CSG HOLDING CO., LTD.
ANNUAL REPORT 2014
Chairman of the Board:
ZENG NAN
March 2015
CSG Annual Report 2014
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 facticity, accuracy and
completeness of the whole contents.
Except for the follow director, others are present the meeting of the Board for deliberating the
annual report of the Company in person.
Name of director absent Position Reason for absence Name of authorized director
Li Jingqi Director On business Chen Chao
The deliberated and approved profit distribution plan in the Board Meeting is: taking total shares of
31 December 2014 as the radix, sending cash dividends of RMB 5.0 (tax included) per 10 shares to
all shareholders, neither bonus shares being sent, nor converting capital reserve into share capital.
Mr. Zeng Nan, Chairman of the Board, CFO Mr. Luo Youming and principal of the financial
department Mr. Zhang Guoming confirm that the Financial Report enclosed in this 2014 Annual
Report is true and complete.
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.
1
CSG Annual Report 2014
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 ............................................................................................................................... 31
Section VI. Changes in Shares and Particulars about Shareholders.............................................................. 38
Section VII. Particulars about Directors, Supervisors and Senior Executives and Employees ................... 44
Section VIII. Corporate Governance ................................................................................................................... 51
Section IX. Internal control .................................................................................................................................. 57
Section X. Financial Report .................................................................................................................................. 59
Section XI. Documents available for Reference ................................................................................................ 161
2
CSG Annual Report 2014
Paraphrase
Items Refers to Contents
Company, the Company, SG or the Group Refers to CSG Holding Co., Ltd.
Ultra-thin electronic glass Refers to The electronic glass with thickness between 0.1~1.1mm
Second-generation energy-saving glass Refers to Double silver coated glass
Third-generation energy-saving glass Refers to Triple Silver coated glass
3
CSG Annual Report 2014
Major risk warning
Existing industry 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.
4
CSG Annual Report 2014
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
CSG Building, No.1 of the 6th Industrial
Contacts add.
Road, Shekou, Shenzhen, P. R.C.
Tel. (86)755-26860666
Fax. (86)755-26860641
E-mail 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
5
CSG Annual Report 2014
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, PricewaterhouseCoopers Center., 202 Hubin Road. Shanghai, P.R.C.
Signing Accountants Yao Wenping, Yang Hua
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
6
CSG Annual Report 2014
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
2013 2012
2014 last year (%)
Before adjusted After adjusted After adjusted Before adjusted After adjusted
Operating income
7,044,502,645 7,733,796,114 7,733,796,114 -8.91% 6,994,358,029 6,994,358,029
(RMB)
Net profit attributable to
shareholders of the 873,653,030 1,535,929,739 1,535,929,739 -43.12% 274,746,219 274,746,219
listed company(RMB)
Net profit attributable to
shareholders of the
listed company after 438,889,847 605,966,975 605,966,975 -27.57% 116,098,805 116,098,805
deducting non-recurring
gains and losses(RMB)
Net cash flow arising
from operating 1,406,259,210 1,698,867,535 1,698,867,535 -17.22% 1,725,795,529 1,725,795,529
activities(RMB)
Basic earnings per share
0.42 0.74 0.74 -43.24% 0.13 0.13
(RMB/Share)
Diluted earnings per
0.42 0.74 0.74 -43.24% 0.13 0.13
share (RMB/Share)
Return on Equity (%) 10.61% 20.52% 20.52% -9.91% 4.04% 4.04%
Changes over
End of 2013 end of last year End of 2012
End of 2014
(%)
Before adjusted After adjusted After adjusted Before adjusted After adjusted
Total assets (RMB) 15,116,808,305 15,078,866,777 15,078,866,777 0.25% 14,335,809,746 14,335,809,746
Net assets attributable to
shareholder of listed
company (Owners’
8,348,561,765 8,047,894,139 8,047,894,139 3.74% 6,816,210,753 6,816,210,753
equity attributable to
shareholder of listed
company ) (RMB)
7
CSG Annual Report 2014
II. Items and amounts of extraordinary profit (gains)/loss
Unit: RMB
Item Amount in 2014 Amount in 2013 Amount in 2012 Note
Gains/losses from the disposal of non-current asset (including the
-17,722,782 -136,459,236 7,202,099 --
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
90,223,936 115,138,161 89,424,440 --
national standards, which are closely relevant to enterprise’s
business)
Gains on disposal of available-for-sale financial assets, gains and
losses from change of fair values of held-for-transaction financial
assets and financial liabilities except for the effective hedge
7,010,790 432,000 360,000 --
business related to normal business of the Company, and
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
14,816,694 85,892,326 15,477,992 --
aforementioned items
Other gains/losses satisfied definition of extraordinary profit
389,101,151 926,639,137 71,306,374 --
(gains)/loss
Less: Impact on income tax 20,318,806 48,004,628 18,202,387 --
Impact on minority shareholders’ equity (post-tax) 28,347,800 13,674,996 6,921,104 --
Total 434,763,183 929,962,764 158,647,414 --
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 100% equity of Shenzhen CSG
definition of extraordinary 311,247,064
Float Glass Co., Ltd.
profit (gains)/loss
Confirmed by State Taxation Bureau of Shuangliu County, Chengdu
CSG Glass Co., Ltd. applied to a preferential income tax rate of 15%
Other gains/losses satisfied
which stipulated in west development policies for encouraging the
definition of extraordinary 77,854,087
enterprises, therefore the enterprise income taxes which were paid at
profit (gains)/loss
original tax rate of 25% in 2011, 2012 and 2013, were adjusted for
final settlement in 2014.
8
CSG Annual Report 2014
Section IV Report of the Board of Directors
I. Introduction
In 2014, when six years has passed since the outbreak of global financial crisis, the global economy remained uncertain.
Development of the major economies was uneven, and emerging economies confronted with challenge from decrease of growth. The
economic recovery was still rough due to lots of uncertain factors, though the economy of advanced economies headed by America
showed a sign of slow recovery. Being influenced by many factors, such as real estate industry adjustment, structural transformation
of economy, insufficient demand as well as over capacity, Chinese economy also challenged by the problems as decline in investment
growth, obvious constraint of financing, relevant industries moving downward obviously, and enterprise operating difficulties. Under
the complicated and varying market condition, the Company responded actively to the adverse impact from market environment
through industrial transformation and upgrade, innovation, construction of expertise team, refined management, comprehensive
energy management, cost management and strict control of operating risks. Meanwhile, the Company constantly took the route of
differential operation and industry upgrading relying on R&D and technology innovation, and continued to strengthen construction of
R&D system and R&D ability. Totally 133 patent applications were submitted by the Company in 2014, and new 39 patent
applications were granted (12 of which were invention patents). Currently, the Company owes 234 authorized patents in total, 56
invention patents included, which account for 24%. Due to the overall loss in float glass industry and shares of the fine glass held by
CSG reduced and the profit of fine glass industry declined as well, CSG implemented revenue of RMB 7,045 million in 2014 with a
year-on-year decline of 8.91%, while a year-on-year increase of 2% after deducting the effect of fine glass. Meanwhile, due to the
overall loss in float glass industry and decline of return on investment as well as influence of fine glass mentioned above, the net
profit attributable to parent company was RMB 874 million. After deducting non-recurring gains and losses, the net profit attributable
to parent company was RMB 439 million with a year-on-year decline of 27.57%.
In 2014, affected by adjustment of real estate and over capacity, float glass industry suffered a greater impact. As the price of float
glass keeping downside and the cost of soda ash and gas retaining upside, the pressure on float industry became more and more
intensified and the whole industry was in the state of poor performance. To cope with unfavorable market environment, flat glass
division of the Company upgraded the old lines which were not competitive after assessing the existing production lines and
continued to reinforce cost control, energy-saving, and promote the manufacture and sales of differentiated and high-grade products.
In 2014, flat glass division achieved revenue of RMB 3,668.29 million (deducted connected transaction) with a year-on-year decline
of 7.71%, and profit of RMB 233.97 million with a year-on-year decline of 21.30%.
In 2014, there was a slowdown in market demand of architectural glass due to adjustment of real estate market, meanwhile, as
homogeneous competition intensified, sales and profit of conventional products were affected. Architectural glass division of the
Company maintained a steady growth through strengthening management, proactively promoting the sales of differentiate products,
such as double-silver and triple-silver products and speeding up the operation of new production capacity. In 2014, architectural glass
division gained revenue of RMB 3,053.75 million (deducted connected transaction) with a year-on-year growth of 6.39% and net
profit of RMB 514.37 million with a year-on-year growth of 14.02%.
In 2014, PV market was still in its slump under double pressure of over capacity and trade protection from Europe & America. In
order to cope with severe market surrounding, the Company conducted a comprehensive transformation of polysilicon production
line in order to greatly lower the production cost and improve the competitiveness of products. The upgraded polysilicon production
9
CSG Annual Report 2014
line entered commercial operation in June 2014. Polysilicon and related products contributed profit of approximately RMB 50
million to the Company in 2014. In 2014, PV industry realized revenue of RMB 1102.95 million (deducted connected transaction),
and profit of RMB 57.35 million, while deficit of approximately RMB 20 million at the same period of last year.
II. Main business analysis
1. Introduction
Unit: RMB
Range of
Items 2014 2013 Reasons and Analysis
Change
Mainly because Shenzhen CSG Display was excluded in
Revenue 7,044,502,645 7,733,796,114 -8.91% the consolidation scope of the Group due to part of the
equity was sold at the end of last year.
Mainly because Shenzhen CSG Display was excluded in
Operating cost 5,323,219,390 5,501,300,657 -3.24% the consolidation scope of the Group due to part of the
equity was sold at the end of last year.
Sales expenses 265,720,355 267,394,775 -0.63% --
Mainly because Shenzhen CSG Display was excluded in
Administrative expenses 597,772,089 671,321,260 -10.96% the consolidation scope of the Group due to part of the
equity was sold at the end of last year.
Including: R&D
182,975,076 179,879,478 1.72% --
expenditure
Financial expenses 231,531,434 238,321,702 -2.85% --
Mainly because Shenzhen CSG Display was excluded in
Net cash flow from
1,406,259,210 1,698,867,535 -17.22% the consolidation scope of the Group due to part of the
operating activities
equity was sold at the end of last year.
Mainly because Shenzhen CSG Display was excluded in
Net cash flows from
-899,601,189 -1,052,078,756 -14.49% the consolidation scope of the Group due to part of the
investing activities
equity was sold at the end of last year.
Net cash flows from Mainly due to increase of bank loan and investment from
-626,284,428 -817,587,745 -23.40%
financing activities minority shareholders absorbed in the report period.
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:
①In 2014, the Company successfully carried out various tasks as scheduled. With completion of industrial layout, the Company
actively promoted industrial upgrading. In the fields of energy-saving glass and flat glass, construction of Wujian CSG 650T/D solar
rolled glass project and Xianning phase II of production capacity expansion project of architectural energy-saving glass were
completed and entered into trial or commercial operation. Construction of Dongguan on-line reflective glass production line and
Chengdu phase III of production capacity expansion project of energy-saving glass will be completed as well. In the field of
ultra-thin glass, Yichang ultra-thin glass project will enter into commercial operation soon, and Qingyuan high-performance
ultra-thin glass project ignited at the beginning of 2015 and went into trial operation; In the field of solar photovoltaic, Yichang CSG
Polysilicon project with production capacity of 6000 tons has completed technological transformation and entered commercial
10
CSG Annual Report 2014
operation. After technological upgrading, production cost of polysilicon has dramatically decreased. The completion of these projects
laid firm foundation for future development of the industries of CSG and effectively strengthened CSG’s comprehensive strength.
②Confronted with severe economic market conditions, the Company constantly took the route of differential operation and industry
upgrading relying on R&D and technology innovation, and continued to strengthen construction of R&D system and ability. In 2014,
the Company submitted 133 patent applications in total, and 39 of which were successfully granted with patent authorization (12 of
which were invention patents), representing best performance in terms of number of patents applications and invention patent
applications. As the breakthrough of the traditional industry, ultra-thin electronic glass continued to diversify its product line. In
particular, the Company realized bulk production of ultra-thin glass of 0.55mm, the quality and yield of which have reached the
advanced level in China. Currently, Yichang ultra-thin glass production line has realized bulk production for ultra-thin glass of
0.33mm and will be put into commercial operation soon. Along with the successive operation of ultra-thin glass production lines, the
Company will also become the ultra-thin electronic glass supplier with the most diversified product lines in this field. In the field of
traditional flat glass, the Company required to fully improve differential operation of flat glass, actively promote production and sales
of differential products while insisting on innovation, aiming to keep profitability of the industry by virtue of differential products
with high quality, thus the production and sales of differential products greatly increased. Besides, the Company realized bulk
production of 2mm solar energy glass, bringing new point of profit growth. In the field of architectural glass, the Company continued
to launch and promote unique new products by taking good use of its advantage in coating technology. According to the requirement
of noise reduction and energy saving of existing building, the Company commenced research and development for ultra-thin paste
glass which enabled the existing buildings to reduce noise and save energy obviously without adoption of insulating energy-saving
glass. Currently, this product is in the stage of market development, and the Company actively improved the feature of the product
based on market response. This product will open up vast market space for the energy-saving glass industry. Differential and
innovative products ensured steady growth of profit for architectural glass industry. The solar industry coped with the trough of
industry with technology innovation, the R&D and production of high-efficiency silicon wafer of which taking the leading position in
domestic market. Meanwhile, with completion of polysilicon technological transformation project, comprehensive anti-risk ability of
PV industry improved.
③The Company used lean management as an important means to keep profitability, the Company fully tapped the potentials of
energy saving in the production process while effectively improved capacity utilization, and controlled cost as much as possible.
Besides, the Company has made lots of efforts in the integrated energy management. In 2014, waste heat power generation of the
Company amounted to approximately 150 million kwh and PV power generation amounted to approximately 40 million kwh,
reducing cost of electricity of nearly RMB 55 million.
④The Company continued to enhance working capital management, improving the efficiency of funds use through reducing
occupation of funds. With the joint efforts from subsidiaries, the Company’s accounts receivable turnover period was 12 days, and
inventory turnover period was 26 days. Operating risks were under effective control by improving efficiency of working capital.
⑤The 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 2014, the Company generally defined specific posts and responsibilities, defined salary range,
conducted overall performance assessment, optimized staff structure and improved management efficiency. In the aspect of internal
control construction, the Company constantly strengthened implementation of internal control system through strict appraisal and
inspection, and further reinforced supervision of solving problems encountered during the implementation.
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 the report period, operation revenue reduced compared with the same period of last year. It’s mainly because Shenzhen CSG
11
CSG Annual Report 2014
Display was excluded in the consolidation scope of the Group due to part of the equity was sold at the end of last year. Deducting the
effect of Shenzhen CSG Display, operation revenue of RMB 139.98 million increased compared with last year, mainly because
technical transformation of Yichang polysilicon had completed and realized sales, as well as product sales of architectural glass
industry increased compared with the same period of last year.
Whether income from physical sales larger than income from labors or not
√ Yes □ No
Unit: RMB
Industries Item 2014 2013 Increase/decrease y-o-y (%)
Sales 3,618,711,310 3,958,217,805 -8.58%
Flat glass industry Output 3,097,562,963 3,112,857,799 -0.49%
Inventory 95,196,551 90,253,902 5.48%
Sales 3,028,041,544 2,854,745,532 6.07%
Architectural glass
Output 2,052,558,769 1,972,836,273 4.04%
industry
Inventory 52,710,420 59,892,430 -11.99%
Sales 1,087,053,989 945,054,866 15.03%
Solar energy industry Output 899,703,806 752,874,808 19.50%
Inventory 18,469,741 9,661,010 91.18%
Reasons for y-o-y relevant data with over 30% changes
√Applicable □ Not applicable
Inventory of solar energy industry increased because Yichang polysilicon had entered commercial operation.
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) 1,076,067,815
Proportion in total annual sales for top five clients (%) 15.28%
Information of top five clients of the Company
√Applicable □Not applicable
Serial Name Sales (RMB) Proportion in total annual sales (%)
1 Client A 336,432,649 4.78%
2 Client B 267,656,086 3.80%
3 Client C 211,920,095 3.01%
4 Client D 136,605,682 1.94%
5 Client E 123,453,303 1.75%
Total -- 1,076,067,815 15.28%
12
CSG Annual Report 2014
3. Cost
Industry classification
Unit: RMB
2014 2013
Industry Y-o-y changes
Item Ratio in operation Ratio in operation
classification Amount Amount (%)
cost (%) cost (%)
Raw material 1,150,497,379 37.20% 1,167,991,269 37.63% -1.50%
Labor wages 160,023,845 5.17% 157,054,361 5.06% 1.89%
Flat glass
Depreciation 312,546,188 10.11% 283,818,813 9.14% 10.12%
industry
Energy 1,342,693,325 43.42% 1,304,509,562 42.02% 2.93%
Other 126,859,577 4.10% 190,908,044 6.15% -33.55%
Raw material 1,358,376,961 65.95% 1,298,813,030 66.37% 4.59%
Labor wages 234,838,620 11.40% 229,253,406 11.71% 2.44%
Architectural
Depreciation 190,722,576 9.26% 166,462,367 8.51% 14.57%
glass industry
Energy 186,885,094 9.07% 179,228,596 9.16% 4.27%
Other 88,917,528 4.32% 83,199,943 4.25% 6.87%
Raw material 414,819,155 46.56% 648,806,733 79.64% -36.06%
Labor wages 69,420,188 7.79% 54,258,238 6.66% 27.94%
Solar energy
Depreciation 116,261,630 13.05% 47,487,861 5.83% 144.82%
industry
Energy 266,292,039 29.89% 42,093,169 5.17% 532.63%
Other 24,102,063 2.71% 22,027,605 2.70% 9.42%
Product classification
Unit: RMB
2014 2013
Product Y-o-y changes
Item Ratio in operation Ratio in operation
classification Amount Amount (%)
cost (%) cost (%)
Raw material 1,150,497,379 37.20% 1,167,991,269 37.63% -1.50%
Labor wages 160,023,845 5.17% 157,054,361 5.06% 1.89%
Flat glass Depreciation 312,546,188 10.11% 283,818,813 9.14% 10.12%
Energy 1,342,693,325 43.42% 1,304,509,562 42.02% 2.93%
Other 126,859,577 4.10% 190,908,044 6.15% -33.55%
Raw material 1,358,376,961 65.95% 1,298,813,030 66.37% 4.59%
Architectural Labor wages 234,838,620 11.40% 229,253,406 11.71% 2.44%
glass Depreciation 190,722,576 9.26% 166,462,367 8.51% 14.57%
Energy 186,885,094 9.07% 179,228,596 9.16% 4.27%
13
CSG Annual Report 2014
Other 88,917,528 4.32% 83,199,943 4.25% 6.87%
Raw material 414,819,155 46.56% 648,806,733 79.64% -36.06%
Labor wages 69,420,188 7.79% 54,258,238 6.66% 27.94%
Solar energy
Depreciation 116,261,630 13.05% 47,487,861 5.83% 144.82%
product
Energy 266,292,039 29.89% 42,093,169 5.17% 532.63%
Other 24,102,063 2.71% 22,027,605 2.70% 9.42%
Explanation
Nil.
Main suppliers of the Company
Total purchase amount from top five suppliers (RMB) 1,362,964,119
Proportion in total annual purchase amount for top five suppliers (%) 25.89%
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 were not over 30%. Income tax
reduced 83.14%, mainly because some subsidiaries which had qualification for high-tech enterprises applied to preferential tax rate
and Chengdu Float Glass and Sichuan Energy-saving enjoyed preferential tax rate adjustment of the development of the western
region caused by adjusted in the early part of last year.
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 2014 amounted to RMB 208.14 million in total, and
accounted for 2.49% and 2.95% in net assets and operation revenue of the Company respectively.
