 December provision for input and d interest capitalised Capitalisation
Name of projects Budget 2012 additions current year deductions 2013 impairment budget (i) capitalised in 2013 rate for 2013 Source of fund
Xianning energy-saving glass project 279,000,600 157,053,302 74,939,766 (217,840,307) - 14,152,761 - 97% 2,125,389 1,066,441 6.00% Internal fund and bank loan
Xianning energy-saving, environmental
281,797,118
friendly material project 599,340,000 236,406,868 (512,719,778) - 5,484,208 - 89% 10,852,098 6,675,474 6.00% Internal fund and bank loan
Yichang CSG Silicon chips supplement
1,306
project 93,000,000 86,116,799 (86,118,105) - - - 83% 888,068 888,068 5.00% Internal fund and bank loan
Hebei Float Glass Golden Sun project 93,093,000 - 84,461,447 (84,461,447) - - - 91% 803,645 803,645 5.08% Internal fund and bank loan
Dongguan Architectual Glass Golden Sun
112,490,000 -
project 108,443,804 (108,443,804) - - - 96% 285,250 285,250 5.00% Internal fund and bank loan
Tianjin Architectual Glass Golden Sun
112,716,000 -
project 97,516,530 (97,516,530) - - - 75% 1,485,085 1,485,085 6.00% Internal fund and bank loan
Xianning CSG Golden Sun project - 98,591,665 36,432,823 (80,738,601) - 53,533,782 (752,105) - 1,632,264 2,470,252 Internal fund and bank loan
1,934,725,631 2,323,211,997 (1,253,997,624) (96,289,101) 2,762,418,100 (145,232,803) 104,237,775 37,392,318
(i) The proportion of project expenditure incurred to the budget was determined by the accumulative expenditures incurred divided by the total budget. Some of the projects were
transferred to property, plant, and equipment because the construction completed.
(ii) The deduction of Shenzhen Float Glass TCO project was attributable to the transfer from property, plant,and equipment to available for sale assets.
(iii) The budget and actual expenditures incurred for these kinds of projects include cost of acquiring land use rights. The balance of construction in progress does not include
the costs of acquiring land-use right.
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CSG Annual Report 2013
(b) Provision for impairment of Construction in Progress
31 December 31 December
2012 Addition 2013 Reason for provision
The equipment is obsolete. Provision is
determined by the difference between
Yichang polycrystalline silicon carrying amount and estimated net selling
technical project 126,512,517 18,720,286 145,232,803 price.
(c) Progress analysis of significant Construction in progress
Yichang Polycrystalline silicon technical project 90% Physical progress of the construction work
Wujiang energy glass expansion project 90% Physical progress of the construction work
Yichang ultrathin electronic glass project 80% Physical progress of the construction work
Dongguan PV Tech 200MV PV-tech Battery
Expansion project 95% Physical progress of the construction work
Dongguan Solar Glass Phase I and II
improvement project 10% Physical progress of the construction work
Xianning energy-saving glass phase II project 60% Physical progress of the construction work
Yichang 700MW silicon slice expansion
project phase III 10% Physical progress of the construction work
Wujiang float glass project 95% Physical progress of the construction work
Qingyuan high-performance ultrathin electronic
glass project 10% Physical progress of the construction work
LED sapphire substratum project 93% Physical progress of the construction work
The main project has been completed,
and supporting projects are still in
Xianning energy-saving glass project construction. Physical progress of the construction work
The main project has been completed,
Xianning energy-saving, environmental friendly and supporting projects are still in
material project construction. Physical progress of the construction work
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CSG Annual Report 2013
(12) Intangible assets and Development expenditure
Intangible assets:
31 December 31 December
2012 Additions Decrease 2013
Total original cost 1,079,206,326 183,492,511 (212,569,745) 1,050,129,092
Land use rights 954,672,907 174,951,196 (198,875,656) 930,748,447
Patents 102,022,588 2,954,326 (11,070,000) 93,906,914
Exploitation rights 4,456,536 - - 4,456,536
Others 18,054,295 5,586,989 (2,624,089) 21,017,195
Accumulated amortisation 138,254,451 33,603,131 (68,268,498) 103,589,084
Land use rights 102,103,830 22,709,666 (57,831,208) 66,982,288
Patents 30,487,292 6,646,446 (10,240,350) 26,893,388
Exploitation rights 1,703,519 400,641 - 2,104,160
Others 3,959,810 3,846,378 (196,940) 7,609,248
Total book value 940,951,875 946,540,008
Land use rights 852,569,077 863,766,159
Patents 71,535,296 67,013,526
Exploitation rights 2,753,017 2,352,376
Others 14,094,485 13,407,947
Provision for impairment 11,464,949 1,745,531 - 13,210,480
Land use rights - - - -
Patents 11,464,949 1,736,398 - 13,201,347
Exploitation rights - - - -
Others - 9,133 - 9,133
Net book value 929,486,926 933,329,528
Land use rights 852,569,077 863,766,159
Patents 60,070,347 53,812,179
Exploitation rights 2,753,017 2,352,376
Others 14,094,485 13,398,814
In the year 2013, the amortisation amount is RMB33,603,131 (2012：RMB32,250,099)
As at 31 December 2013, ownership certificates of land use right (“Land ownership Certificates”) for certain land use
rights of the Group with carrying amounts of approximately RMB18,134,263 (Original cost: RMB18,273,829) had not yet
been obtained by the Group (2012, net book value: RMB329,102,430, Original cost: RMB32,225,293). 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
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CSG Annual Report 2013
Certificates and has no adverse effect on the Group’s business operation. The company estimated that the land use right
certificates could be obtained within two years.
The decrease of intangible assets during the year was mainly attributable to the transfer of shares of Shenzhen CSG
Display Technology Co., Ltd(Notes 4(b)) and transfer from intangible assets to non-current assets held for sale in
Shenzhen CSG Float Glass Co., Ltd(Notes 5(7)).
(a) Asset held for sale
As at 31 December 2013, the Group’s non-current assets held for sale are set out as follows:
Carrying amount Estimated time of disposal
Land use right 41,166,937 Year 2014
Others 73,786 Year 2014
41,240,723
(b) Research expenditure is analysed below:
31 December Current year 31 December
2012 additions Decrease 2013
Recognised as Recognised as
expense intangible asset
Development expenditure 3,610,292 22,841,613 (11,734,519) (4,836,076) 9,881,310
In 2013, the total amount of research and development expenditures of the Group is RMB 190,986,572 (2012:
RMB162,827,747), including RMB179,879,478 (2012: RMB148,329,637) recorded in income statement, RMB4,836,076
(2012: RMB41,576,152) was recognized as intangible assets. The development expenditures account for 12% of total
research and development expenditures (2012: 37%). As at 31 December 2013, the intangible assets arised from internal
research and development accounted for 6.61% of total of intangible assets (2012: 6.12%).
(13) Goodwill
31 December 31 December
2012 Addition Deduction 2013
Goodwill 3,039,946 - - 3,039,946
(i) The goodwill was arised from purchasing the minority shareholder equity from Tianjin CSG Architectural Glass Co.,
Ltd in 2007.
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CSG Annual Report 2013
The goodwill is allocated to Floating Glass and Archetectural Glass segment.
The directors of the company considered that the goodwill was not impaired at 31 December 2013.
The management determined the recoverable amount of goodwill based on estimation of present value of the future cash
flows from the cash generating unit. The future cash flows are prepared basing on the 5 years cash flow forecast
approved by management. The profit margin and growth rate used in the cash flows forecast are determined by
management’s historical experiences and expection of future market development. The discount rate adopted was pre-tax
rate and reflected the special risk related to the cash generating unit.
(14) Deferred income tax assets and liabilities
(a) Deferred income tax assets before offset
31 December 2013 31 December 2012
Deferred income tax The temporary Deferred income tax The temporary
assets differences assets differences
Provisions for impairment
of assets 66,928,812 394,062,293 81,240,402 489,901,898
Tax loss 82,067,509 488,375,368 65,432,718 307,944,445
Government grant 18,168,759 74,376,594 14,616,115 58,464,458
Accrued expense 2,746,933 18,704,822 8,892,688 48,776,994
Accumulated depreciation 13,373,098 55,638,307 5,389,297 25,285,355
Provisions - - 109,031 526,872
183,285,111 1,031,157,384 175,680,251 930,900,022
(b) Deferred income tax liabilities before offset
31 December 2013 31 December 2012
Deferred income tax The temporary Deferred income tax The temporary
liabilities differences liabilities differences
Accumulated depreciations 19,136,896 90,877,625 12,665,765 50,663,060
Investment income 9,942,308 42,016,274 9,942,308 42,016,274
Fair value change of
available for sale financial
asset (note 5(48)) 12,967,738 56,333,710 10,020,199 43,529,169
Withholding income tax(i) 10,749,040 190,630,093 11,998,676 188,784,958
52,795,982 379,857,702 44,626,948 324,993,461
(i) In accordance with CIT Laws, if the subsidiaries in Mainland China remit dividends, which realised after 1 January
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CSG Annual Report 2013
2008, to those overseas subsidiaries within the Group, the overseas subsidiaries should pay the certain income tax
for dividends received.
(c) The temporary differences and tax loss not recognised as deferred income tax assets are analysed below:
31 December 2013 31 December 2012
Temporary differences - 810,344
Deductible tax loss(i) 10,083,600 38,297,154
10,083,600 39,107,498
(i) The deductible tax losses not recognised as deferred tax assets mainly represented the tax losses of the Company
and some dorninant 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 utilised, and accordingly, did not recognise
the deferred tax assets.
(d) The tax losses for which no deferred tax assets were recognised will expire in the following years:
31 December 2013 31 December 2012
Year 2013 - 8,451,064
Year 2014 - 15,408
Year 2015 1,239,309 1,239,309
Year 2016 8,102,695 27,849,777
Year 2017 741,596 741,596
10,083,600 38,297,154
(e) The amount of deferred income tax assets and deferred income tax liabilities offseted is as follows:
31 December 2013 31 December 2012
Deferred income tax assets 18,497,953 12,580,247
Deferred income tax liabilities 18,497,953 12,580,247
Net deferred income tax assets and deferred income tax liabilities after offsetting:
31 December 2013 31 December 2012
Net deferred income Temporary differences Net deferred income Temporary differences
tax assets or liabilities and deductable tax loss tax assets or liabilities and deductable tax loss
Deferred income tax
assets 164,787,158 945,930,458 163,100,004 880,579,034
Deferred income tax
liabilities 34,298,029 294,630,776 32,046,701 274,672,473
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CSG Annual Report 2013
(15) Other non-current assets
All other non-current assets are land premium.