6. Cash flow
Unit: RMB
Item 2014 2013 Y-o-y changes (%)
Subtotal of cash in-flow from operation activities 8,272,984,129 9,208,299,739 -10.16%
Subtotal of cash out-flow from operation activities 6,866,724,919 7,509,432,204 -8.56%
Net cash flow from operation activities 1,406,259,210 1,698,867,535 -17.22%
Subtotal of cash in-flow from investment activities 1,073,874,633 1,215,295,555 -11.64%
Subtotal of cash out-flow from investment activities 1,973,475,822 2,267,374,311 -12.96%
Net cash flow from investment activities -899,601,189 -1,052,078,756 -14.49%
Subtotal of cash in-flow from financing activities 5,040,721,840 3,627,868,640 38.94%
Subtotal of cash out-flow from financing activities 5,667,006,268 4,445,456,385 27.48%
Net cash flow from financing activities -626,284,428 -817,587,745 -23.40%
Net increase of cash and cash equivalent -119,612,608 -171,285,668 -30.17%
Reasons for y-o-y relevant data with over 30% changes
14
CSG Annual Report 2014
√Applicable □Not applicable
Cash in-flow& out-flow from financing activities increased mainly because the cash received from the loan and the cash paid to loan
increase in financing activities, while the net loan decreased compared with the same period of last year.
Increase of cash and cash equivalent kept less than the same period of last year, mainly because the Company strengthened the
control of monetary fund through reducing its tie up fund and speeding up turnover fund.
Reasons of major difference between the cash flow from operation activities in report period and net profit of the Company
√Applicable □Not applicable
Net profit 939,764,732
Add: Assets impairment provision 25,270,581
Depreciation of fixed assets 698,205,192
Amortization of intangible assets 31,158,918
Safe production expenses 3,007,776
Employee’s remuneration determined by share-base -
Net loss on disposal of fixed assets and intangible assets 17,722,782
Income of insurance compensation -
Financial expenses 217,685,313
Investment income -328,439,649
Decrease of deferred income tax asset 14,279,079
Decrease of deferred income tax liability -403,566
Increase of inventory -10,655,715
Increase of operating receivable accounts -62,612,305
Decrease of operating receivable accounts -138,723,928
Net cash flow arising from operating activities 1,406,259,210
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 3,618,711,310 3,092,620,314 14.54% -8.58% -0.38% -7.03%
Architectural glass industry 3,028,041,544 2,059,740,779 31.98% 6.07% 5.25% 0.53%
Solar energy industry 1,087,053,989 890,895,075 18.05% 15.03% 9.36% 4.25%
Off-setting between -758,024,336 -760,724,902
15
CSG Annual Report 2014
divisions
According to products
Flat glass 3,618,711,310 3,092,620,314 14.54% -8.58% -0.38% -7.03%
Architectural glass 3,028,041,544 2,059,740,779 31.98% 6.07% 5.25% 0.53%
Solar energy products 1,087,053,989 890,895,075 18.05% 15.03% 9.36% 4.25%
Off-setting between
-758,024,336 -760,724,902
divisions
According to areas
Mainland China 6,335,795,910 4,806,029,913 24.14% -4.30% 1.29% -4.19%
H.K. China 33,952,873 23,040,307 32.14% -88.43% -86.22% -10.90%
Europe 132,787,154 109,213,427 17.75% -56.12% -55.67% -0.83%
Asia (excluding Mainland
304,252,167 233,760,171 23.17% 9.76% 19.44% -6.23%
China and H.K.)
North America 81,199,816 56,867,626 29.97% 45.60% 42.27% 1.64%
Australia 85,052,465 51,302,339 39.68% -9.11% -14.25% 3.61%
Other region 2,742,122 2,317,483 15.49% -86.36% -86.23% -0.79%
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
IV. Assets and liability analysis
1. Major changes of assets
Unit: RMB
End of 2014 End of 2013
Ratio in Ratio in Ratio
total total changes Notes of major changes
Amount Amount
assets assets (%)
(%) (%)
Cash at bank Mainly because the turnover of funds speeded up this
158,139,050 1.05% 279,672,523 1.85% -0.80%
and on hand year.
Mainly because operation revenue increased deducting
Accounts fine glass industry, and Wujiang solar energy project
318,274,574 2.11% 136,430,683 0.90% 1.21%
receivable entered commercial operation led the account
receivable increased slightly.
Inventories 390,652,618 2.58% 378,684,712 2.51% 0.07% --
Long-term
equity 751,623,543 4.97% 770,037,176 5.11% -0.14% --
investments
Mainly because construction of some subsidiaries had
Fixed assets 9,851,117,915 65.17% 7,979,937,683 52.92% 12.25%
completed and construction in progress of these
16
CSG Annual Report 2014
subsidiaries were transferred into fixed assets.
Mainly because construction of some subsidiaries had
Construction
1,934,595,736 12.80% 2,762,418,100 18.32% -5.52% completed and construction in progress of these
in progress
subsidiaries were transferred into fixed assets.
2. Major changes of liability
Unit: RMB
End of 2014 End of 2013
Ratio in Ratio in Ratio
total total changes Notes of major changes
Amount Amount
assets assets (%)
(%) (%)
Short-term
1,957,123,175 12.95% 1,424,743,800 9.45% 3.50% Mainly because more short-term financing bills issued.
borrowings
Long-term
383,817,820 2.54% 302,904,204 2.01% 0.53% --
borrowings
Non-current
Mainly because payable bond which will mature in
liabilities
2,119,066,755 14.02% 399,849,715 2.65% 11.37% Oct. 2015 was reclassified as non-current liabilities
due within
due within one year.
one year
3. Assets and liability measured by fair value
√Applicable □Not applicable
Unit: RMB
Gains/losses Accumulative
Amount at from changes of fair Impairment Purchased Amount on Amount at
Item
period-begin changes of value reckoned accrual amount sale period-end
fair value into equity
Financial assets
Financial assets available
122,760,000 59,886,100 37,078,000 145,568,100
for sale
Subtotal of financial assets 122,760,000 59,886,100 37,078,000 145,568,100
Total 122,760,000 59,886,100 37,078,000 145,568,100
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. 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.
17
CSG Annual Report 2014
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 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 report period, the Company's core competitiveness remains strong.
VI. Investment analysis
1. External equity investment
(1) External investment
√Applicable □Not applicable
external investment
Amount invested in 2014 (RMB) Amount invested in 2013 (RMB) Changes
18,361,667 23,000,000 -20.17%
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 6.65%
(2)Statement on holding shares of other listed company
The Company held 14,370,000 shares of Golden Glass and had 6.65% voting rights. Directors and key managers of Golden Glass are
not appointed by the Company, the Company doesn’t participate or impact finance and operation decision-making or routine
operation activities of Golden Glass in other way, thus, the Company shows no major influence on Golden Glass, so the shares held
by the Company was calculated as equity instrument available for sale.
In the report period, the Company sold 3,630,000 shares of Golden Glass and the return on investment was RMB 6,912,150.
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)
Development,
RMB
Chengdu CSG Glass manufacture and
Subsidiary Manufacturing 166.66 891,128,447 390,826,124 849,743,395 45,021,894 98,227,937
Co., Ltd. sales of float glass
million
products and deep
18
CSG Annual Report 2014
processing of glass
Development,
Sichuan CSG manufacture and RMB
Energy-saving Glass Subsidiary Manufacturing sales of special 180.00 628,465,430 305,624,907 528,901,934 102,208,059 97,694,716
Co., Ltd glass and deep million
processing of glass
Development,
Tianjin CSG Energy
producing and sales RMB336
Conservation Glass Subsidiary Manufacturing 767,437,690 566,317,327 694,258,015 127,698,100 118,888,073
of energy-saving million
Co., Ltd
special glass
Dongguan CSG
Deep processing RMB 240
Architectural Glass Subsidiary Manufacturing 888,372,937 434,945,127 814,277,503 136,216,205 119,468,461
of glass million
Co., Ltd.
Dongguan CSG Manufacture and
RMB 480
Solar Glass Co., Subsidiary Manufacturing sales of 1,156,750,174 544,971,670 790,339,133 113,537,872 100,250,320
million
Ltd. Solar-Energy Glass
Manufacture and
RMB
Yichang CSG sales of high purity
Subsidiary Manufacturing 1,467.98 3,072,512,373 947,407,363 736,446,474 48,162,342 49,320,773
Polysilicon Co., Ltd. silicon material
million
products
Wujiang CSG East
Deep processing RMB 320
China Architectural Subsidiary Manufacturing 726,793,152 495,853,379 707,501,425 130,541,838 111,944,566
of glass million
Glass Co., Ltd.
Dongguan CSG Manufacture and RMB 516
Subsidiary Manufacturing 858,969,948 318,790,530 403,139,720 2,006,384 8,026,685
PV-tech Co., Ltd. sales of solar cells million
Manufacture and USD
Hebei CSG Glass
Subsidiary Manufacturing sales of vary special 48.06 715,701,454 378,127,567 435,191,916 -18,914,485 -11,622,532
Co., Ltd.
float glass million
Manufacture and RMB
Wujiang CSG Glass
Subsidiary Manufacturing sales of vary special 565.04 1,739,321,618 643,316,898 860,367,290 -6,113,629 -1,269,055
Co., Ltd.
float glass million
HKD
CSG (Hong Kong) Glass trading and
Subsidiary Trading 86.44 935,801,891 883,189,651 206,356,208 137,671,703 133,714,868
Limited investment holding
million
Manufacture and
Hebei Panel Glass sales of vary RMB 243
Subsidiary Manufacturing 352,550,393 298,839,829 163,883,699 55,715,193 52,165,784
Co., Ltd. ultra-thin electronic million
glass
Developing and
Xianning CSG manufacture and RMB 235
Subsidiary Manufacturing 726,208,952 267,280,732 692,081,745 -2,219,937 23,635,632
Glass Co., Ltd. sales of vary special million
glass
Xianning CSG Deep processing RMB 215
Subsidiary Manufacturing 660,061,139 285,471,493 281,365,538 50,288,457 51,130,378
Energy-saving Glass of glass million
19
CSG Annual Report 2014
Co., Ltd
Qingyuan CSG
Manufacture and
Energy
sales of varied RMB 300
Conservation Subsidiary Manufacturing 440,118,055 280,708,182 0 -10,451,095 -7,838,321
ultra-thin electronic million
New-materials Co.,
glass
Ltd.
CSG (Australia) Subsidiary Trading Glass trading AUD
18,670,659 8,851,782 85,052,465 10,063,554 7,045,289
Limited 500,000
Jiangyou CSG
Manufacture and
Mining RMB 100
Subsidiary Manufacturing sales of silica sand 170,645,317 69,686,505 62,166,207 -5,234,406 -7,979,837
Development Co., million
and co-product
Ltd.
Manufacture and
Yichang CSG
sales of varied RMB200
Photoelectric Glass Subsidiary Manufacturing 450,794,459 210,746,613 1,608,439 -6,122,980 -11,637,179
ultra-thin electronic million
Co., Ltd.
glass
Shenzhen CSG Manufacture and
Joint-stock RMB 143
Display Technology Manufacturing sales of display 1,659,668,785 849,987,463 614,918,196 190,407,151 157,597,882
company million
Co., Ltd. device products
Notes of main subsidiaries and joint-stock companies
Impact by overcapacity in industry and insufficient demand over float glass industry of the Company, performance of relevant
subsidiaries declined dramatically. On basis of expansion in production capacity, architectural glass increased the sales via adjusting
sales strategy, controlling cost efficiently, and enabled the performance of the subsidiaries in the industry promoted compared with
last year. At the same time, Yichang CSG Polysilicon turned to commercial operation in June. Benefited from the technical
transformation achievement of Polysilicon, solar energy industry made a turnaround from loss in the year, thus, subsidiary of solar
energy industry got dramatically growth in performance. Affected by the fierce competition in display industry and relocation,
Shenzhen CSG Display Technology Co., Ltd, joint-stock company of CSG, and its subsidiaries suffered a substantial slump in
performance.
Particular about subsidiaries obtained or disposed in the report period
√ Applicable □Not applicable
20
CSG Annual Report 2014
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
Owing to the two aged float glass lines,
Shenzhen CSG Float has defects of more
The Company transferred 100%
investment and high-energy consumption
shares of Shenzhen CSG Float
compared with other float glass lines of The transfer brought RMB
Shenzhen CSG Float to GoldenTime Investment
CSG. That made the high general cost of 311,247,064 investment
Glass Co., Ltd. Consultant (Shenzhen) Co.,
product, and lost the competitiveness. For earnings
Ltd.. The transfer procedure
general development of CSG flat glass
completed in April, 2014.
industry, the Company decided to transfer
equity of Shenzhen CSG Float.
3. Major investment with non-raised proceeds
Unit: RMB’0,000
Accumulative
Amount amount
Investment Returns from
Project invested in actually Progress of project(finished in 2014)
amount project
this year invested ended
as period-end
Planning to build production lines for 1.2 million
square meters of coated insulating glass, 3 million
square meters of wide flat coated glass and In the report
energy-saving glass substrate production line in period, the
Changjiang Industry Park of Xianning Economic project has
Xianning CSG Development Zone, Hubei. At present, line-1 and line been
108,670 19,563 107,090
project 2 of energy-saving glass substrate ignited respectively completed, and
in April and June, 2013. 1.2 million square meters of the net profit
coated insulating glass production line has been put was RMB74.77
into operation at the end of the first quarter. 3 million million.
square meters of wide flat coated glass production
line has been put into operation in Sep. 2014.
Planning to implement cold hydrogenation and
Polysilicon cold distillation system on production line of polysilicon, In the report
hydrogenation, technological transformation on giant energy-saving period, the
technological reduction furnace and new-type CDI tail recovery project has
transformation treatment system, reduce material consumption, been
59,616 5,676 58,993
project of power consumption and steam consumption completed, and
distillation system, substantially so that the cost will be reduced with the net profit
reduction furnace more capacity obtained. The project had been was RMB40.54
and CDI system completed and entered into commercial operation in million.
June 2014.
21
CSG Annual Report 2014
Being considered all factors and matching the
terminal market, removed Heyuan CSG PV glass In the report
project to Wujiang to build a production line for PV period, the
rolled glass with capacity of 650 tons per day and a project has
Wujiang CSG PV tempering deep processing production line with been
57,980 12,977 51,970
Glass project annual capacity of 16.2 million square meters.The completed, and
production line used clear natural gas as the fuel. the net profit
Approximately RMB 580 million has been invested was RMB4.7
to the project and the line ignited in March 2014, and million.
entered into commercial operation.
Plans to establish the silicon productivity expansion Part of the
project in Yichang CSG, 300MW project has project
Yichang CSG completed in 2014. Remaining approximately completed, and
700MW solar cell 198,000 25,479 33,785 400MW project will be invested in due time the net profit
project according to the situation. was RMB2.31
million in the
report period
Subtotal 424,266 63,695 251,838 -- --
Accumulative
Amount amount
Investment Progress of project (expected to finished from Returns from
Project invested in actually
amount 2015-2017) project
this year invested ended
as period-end
Planning to build a wide flat coated glass production At present,
Expansion on line. When the project is completed, the annual there’s no
energy-saving deep-processing capacities of the wide flat coated profit from the
19,835 18,116 18,116
glass capacity of products will reach 3million square meters. It is project.
Chengdu project estimated that the project will be completed and put
into operation in 2015.
Planning to build a ultra-thin electronic glass
production line with capacity of 240T/D, the
Yichang CSG production line uses natural gas as fuel and adopts At present,
ultra-thin float process to produce 0.33~1.1mm ultra-thin glass. there’s no
32,000 12,012 33,117
electronic glass The annual productivity of the line expected to be profit from the
project 34,440 tons of ultra-thin electronic glass. The project project.
was ignited in February 2014 .It is in trial production
currently.
Qingyuan Planning to build a high-performance ultra-thin
At present,
high-performance electronic glass production line with monthly capacity
there’s no
ultra-thin 47,166 30,026 32,919 of approximately one million square meters in
profit from the
electronic glass Qingyuan. The production line adopts CSG’s unique
project.
project technology to produce 0.55mm~1.1mm higher
22
CSG Annual Report 2014
performance ultra-thin electronic glass. The project
ignited in Feb. 2015, and entered into trial operation.
Planning to establish an on-line coated production
line in green energy industrial park of Dongguan
CSG, achieving resource sharing through making use
The project
of production line processing facilities of Shenzhen
Dongguan CSG was still in
CSG Float and invigorating idle assets such as plant
solar on-line 39,000 15,138 15,138 construction in
of Dongguan solar energy rolled glass project and its
coated project the report
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.
Plans to established a production line for
Hebei Panel Glass
medium-alumina ultra-thin electronic glass in Hefei
project of The project
Panel Glass, the production line uses clean natural gas
medium-alumina 25,950 0 0 was still in
as the fuel, and produce 0.33mm ～ 1.1mm
ultra-thin preparation.
medium-alumina ultra-thin glass with the float
electronic glass
process.
Subtotal 163,951 75,292 99,290 -- --
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 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 Project 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 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.
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 280,843 0 21,239 -- --
23
CSG Annual Report 2014
Total 869,060 138,987 372,367 -- --
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
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 2012.
4. Wujiang CSG PV Glass project has been deliberated and approved by extraordinary meeting of the 6th board of directors on 30
April 2013.
5. 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.
6. Dongguan CSG solar on-line coated project has been deliberated and approved by extraordinary meeting of the 6th board of
directors on 24 Jan. 2014.
7. Hebei Panel Glass project of aluminum ultra-thin electronic glass has been deliberated and approved by 4th meeting of 7th board
of directors on 27 Oct. 2014.
VII. Future Development Prospects
1. Development Trend of the Industry
In 2015, the domestic economic situation remains tough. Flat glass industry still confronts the dual pressure of weakened market
demand arising from property market adjustment and a serious overcapacity in low-end market, and float glass remains to face heavy
pressure in product price. The overall development of the industry is not optimistic. Since early 2015, Ministry of Industry and
Information Technology further raised threshold for flat glass industry, besides local government intensified to eliminate the outdated
capacities all over the country, flat glass market will become stable gradually, therefore profitability of the leading enterprise who
owes a cost advantage will be sustained. In 2015, production capacity expansion of ultra-thin glass in domestic market will further
increase. Benefited from relatively high threshold of technology in the industry, popularity of downstream electronic products and
rapid growth of smart mobile phone market, the development potential of this industry is still huge.
Market demand for architectural glass industry will slow down influenced by property market adjustment in 2015. Meanwhile,
homogeneity competition will be further intensified, which brings challenge for development of the industry. Due to government’s
more attention to energy-saving and environment-protection and people’s increasing awareness of environment-protection and higher
requirement of living conditions, green buildings and green construction materials will be future development trend, which means
that there is larger market potential for energy-saving glass. Challenges and opportunities coexist in the development of the industry.
Solar photovoltaic glass still faces the pressure of overcapacity in 2015. After a trough for photovoltaic industry, government
enhances supports for this industry and encourages cultivating leading enterprises. Also, emerging of photovoltaic application market
such as photovoltaic power generation industry in downstream markets contributes to benign development of PV market. It is
expected for the industry to a new stage with expanding scale and bright prospects.
24
CSG Annual Report 2014
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 2015
① Elaborately plan, concerted supervise and elaborately operate to ensure to accomplish the development and operation targets for
2015.
② Continue to implement cautious financial policy, strengthen management on working capital and budget control, 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.
④ Strictly control all costs and expenses, improve refined management, strengthen the internal control, achieved a low-cost and
efficiency operation mode;
⑤ Further enhance utilization rate of the equipments, consolidate and improve market share, further to deepen differential
management, speed up transformation and upgrading for products, enlarge brand advantage of CSG, occupy high-end market
firmly;
⑥ give priority to talent cultivation and team building, implement assessment for all the staff, reserve cadres training, staff training
and fix work posts and define personnel quota;
⑦ Further standardize the operation procedures of the Company, promote controlling measures for internal control, introduce an
information platform and positively prevent various operational risks;
⑧Promote the level of informationization, improve work efficiency.
4. Capital Requirements, Plan and Sources
In 2015, CSG capital expenditure budget is about RMB1.187 billion, which is mainly used in the project construction of Qingyuan
high-performance ultra-thin electronic glass project, Hebei Panel Glass medium alumina glass, wafer expanding project in Yichang
CSG and other projects in construction of the previous year. The capital is mainly from self-owned capital of CSG and loans
borrowed from financial institutions.
5. Risks and Countermeasures
In 2015, 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 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.
25
CSG Annual Report 2014
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 9.08% 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
√Applicable □ Not applicable
In 2014, the Ministry of Finance of the PRC issued CAS 39 "Fair Value Measurement", CAS 40 "Joint arrangement", CAS 41
"Disclosure of Interests in Other Entities", CAS 2 "Long-Term Equity Investments"(revised), CAS 9 "Employee Benefits" (revised),
CAS 30 "Presentation of Financial Statements" (revised), CAS 33 "Consolidated Financial Statements" (revised) and CAS 37
"Presentation of Financial Instrument" (revised). Other than CAS 37 "Presentation of Financial Instrument" (revised), which should
be implemented for the financial statements of annual 2014 and ever since, other statements should be applied from 1 July 2014. The
proposal on “Changes of Accounting Policy” was deliberated and approved in the 4th meeting of the 7th board of directors on 27
October 2014.
The Group has adopted the above new standards to prepare the financial statements for the year ended 31 December 2014, and the
major impacts are as follows:
Details and reasons for changes of accounting policies Affected accounts and amount
Accounting treatment in relation to long-term equity investments has been
restated under the Accounting Standard for Business Enterprises Please see the table(a) as below for the details
No.2-Long-Term Equity Investments.
Several items in the financial statements have been revised or added and
the comparative financial information has been adjusted accordingly in
compliance with the above prescribed standards, and the balance sheet as at
Please see the table(b) as below for the details
1 January 2013 has been presented according to Application Guidance for
Accounting Standard for Business Enterprises No. 30 - Presentation of
Financial Statements.
Disclosure in relation to fair value has been prepared under the Accounting
Standard for Business Enterprises No. 39 - Fair Value Measurement, but the
N/A
relevant information of the comparative period has not been adjusted
according to the standard.
Disclosure in relation to the interests of the Group in other entities has been
prepared under the Accounting Standard for Business Enterprises No. 41 -
N/A
Disclosure of Interests in Other Entities. The financial information of the
comparative period has been adjusted accordingly.
(a) Accounts and amount affected by the first item in changes of accounting policies as listed above:
26
CSG Annual Report 2014
Item 31 December 2013 01 January 2013
Other comprehensive income -112,417,641 -112,417,641
Undistributed profits 104,227,304 104,227,304
Surplus reserve 8,190,337 8,190,337
The Company held shares of Guangdong Golden Glass Technologies Limited (“Golden Glass”). On 30 June 2011,
the Company ceased to have significant influence over this company due to changes in directors, and the accounting
treatment was changed from long-tern equity investments- equity method to financial assets- recognition and
measurement of held-for-sale assets. As at 30 June 2011, the difference between the fair value of shares held by the
Company in golden glass and carrying amount of original long-term investments was charged into capital reserve,
and it shall be recorded into investment income for current period according to the revised 2014 accounting
standards.
(b) Accounts and amount affected by the second item in changes of accounting policies as listed above:
Item 31 December 2013 01 January 2013
Other non-current liabilities -432,364,880 -287,373,063
Deferred revenue 432,364,880 287,373,063
Capital surplus -45,915,972 -36,058,970
Other comprehensive income 43,980,241 37,076,752
Differences on translation of foreign 1,935,731 -1,017,782
currency financial statements
IX. Explanation on change of consolidation scope of financial statements as compared with
last year
√Applicable □ Not applicable
Compared with 2013, one unit was eliminated from consolidation this year for the following reason:
The Company lost control over Shenzhen CSG Float Glass Co., Ltd by selling 100% equity of it, and it is 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 2013 was approved in 2013 Annual General Meeting on 14 April 2014, that is, distribute
RMB 3 (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 28 April 2014 and relevant distribution has completed.
Special explanation on cash dividend policy
Satisfy regulations of General Meeting or requirement of Article of Association Y
27
CSG Annual Report 2014
(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 2014: base on 2,075,335,560 shares
of the total shares while dividends will be distributed, distributing cash dividend of RMB 5.00 (tax included) for every 10 shares to
all share holders. In 2014 the Company will not transfer capital reserve into capital.
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.
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 (%)
2014 1,037,667,780 873,653,030 118.77%
2013 622,600,668 1,535,929,739 40.54%
2012 311,300,334 274,746,219 113.30%
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) 5
Shares added for every 10-share base (Share) 0
Equity base for distribution preplan (share) 2,075,335,560
Total amount distribution in cash (RMB) (tax included) 1,037,667,780
Profit available for distribution (RMB) 1,588,753,536
28
CSG Annual Report 2014
Cash distributing accounted for the proportion of the total amount of profit distribution (％) 100.00%
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 873,653,030 in 2014, and the net profit of parent company statement is RMB
575,336,724 in 2014. 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 57,533,672 based on the net profit RMB 575,336,724 of parent
company statement 2014. Profit available for distribution in 2014 is RMB 1,588,753,536.
The Board of Directors proposed to distribute every shareholder RMB 5.00 (including tax) for each 10 shares based on the amount
2,075,335,560 shares, and the total amount distribution is RMB1,037,667,780 (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 2014 Annual General Meeting of shareholders.
XII. Social responsibilities
2014 Annual Social Responsibilities Report of CSG was the 7th year the Company consecutively released social responsibilities
report, the report emphasized in 2014, 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 □Not applicable
The listed company and subsidiaries owes other major social safety issues
□Yes √ No □Not applicable
Administrative penalty occurred in reporting period
□Yes √ No □Not applicable
XIII. In the report period, reception of research, communication and interview
Contents discussed and
Time Place Way Type Reception
material provided
Introduced the operation
HSBC Global Assets Management (H.K.)
2014-5-28 The Company Field research Institution condition of the
Co., Ltd., Macquarie Bank Limited
Company disclosed
Rongtong Fund Management Co., Ltd.,
Essence Securities Co., Ltd., Shenzhen Introduced the operation
2014-8-19 The Company Field research Institution Jingjiantou Holding Limited, Founder condition of the
Securities Co., Ltd., Minsheng Tonghui Asset Company disclosed
Management Co., Ltd., First State Cinda Fund
29
CSG Annual Report 2014
Management Co., Ltd., Beijing Xingshi
Investment Management Co., Ltd.,
Guangzhou Shize Investment Management
Co., Ltd., and Houde Investment (China)
Limited
Reception (times) 2
Number of hospitality 11
Number of individual reception 0
Number of other reception 0
Disclosed, released or let out major
No
undisclosed information
30
CSG Annual Report 2014
Section V Important Events
I. Significant lawsuits and arbitrations of the Company
□ Applicable √ Not applicable
No significant lawsuits and arbitrations occurred in the reporting period
II. Questioned from media
□Applicable √Not applicable
No media questioned for the Company in reporting period
III.. Assets transaction
1. Acquisition of assets
□ Applicable √ Not applicable
2. Assets sold
√Applicable □ Not applicable
The
The net profits
proportion The
contributed to The
of the net The ownership
the listed creditor's
profits that association of
Transactio company by Related rights and
The the assets with the property
n price (in the asset from Impact on Pricing transactio debts that Date of Index of
Counterpart Assets date for sale counterpart rights that
10 the beginning the principl n involved disclosur disclosur
y for sale of contribute y involved
thousand of current Company e confirmed has e e
sale d to the (Applicable has
Yuan) period to the (Y/N) transferre
listed for related transferre
date of sale(in d totally
company transaction) d totally
10 thousand (Y/N)
in total (Y/N)
Yuan)
profits
Refer to
100% the
Golden
equity of RMB pricing
Time
Shenzhe 311.25 of net
Investment 2014- Not 2013-9-2
n CSG 91,800 -323 million 35.63% assets of No Yes Yes 2013-028
Consultant 4-30 applicable 8
Float investmen the
(Shenzhen)
Glass t earnings target
Co., Ltd.
Co., Ltd. compan
y
31
CSG Annual Report 2014
IV. Implementation of stock option incentive and its impact
√ Applicable □ Not applicable
The 15th meeting of 6th session of the Board held on 22 March 2014 deliberated and approved the “Proposal of Incentive Plan for
Restricted Stock of A-share (Draft) and Summary” (hereinafter referred to Incentive Plan).
The incentive plan will issue no more than 90 million restricted A shares to grant plan participants in one time. The participants who
can be awarded with restricted shares should correspond to award requirements regulated in restrict shares incentive plan. The Plan is
valid for 48 months. The first 12 months since granted date was the lockup period and the later 36 months was the unlocked period.
During the unlocked period, plan participants can apply unlocking the restricted shares in three phases if achieved the release
condition, and the unlocked ratio shall be no more than 40%、30%、30% of the total restricted shares respectively. The incentive plan
has been put on file without objection by China Securities Regulatory Commission and should be submitted to the general meeting of
shareholders for deliberation.
Details of the incentive plan can be found in the relevant notices released in the China Securities Journal, Securities Times, Hong
Kong Commercial Daily and Juchao Website (www.cninfo.com.cn) on 25 March 2014.
Industry situation and market conditions experienced substantial changes after the Company launched the share option incentive plan,
thus the incentive plan can hardly reach the expected incentive effects. Meanwhile, with consideration of opinions and advice from
certain minority shareholders, the Company decided to cancel Proposal of Incentive Plan for Restricted Stock of A-share (Draft) after
prudent consideration, also the related Assessment Method on Grantee under Proposal of Incentive Plan for Restricted Stock of
A-share was cancelled as well. The proposal on Cancellation of Incentive Plan for Restricted Stock of A-share (draft) was deliberated
and approved at the 3rd meeting of the 7th board of directors on 1 August 2014, Details of the incentive plan can be found in the
relevant notices released in the China Securities Journal, Securities Times, Hong Kong Commercial Daily and Juchao Website
(www.cninfo.com.cn) on 5 August 2014.
V. Major related transaction
1. Related transaction with routine operation concerned
√Applicable □ Not applicable
Proportion Market
Trading
Related Related Related in the price of
Related Pricing Dealing amount (in Means of Date of Index of
transaction transaction transactio amount of similar
relationship principle price 10 thousand payments disclosure disclosure
parties type n content the same transaction
Yuan)
transaction available
CSG holds
Shenzhen 44.70% of the Sales
CSG equity of products and Sales of Refers to
Monthly
Display Shenzhen CSG commodities utra-thin market N/A 1,264 0.18% N/A 2014-1-14 2014-003
cost
Technology Display to related glass price
Co., Ltd. Technology person
Co., Ltd.
Total -- -- 1,264 -- -- -- -- --
Details of major sold-out order sent back N/A
Necessity and sustainable of related transaction as well The routine related transactions above mentioned are consistent with the principle of fairness, inside
32
CSG Annual Report 2014
as reasons of related transaction with related parties(not the scope of regular service of the Company, which are in favor of reducing operation cost between
with other marketing dealers) two parties and enlarging sales channel of the Company
Influence on independence of listed company from The related transactions shows harmless to 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 independence 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)
VI. Significant contract and implementations
1. Guarantees
√ Applicable □ Not applicable
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)
Yichang Photovoltaic General
2014/3/25 8,000 2014/6/25 1,456 3 years No No
Glass Co., Ltd. guarantee
Yichang CSG General
2014/8/5 1,000 2014/10/17 1,000 1 year No No
Polysilicon Co., Ltd. guarantee
Dongguan CSG PV-tech General
2014/8/5 6,000 2014/10/13 903 1 year No No
Co., Ltd guarantee
Qingyuan CSG Energy
General
Conservation 2014/8/5 8,000 2014/8/7 5,945 3 years No No
guarantee
New-materials Co., Ltd.
Qingyuan CSG Energy
General
Conservation 2014/8/5 30,000 2014/12/26 2,000 1 year No No
guarantee
New-materials Co., Ltd.
Total amount of approving guarantee Total amount of actual occurred
374,400 41,272
for subsidiaries in report period (B1) guarantee for subsidiaries in report
33
CSG Annual Report 2014
period (B2)
Total amount of approved guarantee for Total balance of actual guarantee for
subsidiaries at the end of reporting 395,523 subsidiaries at the end of reporting 59,722
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
374,400 41,272
report period (A1+B1) guarantee in report period (A2+B2)
Total amount of approved guarantee at Total balance of actual guarantee at the
395,523 59,722
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
7.15%
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)
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
VII. 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
The original
merger reform in May 2006. Till June
non-tradable By the end of
2008, the share of the original
shareholder the report
non-tradable shareholders which holding
Shenzhen period, the
over 5% total shares of the Company had
International above
all released. Therein, the original
Commitments for Holdings (SZ) 2006-5- shareholders of
non-tradable shareholder Shenzhen N/A
Share Merger Reform Limited and Xin 22 the Company
International Holdings (SZ) Limited and
Tong Chan had strictly
Xin Tong Chan Industrial Development
Industrial carried out
(Shenzhen) Co., Ltd. both are
Development their promises.
wholly-funded subsidiaries to Shenzhen
(Shenzhen) Co.,
International Holdings Limited
Ltd.
(hereinafter Shenzhen International for
34
CSG Annual Report 2014
short) listed in Hong Kong united stock
exchange main board. Shenzhen
International made commitment that it
would strictly carry out related
regulations of Securities Law,
Administration of the Takeover of Listed
Companies Procedures and Guiding
Opinions on the Listed Companies’
Transfer of Original Shares Released from
Trading Restrictions issued by CSRC
during implementing share
decreasingly-held plan and take
information disclosure responsibility
timely.
Commitments in report of
acquisition or equity change
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 unfinished
Not applicable
commitment and further plan
VIII. 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 13 years
Name of domestic CPA Yao Wenping, Yang Hua
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 the report period,
RMB 0.25 million paid for expenses (not including traveling and accommodation expenses).
35
CSG Annual Report 2014
IX. Statement on Other Important Matters
1. Sales of stock odd lots
The Company has 139,745 stock odd lots arising from implementation of dividend distribution, and the shares are recorded in
specific account of Shenzhen Branch of China Securities Depository and Clearing Co., Ltd. (“CSDC” for short). In order to solve the
stock odd lots matter left over by history, according to the requirement of China Securities Regulatory Commission, the Company
signed an agreement of Listed Companies Entrust Shenzhen Branch of CSDC to sell Odd Lots and authorized CSDC to sell Odd Lots.
In August 2014, net income of RMB 1,045,450 was received and classified into capital reserve account in accordance with the
provisions.
2. Super & Short-term Commercial Paper (SCP)
On 10 December 2014, the “Application for Registration and Issuance of Super & Short-term Commercial Paper ” was deliberated
and approved in the 1st Extraordinary General Meeting 2014 of CSG Holding Co., Ltd.. The meeting agreed the Company to issue
Super & Short-term Commercial Paper with registered capital of RMB 4 billion at most, validity within 2 years.
3. Medium-term Notes
On 10 December 2014, the “Application for Registration and Issuance of Medium-term Notes” was deliberated and approved in the
1st Extraordinary General Meeting 2014 of CSG Holding Co., Ltd.., The meeting agreed the Company to issue medium-term notes
with total amount of RMB 1.2 billion at most, which can be registered step by step according to the actual capital demand of the
Company and situation of capital in interbank market. Each registration is valid for 2 years. The Company can choose the appropriate
opportunity to issue medium-term notes during the period of validity.
4. Short-term Financing Bonds
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 27 June 2014, the Company continued to issue the 2nd batch of short-term financing bills for the
year with a total amount of RMB 700 million and annual interest rate of 5.10%, and the expiry date is 27 June 2015. On 25 August
2014, the Company continued to issue the 3rd batch of short-term financing bills for the year with a total amount of RMB 400
million and annual interest rate of 5.10%, and the expiry date is 25 August 2015.
On 23 April 2013, annual general meeting of 2012 of CSG Holding Co., Ltd deliberated and approved the proposal of short-term
financing bills offering with application of short-term financing bills with a total amount of no more than 40 percent of the
Company’s net assets (the issued short-term financing bills included). On 20 December 2013, 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, valid for two 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 short-term financing bills with a total
amount of RMB 0.5 billion and deadline of one year, which was redeemed on 16 March 2015. As for the remaining RMB 0.6 billion
36
CSG Annual Report 2014
and one-year term short-term financing bonds, the issuance date is undetermined.
For details, please refer to www.chinabond.com.cn and www.chinamoney.com.cn.
X. Issuance of corporate bonds by the Company
√Applicable □ Not applicable
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
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 2014, 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, 21 October 2013 and 20 October 2014. 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.
.
37
CSG Annual Report 2014
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 10,284,197 0.50% -223,950 -223,950 10,060,247 0.48%
1. State-owned shares 0 0.00% 0 0 0.00%
2. State-owned legal person’s
0 0.00% 0 0 0.00%
shares
3. Other domestic shares 10,284,197 0.50% -223,950 -223,950 10,060,247 0.48%
Including: Domestic legal
0 0.00% 0 0 0.00%
person’s shares
Domestic natural
10,284,197 0.50% -223,950 -223,950 10,060,247 0.48%
person’s shares
4. Foreign shares 0 0.00% 0 0 0.00%
Including: Foreign legal
0 0.00% 0 0 0.00%
person’s shares
Foreign natural person’s
0 0.00% 0 0 0.00%
shares
II. Unrestricted shares 2,065,051,363 99.50% 223,950 223,950 2,065,275,313 99.52%
1. RMB Ordinary shares 1,302,467,371 62.76% 301,200 301,200 1,302,768,571 62.77%
2. Domestically listed foreign
762,583,992 36.75% -77,250 -77,250 762,506,742 36.75%
shares
3. Overseas listed foreign
0 0.00% 0 0 0.00%
shares
4. Others 0 0.00% 0 0 0.00%
III.Total shares 2,075,335,560 100.00% 0 2,075,335,560 100.00%
2. Changes of restricted shares
√Applicable □ Not applicable
Unit: share
Number of shares Number of shares Number of new Number of shares
Shareholders’
restricted at released in the shares restricted restricted at Restriction reasons Released date
name
Period-begin Year in the Year Period-end
On 29 November
2013, Mr. Lu Wenhui
was no longer in
Lu Wenhui 573,750 573,750 0 0 office of the 2014-5-29
Company as senior
executive, shares held
by Mr. Lu Wenhui
38
CSG Annual Report 2014
which had been
locked up for six
months by regulation.
On 14 April 2014,
Mr. Zhang Bozhong
was appointed as vice
president of the
Company. Therefore,
the 75% shares held
by Mr. Zhang
Zhang Bozhong 0 0 349,800 349,800 Bozhong, that was --
349,800 shares
(including 272,550 A
share, 77,250 B
share) were classified
into the senior
executives’ restricted
shares.
Total 573,750 573,750 349,800 349,800 -- --
III. Particulars about shareholder and actual controller of the Company
1. Amount of shareholders of the Company and particulars about shares holding
Unit: share
Total preference shareholders
Total common shareholders
Total common shareholders with voting rights recovered at
195,297 ended as the 5th trading day 173,283 N/A
in reporting period-end end of reporting period (if
before annual report disclosed
applicable)
Particulars about shares held above 5% by shareholders or top ten shareholders
Total Number of share
Proporti shareholders Amount of Amount of pledged/frozen
Full name of Nature of on of Changes in
at the end restricted un-restricted
Shareholders shareholder shares report period
held of report shares held shares held State of share Amount
period
China Northern State-owned
3.62% 75,167,934 0 0 75,167,934
Industries Corporation legal person
Xin Tong Chan Domestic non
Industrial Development state-owned 2.99% 62,052,845 0 0 62,052,845
(Shenzhen) Co., Ltd. legal person
Shenzhen International Domestic non 2.60% 53,928,813 -5,850,000 0 53,928,813
39
CSG Annual Report 2014
Holdings (Shenzhen) state-owned
Co., Ltd. legal person
China Merchants
State-owned
Securities (HK) Co., 0.79% 16,339,038 9,716,636 0 16,339,038
legal person
Ltd.