(16) Asset of impairment
Deductions
31 December Disposal of 31 December
2012 Additions Reverse subsidiary Write-off 2013
Provisions for bad debts 9,352,479 403,270 (2,202,236) (2,237,034) (1,000,948) 4,315,531
included：accounts
receivables 6,922,827 357,370 (950,500) (2,183,012) (190,603) 3,956,082
other receivables 2,429,652 45,900 (1,251,736) (54,022) (810,345) 359,449
Provisions for impairment
of inventories 28,487,543 2,575,770 - - (26,928,285) 4,135,028
Provisions for impairment
of long-term investment 444,997 - - - (444,997) -
Provisions for impairment
of fixed assets 334,804,253 7,718,170 - (18,422,468) (273,454,419) 50,645,536
Provisions for constructions
in progress 126,512,517 54,125,723 - - (35,405,437) 145,232,803
provision for impairment of
intangible assets 11,464,949 1,745,531 - - - 13,210,480
511,066,738 66,568,464 (2,202,236) (20,659,502) (337,234,086) 217,539,378
(17) Short-term borrowings
(a) Categorization of short-term borrowings
31 December 2013 31 December 2012
Guaranteed(i) 139,743,800 804,372,858
Unsecured 185,000,000 183,676,713
Short-term finance bonds (ii) 1,100,000,000 700,000,000
1,424,743,800 1,688,049,571
(i) As at 31 December 2013, loans of certain subsidiaries of the Company amounting to RMB 139,743,800 (2012:
RMB804,372,858) were guaranteed by the Company, of which the minority shareholders provided a back to back
guarantee to the Company amounting to RMB13,577,007 (2012: RMB 17,795,000).
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CSG Annual Report 2013
(ii) Approved by file No. [2013]CP20 of Inter Bank Market Trading Association, the Company is entitled to issue short term
financial bonds of RMB 1,100,000,000, which expires on 25 January 2015. The company has issued short term bonds of
RMB1,100,000,000 on 7 Marth 2013 , and has matured on 7 March 2014, with an annual interest rate of 4.26%.
As at 31 December 2013, the weighted average interest rate of short-term borrowings was 5.52% per annum (31
Decomber 2012: 5.45%).
(b) The following balances were dominated in foreign currency:
31 December 2013 31 December 2012
Original Exchange RMB Original Exchange RMB
currency rate equivalent currency rate equivalent
USD 8,643,003 6.0969 52,695,525 25,587,671 6.2855 160,831,306
EUR 4,458,601 8.4189 37,536,513 2,017,190 8.3176 16,778,180
90,232,038 177,609,486
(18) Notes payable
31 December 2013 31 December 2012
Trade acceptance notes - 1,578,217
Bank acceptance notes 4,429,188 181,908,999
4,429,188 183,487,216
All notes payable are due within one year.
(19) Accounts payable
31 December 2013 31 December 2012
Account payable for materials 451,221,943 464,599,516
Account payable for constructions 183,742,269 345,740,308
Account payable for equipment 269,562,625 232,354,809
Account payable for freight expenses 56,828,669 50,872,366
Others 20,260,943 26,436,976
981,616,449 1,120,003,975
(a) The Group did not have any balances which were due to parties having 5% or above shareholdings in the Company.
(b) As at 31 December 2013, the amount of accounts payable over 1 year is approximately RMB94,719,853 (2012:RMB
184,660,497), which mainly comprised of payables for construction contract. As the construction work has not passed the
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CSG Annual Report 2013
final acceptance test yet, the balance was not yet settled.
(c) The following balances were dominated in foreign currency
31 December 2013 31 December 2012
Original Exchange Original Exchange
currency rate RMB equivalent currency rate RMB equivalent
USD 2,155,204 6.0969 13,140,063 9,167,210 6.2855 57,620,498
EUR 2,837,747 8.4189 23,890,708 4,672,501 8.3176 38,863,994
JPY - 0.0578 - 11,204,945 0.0730 817,961
HKD - 0.7862 - 668,182 0.8109 541,829
AUD - 5.4301 - 50,696 6.5363 331,364
37,030,771 98,175,646
(20) Advances from customers
31 December 2013 31 December 2012
Advances from customers 160,689,070 135,413,065
The Group did not have any balances which were due to parties having 5% or above voting rights in the Company.
The balances were substantively dominated in RMB and the aging was within 1 year.
(21) Employee benefits payable
31 December 2012 Additions Decrease 31 December 2013
Wages and salaries, bonuses,
allowances and subsidies 87,307,146 762,503,675 (757,742,193) 92,068,628
Social security contributions 4,217 110,081,100 (110,078,237) 7,080
Included: Pension 3,294 83,943,406 (83,941,579) 5,121
Medical 606 17,175,725 (17,175,035) 1,296
Unemployment 185 5,256,593 (5,256,411) 367
Injury 66 2,513,447 (2,513,332) 181
Maternity 66 1,191,929 (1,191,880) 115
Housing funds 871,935 37,831,908 (37,015,496) 1,688,347
Labor union and employee
education funds 16,711,992 11,423,617 (14,458,040) 13,677,569
Termination benefit (i) - 25,767,795 (19,632,181) 6,135,614
Management bonus (ii) - 71,800,000 (19,000,000) 52,800,000
104,895,290 1,019,408,095 (957,926,147) 166,377,238
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CSG Annual Report 2013
(i) Termination benefit is provided for compensation of the employee of Shenzhen CSG Float Glass Co., Ltd. and Display
Glass for termination of employment contracts.
(ii) 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, management bonus 71,800,000 (2012: none)were accrued and charged to profit
and loss.
As at 31 December 2013, there was no overdue payroll and welfare expense. The balances will be settled in 2014.
(22) Taxes payable
31 December 2013 31 December 2012
Corporate income tax payable 103,256,466 73,925,573
Value-added-tax payable 29,120,147 32,104,759
Property tax payable 12,493,565 9,451,647
Urban maintenance and construction tax 2,905,195 4,638,903
Education surcharge 4,201,672 5,298,651
Others 8,777,658 9,225,838
160,754,703 134,645,371
(23) Interest payable
31 December 2013 31 December 2012
Interest payable for long-term borrowings 1,501,744 1,502,347
Interest for corporate bonds (note 5(29)) 21,205,379 21,205,379
Interest payable for short-term borrowings 1,398,983 6,166,634
Interest payable for short-term bond 36,661,428 6,217,630
60,767,534 35,091,990
(24) Dividends payable
As at 31 December 2013, the balance of the dividends payable represented those declared before the reform of
shareholder structure of the Company but not yet able to pay to then shareholders.
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CSG Annual Report 2013
(25) Other payables
31 December 2013 31 December 2012
Advance received for dispose of a subsidiary(i) 450,000,000 21,800,000
Guarantee deposits received from construction contractors 65,810,543 80,677,823
Accrued operating expense (ii) 23,158,690 36,966,873
Temporary receipts 6,144,727 15,286,242
Individual income tax 2,597,520 3,334,820
Payable for contracted labor costs 8,000,696 7,660,655
Others 1,418,407 242,742
557,130,583 165,969,155
(i) Pursuant to the agreement entered into with JinShiDai Co.,Ltd, the Group will transfer 100% equity
interests in Shenzhen CSG Float Glass to JinShiDai at total consideration of RMB450,000,000. The
transaction was not completed on 31 December 2013.
(ii) Accrued operating expenses represent expenses that have incurred but not yet invoiced, including utilities expenses,
professional service charges, travel fees and etc.
The Groups did not have any balances which were due to parties holding 5% or above voting rights of the Company.
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
31 December 2013 31 December 2012
Long-term borrowing due within 1year
- guaranteed(i) 106,074,515 123,480,256
- credit 293,775,200 289,572,985
other non-current liabilities due within 1 year(ii) - 68,634,600
399,849,715 481,687,841
(i) The loans are guaranteed by the Company in favor of the subsidiaries, of which RMB 10,931,447 (2012:
RMB13,325,664) were back to back guaranteed by the minority shareholders of the subsidiaries of the Company.
(ii) It represents the loan from Yichang local financial department borrowed by Yichang CSG. It should only be used for
the infrastructure construction. The loan is interest free and repayable on 20 December 2013. Total amount of the
loan is RMB103,634,600. In 2012, Yichange CSG repaid loan of RMB35,000,000. In 2013, Yichang CSG repaid
remaining balance of RMB68,634,600.
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CSG Annual Report 2013
(a) The top 5 long-term borrowings due within 1 year:
Beginning
Date Maturity date Currency Interest rate (%) 31 December 2013 31 December 2012
Foreign Foreign
Currency Currency
amount RMB amount RMB
Bank A 2012-06-25 2014-06-01 RMB 1-3 year export loan rate 100,000,000 100,000,000
Bank B 2010-03-01 2014-05-09 RMB Benchmark interest rates fall 10% 50,000,000 50,000,000
Bank C 2012-06-01 2014-06-01 RMB 1-3 year export loan rate 30,000,000 30,000,000
Bank D 2011-05-26 2014-11-20 USD 3 month LIBOR+3% 3,750,000 22,863,375 5,530,000 34,749,513
Bank E 2009-01-05 2014-05-09 RMB Benchmark interest rates fall 10% 20,000,000 20,000,000
222,863,375 234,749,513
(b) The following balances of long-term borrowings due within 1 year are dominated in foreign currency:
31 December 2013 31 December 2012
Original Exchange RMB Original Exchange RMB
Currency rate Equivalent Currency rate Equivalent
USD 11,750,000 6.0969 71,638,575 46,666,465 6.2855 293,322,066
(27) Other current liabilities
31 December Current year Current year 31 December
2012 additions reductions 2013
Accrued liabilities
－Warranty 226,872 - (226,872) -
－Others 300,000 - - 300,000
526,872 - (226,872) 300,000
(28) Long-term borrowings
31 December 2013 31 December 2012
Credit - 393,530,115
Guarantee (i) 302,904,204 317,582,846
302,904,204 711,112,961
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CSG Annual Report 2013
(i) As at 31 December 2013, loans of certain subsidiaries of the Company were guaranteed by the Company, and the
minority shareholders provided a back to back guarantee to the Company amounting to RMB 74,536,483 (2012: RMB
55,606,925). The interest should be paid monthly or quarterly. The principals will be repaid between March 2015 and
May 2019.
(a) The top 5 long-term borrowings:
Beginning Maternity
date date Currency Interest rate(%) 31 December 2013 31 December 2012
Foreign Foreign
Currency currency
amount RMB amount RMB
BankD 2013-08-30 2016-08-29 RMB Benchmark interest rates rise 2% - 47,000,000 - -
BankE 2013-06-27 2017-06-26 RMB Benchmark interest rates - 30,000,000 - -
BankE 2013-08-09 2017-08-08 RMB Benchmark interest rates - 30,000,000 - -
BankE 2013-07-12 2017-07-11 RMB Benchmark interest rates - 30,000,000 - -
Bank F 2013-03-20 2016-03-19 RMB Benchmark interest rates - 20,000,000 - -
157,000,000 -
(b) The maturity of long-term borrowings is set out below :
31 December 2013 31 December 2012
1 to 2 years 91,633,420 488,530,115
2 to 5 years 205,000,000 187,833,333
Above 5 years 6,270,784 34,749,513
302,904,204 711,112,961
(c) The following balances were dominated in foreign currency.
31 December 2013 31 December 2012
Exchange RMB Original Exchange RMB
Original currency rate equivalent currency rate equivalent
USD 1,028,520 6.0969 6,270,784 11,658,520 6.2855 73,279,627
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CSG Annual Report 2013
The weighted average interest rate of long-term borrowings was 5.76% per annum as at 31 December 2013 (2012:
5.70%).
(29) Bonds Payable
31 December 31 December
2012 Addition Deduction 2013
Corporate Bonds 1,986,624,288 4,416,887 - 1,991,041,175
Related information on bonds are as below:
Par value Issuing date Bond maturity Issuing 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 analysed below:
31 December Paid 31 December
2012 Accrued interest interest 2013
Corporate bonds (note5(23)) 21,205,379 106,600,000 (106,600,000) 21,205,379
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 RMB2 billion.