BBH A/C VANGUARD
EMERGING Foreign legal
0.76% 15,672,052 301,888 0 15,672,052
MARKETS STOCK person
INDEX FUND
Hua Xia Bank Co., Ltd.
– Huashang Market
Domestic non
Quantization Selected
state-owned 0.48% 9,888,198 9,888,198 0 9,888,198
Flexibly Configured
legal person
Mixed Securities
Investment Fund
GUOTAIJUNAN
Foreign legal
SECURITIES(HONGK 0.45% 9,326,241 -1,112,807 0 9,326,241
person
ONG) LIMITED
GIC PRIVATE Foreign legal
0.40% 8,329,614 330,500 0 8,329,614
LIMITED person
ICBC—Rongtong 100 Domestic non
Index Stock Investment state-owned 0.34% 6,995,513 -3,255,445 0 6,995,513
Fund legal person
CMBC—Yinhua 100 Domestic non
Grading Stock state-owned 0.29% 6,020,361 -8,117,922 0 6,020,361
Investment Fund legal person
Among shareholders as listed above, Shenzhen International Holdings (Shenzhen) Co.,
Ltd. and Xin Tong Chan Development (Shenzhen) Co., Ltd. are holding enterprises and
Explanation on associated relationship belong to controlling enterprise of Shenzhen International Holdings Co., Ltd.. Except for
among the aforesaid shareholders 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 shares held at Type of shares
Shareholders’ name
Period-end Type Amount
China Northern Industries Corporation 75,167,934 RMB ordinary shares 75,167,934
Xin Tong Chan Industrial Development
62,052,845 RMB ordinary shares 62,052,845
(Shenzhen) Co., Ltd.
Shenzhen International Holdings (Shenzhen)
53,928,813 RMB ordinary shares 53,928,813
Co., Ltd.
40
CSG Annual Report 2014
Domestically listed
China Merchants Securities (HK) Co., Ltd. 16,339,038 16,339,038
foreign shares
BBH A/C VANGUARD EMERGING Domestically listed
15,672,052 15,672,052
MARKETS STOCK INDEX FUND foreign shares
Hua Xia Bank Co., Ltd. – Huashang Dapan
quantize selected Flexibly Configured Mix 9,888,198 RMB ordinary shares 9,888,198
Securities Investment Fund
GUOTAIJUNAN Domestically listed
9,326,241 9,326,241
SECURITIES(HONGKONG) LIMITED foreign shares
Domestically listed
GIC PRIVATE LIMITED 8,329,614 8,329,614
foreign shares
ICBC—Rongtong 100 Index Stock Investment
6,995,513 RMB ordinary shares 6,995,513
Fund
CMBC—Yinhua 100 Grading Stock Investment
6,020,361 RMB ordinary shares 6,020,361
Fund
Among shareholders as listed above, Shenzhen International Holdings (Shenzhen)
Co., Ltd. and Xin Tong Chan Development (Shenzhen) Co., Ltd. are holding
Expiation on associated relationship or
enterprises and belong to controlling enterprise of Shenzhen International
consistent actors within the top 10 un-restrict
Holdings Co., Ltd.. Except for this, It is unknown whether other shareholders
shareholders and between top 10 un-restrict
belong to related party or have associated relationship regulated by the
shareholders and top 10 shareholders
Management Regulation of Information Disclosure on Change of Shareholding for
Listed Companies.
Explanation on shareholders involving margin
business about top ten common shareholders
N/A
with un-restrict shares held(if applicable) (see
note4)
Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a buy-back agreement
dealing in reporting period
□ Yes √ No
The top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company have no buy-back
agreement dealing in reporting period.
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. At the end of report period, Shenzhen International Holdings Co., Ltd. holds 5.59% 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.
Changes of controlling shareholders in the report period
41
CSG Annual Report 2014
□ 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 5.59% equity of the Company at the end of the report period. 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 the report 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
Shares held in ultimate controlling level
Legal
rep./person in Date Organization Registered
Shareholders Main business
charge of the established code capital
unit
Mainly engaged in investment,
Shenzhen International HKD 2 billion construction and operation of logistic
Holdings Co., Ltd. Gao Lei 1989-11-10 Not applicable (authorized infrastructure; and provided vary
(0152.HK) capital) 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
Future development strategy zone and toll roads through acquisition, reorganization and integration; provided
high-end logistic value-add service to clients by application of supply chain management
technology and information technology, create more value for shareholders.
Operation result, financial situation, cash
Operation is normal, financial situation is good and cash flow stability is fine.
flow
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:
42
CSG Annual Report 2014
State-owned Assets Supervision & Administration Commission of Shenzhen Municipality
100%
Shenzhen Investment Holdings Co., Ltd.
43.89%
Shenzhen International Holdings Co., Ltd.
100%
100%
Xin Tong Chan Industrial Development (Shenzhen) Co., Ltd. Shenzhen International Holdings (Shenzhen) Co., Ltd.
2.99% 2.60%
CSG Holding Co., Ltd.
Actual controller controlling of the Company by entrust or other assets management
□Applicable √Not applicable
43
CSG Annual Report 2014
Section VII. Particulars about Directors, Supervisors and Senior
Executives and Employees
I. Changes of shares held by directors, supervisors and senior executives
Amoun
Amount t of
Shares held of shares shares Shares
Working Start dated at increase decreas held at
End date of
Title Sex Age of office
Name status office term period-begin d in this ed in period-end
term
(Share) period this (Share)
(Share) period
(Share)
Chairman of Currently in
Zeng Nan M 70 2014-4-15 2017-4-15 4,500,388 0 0 4,500,388
the Board office
Zhang Independent Currently in
M 50 2014-4-15 2017-4-15
Jianjun Director office
Independent Currently in
Fu Qilin M 60 2014-4-15 2017-4-15
Director office
Du Independent Currently in
F 46 2014-4-15 2017-4-15
Wenjun Director office
Currently in
Li Jingqi Director M 58 2014-4-15 2017-4-15
office
Guo Currently in
Director M 47 2014-4-15 2017-4-15
Yongchun office
Currently in
Chen Chao Director M 59 2014-4-15 2017-4-15
office
Yan Currently in
Director M 55 2014-4-15 2017-4-15
Ganggang office
Wu Currently in
Director/CEO M 50 2014-4-15 2017-4-15 1,810,000 0 0 1,810,000
Guobin office
Chairman of
the Currently in
Long Long M 59 2014-4-15 2017-4-15
Supervisory office
Committee
Hong Currently in
Supervisor M 60 2014-4-15 2017-4-15
Guo’an office
44
CSG Annual Report 2014
Yan Currently in
Supervisor M 47 2014-3-15 2017-4-15
Wendou office
Zhang Currently in
Vice President M 50 2014-4-15 2017-4-15 466,400 0 0 466,400
Bozhong office
Currently in
Zhang Fan Vice President M 49 2014-4-15 2017-4-15 1,530,000 0 0 1,530,000
office
Chief Currently in
Luo
Financial M 52 2014-4-15 2017-4-15 1,790,000 0 0 1,790,000
Youming office
Officer
Currently in
Ke Hanqi Vice President M 49 2014-4-15 2017-4-15 1,730,000 0 0 1,730,000
office
Currently in
Ding Jiuru Vice President M 52 2014-4-15 2017-4-15 1,374,375 0 0 1,374,375
office
Zhou Secretary of Currently in
F 49 2014-4-15 2017-4-15 212,500 0 0 212,500
Hong the Board office
Sun
Supervisor Office leaving F 49 2011-4-15 2014-3-15
Jingyun
Total -- -- -- -- -- -- 13,413,663 0 0 13,413,663
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.
Zhang Jianjun, took posts of Dean and Professor of Economy College of Shenzhen University and Independent Director of
Shenzhen Gas Corporation Ltd., Independent Director of Tapai Group and Independent Director of Shenzhen Chiwan Wharf
Holdings Limited. 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 Airport Co., Ltd, Independent director of
Shenzhen MYS Environmental Protection & Technology Company Ltd. and Independent director of Shenzhen Topway Video
Communication 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.
Du Wenjun, succesively took the post of group leader of IT research group of the institute of Jun An Securities Co., Ltd., director
General Manager of the acquisition & merger headquater of Guotai Junan Secutities Co., Ltd., investment director of GTJA
Innovation Investment Co., Ltd., assistant president of Guohai Secuties Co., Ltd., At present, she is General Manager of Sealand
Innovation Capital Investment Management Co., Ltd., independent director of Shenzhen Gas Corporation Ltd. and Independent
Director of the Company.
Li Jingqi, now serves as Executive Director, President and deputy secretary of the Party Committee of Shenzhen International
Holdings Co., Ltd. (corporate shareholder of the Company), Chairman and General Manager of Shenzhen International Holdings (SZ)
Limited (corporate shareholder of the Company), chairman and general manager of Xin Tong Chan Industrial Development
(Shenzhen) Co., Ltd. (corporate shareholder of the Company), chairman of Yibin Industrial (Shenzhen) Co., Ltd., president of
Shenzhen Shenguanghui Expressway Corporation, Director of Shenzhen Expressway Co., Ltd, Director of the Company.
45
CSG Annual Report 2014
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., Director of the
Company.
Chen Chao, successively took the posts of Chairman of former Yiwan Industrial Development (Shenzhen) Co., Ltd., Chairman and
General Manager of 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, the Chairman of the Company,
Chairman of Shenzhen Tonge Group and the Chairman of Shenzhen Property Right Exchange Co., Ltd., Independent Director of
Guangxi Wuzhou Communications Co., Ltd., Independent Director of the Company. At present, he is Director of the Company,
Director of Shenzhen Boxiong Industrial Co., Ltd., Executive Partner of Shenzhen Balas Equity Investment Fund Management Co.,
Ltd.
Yan Ganggang, successively took the deputy director of law office of Shenzhen Legislative Affairs Bureau, Partner of Guangdong
Liang and Yan Law Office. At present, he is the Partner of Guangdong Zhongzhen Law Office and 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 and CEO of 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, independent director of Guizhou Huaneng Jiaohua Co., Ltd., independent
director of Shenzhen Jinjia Printing Group Co., Ltd. At present, he is Director of Council of China Comprehensive Development
Research Institute (Shenzhen, China), Director of Industrial Economy Research Center, committee members of the Shenzhen Policy
Consultative Committee, chairman of supervisory of the Company, director of Guangdong Shirongzhaoye Co., Ltd. and director of
Shenzhen Jinjia Printing Group 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
Deputy chairman/senior lawyer of Zhonglun W&D (Shenzhen) Law Firm and supervisor of the Company. .
Yan Wendou, successively served as Manager of auditing department, At present, he is Manager of audit department of the
Company and staff supervisor of the Company.
Zhang Bozhong: successively served as General Manager of Chengdu CSG and Tianjin CSG, president of architectural glass
division of the Company, and Assistant to the President of the Company. At present, he is Vice President of the Company.
Zhang Fan, took posts of General Manager of Float Glass Department of the Company and Assistant to the President of the
Company, Vice President of the Company and President of Flat Glass Department in the Company. At present, he is Vice President 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.
Ke Hanqi, took posts of General Manager of Fine Glass Department of the Company, Director, Vice President of the Company and
President of Solar Energy Department in the Company. At present, he is Vice President of 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
46
CSG Annual Report 2014
Received
Start dated of End date of remuneration from
Name Name of shareholder’s unit Position in shareholder’s unit n
office term office term shareholder’s unit
or not
Xin Tong Chan Industrial
Li Jingqi Development (Shenzhen) Co., Chairman and General Manager Oct. 2013 -- No
Ltd.
Shenzhen International Holdings
Li Jingqi Chairman and General Manager Nov. 2013 -- No
(Shenzhen) Co., Ltd.
Shenzhen International Holdings
Li Jingqi Executive Director & President Aug. 2006 -- Yes
Co., Ltd.
Post-holding in other unit
√Applicable □Not applicable
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
Accounting & Finance Institute of Director,
Zhang Jianjun Jan. 2007 -- Yes
Shenzhen University professor
Independent
Zhang Jianjun Shenzhen Airport Co., Ltd. Dec. 2010 -- Yes
director
Shenzhen MYS Environmental Protection Independent
Zhang Jianjun Sep. 2013 -- Yes
& Technology Company Ltd. director
Shenzhen Topway Video Communication Independent
Zhang Jianjun Dec. 2013 -- Yes
Co., Ltd. director
China University of Political Science & Professor,
Fu Qilin Dec. 2011 -- Yes
Law doctorial advisor
Sealand Innovation Capital Investment General
Du Wenjun Jan. 2012 -- Yes
Management Co., Ltd. Manager
Independent
Du Wenjun Shenzhen Gas Corporation Ltd. May 2010 -- Yes
director
Li Jingqi Shenzhen Expressway Co., Ltd. Director April 2005 -- No
Li Jingqi Yibin Industrial (Shenzhen) Co., Ltd. Chairman Nov. 2006 -- No
Shenzhen Shenguanghui Expressway
Li Jingqi Chairman June 2009 -- No
Corporation
Deputy General
Guo Yongchun Northern Industries Technology Co., Ltd. March 2011 -- Yes
Manager
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
Yan Ganggang Guangdong Zhongzhen Laws Firm Partner July 2001 -- Yes
Long Long CDI (Shenzhen. China) council; CIE Director, chief June 1990 -- Yes
47
CSG Annual Report 2014
Long Long Guangdong Shirong Zhaoye Co., Ltd. Director Dec. 2008 -- Yes
Long Long Shenzhen Jinjia Printing Group Co., Ltd. Director March 2014 -- Yes
Deputy
Beijing Zhonglun W&D(Shenzhen) Law
Hong Guo’an chairman/Senior Aug 2012 -- Yes
Firm
lawyer
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
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 6.6323 million.
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)
Zeng Nan Chairman of the Board M 70 Currently in office 104.16 0 104.16
Zhang Jianjun Independent Director M 50 Currently in office 10 0 10
Fu Qilin Independent Director M 60 Currently in office 10 0 10
Du Wenjun Independent Director F 46 Currently in office 7.5 0 7.5
Li Jingqi Director M 58 Currently in office 0 91.5 91.5
Guo Yongchun Director M 47 Currently in office 0 0 0
Chen Chao Director M 59 Currently in office 10 0 10
Yan Ganggang Director M 55 Currently in office 10 0 10
Wu Guobin Director / CEO M 50 Currently in office 92.06 0 92.06
Chariman of Supervisory
Long Long M 59 Currently in office 10 0 10
Committee
Hong Guoan Supervisor M 60 Currently in office 10 0 10
Yan Wendou Supervisor M 47 Currently in office 51.35 0 51.35
Zhang Vice President M 50 Currently in office 83.30 0 83.30
48
CSG Annual Report 2014
Bozhong
Zhang Fan Vice President M 49 Currently in office 82.89 0 82.89
Luo Youming CFO M 52 Currently in office 86.15 0 86.15
Ke Hanqi Vice President M 49 Currently in office 84.41 0 84.41
Ding Jiuru Vice President M 52 Currently in office 80.62 0 80.62
Zhou Hong Secretary of the Board F 49 Currently in office 49.64 0 49.64
Sun Jingyun Supervisor F 49 Office leaving 49.59 0 49.59
Total -- -- -- -- 831.67 91.50 923.17
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
Independent
Du Wenjun Elected 2014-04-15 At expiration of office term
Director
Chen Chao Director Elected 2014-04-15 At expiration of office term
Yan Wendou Supervisor Elected 2014-03-15 Elected on workers congress
Board of the Company agrees to nominate
Mr. Zhang Bozhong serves as Vice
Zhang Bozhong Vice President Appointed 2014-04-15
President of the Company due to business
development requirement
Independent
Chen Chao Leave office while terms expired 2014-04-15 Leave office upon term expiration
Director
Ke Hanqi Director Leave office while terms expired 2014-04-15 At expiration of office term
Submitted resignation to Supervisory
Sun Jingyun Supervisor Leave office 2014-03-15
Committee due to career moves
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 the report period. Therefore there is no major influence
on operation.
VI. Particulars of workforce
1. Number of employees and constitution
Ended as 31 December 2014, totally 10,432 employees in the Company and its subsidiaries, including 6,980 production personnel,
609 salesman, 1,408 technicians, 135 financial personnel and 1,300 administrative personnel. Education background as: 5 people
with doctor’s degree, 120 people with master degree, 1,790 people undergraduate, 2,210 from junior college and 6,307 with college
49
CSG Annual Report 2014
and below
Administrative
12.46%
Financial
1.29%
Technical
13.50%
Marketing
5.84%
Production
66.91%
Doctor
Master
0.05%
1.15%
College
17.16%
Junior College
Others 21.18%
60.46%
c
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
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.
50
CSG Annual Report 2014
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. Carry out special study on insider transaction warning education exhibition
The relevant staff of the Company participated in the insider transaction warning education exhibition organized by the securities
regulatory bureau of Shenzhen in November. For those directors, supervisors, senior management and other relevant staff who can’t
attend such exhibition on site due to business affairs, the Company has notified them by mail the Circular on Supplemental Study on
Insider Transaction Warning Education Exhibition issued by the securities regulatory bureau of Shenzhen. Through such exhibition
and the internal propaganda, the relevant staff of the Company was well known of the legal regulations in respect of insider
transitions. Accordingly, their awareness of preventing insider transaction was raised, forming sound atmosphere to control insider
transaction.
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
51
CSG Annual Report 2014
according to the newly-promulgated laws and rules timely, defined the standards for inside information, built registration & record
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 2013 of CSG, Work
Report of Supervisory Committee 2013 of CSG,
The Independent Director Report, Annual Report All proposals
Annual Shareholder
and Summary 2013 of CSG, Financial Result have been
General Meeting of 2014-4-14 2014-4-15 No. 2014-015
Report 2013 of CSG, Profit Distribution Plan of deliberated and
2013
2013 of CSG, Engagement of Audit Institute for passed
year of 2014, General Election of the Board and
General Election of the Supervisory Committee
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
Application for registration and issuance of All proposals
1st extraordinary
Medium-term Notes, Application for registration have been
shareholders general 2014-12-10 2014-12-11 No.: 2014-036
and issuance of Super & Short-term Commercial deliberated and
meeting of 2014
Paper passed
III. Responsibility performance of independent directors in the report period
1. The attending of independent directors to Board meetings and shareholders’ general meeting
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 3 2 1 0 0 No
Zhang Jianjun 8 4 4 0 0 No
52
CSG Annual Report 2014
Fu Qilin 8 3 4 1 0 No
Du Wenjun 5 2 3 0 0 No
Times for attending shareholders general
2
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
During the report period, according to the requirements of “Working System of Independent Directors” and “Annual Report Working
System of Independent Directors”, the independent directors actively communicated with the accounts, supervised and urged the
annual report to proceed as planned, performed field research in HQ of the Company, Chengdu CSG Co., Ltd., visited architectural
glass project cases of the Company in Yunnan, and further mastered the development of the production and management and project
construction of the Company. Each independent director seriously deliberated all proposals of the board of directors, made
independent opinions on significant operating management issues, changes of directors, engagement of senior management, incentive
plan, internal control construction and accounting policy changes. Suggestions of independent directors related to the Company have
been adopted and have 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
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 2014 and operation achievement in 2014 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
53
CSG Annual Report 2014
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 2014 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 2015.
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.
①According 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.
②The remuneration and examination committee deliberated the relevant items of equity incentive, relevant beneficiary avoiding for
vote, and the deliberation results were submitted to the Board.
3. Performance of the nomination committee of the Board
The nomination committee of the Board of Directors of the Company is constituted with 5 directors, and 3 of them are independent
directors. The convoker is independent director.
①In the report period, nomination committee reviewed to determine candidates of directors and independent directors for 7th session
of the Board, and agreed to submit the deliberation to the Board and general meeting of shareholders.
②Nomination committee of the Board performed evaluation on the work of the Board, and believed that the directors of 7th session
of the Board abided by the State laws, administrative rules and regulation of Article of Association since they took office. They
attended or delegated to attend the Board Meeting and general meeting of shareholders on time, performed voting rights based on
relevant regulations, actively kept eyes on the management situation of the Company, and performed the duty of Directors diligently.
4. Performance of the strategy committee of the Board
The strategy committee of the Board of Directors of the Company is constituted with 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, guarantee for controlling subsidiary, application for registration and
issuance of Medium-term Notes and Super & Short-term Commercial Paper and submitted to the board for consideration.
54
CSG Annual Report 2014
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
55
CSG Annual Report 2014
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%.
56
CSG Annual Report 2014
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 2014,
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 2014 Self-evaluation Report on Internal Control. The review scope of this report covered HQ and several
wholly-owned and controlling subsidiaries including Chengdu CSG Glass Co., Ltd. and Hebei CSG Glass Co., Ltd. The total assets
amount of the included companies accounted for 99% of the total assets in the consolidated financial statement of the Company, and
the operating income of those companies accounted for 97% of the total operating income in the consolidated financial statement of
the Company. In addition, internal control review also included Shenzhen CSG Display Technology Co., Ltd. the joint-stock
company of CSG. 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 2014 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.
57
CSG Annual Report 2014
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
31 March 2015
internal control disclosed (full-text)
Index of self-evaluation report of More details can be found in Self-evaluation Report of Internal Control 2014 released on
internal control disclosed(full-text) www.cninfo.com.cn
V. Audit report of internal control
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 2014, issued PwC Zhong Tian (2015) No. 0249 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
31 March 2015
control audit reports
Disclosure index of internal control More details can be found in 2014 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.
58
CSG Annual Report 2014
Section X. Financial Report
I. Report of the Auditors
Type of Auditor’s Opinion Standard and unqualified
Issue date of Report of the Auditors 27 March 2015
Name of Auditor’s organization PricewaterhouseCoopers Zhong Tian LLP
Reference number of Report of the Auditors PwC ZT Shen Zi (2015) 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 2014, and the consolidated and company income statements, the
consolidated and company statements of changes in owners’ 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 2014, 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 LLP Certified Public Accountant Yao Wenping
Shanghai, the PRC Certified Public Accountant Yang Hua
27 March 2015
59
CSG Annual Report 2014
CSG HOLDING CO., LTD.
CONSOLIDATED AND COMPANY BALANCE SHEETS
AS AT 31 DECEMBER 2013
(All amounts in RMB Yuan unless otherwise stated)
[English Translation for Reference Only]
31 December 31 December 1 January
ASSETS Note 2014 2013 2013
(Restated) (Restated)
Current assets
Cash at bank and on hand 4(1) 158,139,050 279,672,523 474,421,278
Notes receivable 4(2) 155,588,629 323,889,490 299,804,348
Accounts receivable 4(3) 318,274,574 136,430,683 276,814,461
Advances to suppliers 4(5) 84,231,553 73,378,329 70,007,569
Other receivables 4(4) 25,973,156 109,366,023 63,047,384
Inventories 4(6) 390,652,618 378,684,712 367,293,857
Other current assets 4(7) 219,908,717 1,021,464,095 167,499,349
Total current assets 1,352,768,297 2,322,885,855 1,718,888,246
Non-current assets
Available-for-sale financial assets 4(8) 145,568,100 122,760,000 109,955,459
Long-term equity investments 4(9) 751,623,543 770,037,176 -
Fixed assets 4(10) 9,851,117,915 7,979,937,683 9,418,430,703
Construction in progress 4(11) 1,934,595,736 2,762,418,100 1,934,725,631
Intangible assets 4(12) 946,586,310 933,329,528 929,486,926
Development expenditure 4(12) 17,675,656 9,881,310 3,610,292
Goodwill 4(13) 3,039,946 3,039,946 3,039,946
Long-term prepaid expenses 2,391,824 3,280,021 2,713,907
Deferred tax assets 4(14) 103,781,894 164,787,158 163,100,004
Other non-current assets 4(15) 7,659,084 6,510,000 51,858,632
Total non-current assets 13,764,040,008 12,755,980,922 12,616,921,500
TOTAL ASSETS 15,116,808,305 15,078,866,777 14,335,809,746
60
CSG Annual Report 2014
CSG HOLDING CO., LTD.
CONSOLIDATED BALANCE SHEET (CONT'D)
AS AT 31 December 2014
(All amounts in RMB Yuan unless otherwise stated)
[English Translation for Reference Only]
1 January
LIABILITIES AND OWNERS' EQUITY Note 31 December 2014 31 December 2013 2013
(Restated) (Restated)
Current liabilities
Short-term borrowings 4(17) 1,957,123,175 1,424,743,800 1,688,049,571
Notes payable 4(18) 3,500,000 4,429,188 183,487,216
Accounts payable 4(19) 960,537,876 981,616,449 1,120,003,975
Advances from customers 4(20) 113,994,747 160,689,070 135,413,065
Employee benefits payable 4(21) 159,040,363 166,377,238 104,895,290
Taxes payable 4(22) 57,213,608 160,754,703 134,645,371
Interest payable 4(23) 74,556,982 60,767,534 35,091,990
Dividends payable - 687,627 687,627
Other payables 4(24) 147,269,978 557,130,583 165,969,155
Current portion of non-current liabilities 4(25) 2,119,066,755 399,849,715 481,687,841
Other non-current liabilities 4(26) 300,000 300,000 526,872
Total current liabilities 5,592,603,484 3,917,345,907 4,050,457,973
Non-current liabilities
Long-term borrowings 4(27) 383,817,820 302,904,204 711,112,961
Bonds payable 4(28) - 1,991,041,175 1,986,624,288
Deferred tax liabilities 4(14) 42,029,332 34,298,029 32,046,701
Deferred revenue 4(29) 444,909,519 432,364,880 287,373,063
Total non-current liabilities 870,756,671 2,760,608,288 3,017,157,013
Total liabilities 6,463,360,155 6,677,954,195 7,067,614,986
Owner's equity
Share capital 4(30) 2,075,335,560 2,075,335,560 2,075,335,560
Capital surplus 4(31) 1,340,090,907 1,345,450,916 1,344,973,018
Other comprehensive income 4(32) (13,521,093) (68,437,400) (75,340,889)
Special reserve 4(33) 14,562,826 14,503,860 14,831,266
Surplus reserve 4(34) 830,772,731 773,239,059 686,406,916
Undistributed profits 4(35) 4,101,320,834 3,907,802,144 2,770,004,882
Total equity attributable to equity
holders of the Company 8,348,561,765 8,047,894,139 6,816,210,753
Minority interests 6(1)(b) 304,886,385 353,018,443 451,984,007
Total owner's equity 8,653,448,150 8,400,912,582 7,268,194,760
TOTAL LIABILITIES AND OWNERS'
EQUITY 15,116,808,305 15,078,866,777 14,335,809,746
The accompanying notes form an integral part of these financial statements.
61
CSG Annual Report 2014
CSG HOLDING CO., LTD.
COMPANY BALANCE SHEET
AS AT 31 December 2014
(All amounts in RMB Yuan unless otherwise stated)
[English Translation for Reference Only]
31 December 31 December 1 January
ASSETS Note 2014 2013 2013
(Restated) (Restated)
Current assets
Cash at bank and on hand 69,089,926 129,337,516 139,915,851
Other receivables 15(1) 3,574,791,409 3,082,240,537 1,753,686,199
Total current assets 3,643,881,335 3,211,578,053 1,893,602,050
Non-current assets
Available-for-sale financial assets 139,854,780 94,156,920 84,335,860
Long-term receivables 15(3) 1,636,290,000 1,953,745,783 2,281,424,431
Long-term equity investments 15(2) 4,733,050,730 4,966,621,199 4,789,220,085
Fixed assets 32,554,885 38,163,267 13,311,942
Construction in progress - - 10,254,145
Intangible assets 2,205,836 2,649,635 3,093,435
Development expenditure - - 134,999
Long-term prepaid expenses 1,701,424 2,424,621 -
Other non-current assets - - 22,806,000
Total non-current assets 6,545,657,655 7,057,761,425 7,204,580,897
TOTAL ASSETS 10,189,538,990 10,269,339,478 9,098,182,947
62
CSG Annual Report 2014
CSG HOLDING CO., LTD.
COMPANY BALANCE SHEET (CONT'D)
AS AT 31 December 2014
(All amounts in RMB Yuan unless otherwise stated)
[English Translation for Reference Only]
LIABILITIES AND OWNERS' 31 December 31 December 1 January
EQUITY Note 2014 2013 2013
(Restated) (Restated)
Current liabilities
Short-term borrowings 1,681,000,000 1,255,000,000 750,000,000
Accounts payable 169,337 923,245 29,790
Employee benefits payable 50,356,110 55,932,331 4,833,381
Taxes payable 1,323,122 26,978,661 72,283
Interest payable 54,281,022 18,800,998 3,115,745
Dividends payable - 687,627 687,627
Other payables 15(4) 270,915,072 829,844,788 842,603,141
Current portion of non-current
liabilities 1,995,783,205 150,000,000 -
Total current liabilities 4,053,827,868 2,338,167,650 1,601,341,967
Non-current liabilities
Long-term borrowings 196,000,000 - 140,000,000
Bonds payable - 1,991,041,175 1,986,624,288
Deferred tax liabilities 30,553,445 19,128,980 16,673,715
Deferred revenue 11,167,800 11,792,800 8,897,000
Total non-current liabilities 237,721,245 2,021,962,955 2,152,195,003
Total liabilities 4,291,549,113 4,360,130,605 3,753,536,970
Owner's equity
Share capital 2,075,335,560 2,075,335,560 2,075,335,560
Capital surplus 1,403,806,545 1,402,034,992 1,401,858,987
Other comprehensive income (15,223,855) (49,497,250) (56,863,045)
Surplus reserve 845,318,091 787,784,419 700,952,276
Undistributed profits 1,588,753,536 1,693,551,152 1,223,362,199
Total owner's equity 5,897,989,877 5,909,208,873 5,344,645,977
TOTAL LIABILITIES AND
OWNERS' EQUITY 10,189,538,990 10,269,339,478 9,098,182,947
The accompanying notes form an integral part of these financial statements.
63
CSG Annual Report 2014
CSG HOLDING CO., LTD.
CONSOLIDATED AND COMPANY INCOME STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
(All amounts in RMB Yuan unless otherwise stated)
[English Translation for Reference Only]
2014 2013 2014 2013
Item Note Consolidated Consolidated Company Company
(Restated) (Restated)
Revenue 4(36) 7,044,502,645 7,733,796,114 846,362 741,079
Less: Cost of sales 4(36) (5,323,219,390) (5,501,300,657) (47,481) (41,575)
Taxes and surcharges 4(37) (33,163,804) (47,859,995) - -
Selling and distribution
expenses 4(38) (265,720,355) (267,394,775) - -
General and administrative
expenses 4(39) (597,772,089) (671,321,260) (87,362,609) (101,223,533)
Financial expenses – net 4(40) (231,531,434) (238,321,702) (121,420,747) (42,888,856)
Asset impairment losses 4(43) (25,270,581) (64,366,228) (2,961) 781,149
Add: Investment income 4(42),15(5) 328,439,649 927,376,139 774,349,602 1,027,318,851
Including: Investment income from
associates 10,181,795 305,002 72,636,044 97,355,619
Operating profit 896,264,641 1,870,607,636 566,362,166 884,687,115
Add: Non-operating revenue 4(44) 113,828,011 216,687,514 2,213,968 9,471,403
Including :Gain on disposal of
non-current assets 4,194,755 4,330,610 881,341 2,285
Less: Non-operating expenses 4(45) (26,510,163) (152,116,263) (2,701,800) (232,408)
Including: Losses on disposal
of non-current
assets (21,917,537) (140,789,846) - (232,408)
Total profit 983,582,489 1,935,178,887 565,874,334 893,926,110
Less: Income tax expenses 4(46) (43,817,757) (259,864,490) 9,462,390 (25,604,680)
Net profit 939,764,732 1,675,314,397 575,336,724 868,321,430
Attributable to equity holders of the
Company 873,653,030 1,535,929,739
Minority interest 66,111,702 139,384,658
Other comprehensive income net
after tax 4(32) 54,366,273 6,903,489 34,273,395 7,365,795
Other comprehensive income net
after tax attributable to equity
holders of the Company 54,916,307
Other comprehensive income
items which will be reclassified
subsequently to profit or loss 54,916,307 6903,489 34,273,395 7365,795
Changes in fair value of
available-for-sale financial
assets 53,081,559 9857,002 34,273,395 7365,795
Difference on translation of foreign
currency financial statements 1,834,748 (2,953,513) - -
Other comprehensive income net
after tax attributable to minority
interest (550,034) -
Total comprehensive income 994,131,005 1,682,217,886 609,610,119 875,687,225
Total comprehensive income
attributable to equity holders of
the Company 928,569,337 1,542,833,228
Total comprehensive income
attributable to minority interests 65,561,668 139,384,658
Earnings per share 4(47)
Basic earnings per share (RMB
Yuan) 0.42 0.74
Diluted earnings per share (RMB
Yuan) 0.42 0.74
The accompanying notes form an integral part of these financial statements.
64
CSG Annual Report 2014
CSG HOLDING CO., LTD.
CONSOLIDATED AND COMPANY CASH FLOW STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
(All amounts in RMB Yuan unless otherwise stated)
[English Translation for Reference Only]
2014 2013 2014 2013
Item Note Consolidated Consolidated Company Company
1.Cash flows from operating activities
Cash received from sales of goods or
rendering of services 8,175,415,917 9,039,929,465 - -
Refund of taxes and surcharges 52,924,067 85,359,790 846,362 -
Cash received relating to other operating
activities 4(48)(a) 44,644,145 83,010,484 1,529,086 2,438,207
Sub-total of cash inflows 8,272,984,129 9,208,299,739 2,375,448 2,438,207
Cash paid for goods and services (4,986,658,347) (5,406,427,033) - -
Cash paid to and on behalf of employees (784,191,083) (868,915,933) (77,164,975) (36,355,290)
Payments of taxes and surcharges (585,283,678) (859,338,552) (17,112,069) (352,467)
Cash paid relating to other operating activities 4(48)(b) (510,591,811) (374,750,686) (13,768,661) (12,881,879)
Sub-total of cash outflows (6,866,724,919) (7,509,432,204) (108,045,705) (49,589,636)
Net cash flows from operating activities 4(49) 1,406,259,210 1,698,867,535 (105,670,257) (47,151,429)
2.Cash flows from investing activities
Cash received from withdrawal of
investments 49,036,914 - - -
Cash received from returns on investments 27,624,931 432,000 553,947,552 645,056,913
Net cash received from disposal of fixed
assets, intangible assets and other
long-term assets 26,328,324 19,606,532 888,414 7,341
Net proceeds from disposal of subsidiaries 4(48)(d) 463,160,123 301,426,705 468,000,000 426,413,663
Cash received relating to other investing
activities 4(48)(c) 507,724,341 893,830,318 - 459,317,040
Sub-total of cash inflows 1,073,874,633 1,215,295,555 1,022,835,966 1,530,794,957
Cash paid to acquire fixed assets, intangible
assets and other long-term assets (1,893,112,812) (2,142,386,726) (1,975,174) (20,261,376)
Cash paid to acquire investments - - (435,385,487) (144,409,932)
Net cash received from acquired subsidiaries 15,366,490 5,345,928 - (39,001,200)
Cash paid relating to other investing activities 4(48)(d) (95,729,500) (130,333,513) - (21,800,000)
Sub-total of cash outflows (1,973,475,822) (2,267,374,311) (437,360,661) (225,472,508)
Net cash flows from investing activities (899,601,189) (1,052,078,756) 585,475,305 1,305,322,449
3.Cash flows from financing activities
Cash received from capital contributions 58,636,000 13,210,000 - -
Including: Cash received from capital
contributions by minority shareholders of
subsidiaries 58,636,000 13,210,000 - -
Cash received from borrowings 4,961,430,390 3,154,582,320 4,393,944,492 3,394,288,942
Cash received relating to other financing
activities 4(48)(e) 20,655,450 460,076,320 - -
Sub-total of cash inflows 5,040,721,840 3,627,868,640 4,393,944,492 3,394,288,942
Cash repayments of borrowings (4,624,703,566) (3,675,399,977) (3,921,944,492) (2,879,288,942)
Cash payments for interest expenses and
distribution of dividends or profits (917,357,771) (699,429,159) (700,724,715) (336,712,054)
Including: Cash payments for dividends to
minority shareholders of
subsidiaries (56,362,791) (145,358,190) - -
Cash payments relating to other financing
activities 4(48)(f) (124,944,931) (70,627,249) (312,520,406) (1,447,029,709)
Sub-total of cash outflows (5,667,006,268) (4,445,456,385) (4,935,189,613) (4,663,030,705)
Net cash flows from financing activities (626,284,428) (817,587,745) (541,245,121) (1,268,741,763)
4. Effect of foreign exchange rate changes
on cash and cash equivalent 13,799 (486,702) 843 (7,592)
5.Net decrease in cash 4(49) (119,612,608) (171,285,668) (61,439,230) (10,578,335)
Add: Balance of cash at beginning of year 276,450,868 447,736,536 129,337,516 139,915,851
6. Cash balance at end of year 4(49) 156,838,260 276,450,868 67,898,286 129,337,516
The accompanying notes form an integral part of these financial statements.
65
CSG Annual Report 2014
CSG HOLDING CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN OWNERS' EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2014
(All amounts in RMB Yuan unless otherwise stated)
[English Translation for Reference Only]
Equity attributable to equity holders of the Company
Differences on
translation of
Other foreign currency
comprehensive Special Surplus Undistributed financial Minority Total owner's
Item Share capital Capital surplus income reserve reserve profits statements Sub-total interests equity
Note 4(30) 4(31) 4(32) 4(33) 4(34) 4(35) 6(1)(b)
Balance 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
Changes in accounting policies 2(29) - (36,058,970) (75,340,889) - 8,190,339 104,227,302 (1,017,782) - - -
Balance at 1 January 2013(restated) 2,075,335,560 1,344,973,018 (75,340,889) 14,831,266 686,406,916 2,770,004,882 - 6,816,210,753 451,984,007 7,268,194,760
Movements for the year ended 31
December 2013
Total comprehensive income
Net profit - - - - - 1,535,929,739 - 1,535,929,739 139,384,658 1,675,314,397
Other comprehensive income 4(32) - - 6,903,489 - - - - 6,903,489 - 6,903,489
Total comprehensive income - - 6,903,489 - - 1,535,929,739 - 1,542,833,228 139,384,658 1,682,217,886
Effects of the change in investees’ other
equity applying the equity method 4(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 - 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 4(34) - - - - 86,832,143 (86,832,143) - - - -
Profit distribution to equity owners 4(35) - - - - - (311,300,334) - (311,300,334) (145,358,190) (456,658,524)
Special reserve - - - (327,406) - - - (327,406) (21,009) (348,415)
Special reserve appropriated 4(33) - - - 3,195,497 - - - 3,195,497 205,053 3,400,550
Special reserve used 4(33) - - - (3,522,903) - - - (3,522,903) (226,062) (3,748,965)
Others - - - - - - - - (106,422,816) (106,422,816)
Disposal of subsidiaries - - - - - - - - (128,615,616) (128,615,616)
Merger of enterprises - - - - - - - - 22,192,800 22,192,800
Balance at 31 December 2013 2,075,335,560 1,345,450,916 (68,437,400) 14,503,860 773,239,059 3,907,802,144 - 8,047,894,139 353,018,443 8,400,912,582
66
CSG Annual Report 2014
CSG HOLDING CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN OWNERS' EQUITY (CONT'D)
FOR THE YEAR ENDED 31 DECEMBER 2014
(All amounts in RMB Yuan unless otherwise stated)
[English Translation for Reference Only]
Equity attributable to equity holders of the Company
Difference on
translation of
Other foreign currency
comprehensive Surplus Undistributed financial Minority Total owner's
Item Share capital Capital surplus income Special reserve reserve profits statements Sub-total interests equity
Note 4(30) 4(31) 4(32) 4(33) 4(34) 4(35) 6(1)(b)
Balance at 1 January 2014 2,075,335,560 1,345,450,916 (68,437,400) 14,503,860 773,239,059 3,907,802,144 - 8,047,894,139 353,018,443 8,400,912,582
Movements for the year ended 31
December 2014
Total comprehensive income
Net profit - - - - - 873,653,030 - 873,653,030 66,111,702 939,764,732
Other comprehensive income 4(32) - - 54,916,307 - - - - 54,916,307 (550,034) 54,366,273
Total comprehensive income - - 54,916,307 - - 873,653,030 - 928,569,337 65,561,668 994,131,005
Effects of the change in investees’ other
equity applying the equity method 4(9) - 324,568 - - - - - 324,568 - 324,568
Capital contribution and withdrawal by
owners - - - - - - - - 58,636,000 58,636,000
Capital contribution by owners - - - - - - - - 58,636,000 58,636,000
Profit distribution - - - - 57,533,672 (680,134,340) - (622,600,668) (56,362,791) (678,963,459)
Appropriation to surplus reserves 4(34) - - - - 57,533,672 (57,533,672) - - - -
Profit distribution to equity owners 4(35) - - - - - (622,600,668) - (622,600,668) (56,362,791) (678,963,459)
Special reserve - - - 58,966 - - - 58,966 - 58,966
Special reserve appropriated 4(33) - - - 3,007,776 - - - 3,007,776 - 3,007,776
Special reserve used 4(33) - - - (2,948,810) - - - (2,948,810) - (2,948,810)
Others - (5,684,577) - - - - - (5,684,577) (115,966,935) (121,651,512)
Transaction with minority interests 4(31) - (6,730,027) - - - - - (6,730,027) (118,214,904) (124,944,931)
Disposal of odd lots - 1,045,450 - - - - - 1,045,450 - 1,045,450
Merger of enterprises - - - - - - - - 2,247,969 2,247,969
Balance at 31 December 2014 2,075,335,560 1,340,090,907 (13,521,093) 14,562,826 830,772,731 4,101,320,834 - 8,348,561,765 304,886,385 8,653,448,150
The accompanying notes form an integral part of these financial statements.