The Corporate Bonds include RMB1 billion that will mature in 5 years and another RMB1 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
31 December 2013 31 December 2012
Deferred income (a) 432,364,880 287,373,063
(a) Deferred income related to governmental grants
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CSG Annual Report 2013
31 Amount of 31
Government grants relating to
December Acquisition non-operating Other December
assets
2012 of subsidiary Additions income changes 2013
Government grants relating
to assets -
Xianning CSG Golden Solar
Project(i) - - 60,610,000 (505,083) - 60,104,917
Tianjin CSG Architectural
Glass CSG Golden Solar
Project(ii) 23,280,000 - 23,280,000 (194,000) - 46,366,000
Dongguan CSG
Architectural Glass CSG
Golden Solar Project(iii) - - 34,090,000 (506,416) - 33,583,584
Hebei CSG Glass Golden
Solar Project(iv) - - 31,810,000 - - 31,810,000
Wujiang CSG Glass Co.,
Ltd(v) 56,972,745 - - (2,781,515) - 54,191,230
Yichang Photoelectric Glass
products project (vi) - - 41,719,660 - - 41,719,660
Yichang Silicon products
project (vii) 35,859,375 - - (2,812,500) - 33,046,875
Chengdu Float
Cogeneration project(viii) 18,745,560 - - (1,654,020) - 17,091,540
Yichang CSG crucible
project(ix) 9,148,872 - 3,700,000 (1,005,002) - 11,843,870
Group Coating Film
experimental project(x) 8,897,000 - 3,000,000 (104,200) - 11,792,800
Display flexibility touch
screen project(xi) 5,000,000 - - - (5,000,000) -
Weiguang conducting
filmtouch screen project(xi) 5,000,000 - - - (5,000,000) -
Flat-panel display project(xii) - - 51,188,500 - (51,188,500) -
Optoelectronic information
project (xii) - - 2,000,000 - (2,000,000) -
Others 25,837,111 1,656,000 2,000,000 (2,311,107) - 27,182,004
188,740,663 1,656,000 253,398,160 (11,873,843) (63,188,500) 368,732,480
Government grants relating
to income
Xianning CSG Glass Co., 98,632,400 - - (35,000,000) - 63,632,400
Ltd(xiii)
287,373,063 1,656,000 253,398,160 (46,873,843) (63,188,500) 432,364,880
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CSG Annual Report 2013
(i) It was granted by Xianning local government for Golden Solar Project which was used for construting photovoltaic power
station and will be amortised and credited to income statement in 20 years. The photovoltaic power station’s ownership is
belong to Xianning CSG after it is completed.
(ii) It was granted by Tianjin local government for Golden Solar Project which was used for construting photovoltaic power
station and will be amortised and credited to income statement in 20 years. The photovoltaic power station’s ownership is
belong to Tianjin CSG after it is completed.
(iii) It was granted by Dongguan local government for Golden Solar Project which was used for construting photovoltaic power
station and will be amortised and credited to income statement in 20 years. The photovoltaic power station’s ownership is
belong to Dongguan CSG after it is completed.
(iv) It was granted by Langfang local government for Golden Sun Project which was used for construting photovoltaic power
station and will be amortised and credited to income statement in 20 years. The photovoltaic power station’s ownership is
belong to Hebei CSG after it is completed.
(v) It was granted by Wujiang local government for infrastructure construction and will be amortised and credited to income
statement in 15 years, in accordance with the minimum operating period committed.
(vi) It was granted by Yichang local government for Photoelectric glass project support fund and will be amortised and
credited to income statement in 15 years, in accordance with the minimum operating period committed.
(vii) The balance represented amounts granted 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 and amortised by 15 years according to the useful life
of the converting station.
(viii) It represented the funds granted by Chengdu local government for energy glass project. It will be amortised and credited
to income statement in 15 years, in accordance with the minimum operating period committed.
(ix) It represented the government supporting fund obtained by Yichang CSG from the acquiring of the assets and liabilities of
Crucible project of Yichang Hejing Photoelectric Ceramic Co., LTD. The proceeds will be amortized and credited to
income statement after related assets put into use.
(x) The allowance was granted by Shenzhen City Development and Reform Commission for the development of Group
Coating Film experimental project.The grant will be amortised and credited to income statement in the estimated useful
life of the relevant fixed assets.
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CSG Annual Report 2013
(xi) The allowance was granted by Shenzhen City Development and Reform Commission for the development of flat-panel
display project.The reduction is due to the disposal of equity income in Shenzhen CSG Display Technology.
(xii) The allowance was granted by Yichang management Commission for the development of flat-panel display project to
Yichang CSG. The earnings plans to be amortized according to depreciation life of relevant assets after come into use.
The reduction is due to the disposal of equity income in Shenzhen CSG Display Technology.
(xiii) According to the document Xian Kai Cai Fa [2013] No. 3 issued by the Center, the allowance was used to support the
development of Xianning CSG during from the year 2012 to year 2015. In the year 2012, RMB 5 million was credited to
income statement.
(31) Share capital
Movement
31 December New issues Bonus 31 December
2012 during the year issue Capitalisation Others Subtotal 2013
Shares with restriction on disposals -
Domestic person shares 9,109,978 - - - 1,174,219 - 10,284,197
Shares without restriction on disposals -
PRC public shares 1,303,641,590 - - - (1,174,219) - 1,302,467,371
Domestically listed foreign shares 762,583,992 - - - - - 762,583,992
2,066,225,582 - - - (1,174,219) - 2,065,051,363
2,075,335,560 - - - - - 2,075,335,560
Movement
31 December New issues Bonus 31 December
2011 during the year issue Capitalisation Others Subtotal 2012
Domestically listed foreign shares -
Domestic person shares 23,420,884 - - - (14,310,906) (14,310,906) 9,109,978
Shares without restriction on disposals -
PRC public shares 1,289,832,184 - - - 13,809,406 13,809,406 1,303,641,590
Domestically listed foreign shares 762,583,992 - - - - - 762,583,992
2,052,416,176 - - - 13,809,406 13,809,406 2,066,225,582
2,075,837,060 - - - (501,500) (501,500) 2,075,335,560
The nominal value of the Domestic is RMB1, and that of domestically listed foreign shares is HKD 1.
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CSG Annual Report 2013
(32) Capital reserve
Current year Current year
31 December 2012 additions reductions 31 December 2013
Capital premium 1,345,264,670 - - 1,345,264,670
Other reserve 35,767,318 10,334,900 - 46,102,218
Change in fair value of
available-for-sale financial assets
(note5(48)) 33,508,970 9,857,002 - 43,365,972
Share of other equity movements
in investee (note 5 (9)) - 27,047 - 27,047
Share based payment (note 8) 1,958,570 450,851 - 2,409,421
Finance incentives for energy and
technical transformation 2,550,000 - - 2,550,000
Transfer from the balance of
capital surplus recognised under
previous accounting system (2,250,222) - - (2,250,222)
1,381,031,988 10,334,900 - 1,391,366,888
Current year Current year
31 December 2011 additions reductions 31 December 2012
Capital premium 1,180,210,446 165,054,224 - 1,345,264,670
Other reserve 200,783,959 7,062,598 (172,079,239) 35,767,318
Change in fair value of
available-for-sale financial assets
(note5(48)) 39,619,191 - (6,110,221) 33,508,970
Share based payment (note 8) 160,864,990 7,062,598 (165,969,018) 1,958,570
Finance incentives for energy and
technical transformation 2,550,000 - - 2,550,000
Transfer from the balance of
capital surplus recognised under
previous accounting system (2,250,222) - - (2,250,222)
1,380,994,405 172,116,822 (172,079,239) 1,381,031,988
(33) Special Reserve
31 December 31 December
2012 Addition Deduction 2013
Safety production cost 14,831,266 3,195,497 (3,522,903) 14,503,860
Yichang CSG is a high risk chemical production enterprise. Therefore, the Company appropriated such reserve in
accordance with relevant regulations.
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CSG Annual Report 2013
(34) Surplus reserve
31 December Current year Current year 31 December
2012 additions reductions 2013
Statutory surplus reserve 550,364,009 86,832,143 - 637,196,152
Discretionary surplus reserve 127,852,568 - - 127,852,568
678,216,577 86,832,143 - 765,048,720
31 December Current year Current year 31 December
2011 additions reductions 2012
Statutory surplus reserve 472,082,529 78,281,480 - 550,364,009
Discretionary surplus reserve 127,852,568 - - 127,852,568
599,935,097 78,281,480 - 678,216,577
According to the PRC Corporation Law and the regulation of the Company, the Company must accrue statutory surplus
reserve at the amount of 10% of the net profit until when the accumulated statutory surplus reserve reached at least 50%
of the capital. After the Company obtained the approval from shareholders’ meeting, the statutory surplus reserve can be
used to make up the loss, or to increase the capital. The Company accrued statutory surplus reserve at the amount of
RMB 86,832,143, 10% of the net profit, in the year 2013. (2012: RMB78,281,480, accrued at 10% of the net profit).
The appropriation to discretion surplus reserve shall 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 year .
(35) Undistributed profit
2013 2012
Amount Appropriation rate Amount Appropriation rate
Undistributed profit at the beginning 2,665,777,580 2,842,873,242
Add: net profits belonging to equity holders of
the Company 1,535,929,739 274,746,219
Less: Appropriation of statutory surplus
reserve (86,632,143) 10% (78,281,480) 10%
Dividends payable (311,300,334) 40% (373,560,401) 40%
Undistributed profitin the end 3,803,574,842 2,665,777,580
Undistributed profit of the Group included the surplus reserve of the subsidiaries attributable to the Group amounting to
RMB730,054,385 (31 December 2012: RMB698,893,170), among which RMB 72,870,930 (31 December 2012:
RMB86,599,678) was appropriated by the subsidiaries and attributable to the Group in the year 2013. The surplus reserve
amounting to RMB41,709,715(31 December 2012: none) was transferred out for the disposal of subsidiary.
Pursuant to the resolution of board of directors of the Company on 23 April, 2013, the Company paid dividend of
RMB1.50(tax inclusive) for each 10 shares outstanding as at 31 December 2012, totaling 311,300,334.
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CSG Annual Report 2013
(36) Minority interests
Minority interests are analysed as follows:
31 December 2013 31 December 2012
Chengdu CSG Glass Co., Ltd. 155,682,133 140,461,015
Xianning CSG Glass Co.,Ltd. 106,996,544 97,920,978
Yichang CSG Silicon Co., Ltd. 54,151,066 57,830,568
Yichang CSG Photoelectric Glass Co., Ltd. 34,425,556 -
Yingde Hongsheng Silica Sand Mine. Co., Ltd 1,763,144 1,744,771
Shenzhen CSG Display Technology Co., Ltd. - 153,953,779
Others - 72,896
353,018,443 451,984,007
(37) Revenue and cost of sales
2013 2012
Revenue from main operations 7,663,179,548 6,938,999,253
Revenue from other operations 70,616,566 55,358,776
7,733,796,114 6,994,358,029
2013 2012
Cost of sales from main operations 5,470,796,940 5,314,364,378
Cost of sales from other operations 30,503,717 41,438,545
5,501,300,657 5,355,802,923
(a) Revenue and cost of main operations.
Revenue and cost of main operations analysed by product are set out below:
2013 2012
Revenue Cost Revenue Cost
Float Glass 3,958,217,805 3,104,282,050 3,267,115,428 2,835,537,916
Architectural glass 2,854,745,532 1,956,957,342 2,606,282,367 1,736,603,345
ITO glass 794,643,237 481,426,660 913,176,044 571,781,267
Solar panel and parts 945,054,866 814,673,607 821,145,144 849,302,813
Elimination (889,481,892) (886,542,719) (668,719,730) (678,860,963)
7,663,179,548 5,470,796,940 6,938,999,253 5,314,364,378
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CSG Annual Report 2013
Revenue and cost of main operations analysed by geographical location are set out below:
2013 2012
Revenue Cost Revenue Cost
Mainland 6,620,467,506 4,744,948,478 5,570,529,891 4,276,582,642
Hong Kong 293,460,515 167,150,258 421,363,444 253,057,291
Europe 302,596,199 246,359,207 554,904,401 502,502,220
Asia (other than Mainland and Hong 277,198,638 195,707,502 215,348,104 156,861,960
Kong)
North America 55,770,796 39,972,044 74,377,968 56,734,061
Australia 93,580,675 59,827,480 86,295,529 55,953,238
Other regions 20,105,219 16,831,971 16,179,916 12,672,966
7,663,179,548 5,470,796,940 6,938,999,253 5,314,364,378
(b) Other revenue and cost
2013 2012
Revenue Cost Revenue Cost
Sale of raw materials 50,353,649 21,622,360 38,971,862 35,692,801
Others 20,262,917 8,881,357 16,386,914 5,745,744
70,616,566 30,503,717 55,358,776 41,438,545
(c) The top 5 customers are analysed as follows:
The sales to the Group’s top five customers were amounted to RMB1,046,478,319(2012: RMB 1,077,950,068),
accounting for 14% of the Group’s total sales (2012: 16%). Details are shown as follows:
% of the total revenue
Revenue of the group
The largest 309,286,785 4%
The second largest 278,493,574 4%
The third largest 163,756,087 2%
The fourth largest 152,379,163 2%
The fifth largest 142,562,710 2%
1,046,478,319 14%
(38) Tax and surcharges
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CSG Annual Report 2013
2013 2012
Business tax 455,227 395,037
City maintenance and construction tax 24,521,529 24,282,102
Educational surcharge 21,823,359 20,894,421
Others 1,059,880 1,304,886
47,859,995 46,876,446
(39) Selling Expenses
2013 2012
Freight expenses 106,828,789 97,292,292
Employee benefit expenses 89,558,604 80,830,937
Travelling expenses 13,271,862 11,071,804
Entertainment expenses 11,276,621 8,538,643
Others 46,458,899 37,087,876
267,394,775 234,821,552
(40) Administrative expenses
2013 2012
Employee benefit expenses 236,610,572 124,641,905
Research and development expenses 179,879,478 148,329,637
Taxation Expenses 50,268,540 46,370,403
Depreciation expenses 61,197,041 59,059,944
Amortisation of intangible assets 33,603,131 32,250,099
Office expenses 22,238,006 20,698,390
Labor union expenditure 11,309,395 8,565,696
Canteen costs 10,872,951 11,986,904
Rental expense 7,297,589 7,232,214
Entertainment expenses 6,406,463 6,189,423
Travel expense 6,293,313 7,731,711
Water and electricity expense 14,771,713 12,935,384
Carriage expense 6,032,421 6,924,395
Others 24,540,647 33,993,433
671,321,260 526,909,538
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CSG Annual Report 2013
(41) Finance expenses
2013 2012
Loan interest 270,041,796 279,617,806
Less: Capitalized interest (37,392,318) (44,196,423)
Interest expenses 232,649,478 235,421,383
Amortization of corporate bond issue costs 4,416,887 4,183,128
Less: Interest income (4,723,169) (8,539,721)
Foreign exchange (gain)/loss (2,502,167) 3,802,869
Others 8,480,673 14,052,395
238,321,702 248,920,054
(42) Investment income
2013 2012
Dividend from holding available-for-sale financial assets 432,000 360,000
Gain from disposal of long-term investment(note 4(4)(c)) 926,639,137 71,306,374
Gain from long-term investment under equity method(note
5(9)) 305,002 -
927,376,139 71,666,374
There is no significant restriction on the remittance of investment income to the Group.
(43) Impairment losses
2013 2012
Provision for bad debts (1,798,966) 1,821,510
Provision for inventories 2,575,770 27,866,770
Impairment losses for fixed assets 7,718,170 140,405,189
Impairment losses for construction in progress 54,125,723 124,667,107
Impairment losses for intangible assets 1,745,531 11,464,949
64,366,228 306,225,525
(44) Non-operating income
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CSG Annual Report 2013
Amount
of non-recurring
gain and loss
2013 2012 included in 2013
Gain on disposal of fixed assets 4,330,610 9,290,952 4,330,610
Government grants (a) 115,138,161 89,424,440 115,138,161
Default income(b) 6,317,040 5,500,000 6,317,040
Insurance compensation(c) 72,000,000 - 72,000,000
Compensation income 2,367,157 1,273,197 2,367,157
Others 16,534,546 10,085,949 16,534,546
216,687,514 115,574,538 216,687,514
(a) Government grants is analysed below:
2013 2012 Catagory
Government grants amortization (note 5 relating to assets
(30)) 46,873,843 19,524,198 and income
Industry supporting fund 51,575,788 44,980,144 relating to income
Interest subsidies for technical
transformation 8,010,000 4,695,934 relating to income
Government awards fund 3,353,990 5,388,000 relating to income
Energy saving subsidy 1,000,000 1,900,000 relating to income
Subsidies for research and development 1,709,980 5,740,297 relating to income
Others 2,614,560 7,195,867 relating to income
115,138,161 89,424,440
(b) Default income
The default income is due to the delay payment of RMB 20,000,000 for transfer the equity interests in Guangzhou CSG.
According to the equity transfer agreement, Guangzhou Bodi should compensate the Group for delay payment at 0.1% of
total overdue balance per day.
(c) Insurance compensation
It represented the reimbursement by PICCP&C for the loss from a fire disaster. The insurance of
RMB72,000,000 was received in January 2014.
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CSG Annual Report 2013
(45) Non-operating expenses
Amount
of non-recurring gain and loss
2013 2012 included in 2012
Loss on disposal of fixed assets
and intangible assets (i) 140,789,846 2,088,853 140,789,846
Loss on compensations 8,000,000 496,000 8,000,000
Donation 160,000 210,937 160,000
Others 3,166,417 674,217 3,166,417
152,116,263 3,470,007 152,116,263
(i) It mainly included the loss from a fire disaster in Dongguan CSG PV Tech of RMB75,103,734, and the loss resulting
from disposal of fixed assets of Dongguan CSG Solar Glass Co., Ltd.
(46) Income tax expenses
2013 2012
Current income tax 267,507,522 182,792,297
Income tax credit related to the purchase of energy
-
conservation and environmental protection equipment (2,342,565)
Deferred income tax (7,643,032) (91,683,592)
259,864,490 88,766,140
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 shown as follows:
2013 2012
Total profit 1,935,178,887 458,572,896
Income tax calculated at applicable tax rates 414,765,434 107,375,885
Effect of change in tax rates - (8,273,800)
Expenses not deductible for tax purpose 8,170,361 7,157,923
Non-taxable income (129,958,948) -
Utilization of previously unrecognized tax losses (38,723,365) (22,197,345)
Tax loss for which no deferred income tax asset was
-
recognised 185,399
Income tax credit related to purchase of energy conservation
-
and environmental protection equipment (2,342,565)
Withholding tax on subsidiaries’ profit to be distributed 5,611,008 6,860,643
Income tax expenses 259,864,490 88,766,140
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CSG Annual Report 2013
(47) Earnings per share
(a) Earnings per share - basic
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the year.
2013 2012
Consolidated profit attributable to equity holders of the Company 1,535,929,739 274,746,219
Weighted average number of ordinary shares in issue 2,075,335,560 2,075,405,685
Basic earnings per share 0.74 0.13
Including:
- Earnings per share for continuing operations 0.69 0.07
- Earnings per share for discontinued operations (note 11) 0.05 0.06
(b) Earnings per share - diluted
Diluted earnings per share is calculated by dividing the profit attributable to equity holders 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 31 December
2013(2012: Nil), accordingly the diluted earnings per share equals basic earnings per share.
(48) Other comprehensive income
2013 2012
(Losses)/Gain from available for sale financial assets 12,804,541 (7,937,368)
Less: effect of income tax resulted from available for sale financial
assets (note 5(14)(b)) (2,947,539) 1,827,147
Subtotal 9,857,002 (6,110,221)
Difference on translation of foreign currency financial statements (1,634,711) 128,755
Less:net gain or loss from disposal of foreign subsidiary (1,318,802) -
Subtotal (2,953,513) 128,755
6,903,489 (5,981,466)
-
- attributable to equity holders of the company 6,903,489 (5,978,775)
- attributable to minority interests - (2,691)
6,903,489 (5,981,466)
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CSG Annual Report 2013
2013 2012
Gain/(Losses) from available for sale financial assets 12,804,541 (7,937,368)
Less: effect of income tax resulted from the variance of available
for sale financial assets (note 5(14)(b)) (2,947,539) 1,827,147
Subtotal 9,857,002 (6,110,221)
The gain from disposal equity interests in subsidiary but not loss
of control(note4(4)) 357,449,689 -
Less: recycle to profit and loss upon loss of control (357,449,689) -
- -
Difference of translating foreign currency financial statements (1,634,711) 128,755
Less: recycle to profit and loss upon disposal of subsidiaires (1,318,802) -
Subtotal (2,953,513) 128,755
6,903,489 (5,981,466)
- attributable to equity holders of the company 6,903,489 (5,978,775)
- attributable to minority interests - (2,691)
6,903,489 (5,981,466)
(49) Notes to consolidated cash flow statements
(a) Cash received relating to other operating activities
2013 2012
Interest income 4,723,169 8,539,721
Government grant 68,264,318 69,900,242
Return of the pledged deposit 7,283,211 29,923,425
Others 2,739,786 4,495,405
83,010,484 112,858,793
(b) Cash paid relating to other operating activities
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CSG Annual Report 2013
2013 2012
Transportation expense 113,444,136 87,786,232
Canteen cost 40,258,218 37,383,327
Office expenses 33,039,420 36,193,613
Travelling expenses 22,715,580 21,902,344
Entertainment expenses 17,517,291 16,234,111
Vehicle use fee 16,356,356 11,917,674
Bank fees 7,007,653 14,052,395
Consulting fee 6,179,099 11,885,295
Insurance fee 6,056,319 7,051,269
Research and development expenses 19,125,674 8,559,581
Maintenance expenses 16,498,724 14,639,048
Others 76,552,216 48,014,239
374,750,686 315,619,128
(c) Cash received relating to other investing activities
2013 2012
Consideration received for disposal of subsidiaries(i) 540,000,000 21,800,000
Government grants received relating to assets 253,398,160 70,965,814
Return of the pledged deposit 82,885,853 55,466,895
Trial production revenue from constructions in progress 11,229,265 80,952,145
Default income related to disposal of a subsidiary 6,317,040 5,500,000
(note5(44)(b))
893,830,318 234,684,854
(i) Consideration received for disposal of subsidiaries of RMB540,000,000 includes the consideration transferred 100%
equity interest in Shenzhen CSG Float Glass RMB450,000,000 (Note 5 (25) (i)) and Shenzhen CSG Display Technology
transferred 100% equity interest in Shenzhen NanXian Technology RMB90,000,000.