67
CSG Annual Report 2014
CSG HOLDING CO., LTD.
COMPANY STATEMENT OF CHANGES IN OWNERS' EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2014
(All amounts in RMB Yuan unless otherwise stated)
[English Translation for Reference Only]
Other
comprehensive Undistributed Total owner's
Item Share capital Capital surplus income Surplus reserve profits equity
Balance at 31 December 2012 2,075,335,560 1,418,767,193 - 678,216,577 1,018,740,912 5,191,060,242
Changes in accounting policies - (16,908,206) (56,863,045) 22,735,699 204,621,287 153,585,735
Balance at 1 January
2013(restated) 2,075,335,560 1,401,858,987 (56,863,045) 700,952,276 1,223,362,199 5,344,645,977
Movements for the year ended 31
December 2013
Total comprehensive income
Net profit - - - - 868,321,430 868,321,430
Other comprehensive income - 7,365,795 - - 7,365,795
Total comprehensive income - - 7,365,795 - 868,321,430 875,687,225
Effects of the change in investees’
other equity applying the equity
method - 176,005 - - - 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 1,402,034,992 (49,497,250) 787,784,419 1,693,551,152 5,909,208,873
Balance at 1 January 2014 2,075,335,560 1,402,034,992 (49,497,250) 787,784,419 1,693,551,152 5,909,208,873
Movements for the year ended 31
December 2014
Total comprehensive income
Net profit - - - - 575,336,724 575,336,724
Other comprehensive income - - 34,273,394 - - 34,273,395
Total comprehensive income - - 34,273,394 - 575,336,724 609,610,119
Effects of the change in investees’
other equity applying the equity
method - 726,104 - - - 726,104
Profit distribution - - - 57,533,672 (680,134,340) (622,600,668)
-Appropriation to surplus reserves - - - 57,533,672 (57,533,672) -
-Profit distribution to equity
owners - - - - (622,600,668) (622,600,668)
Disposal of odd lots - 1,045,450 - - - 1,045,450
Balance at 31 December 2014 2,075,335,560 1,403,806,545 (15,223,856) 845,318,091 1,588,753,536 5,897,989,877
The accompanying notes form an integral part of these financial statements.
68
CSG Annual Report 2014
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
(All amounts are stated in RMB Yuan unless otherwise stated)
[English Translation for Reference Only]
1. General information
CSG Holding Co Ltd (the “Company”) was incorporated in September of 1984 ,known as China South Glass
Company, as a joint venture enterprise by Hong Kong China Merchants Shipping Co., LTD (香港招商局轮船股份有限
公司), Shenzhen Building Materials Industry Corporation(深圳建筑材料工业集团公司), China North Industries
Corporation (中国北方工业深圳公司) and Guangdong International Trust and Investment Corporation (广东国际信托
投资公司). The Company was registered in Shenzhen, Guangdong Province of the People's Republic of China and
its headquarter locates in Guangdong Province of the People's Republic of China. The registered capital upon
incorporation was USD 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 shares, in October 1991 and January 1992, respectively.
Both shares were listed in Shenzhen Stock Exchange in February 1992. The total share capital of the Company
increased to 107,532,550 shares.
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 share capital of 832,519,306 shares 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 RMB 8.58 per share. The total share
capital of the Company increased to 1,237,103,124 shares upon the completion of the issuance.
69
CSG Annual Report 2014
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 shares.
Since certain employees resigned from the Group, the Company repurchased and cancelled 1,042,500 A shares in
2010. The Company's total share capital was reduced to 1,222,695,624 shares.
Pursuant to the resolutions of shareholder’s meeting on 20 April 2010, the Company paid scrip dividend of
855,886,936 shares, on the basis of issuing 7 shares for each 10 shares by capitalisation of capital surplus out of a
total capital of 1,222,695,624 shares. The Company’s total share capital was increased to 2,078,582,560 shares
thereafter.
As certain employees resigned from the Group during 2010-2012, the Company repurchased and cancelled 3,247,000 A
shares. The Company's total capital was reduced to 2,075,335,560 shares.
The Company and its subsidiaries (collectively referred to the “Group”) are mainly engaged in the manufacture and
sales of floating glass, specialized glass, engineering glass, energy saving glass, silicon related materials, and solar
panels.
The subsidiary newly brought into the consolidation scope this year mainly includes China Southern Glass (Australia)
Limited. Please refer to Note 4(9) and 5(2) for the detail. The subsidiary not in the consolidation scope this year
mainly includes Shenzhen CSG Float Glass Co., Ltd.. Please refer to Note 5(1) for the detail.
The financial statements were authorized for issue by the board of directors on 27 March 2015.
2. Summary of significant accounting policies and accounting estimates
The Group determines its specific accounting policies and estimates according to manufacturing and operation
feature. It mainly reflected in provision for bad debts of receivables(Note 2(10)), inventory costing method(Note
2(11)), the criteria for determining impairment for available-for-sale equity instruments(Note 2(9)), amortization of
fixed assets and intangible assets (Note 2(13)(16)), criteria for determining capitalised development expenditure
(Note 2(16)), and timing for revenue recognition(Note 2(23)).
Please see Note 2(30) for the key judgements adopted by the Group in applying important accounting policies.
(1)Basis of preparation
The financial statements are prepared in accordance with the Accounting Standard for Business Enterprises - Basic
Standard, and the specific accounting standards and other relevant regulations issued by the Ministry of Finance on
15 February 2006 and in subsequent periods (hereafter collectively referred to as “the Accounting Standard for
Business Enterprises” or “CAS”), and “Information Disclosure Rule No. 15 for Companies with Public Traded
Securities - Financial Reporting General Provision” issued by China Security Regulatory Commission.
As at 31 December 2014, the Group had net current liabilities of about RMB 4,240,000,000.00 and committed capital
expenditure of about RMB195,000,000.00 (Note 10(1)). The directors of the Company has assessed the following facts
70
CSG Annual Report 2014
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 2014, the Group had unutilised banking facilities
of approximately RMB 8 billion, among which the long-term banking facilities was about RMB 1.8 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 Standard for Business Enterprises
The financial statements of the Company for the year ended 31 December 2014 truly and completely present the
financial position as of 31 December 2014 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).
(5)Business combinations
(a)Business combinations involving enterprises 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 enterprises 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.
71
CSG Annual Report 2014
(6)Preparation of consolidated financial statements
The consolidated financial statements comprise the financial statements of the Company and all of its subsidiaries.
Subsidiaries are consolidated from the date when the Group obtains control and are de-consolidated from the date
when control ceases. For a subsidiary that is acquired in a business combination involving enterprises under
common control, it is included in the consolidated financial statements from the date when it, together with the
Company, comes under common control of the ultimate controlling party. The portion of the net profits realised
before the combination date is presented separately in the consolidated income statement.
When preparing the consolidated financial statements, if the accounting policies and the accounting periods of the
Company and subsidiaries are inconsistent, the financial statements of the subsidiaries are adjusted in accordance
with the accounting policies and the accounting period of the Company. For subsidiaries acquired from business
combinations involving enterprises not under common control, the individual financial statements of the subsidiaries
are adjusted based on the fair value of the identifiable net assets at the acquisition date.
All significant intra-group balances, transactions and unrealised profits are eliminated in the consolidated financial
statements. The portion of subsidiaries’ equity and the portion of a subsidiaries’ net profits and losses and
comprehensive incomes for the period not attributable to Company are recognised as minority interests and
presented separately in the consolidated financial statements under equity, net profits and total comprehensive
income respectively. Unrealized profits and losses resulting from the sale of assets by the Company to the subsidiary
fully eliminate the net profits attributable to equity holders of the parent; unrealized profits and losses resulting from
the sale of assets by the subsidiary to the Company are eliminated and allocated between net profit attributable to
owners of the parent and minority interests in accordance with the allocation proportion of the Company in the
subsidiary. Unrealized profits and losses resulting from the sale of assets by one subsidiary to another are eliminated
and allocated between net profit attributable to owners of the parent and minority interests in accordance with the
allocation proportion of the parent in the subsidiary.
If the accounting treatment of a transaction which considers the Group as an accounting entity is different from that
considers the Company or its subsidiaries as an accounting entity, it is adjusted from the perspective of the Group.
(7)Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, deposits that can be readily drawn on demand, and short-term and
highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant
risk of changes in value.
(8)Foreign currency translation
(a)Foreign currency transaction
Foreign currency transactions are translated into RMB using the exchange rates prevailing at the dates of the
72
CSG Annual Report 2014
transactions.
At the balance sheet date, monetary items denominated in foreign currencies are translated into RMB using the spot
exchange rates on the balance sheet date. Exchange differences arising from these translations are 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 or construction of qualifying assets, which are capitalised as part of the cost of those assets.
Non-monetary items denominated in foreign currencies that are measured at historical costs are translated at the balance
sheet date using the spot exchange rates at the date of the transactions. The effect of exchange rate changes on cash is
presented separately in the cash flow statement.
(b)Translation of foreign currency financial statements
The asset and liability items in the balance sheets for overseas operations are translated at the spot exchange rates on
the balance sheet date. Among the owners’ equity items, the items other than “undistributed profits” are translated at the
spot exchange rates of the transaction dates. The income and expense items in the income statements of overseas
operations are translated at the spot exchange rates of the transaction dates. The differences arising from the above
translation are presented separately in the owners’ equity. The cash flows of overseas operations are translated at the
spot exchange rates on the dates of the cash flows. The effect of exchange rate changes on cash is presented separately
in the cash flow statement.
(9)Financial instrument
(a)Financial assets
(i)Classifications of financial assets
Financial assets are classified into the following categories at initial recognition: financial assets at fair value through
profit or loss, receivables, available-for-sale financial assets and held-to-maturity investments. The classification of
financial assets depends on the Group’s intention and ability to hold the financial assets. The Group has no financial
assets at fair value through profit or loss and held-to-maturity investments for 2014.
Receivables
Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market. Receivables comprise notes receivable. accounts receivable and other receivables(Note 2(10).
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either designated in this category or not
classified in any of the other categories at initial recognition. Available-for-sale financial assets are included in other
current assets on the balance sheet if management intends to dispose of them within 12 months after the balance sheet
date.
(ii)Recognition and measurement
73
CSG Annual Report 2014
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. The related transaction costs that are attributable to the acquisition
of receivables and available-for-sale financial assets are included in their initial recognition amounts.
Available-for-sale financial assets are subsequently measured at fair value. Investments in equity instruments are
measured at cost when they do not have a quoted market price in an active market and whose fair value cannot be
reliably measured. Receivables are measured at amortised cost using the effective interest method.
Gains or losses arising from change in fair value of available-for-sale financial assets are recognised directly in equity,
except for impairment losses and foreign exchange gains and losses arising from translation of monetary financial assets.
When such financial assets are derecognised, the cumulative gains or losses previously recognised directly into equity
are recycled into profit or loss for the current period. Interests on available-for-sale investments in debt instruments
calculated using the effective interest method during the period in which such investments are held and cash dividends
declared by the investee on available-for-sale investments in equity instruments are recognised as investment income,
which is recognised in profit or loss for the period.
(iii)Impairment of financial assets
The Group assesses the carrying amounts of financial assets at each balance sheet date. If there is objective
evidence that a financial asset is impaired, an impairment loss is provided for.
Objective evidence indicating impairment of financial assets refers to the matter that actually occurs after the initial
recognition of financial assets, it will affect estimated future cash flows of financial assets, and its impact can be
reliably measured.
Objective evidence which indicates the occurrence of impairment for available-for-sale equity instruments includes
significant or non-temporary decrease of fair value of equity instruments investment. The Group conducts individual
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. The Group calculates the initial investment cost of initial
available-for-sale equity instruments investment using the weighted average method
When an impairment loss on a financial asset carried at amortised cost has occurred, the amount of loss is provided
for at the difference between the asset’s carrying amount and the present value of its estimated future cash flows
(excluding future credit losses that have not been incurred). If there is objective evidence that the value of the
financial asset recovered and the recovery is 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 profit
or loss.
74
CSG Annual Report 2014
If an impairment loss on available-for-sale financial assets measured at fair value is incurred, the cumulative losses arising
from the decline in fair value that had been recognised directly in shareholders' equity are transferred out from equity and
into impairment loss. For an investment in debt instrument classified as available-for-sale on which impairment losses
have been recognised, if, in a subsequent period, its fair value increases and the increase can be objectively related to an
event occurring after the impairment loss was recognised in profit or loss, the previously recognised impairment loss is
reversed into profit or loss for the current period. For an investment in an equity instrument classified as available-for-sale
on which impairment losses have been recognised, the increase in its fair value in a subsequent period is recognised
directly 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 sum of the consideration
received and the cumulative changes in fair value that had been recognised directly in owner's equity, is recognised in
profit or loss.
(b)Financial liabilities
Financial liabilities are classified into two categories at initial recognition: financial liabilities at fair value through profit
or loss and other financial liabilities. The financial liabilities in the Group mainly comprise of other financial liabilities,
including payables, borrowings and bonds payable.
Payables comprise accounts payable, notes payable and other payables, which are recognised initially at fair value
and measured subsequently at amortised cost using the effective interest method.
Borrowings and bonds payable are recognised initially at fair value, net of transaction costs incurred, and subsequently
measured at amortised cost 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 a financial liability) is derecognised when all or part of the obligation is extinguished. 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 fair value of financial instruments
75
CSG Annual Report 2014
The fair value of a financial instrument that is traded in an active market is determined at the quoted price in the active
market. The fair value of a financial instrument that is not traded in an active market is determined by using a valuation
technique. During valuation, the Group adopts a valuation technique suitable for current situation, which is supported by
sufficient available data and other information, chooses the inputs consistent with the feature of assets or liabilities
considered in the transaction thereof with market participants, and uses related observable inputs in preference to the
greatest extent. Unobservable inputs are used when it is unable to obtain or is infeasible for related observable inputs.
(10)Receivables
Receivables comprise notes receivable. accounts receivable and other receivables. Accounts receivable arising from sale
of goods or rendering of services are initially recognised at fair value of the contractual payments from the buyers or
service recipients.
(a)Receivables with amounts that are individually significant and subject to separate assessment for provision for
bad debts
Receivables with amounts that are individually significant are subject to separate assessment for impairment. If there
exists objective evidence that the Group will not be able to collect the amount under the original terms, a provision
for bad debts of that receivable is made at the difference between its carrying amount and the present value of its
estimated future cash flows.
The basis or amount for individually significant receivables is individually greater than RMB 20 million.
(b)Receivables with amounts that are not individually significant but subject to separate assessment for provision for
bad debts
If there exists objective evidence that the Group will not be able to collect the amount under the original terms, a provision
for bad debts of that receivable is made at the difference between its carrying amount and the present value of its
estimated future cash flows.
(c)Receivables that are subject to provision for bad debts on the grouping basis
Receivables with amounts that have not been individually provided for impairment are classified into certain
groupings based on their credit risk characteristics. The provision for bad debts is determined based on the historical
loss experience for the groupings of receivables with similar credit risk characteristics, taking into consideration of
the current circumstances.
Basis on determine the portfolio is as below:
Portfolio 1 Receivables not impaired after separate assessment
Portfolio 2 Related party portfolio
76
CSG Annual Report 2014
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 2% 2%
(d)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 refer to manufacturing sector, including raw materials, work in progress, finished goods and turnover materials,
and are measured at the lower of cost and net realisable value.
(b)Inventory costing method
Cost is determined using the weighted average method. The cost of finished goods and work in progress comprise raw
materials, direct labour and systematically allocated production overhead based on the normal production capacity.
(c)Amortisation methods of low value consumables and packaging materials
Turnover materials include low value consumables and packaging materials, which are expensed when issued.
(d)The determination of net realisable value and the method of provision for impairment of inventories
Provision for decline in the value of inventories is determined at the excess amount of the carrying amounts of the
inventories over their net realisable value. Net realisable value is determined based on the estimated selling price in the
ordinary course of business, less the estimated costs to completion and estimated costs necessary to make the sale and
related taxes.
(e)The Group adopts the perpetual inventory system.
(12)Long-term equity investments
Long-term equity investments comprise the Company’s long-term equity investments in its subsidiaries, and the
Group’s long-term equity investments in its associates.
77
CSG Annual Report 2014
Subsidiaries are the investees over which the Company is able to exercise control. Associates are the investees that
the Group has significant influence on their financial and operating policies.
Investments in subsidiaries are measured using the cost method in the Company’s financial statements, and adjusted by
using the equity method when preparing the consolidated financial statements. Investments in associates are accounted
for using the equity method. Long-term equity investments where the Group does not have control, joint control or
significant influence over the investees, and which are not quoted in an active market and whose fair value cannot be
reliably measured are measured using the cost method.
(a)Initial recognition
For long-term equity investments formed in business combination: when obtained from business combinations
involving entities under common control, the long-term equity investment is stated at carrying amount of equity for
the combined parties at the time of merger; when the long-term equity investment obtained from business
combinations involving entities not under common control, the investment is measured at combination cost.
For long-term equity investments not formed in business combination: the one paid by cash is initially measured at actual
purchase price; the long-term investment obtained by issuing equity securities is stated at fair value of equity securities as
initial investment cost.
(b)Subsequent measurement and recognition method of profit or loss
Long-term equity investments accounted for using the cost method are measured at initial investment cost. Cash
dividend or profit distribution declared by the investees is recognised as investment income in profit or loss.
For long-term equity investments accounted for using 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 difference is included in profit or loss for the current period and the
cost of the long-term equity investment is adjusted upwards accordingly.
For long-term equity investments accounted for using the equity method, the Group recognises the investment income
according to its share of net profit or loss of the investee. The Group discontinues recognising its share of the net losses of
an investee after the carrying amounts 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 additional losses and the criteria with respect to recognition of provisions under the accounting standards
on contingencies are satisfied, the Group continues recognising the investment losses and the provisions. For changes in
owners’ equity of the investee other than those arising from its net profit or loss, its proportionate share is directly recorded
into capital surplus, provided that the proportion of shareholding of the Group in the investee remains unchanged. The
carrying amount of the investment is reduced by the Group’s share of the profit distribution or cash dividends declared by
an investee. The unrealised profits or losses arising from the transactions between the Group and its investees are
eliminated in proportion to the Group’s equity interest in the investees, based on which the investment gain or losses are
recognised. Any losses resulting from transactions between the Group and its investees attributable to asset impairment
losses are not eliminated.