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CSG Annual Report 2013
(d) Cash paid relating to other investing activities
2013 2012
Deposit returned related to disposal of a subsidiary 21,800,000 -
Deposit paid 64,643,573 68,917,680
Trial production expenditures from constructions in
progress 43,889,940 82,790,230
Prepayment on acquisition Yichang Hejing Photoconductive
Ceramics Co., Ltd - 22,806,000
Others - 15,000,000
130,333,513 189,513,910
(e) Cash received relating to other financing activities
2013 2012
Cash received from related party (i) 436,613,233 -
Return of deposits for issuing bank acceptance notes 23,463,087 -
Proceeds received from disposal partial equity interests in
Xianning CSG - 36,000,000
460,076,320 36,000,000
(i) Cash received from related party is the receivable from Display Glass which had not been settled.
(f) Cash paid relating to other financing activities
2013 2012
Repayment of interest-free loan to government (note 5(26)(ii)) 68,634,600 35,000,000
Payment of deposits for borrowings 1,992,649 10,426,684
Repurchase of Restrictive A Shares - 2,221,645
70,627,249 47,648,329
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CSG Annual Report 2013
(50) Supplement notes of cash flow statement
(a) Reconciliation from the net profit to the cash flows from operating activities
2013 2012
Net profit 1,675,314,397 369,806,756
Add: Provisions for assets impairment 64,366,228 306,225,525
Depreciation of fixed assets 666,726,289 598,949,960
Amortisation of intangible assets 33,603,131 32,250,099
Safety production costs 3,400,550 6,982,771
Employee service cost relating to share based
payment 692,644 7,355,372
Losses/ (Gains) on disposal of fixed assets and
intangible assets 136,459,236 (7,202,099)
Insurance indemnity income (72,000,000) -
Finance expenses 237,066,365 239,344,532
Investment income (927,376,139) (71,666,374)
Increase in deferred tax assets (6,946,821) (81,723,155)
(Decrease) in deferred tax liability (696,211) (10,216,996)
(Increase)/Decrease in inventories (41,135,247) 88,773,044
(Increase)/Decrease in operating receivables (33,298,622) 244,810,457
(Decrease)/Increase in operating payables (37,308,265) 2,105,637
Net cash flows from operating activities 1,698,867,535 1,725,795,529
(b) Net decrease in cash and cash equivalents
2013 2012
Cash at the end of year 276,450,868 447,736,536
Less: cash at the beginning of year (447,736,536) (634,416,575)
Net decrease in cash and cash equivalents (171,285,668) (186,680,039)
(c) Cash and cash equivalents
31 December 2013 31 December 2012
Cash
- Cash on hand 32,108 28,205
- Cash at bank without restriction 276,313,987 447,448,464
- others without restriction 104,773 259,867
Cash at end of year 276,450,868 447,736,536
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CSG Annual Report 2013
(d) Disposal of subsidiary
2013 2012
Consideration 426,413,663 661,894,246
Cash received from disposal of subsidiary 426,413,663 495,988,346
Less: cash held by subsidiary (144,986,958) (9,221,058)
Add: advance received relating to dispose of subsidiary in 2011 - 299,800,000
Less: advance received relating to dispose of subsidiary in 2012
(Notes5(4)) 20,000,000 -
Net cash received from disposal of subsidiary 301,426,705 186,967,288
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:
- Float Glass Segment, being engaged in the production and sales of float glass and production of silica sand
which can be used to produce float glass.
- Architectural Glass Segment, being engaged in the production and sales of architectural Glass.
- Fine Glass Segment, being engaged in the production and sales of fine glass.
- Solar Energy Segment, being engaged in the production and sales of polycrystalline silicon chip, solar glass, and
solar module.
The inter-segment transfer prices are 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.
In the year 2013, according to business development and requirement of management, the Float Glass and Architectual
Glass Segment was separated into Float glass Segment and Architectual Glass Segment. The financial statement
disclosure of the segment was changed correspondingly. Meanwhile, the segment information for the year 2012 had been
restated.
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(a) Segment information as at and for the year ended 31 December 2013 is as follows:
Architectural Undistributed
Floating glass Glass Fine glass Solar energy Others profits Elimination Total
Revenue from external customers 3,125,692,198 2,835,070,154 829,199,049 943,093,634 - 741,079 - 7,733,796,114
Inter-segment revenue 848,888,166 35,399,896 84,383 21,417,968 - - (905,790,413) -
Interest Income 1,029,406 880,616 272,744 279,329 520 2,260,554 - 4,723,169
Interest expense (103,662,331) (29,136,604) (13,065,285) (43,858,285) - (42,926,973) - (232,649,478)
Investment income from associates and joint
companies - - - - - 305,002 - 305,002
Asset impairment (losses)/reversal (35,368,139) 51,572 (349,332) (29,481,478) - 781,149 - (64,366,228)
Depreciation and amortisation (341,076,904) (196,175,819) (64,613,506) (92,358,284) (558) (6,104,349) - (700,329,420)
Total profit/(Losses) 396,612,629 531,020,162 230,470,542 (17,375,281) 880,742 808,740,657 (15,170,564) 1,935,178,887
Income tax expenses (99,327,432) (79,880,626) (32,596,858) (1,963,998) - (46,095,576) - (259,864,490)
Net profit/(losses) 297,285,197 451,139,536 197,873,684 (19,339,279) 880,742 762,645,081 (15,170,564) 1,675,314,397
Total assets 6,935,561,911 3,644,219,356 - 3,479,020,559 1,422,712 1,018,642,239 - 15,078,866,777
Total liabilities 1,298,439,341 821,941,047 - 577,424,988 2,852,814 3,977,296,005 - 6,677,954,195
Other non-cash expenses besides
depreciation and amortization charges - - (692,644) - - - - (692,644)
Long term equity investment on associates
and joint ventures - - - - - 770,037,176 - 770,037,176
The increase in non-current assets other than
long-term equity investments 1,147,584,896 449,515,039 296,772,401 465,204,405 - 18,285,912 - 2,377,362,653
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CSG Annual Report 2013
(b) Segment information as at and for the year ended 31 December 2012 is as follows:
Architectural Undistributed
Floating glass Glass Fine glass Solar energy Others profits Elimination Total
Revenue from external customers 2,622,251,060 2,621,145,354 926,008,392 823,511,170 184,200 1,257,853 - 6,994,358,029
Inter-segment revenue 658,231,113 10,350,686 107,068 33,314 - - (668,722,181) -
Interest Income 5,003,152 1,200,962 297,285 458,462 11,272 1,568,588 - 8,539,721
Interest expense (108,258,880) (31,931,109) (13,631,200) (52,125,069) - (29,475,125) - (235,421,383)
Asset impairment (losses)/reversal (139,984,318) (1,453,868) 472,129 (164,501,418) - (758,050) - (306,225,525)
Depreciation and amortisation (281,195,692) (148,194,140) (69,016,965) (133,754,231) (958) (163,832) 1,125,759 (631,200,059)
Total profit/(Losses) (13,557,738) 518,380,767 261,916,360 (338,644,062) 1,645,331 19,816,764 9,015,474 458,572,896
Income tax expenses (8,376,865) (79,121,435) (40,136,044) 50,026,501 - (11,158,297) - (88,766,140)
Net profit/(losses) (21,934,603) 439,259,332 221,780,316 (288,617,561) 1,645,331 8,658,467 9,015,474 369,806,756
Total assets 6,535,317,318 3,317,968,899 1,004,473,674 3,216,007,942 2,078,645 259,963,268 - 14,335,809,746
-
Total liabilities 1,737,699,928 1,141,795,336 193,535,436 1,047,433,757 4,475,211 2,942,675,318 - 7,067,614,986
-
Other non-cash expenses besides
depreciation and amortization charges 1,662,600 1,972,395 33,894 660,832 - 3,025,651 - 7,355,372
The increase in non-current assets other than
long-term equity investments 723,010,205 197,753,637 27,416,038 327,510,899 - 4,877,625 - 1,280,568,404
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CSG Annual Report 2013
Revenue from external customers derived from both mainland and other countries or areas and the total of non-current
assets other than financial instruments and deferred tax assets are analysed as below:
Revenue from external customers 2013 2012
Mainland 6,690,537,041 5,625,888,667
Hong Kong 294,007,546 421,363,444
Europe 302,596,199 554,904,401
Asia(other than Mainland and Hong Kong) 277,198,638 215,348,104
Australia 93,580,675 86,295,529
North America 55,770,796 74,377,968
Other regions 20,105,219 16,179,916
7,733,796,114 6,994,358,029
Non-current assets 2013 2012
Mainland 12,455,585,431 12,329,686,153
Hong Kong 12,848,333 13,921,797
Australia - 258,087
12,468,433,764 12,343,866,037
No revenue from a single customer exceeded 10% or more of the Group’s revenue.
7 Related party relationships and transactions
(1) The parent company
The Company has no parent company.
(2) The subsidiaries companies
The basic information of subsidiaries may be referred to Notes 4.
(3) Associates
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CSG Annual Report 2013
Type of Place of Legal Nature of the Registered Shareholding Proportion Organization
enterprise registration representative business capital ratio of votes code
(in ten
thousand)
Associate–
Joint Shenzhen,
Display Glass Venture the PRC Lu Wenhui Manufacturing 14,300 44.70% 44.70% 723033463
China Southern Glass Limited A.C.N.06430
(Australia) Limited Company Australia Zhang Jie Trading AUD 50 49.00% 49.00% 5639
The related party transactions with the associates above were sum up from the day when the group lost control of Display
Glass and China Southern Glass (Australia) Limited (Note4(4))..
(4) Related party transactions
(a) The purchase and sale of goods, provide and receive services
The purchase and sale of goods, provide and receive services
2013 2012
Proportion of Proportion of
Pricing of similar similar
Related party related party transactions transactions
Related party transactions transaction Amount accounted Amount accounted
With reference
Display Sales of to the market
Glass fine glass price 449,514 0.01% - -
China Southern Sales of With reference
Glass (Australia) architectural to the market
Limited glass price 6,397,245 0.08% - -
(b) Guarantee
Fulfilled Facilities
The guarantor The secured party Type Currency Amount Starting Date Due Date or not drawn down
(i)
CSG Company Display Glass Bank credit RMB 100,000,000 July 20, 2012 July 20 ,2014 No 30,000,000
CSG Company Display Glass Bank credit RMB 24,387,600 April 28, 2012 April 28, 2017 No -
CSG Company Display Glass Bank credit RMB 36,581,400 April 28, 2012 April 28, 2017 No -
CSG Company Display Glass Bank credit RMB 200,000,000 August 6, 2013 August 6, 2014 No 50,000,000
CSG Company Display Glass Bank credit RMB 300,000,000October 22, 2013 October 22, 2018 No -
CSG Company Display Glass Bank credit RMB 50,000,000October 22, 2013 October 22, 2014 No -
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CSG Annual Report 2013
(i)The drawn-down facilities occupied by Display Glass had been repaid in the year 2014. It would not occupy the facility
any longer.
(c) Taking back of advance payment for related party
2013 2012
Display Glass 436,613,233 -
(d) Key management personnel payroll
2013 2012
Payroll 6,688,500 5,440,903
Employee service cost relating to share based payment for
this year - 2,388,411
6,688,500 7,829,314
(e) Related receivables balance
31 December 2013 31 December 2012
Provision for bad Provision for bad
Amount debts Amount debts
Accounts
Receivable Display Glass 544,391 - - -
China Southern Glass
(Australia) Limited 3,653,741 - - -
4,198,132 - - -
Other
Receivable Display Glass 20,491,742 - - -
(i) The other receivable is the corporate bonds allocated to Display Glass by the CSG company. The receivable has
been settled in January 2014.
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CSG Annual Report 2013
8 Share-based payment
The transfer of equity had been approved by the fifth Board of Directors, and the Company signed an agreement with
Zhong Fu Sheng Entrepreneurship Investment Limited (hereinafter referred to as “Zhong Fu Sheng”)on 1 November, 2010
to transfer 9.55% equity interest in Display Glass held by the Company to Zhong Fu Sheng 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 Glass on 25 October 2010. The purpose of the establishment of the firm is to hold
the equity interest of Display Glass. There are 2 unlimited partners in the limited partnership enterprise, and the rest of the
partners are all limited partners. The unlimited partners include one key management of the Company.
Transaction above has been considered as equity-settled share-based payment to the staff, with the fair market value of
RMB 5,335,404, a price 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 this year was RMB692,644 (2011: RMB726,107).
9 Contingencies
There is no contingencies as at 31 December 2013.
10 Commitments
(1) Commitments relating to capital expenditure
As the balance sheet date, commitments relating to capital expenditure that has signed but not recognised in the financial
statement are analysed below:
31 December 2013 31 December 2012
Property, plant and equipment 589,482,656 525,561,856
(2) Fulfillment of previous commitment
The commitment relating to capital expenditures at 31 December 2012 has been fulfilled.
11 Discontinued operations
As stated in Note (4) above, after the completion of disposal of 19% equity interests in Display Glass and the capital
injection, the equity interests in Display Glass held by the Company reduced to 44.70%. The Company lost control over
Display Glass and its subsidiaries thereafter.
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CSG Annual Report 2013
On 16 July 2013, the Company signed an irrevocable transfer agreement with a third party - Truly Wealth Company, to
transfer 51% equity interests held in China Southern Glass (Australia) Limited to the third party.The transaction has been
completed on 13 December 2013 when the company lost control of China Southern Glass (Australia) Limited.
On 11 September 2013, the Company signed an irrevocable transfer agreement with a third party – Jinshidai Company ,
to transfer 100% equity interests held in Shenzhen CSG Float Glass Company Limited.The transaction is expected to be
completed by 2014. As at 31 December 2013, the company has received RMB450,000,000 as part of the price for the
consideration.
The operating results of the discontinued operations are shown as follows:
2013 2012
Income from discontinued operations 1,443,179,940 1,611,285,919
Less: Cost and expenses from discontinued operations (1,226,087,428) (1,369,943,353)
Profit before tax from discontinued operations 217,092,512 241,342,566
Less: Income tax expense from discontinued operations (31,024,434) (35,393,361)
Net profit from discontinued operations 186,068,078 205,949,205
Of which: Attributable to equity holders of the Company 112,812,253 133,928,642
12 Events after the balance sheet date
(a) Dividend distribution after the balance sheet date
Amount
Dividend authorized to declare 622,600,668
In accordance with the resolution at the Board of Directors’ meeting on 22 March 2014, the Board of Directors proposed a
dividend of RMB622,600,668 to be paid to the shareholders, which is not recorded as liability in the financial statements
for the current year.
(b) Issue of short term bonds
Approved by file No. [2014]CP11 of Inter Bank Market Trading Association, the Company issued short term bonds of RMB
500 million on 14 March 2014. The bonds will mature on March 14, 2015, with an annual interest rate of 5.65%.
13 Financial instrument and financial risks
The Group’s activities were exposed to a variety of financial risks: market risk (mainly comprise of currency risk and
interest rate risk), credit risk, and liquidity risk. The Group’s overall risk management focuses on the unpredictability of
financial markets and seeks to minimise potential adverse effects on the Group’s financial performance.
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CSG Annual Report 2013
(1) Market risk
(a) Currency risk
The Group mainly operates in the PRC, and most of the transactions are settled in RMB. However, overseas
business are settled in foreign currency. Besides, the foreign currency assets, liabilities and overseas
transactions are still exposed to currency risk. (Those foreign currency assets and liabilities are mainly
calculated in USD and EUR). The Group monitors the scale of foreign currency transactions, foreign currency
assets and liabilities, and adjust settlement currency of export business, to mostly reduce the currency risk.
As at 31 December 2013, financial assets and liabilities denominated in foreign currency held by the Group
are shown as below:
31 December 2013
Other
USD foreign currencies Total
Foreign Financial assets -
Cash at bank and on hand 14,432,704 4,532,123 18,964,827
Receivables 16,420,171 1,146,757 17,566,928
30,852,875 5,678,880 36,531,755
Foreign Financial liabilities -
Short-term borrowings 52,695,525 37,536,513 90,232,038
Payables 13,140,063 23,890,708 37,030,771
Long-term borrowings 6,270,784 - 6,270,784
Long-term borrowings due within 1 year 71,638,575 - 71,638,575
143,744,947 61,427,221 205,172,168
31 December 2012
Other
USD foreign currencies Total
Foreign Financial assets -
Cash at bank and on hand 32,845,653 18,236,989 51,082,642
Receivables 80,820,417 9,505,102 90,325,519
113,666,070 27,742,091 141,408,161
Foreign Financial liabilities -
Short-term borrowings 160,831,306 16,778,180 177,609,486
Payables 57,620,498 40,555,148 98,175,646
Long-term borrowings 73,279,627 - 73,279,627
Long-term borrowings due within 1 year 293,322,066 - 293,322,066
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CSG Annual Report 2013
585,053,497 57,333,328 642,386,825
At 31 December 2013, should RMB had appreciated/depreciated by10% against USD, with all other variables held
constant, net profit for the year would have increased or decreased at RMB 9,595,826. (31 December, 2012:
approximately RMB 37,573,400). For the changes of exchange rate in other foreign currency, the impact on the group's
business activities is not significant.
(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
adjusts the proportion of fixed interest rate debts and variable interest rate debts when the market
environment changed. As at 31 December 2013, the Group’s long-term interest-bearing debt at variable rates
and fixed rates as illustrated below:
31 December 2013 31 December 2012
Debt at fixed rates 1,991,041,175 1,986,624,288
Debt at variable rates 302,904,204 711,112,961
2,293,945,379 2,697,737,249
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 monitor 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.
On 31 December 2013, if the floating interest rates had been 50 basis higher/lower with all other variables held constant,
net profit for the year would have decreased or increased at RMB 1,287,342 (31 December, 2012:approximately
RMB2,162,987).
(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 believes that 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 believe 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,
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CSG Annual Report 2013
the Group will send payment reminders in written, shorten or cancel the credit period, etc. to ensure the Group’s entire
credit risk is 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.
As stated in note (2) above, on December 31, 2013, the Group had net current liabilities of approximately RMB 1,600
million and committed capital expenditures of approximately RMB 589 million. Management will implement the following
measures to manage the liquidation risk:
(a) The Group will have steady cash inflows from operating activities;
(b) The Group will pay the debts that mature and finance the construction projects through the existing bank facilities.
(c) The Group will closely monitoring the payment of construction expenditure in terms of payment time and amount.
The financial assets and liabilities of the Group at the balance sheet date are analysed by their maturity date below at their
undiscounted contractual cash flows :
31 December 2013
Within 1 year 1 to 2 years 2 to 5 years Over 5 years Total
Financial Assets
Cash at bank and on hand 279,672,523 - - - 279,672,523
Receivables 569,686,196 - - - 569,686,196
Financial assets available for
sale - - - 122,760,000 122,760,000
849,358,719 - - 122,760,000 972,118,719
Financial liabilities -
Short-term borrowings 1,442,478,875 - - - 1,442,478,875
Payables 1,604,631,381 - - - 1,604,631,381
Long-term borrowing due
410,672,685 - - 410,672,685
within 1year
Long-term borrowing 18,779,624 107,359,153 218,049,563 6,358,322 350,546,662
Bonds payable 106,600,000 2,106,600,000 - - 2,213,200,000
3,583,162,565 2,213,959,153 218,049,563 6,358,322 6,021,529,603
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CSG Annual Report 2013
31 December 2012
Within 1 year 1 to 2 years 2 to 5 years Over 5 years Total
Financial Assets
Cash at bank and on hand 474,421,278 - - - 474,421,278
Receivables 639,666,193 - - - 639,666,193
Financial assets available for
- - - 109,955,459 109,955,459
sale
1,114,087,471 - - 109,955,459 1,224,042,930
Financial liabilities -
Short-term borrowings 1,743,434,433 - - - 1,743,434,433
Payables 1,505,239,963 - - - 1,505,239,963
Long-term borrowing due
- - -
within 1year 487,343,086 487,343,086
Long-term borrowing 40,054,867 513,477,462 196,916,157 36,597,796 787,046,282
Bonds payable 106,600,000 106,600,000 2,106,600,000 - 2,319,800,000
3,882,672,349 620,077,462 2,303,516,157 36,597,796 6,842,863,764
(4) Fair value estimation
(a) Financial instruments not measured at fair value
Other than the available-for-sale financial asset, the Group’s financial assets and liabilities are 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:
31 December 2013 31 December 2012
carrying amount fair value carrying amount fair value
Interest-free government loans - - 68,634,600 64,749,623
Corporate Bonds(i) 1,991,041,175 1,985,000,000 1,986,624,288 1,993,800,000
1,991,041,175 1,985,000,000 2,055,258,888 2,058,549,623
(i)The fair value of Corporate Bond traded in active markets is determined on quoted market prices at the balance sheet
date.
(b) Financial instruments measured at fair value
Based on the lowest level input that is significant to the fair value measurement in its entirety, the fair value hierarchy are
divided into the following levels:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
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CSG Annual Report 2013
Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly
(that is, as prices) or indirectly (that is, derived from prices).
Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs)
As at 31 December 2013, the financial assets measured at fair value by the above three levels are analysed below:
Level 1 Level 2 Level 3 Total
Financial assets held for trading-
Available-for-sale equity
instruments 122,760,000 - - 122,760,000
As at 31 December 2013, the available-for-sale equity instrument is the investment in Golden Glass(Note5(8)), the fair
value is determined at the quoted price in the active market.
14 Measurement of assets and liabilities at fair value.
Profits and Changes in fair
losses on the value Impairment
31 December changes recognised in recognised in 31 December
2012 in fair value the equity current year 2013
Available-for-sale financial
assets 109,955,459 - 56,333,710 - 122,760,000
15 Financial asset and liabilities dominated in foreign currency
Profits and Changes in fair
losses on the value Impairment
31 December changes recognised in recognised in 31 December
2012 in fair value the equity current year 2013
Financial assets
- Foreign currency and
receivables 141,408,161 - - (1,455,171) 36,531,755
Financial liabilities
- borrowing and payables 642,386,825 - - - 205,172,168
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CSG Annual Report 2013
16 Notes to the Company’s financial statements
(1) Other receivables
31 December 2013 31 December 2012
Other receivables due by related parties 3,082,033,658 1,738,009,011
Equity transfer receivables - 15,000,000
Others 211,101 2,272,904
3,082,244,759 1,755,281,915
Less: provision for bad debts (4,222) (1,595,716)
3,082,240,537 1,753,686,199
(a) The aging of receivables is analysed below:
31 December 2013 31 December 2012
Within 1 year 3,082,244,759 1,753,939,542
1 year to 2 year - 532,028
Over 3 years - 810,345
3,082,244,759 1,755,281,915
(b) Other receivables classified as below:
31 December 2013 31 December 2012
Carrying amount Provision for bad debts Carrying amount Provision for bad debts
% of total Provision forProvision % of total Provision for Provision
Amount balance bad debts ratio Amount balance bad debts ratio
Individually significant and provided for bad
debts seperately - - - - - - - -
Individually not significant but provided for
bad debts seperately - - - - 810,345 0% (810,345) 100%
Provision for bad debts on a portfolio
- Related parties 3,082,033,658 100% - - 1,738,009,011 99% - -
- Non-related parties 211,101 0% (4,222) 2% 16,462,559 1% (785,371) 5%
3,082,244,759 100% (4,222) 0% 1,755,281,915 100% (1,595,716) 0.1%
(c) No other receivables are due by the shareholders have more than 5% (include 5%) of the company’s shares.