78
CSG Annual Report 2014
(c)Definition of control, joint control and significant influence over the investees
The term "control" refers to the power in the investees, to obtain variable returns by participating in the related
business activities of the investees, and the ability to affect the returns by exercising its power over the investees.
The term "significant influence" refers to the power to participate in the formulation of financial and operating policies of an
enterprise, but not the power to control, or jointly control, the formulation of such policies with other parties.
(d)Impairment of long-term equity investments
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)).
(13)Fixed assets
(a)Recognition and initial measurement
Fixed assets comprise buildings, machinery and equipment, motor vehicles, computers and electronic equipment
and office equipment.
Fixed assets are recognised when it is probable that the related economic benefits will flow to the Group and the
costs can be reliably measured. Fixed assets purchased or constructed by the Group are initially measured at cost at
the 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
associated economic benefits will flow to the Group and the related cost can be reliably measured. The carrying amount of
the replaced part is derecognised. All the other subsequent expenditures are recognised in profit or loss in the period in
which 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 that have been provided for impairment loss,
the related depreciation charge is prospectively determined based upon the adjusted carrying amounts over their
remaining useful lives.
The estimated useful lives, the estimated residual values expressed as a percentage of cost and the annual
depreciation rates of fixed assets are as follows:
Estimated Estimated Annual depreciation
useful lives residual value rate
Buildings 20-35 years 5% 2.71% to 4.75%
79
CSG Annual Report 2014
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 and the estimated net residual value of a fixed asset and the depreciation method applied to the
asset are reviewed, and adjusted as appropriate at each year-end.
(c)The carrying amount of a fixed asset is reduced to the recoverable amount when the recoverable amount is below the
carrying amount (Note 2(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 from disposals on sale, transfer, retirement or damage of a fixed asset net of its carrying amount and
related taxes and expenses is recognised in profit or loss for the current period.
(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 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
depreciation begins from the following month.
The carrying amount of construction in progress is reduced to the recoverable amount when the recoverable amount is
below the carrying amount (Note 2(18)).
(15) Borrowing costs
The borrowing costs that are directly attributable to the acquisition and construction of a fixed asset that needs a
substantially long period of time for its intended use commence to be capitalised 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 and the borrowing costs incurred thereafter are recognised in profit or loss for the current period.
Capitalisation of borrowing costs is suspended during periods in which the acquisition or construction of a fixed asset
is interrupted abnormally and the interruption lasts for more than 3 months, until the acquisition or construction is
resumed.
For the specific borrowings obtained for the acquisition or construction of a fixed asset qualifying for capitalisation,
the amount of borrowing costs eligible for capitalisation is determined by deducting any interest income earned from
80
CSG Annual Report 2014
depositing the unused specific borrowings in the banks or any investment income arising on the temporary
investment of those borrowings during the capitalisation period.
For the general borrowings obtained for the acquisition or construction of a fixed asset qualifying for capitalisation, the
amount of borrowing costs eligible for capitalisation is determined by applying the weighted average effective interest rate
of general borrowings, to the weighted average of the excess amount of cumulative expenditures on the asset over the
amount of specific borrowings. The effective interest rate is the rate at which the estimated future cash flows during the
period of expected duration of the borrowings or applicable shorter period are discounted to the initial amount of the
borrowings.
(16) Intangible assets
Intangible assets, including land use rights and, patents and exploitation rights, are measured at cost.
(a)Land use rights
Land use rights are amortised on the straight-line basis over their approved use period of 30 to 70 years. If the acquisition
costs of the land use rights and the buildings located thereon cannot be reasonably allocated between the land use rights
and the buildings, all of the acquisition costs are recognised as fixed assets.
(b)Patents
Patents are amortised on a straight-line basis over the patent protection period of 10 years as stipulated by the laws.
(c)Exploitation rights
Exploitation rights are amortized on a straight-line basis over permitted exploitation periods of 10 years set out on the
exploitation certificate.
(d)Periodical review of useful life and amortisation method
For an intangible asset with a finite useful life, review of its useful life and amortisation method is performed at each
year-end, with adjustment made as appropriate.
(e)Research and development
The expenditure on an internal research and development project is classified into expenditure on the research
phase and expenditure on the development phase based on its nature and whether there is material uncertainty that
the research and development activities can form an intangible asset at end of the project.
Expenditure on the research phase related to planned survey, evaluation and selection for research on
81
CSG Annual Report 2014
manufacturing technique is recognised in profit or loss in the period in which it is incurred. Prior to mass production,
expenditure on the development phase related to the design and testing phase in regards to the final application of
manufacturing technique is capitalised only if all of the following conditions are satisfied:
the development of manufacturing technique has been fully demonstrated by technical team;
the management has approved the budget for the development of manufacturing technique;
there exists research and analysis of pre-market research explaining that products manufactured with such
technique are capable of marketing;
there is sufficient technical and capital to support the development of manufacturing technique and subsequent
mass production; and the expenditure on manufacturing technique development can be reliably gathered.
Other development expenditures that do not meet the conditions above are recognised in profit or loss in the period
in which they are incurred. Development costs previously recognised as expenses are not recognised as an asset in
a subsequent period. Capitalised expenditure on the development phase is presented as development costs in the
balance sheet and transferred to intangible assets at the date that the asset is ready for its intended use.
(f)Impairment of intangible asset
If the recoverable amount of intangible asset is less than its carrying value, the carrying value is deducted to recoverable
amount (Note 2(18)).
(17) Long-term prepaid expenses
Long-term prepaid expenses include the expenditures that have been incurred but should be recognised as expenses
over more than one year in the current and subsequent periods. Long-term prepaid expenses are amortised on the
straight-line basis over the expected beneficial period and are presented at actual expenditure net of accumulated
amortisation.
(18) Impairment of long-term assets
Fixed assets, construction in progress, intangible assets with finite useful lives and long-term equity investments in
joint ventures and associates are tested for impairment if there is any indication that the assets may be impaired at
the balance sheet date; intangible assets not ready for their intended use are tested at least annually for impairment,
irrespective of whether there is any indication that they may be impaired. If the result of the impairment test indicates
that the recoverable amount of an asset is less than its carrying amount, a provision for impairment and an
impairment loss are 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. Provision for asset impairment is determined and
recognised on the individual asset basis. If it is not possible to estimate the recoverable amount of an individual
asset, the recoverable amount of a group of assets to which the asset belongs is determined. A group of assets is the
smallest group of assets that is able to generate independent cash inflows.
82
CSG Annual Report 2014
Goodwill that is separately presented in the financial statements is tested at least annually for impairment,
irrespective of whether there is any indication that it may be impaired. In conducting the test, the carrying value of
goodwill is allocated to the related asset groups or groups of asset groups which are expected to benefit from the
synergies of the business combination. If the result of the test indicates that the recoverable amount of an asset
group or group of asset groups, including the allocated goodwill, is lower than its carrying amount, the corresponding
impairment loss is recognised. The impairment loss is first deducted from the carrying amount of goodwill that is
allocated to the asset group or group of asset groups, and then deducted from the carrying amounts of other assets
within the asset groups or groups of asset groups in proportion to the carrying amounts of assets other than goodwill.
Once the above asset impairment loss is recognised, it will not be reversed for the value recovered in the subsequent
periods.
(19) Employee benefits
Employee benefits include short-term employee benefits, post-employment benefits, termination benefits and other
long-term employee benefits provided in various forms of consideration in exchange for service rendered by employees or
compensations for the termination of employment relationship.
(a)Short-term employee benefits
Short-term employee benefits include employee wages or salaries, bonus, allowances and subsidies, staff welfare,
premiums or contributions on medical insurance, work injury insurance and maternity insurance, housing funds, union
running costs and employee education costs, short-term paid absences. The employee benefit liabilities are recognised in
the accounting period in which the service is rendered by the employees, with a corresponding charge to the profit or loss
for the current period or the cost of relevant assets. Employee benefits which are non-monetary benefits shall be
measured at fair value.
(b)Post-employment benefits
The Group classifies post-employment benefit plans as either defined contribution plans or defined benefit plans.
Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into a
separate fund and will have no obligation to pay further contributions; and Defined benefit plans are
post-employment benefit plans other than defined contribution plans. During the reporting period, the Group's
post-employment benefits mainly include basic pensions and unemployment insurance, both of which belong to the
defined contribution plans.
Basic pensions
The Group’s employees participate in the basic pension plan set up and administered by local authorities of Ministry of
Human Resource and Social Security. Monthly payments of premiums on the basic pensions are calculated according to
prescribed bases and percentage by the relevant local authorities. When employees retire, the relevant local authorities
are obliged to pay the basic pensions to them. The amounts based on the above calculations are recognised as liabilities
83
CSG Annual Report 2014
in the accounting period in which the service has been rendered by the employees, with a corresponding charge to the
profit or loss for the current period or the cost of relevant assets.
(c)Termination benefits
The Group provides compensation for terminating the employment relationship with employees before the end of the
employment contracts or as an offer to encourage employees to accept voluntary redundancy before the end of the
employment contracts. The Group recognises a liability arising from compensation for termination of the employment
relationship with employees, with a corresponding charge to profit or loss at the earlier of the following dates: 1)
when the Group cannot unilaterally withdraw the offer of termination benefits because of an employment termination
plan or a curtailment proposal;2) when the Group recognises costs or expenses related to the restructuring that
involves the payment of termination benefits.
Early retirement benefits
The Group offers early retirement benefits to those employees who accept early retirement arrangements. The early
retirement benefits refer to the salaries and social security contributions to be paid to and for the employees who
accept voluntary retirement before the normal retirement date prescribed by the State, as approved by the
management. The Group pays early retirement benefits to those early retired employees from the early retirement
date until normal retirement date. The Group accounts for the early retirement benefits in accordance with the
treatment of termination benefits, in which the salaries and social security contributions to be paid to and for the early
retired employees from the off-duty date to the normal retirement date are recognised as liabilities with a
corresponding charge to the profit or loss for the current period. The differences arising from the changes in the
respective actuarial assumptions of the early retirement benefits and the adjustments of benefit standards are
recognised in profit or loss in the period in which they occur.
The termination benefits expected to be paid within one year since the balance sheet date are classified as current
liabilities.
(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) Deferred tax assets and deferred tax liabilities
Deferred tax assets and deferred tax liabilities are calculated and recognised based on the differences arising
between the tax bases of assets and liabilities and their carrying amounts (temporary differences). Deferred tax
asset is recognised for the deductible losses that can be carried forward to subsequent years for deduction of the
taxable profit in accordance with the tax laws. 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
84
CSG Annual Report 2014
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 utilised.
Deferred tax liabilities are recognised for temporary differences arising from investments in subsidiaries and
associates, except where the Group is able to control the timing of reversal of the temporary difference, and it is
probable that the temporary difference will not reverse in the foreseeable future. When it is probable that the
temporary differences arising from investments in subsidiaries and associates will be reversed in the foreseeable
future and that the taxable profit will be available in the future against which the temporary differences can be utilised,
the corresponding deferred tax assets are recognised.
Deferred tax assets and liabilities are offset when:
the deferred taxes are related to the same tax payer within the Group and the same taxation authority; and,
that tax payer within the Group has a legally enforceable right to offset current tax assets against current tax liabilities.
(22) Provisions
Business restructuring, provisions for product warranties, onerous contracts etc. are recognised when the Group has
a present obligation, it is probable that an outflow of economic benefits will be required to settle the obligation, and
the amount of the obligation can be measured reliably.
A provision is initially measured at the best estimate of the expenditure required to settle the related present
obligation. Factors surrounding a contingency, such as the risks, uncertainties and the time value of money, are
taken into account as a whole in reaching the best estimate of a provision. Where the effect of the time value of
money is material, the best estimate is determined by discounting the related future cash outflows. The increase in
the discounted amount of the provision arising from passage of time is recognised as interest expense.
The carrying amount of provisions is reviewed at each balance sheet date and adjusted to reflect the current best
estimate.
(23) Revenue recognition
The amount of revenue is determined in accordance with the fair value of the consideration received or receivable
for the Sale of goods and services in the ordinary course of the Group’s activities. Revenue is shown net of discounts,
rebates and returns.
85
CSG Annual Report 2014
Revenue is recognised when the economic benefits associated with the transaction will flow to the Group, the related
revenue can be reliably measured, and the specific revenue recognition criteria have been met for each type of the
Group’s activities as described below:
(a)Sale of goods
The Group mainly sells flat and engineer glass, fine 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 specified in the
contract. For above sales, when the buyer takes over the goods, the buyer has the right to sell the products, and
should bear the risk of price fluctuation or goods damage
(b)Rendering of services
Revenue is recognized for the rendering of service by the Group to external parties upon the completion of related
service.
(c)Transfer of asset use rights
Interest income is recognized on a time-proportion basis using the effective interest method.
(24) Government grants
Government grants are the monetary asset the Group receives from the government for free, including tax refund,
government subsidies, etc.
Grants from the government are 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. 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 related to an asset refer to the government assets which are obtained by enterprises for the
purposes of purchase or construction of, or which form the long-term assets by other ways. Government grants
related to income refers to government grants other than those related to assets.
Deferred income is recognized for government grants related to an asset and evenly allocated over the useful life of
the related assets, which are recognised in profit or loss for the current period. Government grants measured at
nominal amount is directly recognised in profit or loss for current period.
Government grants relating to income, which is used to compensate the costs or losses incurred in future, are recognised
86
CSG Annual Report 2014
as deferred income and recognised in profit or loss over the period in which related costs are recognised.
(25) Leases
A lease that transfers substantially all the risks and rewards incidental to ownership of an asset is a finance lease. An
operating lease is a lease other than a finance lease. 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, and
are either capitalised as part of the cost of related assets, or charged as an expense for the current period.
(26) Held for sale
A non-current asset or a disposal group is classified as held for sale when all of the following conditions are satisfied:
(1) the non-current asset or the disposal group is available for immediate sale in its present condition subject only to
terms that are usual and customary for sales of such non-current asset or disposal group; (2) the Group has made a
resolution and obtained appropriate approval for disposal of the non-current asset or the disposal group; (3) the
Group has signed an irrevocable transfer agreement with the transferee; and (4) the transfer is to be completed
within one year.
Non-current assets (except for financial assets and deferred tax assets) that meet the recognition criteria for held for
sale are recognised at the amount equal to the lower of the fair value less costs to sell and the carrying amount. The
difference between fair value less costs to sell and carrying amount, should be presented as impairment loss.
Such non-current assets and assets included in disposal groups as classified as held for sale are accounted for as
current assets; while liabilities included in disposal groups classified as held for sale are accounted for as current
liabilities.
A discontinued operation is a component of the Group that either has been disposed of or is classified as held for sale,
and is separately identifiable operationally and for financial reporting purposes, and satisfies one of the following
conditions: (1) represents a separate major line of business or geographical area of operations; (2) is part of a single
coordinated plan to dispose of a separate major line of business or geographical area of operations; and (3) is a
subsidiary acquired exclusively with a view to resale.
(27) 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 appropriates safety production reserve on
following basis:
(a) 4% for revenue below RMB 10 million of the year;
(b) 2% for the revenue between RMB 10 million to RMB 100 million of the year;
87
CSG Annual Report 2014
(c) 0.5% for the revenue between RMB 100 million to RMB 1 billion of the year;
(d) 0.2% for the revenue above RMB 1 billion of the year.
The safety production reserve is mainly used for the overhaul, renewal and maintenance of safety facilities. The
safety production costs are charged to costs of related products or profit and loss when appropriated, and safety
production reserve in equity account are credited correspondingly. When using the special reserve, if the
expenditures are expenses in nature, the expenses incurred are offset against the special reserve directly when
incurred. If the expenditures are capital expenditures, when projects are completed and transferred to fixed assets,
the special reserve should be offset against the cost of fixed assets, and a corresponding accumulated depreciation
are recognised. The fixed assets are no longer be depreciated in future.
(28) Segment information
The Group identifies operating segments based on the internal organisation structure, management requirements
and internal reporting system, and discloses segment information of reportable segments which is determined on the
basis of operating segments.
An operating segment is a component of the Group that satisfies all of the following conditions: (1) the component is able
to earn revenues and incur expenses from its ordinary activities; (2) whose operating results are regularly reviewed by the
Group’s management to make decisions about resources to be allocated to the segment and to assess its performance,
and (3) for which the information on financial position, operating results and cash flows is available to the Group. If two or
more operating segments have similar economic characteristics and satisfy certain conditions, they are aggregated into
one single operating segment.
88
CSG Annual Report 2014
(29) Changes in significant accounting policies
In 2014, the Ministry of Finance of the PRC issued CAS 39 "Fair Value Measurement", CAS 40 "Joint arrangement", CAS 41 "Disclosure of Interests in Other Entities", CAS 2
"Long-Term Equity Investments"(revised), CAS 9 "Employee Benefits" (revised), CAS 30 "Presentation of Financial Statements" (revised), CAS 33 "Consolidated Financial
Statements" (revised) and CAS 37 "Presentation of Financial Instrument" (revised). Other than CAS 37 "Presentation of Financial Instrument" (revised), which should be implemented
for the financial statements of annual 2014 and ever since, other statements should be applied from 1 July 2014.
The Group has adopted the above new standards to prepare the financial statements for the year ended 31 December 2014, and the major impacts are as follows:
Details and reasons for changes of accounting policies Approval procedure Affected accounts and amount
Accounting treatment in relation to long-term equity investments has been restated
under the Accounting Standard for Business Enterprises No.2-Long-Term Equity
Investments. Please see the table(a) as below for the details
Several items in the financial statements have been revised or added and the
comparative financial information has been adjusted accordingly in compliance with
the above prescribed standards, and the balance sheet as at 1 January 2013 has
been presented according to Application Guidance for Accounting Standard for
Business Enterprises No. 30 - Presentation of Financial Statements. Please see the table as below for the details
Disclosure in relation to fair value has been prepared under the Accounting Standard
for Business Enterprises No. 39 - Fair Value Measurement, but the relevant
information of the comparative period has not been adjusted according to the
standard. N/A
Disclosure in relation to the interests of the Group in other entities has been prepared
under the Accounting Standard for Business Enterprises No. 41 - Disclosure of
Interests in Other Entities. The financial information of the comparative period has
been adjusted accordingly. N/A
89
CSG Annual Report 2014
(a) Accounts and amount affected by the first item in changes of accounting
policies as listed above:
Item 31 December 2013 01 January 2013
Other comprehensive income (112,417,641) (112,417,641)
Undistributedprofits 104,227,304 104,227,304
Surplusreserve 8,190,337 8,190,337
The Company held shares of Guangdong Golden Glass Technologies Limited (“Golden Glass”). On 30 June 2011, the Company ceased to have significant influence over this
company due to changes in directors, and the accounting treatment was changed from long-tern equity investments- equity method to financial assets- recognition and
measurement of held-for-sale assets. As at 30 June 2011, the difference between the fair value of shares held by the Company in golden glass and carrying amount of original
long-term investments was charged into capital reserve, and it shall be recorded into investment income for current period according to the revised 2014 accounting
standards.
(b) Accounts and amount affected by the second item in changes of
accounting policies as listed above:
Item 31 December 2013 01 January 2013
Other non-current liabilities (432,364,880) (287,373,063)
Deferred revenue 432,364,880 287,373,063
Capital surplus (45,915,972) (36,058,970)
Other comprehensive income 43,980,241 37,076,752
Differences on translation of foreign currency financial statements 1,935,731 (1,017,782)
90
CSG Annual Report 2014
(30) Critical accounting estimates and judgements
The Group continually evaluates the critical accounting estimates and key assumption applied based on historical
experience and other factors, including expectations of future events that are believed to be reasonable.