(d) The top five of other receivables at 31 December 2013 are analysed as below:
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CSG Annual Report 2013
Relationship with the
Group Amount Aging Proportion
Yichang CSG Polysilicon Co,. Ltd. Subsidiaries 1,096,901,550 Within one year 36%
Wujiang CSG Glass Co. Ltd Subsidiaries 430,087,556 Within one year 14%
Dongguan CSG Solar Glass Co,. Ltd. Subsidiaries 427,789,320 Within one year 14%
Hebei CSG Glass Co. Ltd. Subsidiaries 189,261,722 Within one year 6%
Xianning CSG Glass Co.Ltd Subsidiaries 179,845,299 Within one year 6%
2,323,885,447 76%
(e) Other receivable due by related parties are analysed as below:
31 December 2013 31 December 2012
Relationship with Impairment Impairmen
Related Party Name the company Amount Proportion provision Amount Proportion t provision
Yichang CSG Polysilicon Co,. Ltd. Subsidiaries 1,096,901,550 36% - 339,930,135 20% -
Wujiang CSG Glass Co. Ltd Subsidiaries 430,087,556 14% - 314,590,342 18% -
Dongguan CSG Solar Glass Co,. Ltd. Subsidiaries 427,789,320 14% - 206,538,547 12% -
Hebei CSG Glass Co. Ltd. Subsidiaries 189,261,722 6% - 229,953,248 13% -
Xianning CSG Glass Co.Ltd. Subsidiaries 179,845,299 6% - - 0% -
Chengdu CSG Glass Co. Ltd. Subsidiaries 167,589,914 5% - 238,371,792 14% -
Jiangyou CSG Mining Development Co. Subsidiaries
150,161,189 5% - 71,841,272 4% -
Ltd
Dongguan CSG Architectural glass Subsidiaries 132,543,669 4% - 32,716,372 2% -
Shenzhen CSG Display Technology Co,. Associate
20,491,742 1% - - - -
Ltd. Companies
Others Subsidiaries 287,361,697 9% - 304,067,303 17% -
3,082,033,658 100% - 1,738,009,011 100% -
(2) Long-term equity investments
31 December 2013 31 December 2012
Subsidiaries (Note (a)) 4,705,853,218 4,722,508,822
Associate Companies - no open market quotation(Note(b)) 315,767,981 -
Less: Impairment provision for investments in subsidiaries
(Note (a)) (55,000,000) (86,874,472)
4,966,621,199 4,635,634,350
The long-term investment of the Company are not subject to restriction on conversion into cash
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CSG Annual Report 2013
(a) Subsidiaries
Cash dividend
Accounting Impairment provision
Initial investment cost 31 December 2012 Deduction 31 December 2013 Impairment provision declared to
method Addition for this year
distribution
(i)
Shenzhen CSG Float Glass Co. Ltd Cost method 705,736,250 714,685,256 - - 714,685,256 - - -
Chengdu CSG Glass Co. Ltd. Cost method 99,514,360 116,964,656 - - 116,964,656 - - 120,312,354
Tianjin CSG Architectural Glass Co. Ltd Cost method 133,500,000 144,404,554 - - 144,404,554 - - 27,399,807
Tianjin Energy Conservation Glass Co. Ltd Cost method 96,000,000 98,498,420 - - 98,498,420 - - 58,374,264
Shenzhen CSG Display Technology Co. Ltd. (ii) Cost method 186,337,604 77,905,873 95,619,932 (173,525,805) - - - 61,476,403
Dongguan CSG Architectural Glass Co. Ltd Cost method 180,000,000 193,618,971 - - 193,618,971 - - 78,628,396
Dongguan CSG Solar Glass Co. Ltd Cost method 278,753,465 288,401,145 12,000,000 - 300,401,145 - - -
Yichang CSG Silicon Co. Ltd Cost method 562,489,000 577,043,114 - - 577,043,114 - - -
Yichang CSG photoelectric Glass Co. ltd Cost method 61,807,200 - 98,597,200 - 98,597,200 - - -
Wujiang CSG North-east Architectural Glass Cost method
Co. Ltd. 240,000,000 251,313,658 - - 251,313,658 - - 74,937,311
Dongguan CSG PV-tech Co. Ltd Cost method 301,276,564 308,122,789 - - 308,122,789 - - -
Hebei CSG Glass Co. Ltd. Cost method 253,354,574 261,998,368 - - 261,998,368 - - 17,113,115
CSG (Hong Kong) Co. Ltd. Cost method 81,664,761 85,742,211 - - 85,742,211 - - -
Wujiang CSG Glass Co. Ltd. Cost method 461,011,271 462,179,564 - - 462,179,564 - - 10,649,429
Hebei Shichuang Glass Co., Ltd. Cost method 243,000,000 243,062,801 - - 243,062,801 - - -
CSG (Australia) Co., Ltd Cost method 3,200,555 3,200,555 - (3,200,555) - - - 4,856,050
Jiangyou CSG Mining Development Co., Ltd Cost method 40,000,000 40,725,041 - - 40,725,041 - - -
Xianning CSG Co.,Ltd. Cost method 300,000,000 300,823,394 - - 300,823,394 - - -
Qingyuan CSG Energy saving new material Cost method 300,000,000 300,185,609 - - 300,185,609 - - -
others(iii) Cost method 253,150,319 253,632,843 - (46,146,376) 207,486,467 (55,000,000) - -
4,780,795,923 4,722,508,822 206,217,132 (222,872,736) 4,705,853,218 (55,000,000) - 453,747,129
(i) As at 31 December 2013, included in the investments in subsidiaries were deemed investment costs of RMB 112,679,926, 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. (2012:
126,016,750)
(ii) The company disposed part of the equity of Shenzhen CSG Display Technology Co. Ltd and CSG (Australia) Co., Ltd, so the effect on such companys turns from cotrol to
significant influence.The accounting method turns from cost method to equity method.
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CSG Annual Report 2013
(iii) Others mainly includes subsidiaries of architectural segment, which located in Shenzhen but the production lines have moved to Dong guan. The operations of the
subsidiaries have discontinued. The Company has made provision against the long term investment in these subsidiaries.
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CSG Annual Report 2013
(b) Associated enterprise
Movement
Influence of
Capital
Initial Cash dividend Net profit or loss Increased by
investment 31 Dec Additional announced to adjustment by other Other Equity 31 Dec
cost 2012 Additon Investment distribute euity method shareholders Movement 2013
(in RMB 10
thousand) (Notes16(5)(b) (Notes16(5)(c)
Shenzhen
CSG
Display
Technolo
gy Co. Ltd 18,633 - 205,870,941 95,619,932 (156,829,540) 96,098,102 72,990,513 624,329 314,374,277
CSG
(Australia)
Co., Ltd AUD24.5 - 5,250,128 - (4,665,617) 1,257,517 - (448,324) 1,393,704
- 211,121,069 95,619,932 (161,495,157) 97,355,619 72,990,513 176,005 315,767,981
Difference between
Shareholding ratio Provision addition
Accounting Shareholding Proportion of and Proportion of Provision for bad for impairment this
Method ratio votes votes debt year
Display Glass Equity Method 44.70% 44.70% NA - -
CSG (Australia) Co.,
Ltd Equity Method 49.00% 49.00% NA - -
- -
In the year 2013, the Group disposed part of the equity interests of Display Glass and CSG (Australia) Co., Ltd. The
Group lost control of Display Glass and CSG (Australia) Co., Ltd. The entities became the associates of the Group. From
1 January 2013, the rest of equity investment is measured under the equity method. Meanwhile, the share of net profit or
loss from the investment date to disposal date should be recycled to retained earnings. For the share of other movement
of owner’ s equity during the period from the date of investment till the beginning of this year , it should be adjusted to
captial reserved.
The adjustment of the year beginning equity is as follows:
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CSG Annual Report 2013
31 Dec 2012 Adjustment 1 Jan 2013
Paid-in capital 2,075,335,560 - 2,075,335,560
Capital surplus 1,418,767,193 8,132,135 1,426,899,328
Surplus reserve 678,216,577 14,545,360 692,761,937
Undistributed profits 1,018,740,912 130,908,240 1,149,649,152
5,191,060,242 153,585,735 5,344,645,977
(3) Long term receivables
31 December 2013 31 December 2012
Corporate bonds allocated to subsidiaries 1,571,900,000 1,779,250,000
Substantive long-term investment in subsidiaries 302,782,265 508,971,584
Trust loan to subsidiaries 120,000,000 140,000,000
1,994,682,265 2,428,221,584
Less: impairment provision (40,936,482) (146,797,154)
1,953,745,783 2,281,424,431
31 December Addition/ 31 December Addition of Deduction of
2012 (Deduction) 2013 Impairment Impairment
Chengdu CSG Glass Co.
Ltd 469,330,000 - 469,330,000 - -
Dongguan CSG PV-tech Co.
Ltd 330,210,000 10,000,000 340,210,000 - -
Yichang CSG Silicon Co. Ltd 244,960,000 - 244,960,000 - -
Dongguan CSG Architectural
Glass Co. Ltd. 219,670,000 - 219,670,000 - -
Shenzhen CSG Float Glass Co.
Ltd 216,000,000 - 216,000,000 - -
Wujiang CSG Glass Co,. Ltd. 200,000,000 - 200,000,000 - -
Dongguan CSG Solar Glass
Co. Ltd 147,560,000 - 147,560,000 - -
Wujiang CSG Huadong
Architectual Glass Co,. Ltd. 95,780,000 (19,881,738) 75,898,262 - -
Others 504,711,585 (423,657,582) 81,054,003 (40,936,482) -
2,428,221,585 (433,539,320) 1,994,682,265 (40,936,482) -
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CSG Annual Report 2013
The company recognises impairment provisions on the long term receivables based on the insolvency amount of the
subsidiaries.
(4) Other payables
31 December 2013 31 December 2012
Subsidiaries 378,952,280 813,388,215
Equity transfer deposit (Note(25)(ii)) 450,000,000 21,800,000
Others 892,508 7,414,926
829,844,788 842,603,141
(5) Investment income
2013 2012
Investment income from cost method (a) 453,747,129 704,243,103
Investment income from equity method(b) 97,355,619 -
Investment income on disposal of equity interest 475,884,759 110,299,416
Dividends from available-for-sale financial assets 331,344 276,120
1,027,318,851 814,818,639
Significant restrictions on repatriation of investment income do not exist.
(a) Investment income from cost method
Investment incomes from top five investees or amounted to over 5% of total profit are analysed as below:
2013 2012 Reason for the movement
Chengdu CSG Glass Co. Ltd. 120,312,354 134,151,975 Profit decreased
Dongguan CSG Architectual Glass
Co,. Ltd. 78,628,396 77,999,559 Profit increased
Wujiang CSG Huadong Architectual
Glass Co,. Ltd. 74,937,311 64,548,623 Profit increased
Shenzhen CSG Display Technology Accounting method changed from cost
Co. Ltd 61,476,403 163,949,736 method to equity method
Tianjin Energy Conservation
Glass Co. Ltd 58,374,264 94,175,425 Profit decreased
393,728,728 534,825,318
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CSG Annual Report 2013
(b) Investment income from equity method
Investment incomes from top five investees or amounted to over 5% of total profit are analysed as below:
2013 2012 Reason for the movement
Accounting method changed from cost method
Display Glass 96,098,102 - to equity method
CSG (Australia) Accounting method changed from cost method
Co., Ltd 1,257,517 - to equity method
97,355,619 -
(c) Investment income from transaction of equity interest
The investment income from transaction of equity interest mainly contains the income from the disposal of 19% of equity
of Shenzhen CSG Display Technology Co. Ltd and the income from the disposal of 49% of equity of CSG (Australia) Co.,
Ltd.The total income is RMB 402,894,215.
The other part of the investment income derived from the injection of capital from other shareholders of Display Glass. The
share of net asset the company entitled increased RMB 72,990,513, which means the investment income increase
RMB72,990,513.
Step 1 Transfer of equity shares interest
Shenzhen CSG
Display Technology CSG (Australia) Co.,
Total Co. Ltd Ltd
Disposal Price 426,413,663 424,980,000 1,433,663
Initial cost movement 67,041,508 63,840,953 3,200,555
Other equity movement 13,881,411 13,881,411 -
Total 80,922,919 77,722,364 3,200,555
Shareholing ratio before the disposal 67.47% 100.00%
The equity ratio of disposal 19.00% 51.00%
Investment cost 23,519,417 21,887,134 1,632,283
Investment income from disposal 402,894,246 403,092,866 (198,620)
Step 2 Capital Increase
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CSG Annual Report 2013
Display Glass
Net asset of the disposed company on disposal date 703,536,544
Shareholding after the capital injection 44.70%
The share of net assets in Display Glass after the capital injection A 314,480,835
The net asset of the disposed entity on disposal date 703,536,544
Less: Capital contributed by the company (95,619,932)
Capital contributed by other shareholder (306,966,767)
Net asset of Display Glass before the capital injection 300,949,845
The company’s shareholding before capital injection 48.47%
The share of net assets in Display Glass before the capital injection B 145,870,390
Less: Capital contributed by the company C (95,619,932)
The investment income from the disposal D=A-B-C 72,990,513
(6) Notes to the Company’s cash flow statements
(a) Reconciliation from the net profit to the cash flows from operating activities
2013 2012
Net profit 868,321,430 782,814,809
Add: Impairment of assets (781,149) 758,050
Depreciation of fixed assets 3,691,050 2,213,615
Amortisation of intangible assets 443,800 443,799
Amortisation of long term prepaid expenses 204,516 -
Losses on disposal of fixed assets and intangible assets 230,123 15,414
Finance expenses 41,096,973 17,429,842
Investment income (1,027,517,471) (814,818,639)
Value of employee service relating to share based payment - 3,025,651
Decrease in operating receivables 2,427,790 4,188,142
Decrease in operating payables 64,731,509 (50,633,197)
Net cash flows from operating activities (47,151,429) (54,562,514)
(b) Movement of the cash and cash equivalent
2013 2012
Cash at the end of the year 129,337,516 139,915,851
Less: Cash at the beginning of the year (139,915,851) (229,898,568)
Net decrease in cash (10,578,335) (89,982,717)
158
CSG Annual Report 2013
CSG HOLDING CO., LTD.
Supplemental information
1 Breakdown of non-recurring gains and losses
2013 2012
Gains and losses of disposal of non-current asset 136,459,236 (7,202,099)
Insurance indemnity (72,000,000) -
Government subsidy recognised as gains and losses (115,138,161) (89,424,440)
Gain from disposal of available for sales financial assets (432,000) (360,000)
Net gains from disposal of the equity interest (926,639,137) (71,306,374)
Other non-operating gains and losses (13,892,326) (15,477,992)
(991,642,388) (183,770,905)
Effect of coporate income tax 48,004,628 18,202,387
Effect of minority interest (after tax) 13,674,996 6,921,104
Total non-recurring gains and losses (929,962,764) (158,647,414)
(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 resulted from transactions/events which are not incurred by the operation of the entity,
or are incurred by the operation, but the amounts or the frequency of which 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
Earnings per share
Basic earning Dilute earning
Weighted average ROE (%) per share per share
2013 2012 2013 2012 2013 2012
Net profit attributable to common
stock shareholders 20.52% 4.04% 0.74 0.13 0.74 0.13
Net profit less Non-recurring gains
and losses attributable to common
stock shareholders 8.10% 1.71% 0.29 0.06 0.29 0.06
159
CSG Annual Report 2013
3 Description of significant movement of the main financial statement data of the Group
The financial statement line items which fluctuate is more than 30%(including 30%) compared with last year, or account
for 5% or more of total assets for balance sheet items, or 10% or more of total profit for income statement items are
analysed as below:
Items of balance sheet:
Increase/(Decrease)
31 December 2013 31 December 2012 Ratio Notes
amount
Cash at bank and on hand 279,672,523 474,421,278 (194,748,755) -41% (1)
Accounts receivable 136,430,683 276,814,461 (140,383,778) -51% (2)
Other receivables 109,366,023 63,047,384 46,318,639 73% (3)
Other current assets 1,021,464,095 167,499,349 853,964,746 510% (4)
Long-term equity investments 770,037,176 - 770,037,176 100% (5)
Fixed assets 7,979,937,683 9,418,430,703 (1,438,493,020) -15% (6)
Construction in progress 2,762,418,100 1,934,725,631 827,692,469 43% (7)
Development expenditure 9,881,310 3,610,292 6,271,018 174% (8)
Other non-current assets 6,510,000 51,858,632 (45,348,632) -87% (9)
Short-term borrowings 1,424,743,800 1,688,049,571 (263,305,771) -16% (10)
Notes payable 4,429,188 183,487,216 (179,058,028) -98% (11)
Employee benefits payable 166,377,238 104,895,290 61,481,948 59% (12)
Interest payable 60,767,534 35,091,990 25,675,544 73% (13)
Other payables 557,130,583 165,969,155 391,161,428 236% (14)
Other current liabilities 300,000 526,872 (226,872) -43% (15)
Long-term borrowings 302,904,204 711,112,961 (408,208,757) -57% (16)
Other non-current liabilities 432,364,880 287,373,063 144,991,817 50% (17)
Undistributed profits 3,803,574,842 2,665,777,580 1,137,797,262 43% (18)
Notes
(1) The decrease of the cash at bank and on hand was mainly due to the disposation of Shenzhen Display Technology
Co. Ltd , which changed the scope of consolidation.
(2) The decrease of the accounts receivable was mainly due to the disposation of Shenzhen Display Technology Co.
Ltd , which changed the scope of consolidation.
(3) The increase of the other receivables was maily due to the insurance indemnity which is cause by the fire accident of
the Dongguan CSG PV tech co ,ltd .
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CSG Annual Report 2013
(4) Other current assets increase because the group reclassified the non-current assets of Shenzhen CSG float glass
Co, Ltd as non-current assets held for sale in current assets .
(5) Long-term equity investments increases was mainly due to the company disposed part of the equity share interest
of Shenzhen CSG Display Technology Co. Ltd. The company lost the control of Shenzhen CSG Display Technology
Company ,the long-term equity investments accouting method turns from cost method to equity method.
(6) The fixed asset decrease was mainly attributable to Shenzhen CSG floating glass turns fix asset to non-current
assets held for sale.
(7) Construction in progress increases was mainly attributable to the propulsion of projects such as Yichang
polycrystalline silicon technical project , Wujiang energy glass expansion project and Yichang photoelectric project.
(8) Development expenditure increases was mainly due to the company expand research activities.
(9) Other non-current assets decreases was maily attributable to the settlement of accounts for the purchase of Yichang
photoelectric company and other engineering prepayment.
(10) Short-term borrowings decreases was mainly due to the disposation of Shenzhen Display Technology Co. Ltd ,
which changed the scope of consolidation.
(11) Notes payable decreases was because the company changes the settlement way with suppliers.
(12) Employee benefits payable increases was because the company take the provision for the management
performance incentive funds this year.
(13) Interest payable increases was mainly because the company issued the short-term financing bonds this year
(14) Other payable increases was mainly attributable to the advanced payment for the equity transfer price of Shenzhen
float glass company.
(15) Other current liabilities decreases was mainly due to the reduce of contingencies.
(16) Long-term borrowings decreases was mainly because the company reclassfication part of long-term borrowings to
current portion of non-current liabilities.
(17) Other non-current liabilities increases was mainly because of the propulsion of CSG golden sun project.
(18) Undistributed profits increases was mainly because the profit for this year increases.
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CSG Annual Report 2013
Income statement items:
31 December 2013 31 December 2012 Increase/(Decrease) amount Ratio Notes
Revenue 7,733,796,114 6,994,358,029 739,438,085 11% (19)
Asset impairment losses (64,366,228) (306,225,525) 241,859,297 -79% (20)
Investment income 927,376,139 71,666,374 855,709,765 1194% (21)
Non-operating income 216,687,514 115,574,538 101,112,976 87% (22)
Non-operating expenses (152,116,263) (3,470,007) (148,646,256) 4284% (23)
Income tax expenses (259,864,490) (88,766,140) (171,098,350) 193% (24)
Other comprehensive income 6,903,489 (5,981,466) 12,884,955 -215% (25)
Notes:
(19) The increase in operating revenue this year was mainly due to the increase of unit selling price of some of the
products compared to the last year, affected by the macro-economic environment.
(20) Asset impairment loss increase because Group's subsidiaries accrued impairment provision on long-term assets last
year and for this year such matters did not happen again.
(21) The investment income increases was mainly due to the disposal of equity interest of Shenzhen Display Technology
Co. Ltd and the value added through the assessment for the rest equity of Shenzhen Display Technology
Company held by the company.
(22) The increase of non-operating income was mainly due to government grant and insurance indemnity.
(23) The increase of non-operating expenses was mainly attributable to the loss on disposal of non-current assets.
(24) The increase of income tax expense was mainly due to the increase of profit before tax this year.
(25) The increase of other comprehensive income was mainly attributable to the increase of market price of available for
sale financial assets.
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CSG Annual Report 2013
Section XI. Documents available for Reference
I. Text of the Annual Report carrying the legal representative’s signature;
II. Text of the financial report carrying the signatures and seals of the legal representative, C.F.O and person in
charge of financial organization;
III. Original of the Auditors’ Report carrying the seal of PricewaterhouseCoopers Zhongtian LLP and the
signatures and seals of the certified public accountants;
IV. All texts of the Company’s documents and original public notices disclosed in the website and papers
appointed by CSRC in the report period.
Board of Directors of
CSG Holding Co., Ltd.
25 March 2014
163