The critical accounting estimates and key assumptions that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next accounting year are outlined below:
(a)Income taxes
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 judgement is required from the
Group in determining the provision for income taxes in each of these jurisdictions. 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 income tax
Estimates on deferred tax assets are based on estimates on amount of taxable income and applicable tax rate for every
year. Realization of deferred income tax are subject to sufficient taxable income that are possible to be obtained by the
Group in the future. Change of the future tax rate as well as the reversed time of temporary difference might have effects
on tax expense (income) and the balance of deferred tax assets or liabilities. Those estimates may also cause significant
adjustment on deferred tax.
(c)Impairment of long-term assets (excluding goodwill)
Long-term assets at the balance sheet date should be subject to impairment testing if there are any indications of
impairment. 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 carrying amount by continually using the assets or disposal; and (3)
whether the assumptions used in expected obtainable present value of future cash flows are appropriate.
Various assumptions, including the discount rate and growth rate applied in the method of present value of future cash
flow, are required in evaluating the recoverable amount of assets. If these assumptions cannot be conformed, the
recoverable amount should be modified, and the long-term assets may be impaired accordingly.
(d)The useful life of fixed assets
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
91
CSG Annual Report 2014
estimation and actual results for next accounting period, so significant adjustments may be made to the carrying amount
of fixed assets in balance sheet.
3. Taxation
(1)The main categories and rates of taxes applicable to the Group are set out below:
Category Taxable basis Tax rate
Enterprise income tax Taxable income 15% to 25%
Value-added tax ("VAT") Taxable value added amount (Tax payable is calculated using the
taxable sales amount multiplied by the applicable tax rate less
deductible VAT input of current period) 17%
City maintenance and
construction tax Value-added tax and business tax paid 1% to -7%
Educational surcharge Value-added tax and business tax paid 3% to -5%
Resource Tax Quantities of Silica sold 3 Yuan per ton
Some subsidiaries of the Group have used the “exempt, credit, refund” method on goods exported and the refund rate is
5%-17%.
(2)Tax incentives
Tianjin 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, the period of validity is three years. It applies to 15% tax
rate for three years since 2012.
Dongguan CSG Architectural Glass Co. Ltd. was recognised as a high and new tech enterprise in 2013, and
obtained the Certificate of High and New Tech Enterprise, the period of validity is three years. It applies to 15% tax
rate for three years since 2013.
Wujiang CSG North-east Architectural Glass Co., Ltd. passed the review on a high and new tech enterprise in 2014,
and obtained the Certificate of High and New Tech Enterprise, the period of validity is three years. It applies to 15%
tax rate for three years since 2014.
Dongguan CSG Solar Glass Co,. Ltd. passed the review on a high and new tech enterprise in 2014, and obtained
the Certificate of High and New Tech Enterprise, the period of validity is three years. It applies to 15% tax rate for
three years since 2014.
Yichang CSG Silicon Co. Ltd. passed the review on a high and new tech enterprise in 2014, and obtained the
Certificate of High and New Tech Enterprise, the period of validity is three years. It applies to 15% tax rate for three
92
CSG Annual Report 2014
years since 2014.
Dongguan CSG PV-tech Co. Ltd. was recognised as a high and new tech enterprise in 2013, and obtained the
Certificate of High and New Tech Enterprise, the period of validity is three years. It applies to 15% tax rate for three
years since 2013.
Hebei Sichuan Glass Co., Ltd. was recognised as a high and new tech enterprise in 2013, and obtained the Certificate of
High and New Tech Enterprise, the period of validity is three years. It applies to 15% tax rate for three years since 2013.
Wujiang CSG Glass Co. Ltd. was recognised as a high and new tech enterprise in 2014, and obtained the
Certificate of High and New Tech Enterprise, and the period of validity was three years. It applies to 15% tax rate for
three years since 2014.
Sichuan CSG Energy Conservation Glass Co. Ltd. obtains enterprise income tax preferential treatment for Western
Development, and temporarily calculates enterprise income tax at a tax rate of 15% for current year.
Chengdu CSG Glass Co., Ltd. obtains enterprise income tax preferential treatment for Western Opening-up, and
temporarily calculates enterprise income tax at a tax rate of 15% for current year.
4.Notes to the consolidated financial statements
(1)Cash at bank and on hand
31 December 2014 31 December 2013
Cash on hand 17,163 32,108
Cash at bank 156,633,575 276,313,987
Other cash balances 1,488,312 3,326,428
Including: Total overseas deposit 19,445,274 6,460,858
158,139,050 279,672,523
Other cash balances include margin deposits for issuing letters of credit and bank acceptance notes, amounting to RMB
1,300,790 (2013: RMB 3,221,655), which is restricted cash.
(2)Notes receivable
31 December 2014 31 December 2013
Trade acceptance notes 35,158,725 25,249,258
Bank acceptance notes 120,429,904 298,640,232
155,588,629 323,889,490
93
CSG Annual Report 2014
(a)As at 31 December 2014, notes receivable which have been pledged as collateral by the Group are as follows:
Bank acceptance notes 26,101,928
The pledged notes receivables are the bank acceptance which have been pledged by the Company’s associate, Yichang
CSG Silicon Co. Ltd to create the Letter of Credit for their imported equipment.
(b)As at 31 December 2014, notes receivable which have been endorsed or discounted by the Group but are not yet
due are as follows:
Derecognised Not derecognised
Trade acceptance notes 84,035,619 -
Bank acceptance notes 1,791,552,288 -
1,875,587,907 -
(3)Accounts receivable
31 December 2014 31 December 2013
Accounts receivable 325,849,881 140,386,765
Less: Provision for bad debts (7,575,307) (3,956,082)
318,274,574 136,430,683
(a)The ageing of accounts receivable is analysed as follows:
31 December 2014 31 December 2013
Within 1 year 318,185,786 134,535,013
1 to 2 years 5,976,526 5,774,297
2 to 3 years 1,687,569 -
Over 3 years - 77,455
325,849,881 140,386,765
(b)Accounts receivable analysed by category are as follows:
31 December 2014 31 December 2013
94
CSG Annual Report 2014
Book value Provision for bad debts Book value Provision for bad debts
Provision Provision
% of for bad % of for bad
total total
Amount balance debts Percentage Amount balance debts Percentage
Amounts that are not
individually significant but
with specific provision for
bad debts 1,055,500 0% (1,055,500) 100% 1,176,952 1% (1,176,952) 100%
Provided for bad debts by
portfolio
Portfolio 1 324,373,257 100% (6,511,385) 2% 135,011,681 96% 2,779,130) 2%
Portfolio 2 421,124 0% (8,422) 2% 4,198,132 3% - 0%
325,849,881 100% (7,575,307) 2% 140,386,765 100% (3,956,082) 3%
(c)Provision for bad debts is provided on grouping basis using the percentage of provision method are analysed as
follows:
31 December 2014 31 December 2013
Book value Provision for bad debts Book value Provision for bad debts
Amount Amount Percentage Amount Amount Percentage
Portfolio 1 324,373,257 (6,511,385) 2% 135,011,681 (2,779,130) 2%
Portfolio 2 421,124 (8,422) 2% 4,198,132 - 0%
324,794,381 (6,519,807) 2% 139,209,813 (2,779,130) 2%
(d)As at 31 December 2014, the Company had no accounts receivable with amounts that were individually significant and
that the related provision for bad debts was provided on the individual basis(31 December 2013: Nil).
(e)As at 31 December 2014, accounts receivable of RMB 1,055,500 (31 December 2013: RMB 1,176,952) was not
individually significant but provided for bad debts separately. It represented the trade receivables of the subsidiary of
Dongguan South Glass Photovoltaic Technology Co., Ltd. (" Dongguan South CSG PV "). Due to the business dispute,
Dongguan South CSG PV made full provision against this receivable.
(f)Accounts receivables of RMB 121,161 were written off this year, all of which were low amount of accounts receivable
and none of which arose from related-party transactions. The reasons for the written-off included disputes with customers
and inability to contact with creditors and etc.
(g)As at 31 December 2014, the Group’s five largest accounts receivable balances are set out as below:
95
CSG Annual Report 2014
Percentage in
total accounts
Provision for bad receivable
Balance debts balance
Total balances for the five largest accounts receivable 95,501,350 (1,910,027) 29%
(4)Other receivables
31 December 2014 31 December 2013
Deposits 11,722,126 11,894,550
Payments made on behalf of other parties 10,877,574 3,577,151
Petty cash 1,100,583 1,093,081
Export tax rebates receivable 885,580 -
Amounts due from related parties - 20,491,742
Receivable from insurance company - 72,000,000
Others 1,917,411 668,948
26,503,274 109,725,472
Less: Provision for bad debts (530,118) (359,449)
25,973,156 109,366,023
(a)The aging of other receivables are analysed below:
31 December 2014 31 December 2013
Within 1 year 20,614,986 97,843,656
1 to 2 years 787,282 4,066,046
2 to 3 years 3,073,147 7,110,817
3 to 4 years 1,550,600 584,295
4 to 5 years 393,000 30,000
Over 5 years 84,259 90,658
26,503,274 109,725,472
(b)Other receivables are analysed by categories as below
96
CSG Annual Report 2014
31 December 2014 31 December 2013
Book value Provision for bad debts Book value Provision for bad debts
Provision
Provision for for bad
% of total % of total
Amount balance bad debts Percentage Amount balance debts Percentage
Provided for bad
debts by portfolio
Portfolio 1 26,503,274 100% (530,118) 2% 89,233,730 81% (359,449) 0.4%
Portfolio 2 - - - - 20,491,742 19% - -
26,503,274 100% (530,118) 2% 109,725,472 100% (359,449) 0.3%
(c)No other receivables were written off this year.
(d)For other receivable provided for bad debts by portfolio, the percentage of provision for the portfolio is as
follows:
31 December 2014 31 December 2013
Book value Provision for bad debts Book value Provision for bad debts
Provision
Amount Amount coverage Amount Amount Percentage
Portfolio 1 26,503,274 (530,118) 2% 89,233,730 (359,449) 0.4%
Portfolio 2 - - - 20,491,742 - -
26,503,274 (530,118) 2% 109,725,472 (359,449) 0.3%
(e)As at 31 December 2014, the top 5 largest other receivables are analysed as bellow:
Percentage in total
other receivable Provision for bad
Nature of business Balance Ageing balance debts
Company A Independent third party 9,040,169 Within 1 year 34% (180,803)
Company B Independent third party 5,050,000 Within 1 year 19% (101,000)
Company C Independent third party 1,000,000 Within 1 year 4% (20,000)
Company D Independent third party 699,993 Within 1 year 3% (14,000)
Company E Independent third party 574,265 Within 1 year 2% (11,485)
16,364,427 62% (327,288)
97
CSG Annual Report 2014
(5)Advances to suppliers
(a)The ageing of advances to suppliers is analysed below:
31 December 2014 31 December 2013
Within 1 year 79,212,988 64,425,812
1 to 2 years 2,380,189 1,194,891
2 to 3 years 1,153,376 -
Over 3 years 1,485,000 7,757,626
84,231,553 73,378,329
As at 31 December 2014, advances to suppliers ageing over one year amount to RMB 5,018,565 (31 December 2013:
RMB 8,952,517. They were mainly the advances of materials, and the payment had not been selected because the
materials had not been received.
(b)As at 31 December 2014, the top five largest advances to supplies are set out as below:
Percentage in
total
advances
Balance balance
Total advances for the five largest advances 49,780,504 60%
(6)Inventories
(a)The inventory is categorised as below:
31 December 2014 31 December 2013
Provision for Provision for
declines in the declines in the
value of Carrying value of Carrying
Book Balance inventories amount Book value inventories amount
Raw materials 182,724,650 (2,635,772) 180,088,878 172,776,858 (3,460,876) 169,315,982
Work in progress 13,529,352 - 13,529,352 11,390,574 - 11,390,574
Finished goods 166,376,712 (187,065) 166,189,647 159,807,342 (674,152) 159,133,190
Turnover materials 30,844,741 - 30,844,741 38,844,966 - 38,844,966
393,475,455 (2,822,837) 390,652,618 382,819,740 (4,135,028) 378,684,712
98
CSG Annual Report 2014
(b)Provision for decline in the value of inventories are analysed as follows:
31 December Increase in the Written off in the 31 December
2013 current year current year 2014
Finished goods 674,152 165,415 (652,502) 187,065
Raw materials 3,460,876 827,379 (1,652,483) 2,635,772
4,135,028 992,794 (2,304,985) 2,822,837
(c)The provisions for declines in the value of inventories is analysed below:
Reasons of inventory
Basis for accrued inventory write-down provision write-down provision reversal
Finished goods The amount of carrying amount less net realisable value -
Raw materials The amount of book value less net realisable value -
(7)Other current assets
31 December 2014 31 December 2013
VAT to be offset 177,597,527 169,072,490
Prepaid enterprise income tax 42,311,190 -
Non-current assets held for sale
-Fixed assets - 714,861,781
-Construction in progress - 96,289,101
-Intangible assets - 41,240,723
219,908,717 1,021,464,095
(8)Available-for-sale financial assets
31 December 2014 31 December 2013
Measured at fair value
- Available-for-sale equity instruments 145,568,100 122,760,000
Less: Provisions for impairment - -
145,568,100 122,760,000
99
CSG Annual Report 2014
(a)Details of available-for-sale financial assets are set out as below:
31 December 2014 31 December 2013
Available-for-sale equity instruments
—Fair value 145,568,100 122,760,000
—Cost 166,695,803 208,804,764
—Accumulation of other comprehensive income (21,127,703) (86,044,764)
—Accumulation of impairment - -
The Group holds 14,370,000 shares of Golden Glass and has 6.65% voting rights. Neither the directors of the board nor
the key management personnel of the Golden Glass are nominated by the Group, and the Group does not participate in or
influence the financial and operating policy decisions or the daily operating activities of Golden Glass in other ways;
thereby the Group has no significant influence over Golden Glass, and accordingly it is accounted for as available-for-sale
equity instruments.
(9)Long-term equity investments
31 December 2014 31 December 2013
Associates (a) 751,623,543 770,037,176
Less: Provision for impairment of other long-term
equity investments - -
751,623,543 770,037,176
There is no significant restriction on sale of the long-term equity investments held by the Group.
100
CSG Annual Report 2014
(a)Associates
Variation in current year
Share of net
31 December profit/(loss) under Cash dividends or profit Provision for Provision for
2013 equity method Other changes in equity distributions declared impairment loss Others 31 December 2014 impairment loss
Shenzhen CSG Display
Technology Co., Ltd. 768,204,865 9,329,476 324,568 (26,235,366) - - 751,623,543 -
China Southern Glass
(Australia) Limited 1,832,311 852,319 - (1,290,925) - (1,393,705) - -
770,037,176 10,181,795 324,568 (27,526,291) - (1,393,705) 751,623,543 -
(i)On 11 March 2014, the Company signed an agreement with Truly Wealth Limited to acquire its 2% shares as owned in China Southern Glass (Australia) Limited. The share
transfer procedures were completed on 1 April 2014, thus the Company's shares in China Southern Glass (Australia) Limited increased to 51% from 49%, and obtained
controls over the latter since the date of acquisition.
101
CSG Annual Report 2014
(10)Fixed assets
Machinery and Motor vehicles
Buildings equipment and others Total
Cost
31 December 2013 2,625,181,542 7,316,514,097 164,355,600 10,106,051,239
Increase in the current year
Acquisition 1,453,709 14,139,802 13,054,308 28,647,819
Transfers from
2,543,150,921 4,068,899 3,047,793,889
construction in progress 500,574,069
Others 44,745,591 59,315,407 4,038,165 108,099,163
Decrease in the current year
Disposal or retirement (303,579) (5,692,953) (5,590,037) (11,586,569)
Transfer in construction in
(713,482,360) (79,235) (721,560,386)
progress (7,998,791)
Others (2,513,621) (16,642,354) - (19,155,975)
31 December 2014 3,161,138,920 9,197,302,560 179,847,700 12,538,289,180
Accumulated depreciation
31 December 2013 315,226,370 1,653,676,371 106,565,279 2,075,468,020
Increase in the current year
Provision 88,715,866 591,546,464 28,925,028 709,187,358
Decrease in the current year
Disposal or retirement (5,981) (3,000,651) (4,223,467) (9,152,447)
Transfer in construction in
progress (3,160,001) (279,338,955) (48,825) (280,625,433)
31 December 2014 400,776,254 1,962,883,229 131,218,015 2,494,877,498
Provision for impairment loss
31 December 2013 - 50,645,536 - 50,645,536
Increase in the current year
Provision - 487,048 - 487,048
Others - 145,232,803 - 145,232,803
Decrease in the current year
Disposal or retirement - (1,261,806) - (1,261,806)
Others (2,809,814) (2,809,814)
102
CSG Annual Report 2014
31 December 2014 - 192,293,767 - 192,293,767
Carrying amount
31 December 2014 2,760,362,666 7,042,125,564 48,629,685 9,851,117,915
31 December 2013 2,309,955,172 5,612,192,190 57,790,321 7,979,937,683
In 2014, the depreciation amount provided for fixed assets was RMB 709,187,358(2013: RMB 666,726,289), and the
amount of depreciation expense charged to cost of sales, selling expenses, general and administrative expenses and
construction in progress were RMB 619,530,394(2013: RMB 603,902,520), RMB 1,294,660 (2013: RMB 1,626,728), RMB
77,380,138 (2013: RMB 61,197,041), and RMB 10,982,166 (2013: RMB 0) respectively.
The cost of property, plant, and equipment transferred from constructions in progress was RMB 3,047,793,889. (2013:
RMB 1,253,997,624).
(a)Property, plant, and equipment that does not obtain ownership certificate
Carrying amount Reason
Have submitted the required documents and are in the process of
Buildings 721,348,295 application, or the related land use right certificate pending
(11)Construction in progress
31 December 2014 31 December 2013
Provision for Carrying Provision for Carrying
Book value impairment loss amount Book value impairment loss amount
Yichang ultrathin electronic glass
project 331,017,838 - 331,017,838 211,049,240 - 211,049,240
Qingyuan high-performance ultrathin
electronic glass project 329,196,892 - 329,196,892 28,936,268 - 28,936,268
Hebei float 900T tech-innovation
project 206,731,167 - 206,731,167 - - -
Dongguan Solar Glass Phase I and II
improvement project 198,222,378 (33,075,116) 165,147,262 225,650,441 (34,169,351) 191,481,090
Dongguan Solar Glass Phase I and II
2*250T project renovation 151,377,587 - 151,377,587 - - -
Dongguan PV Tech 200MV PV-tech
Battery Expansion project 137,416,428 - 137,416,428 198,993,042 - 198,993,042
Chengdu Float 700T line
tech-renovation 125,046,580 - 125,046,580 - - -
Sichuan energy-saving project Phase
III 121,483,787 - 121,483,787 - - -
103
CSG Annual Report 2014
Electronic Silicon products expansion
project with annual capacity of 1000
tons 78,039,730 - 78,039,730 - - -
Xianning energy-saving glass project 59,279,228 - 59,279,228 138,872,425 138,872,425
Wujiang new energy distributed
generation project 52,761,779 - 52,761,779 - - -
Wujiang float glass project 70,831,532 (19,876,460) 50,955,072 58,282,399 - 58,282,399
Suzhou PV distributed generation
project 36,670,408 - 36,670,408 - - -
Wujiang energy glass expansion
project 16,203,036 - 16,203,036 389,766,964 - 389,766,964
Yichang 700MW silicon slice expansion
project phase III 3,179,106 - 3,179,106 80,510,116 - 80,510,116
Yichang Polycrystalline silicon technical
project - - - 1,525,226,129 (144,480,698) 1,380,745,431
Others 70,089,836 - 70,089,836 84,533,230 (752,105) 83,781,125
1,987,547,312 (52,951,576) 1,934,595,736 2,941,820,254 (179,402,154) 2,762,418,100
104
CSG Annual Report 2014
(a)Movement of Significant Project
Proportion
Transfer to fixed between Amount of Amount of
assets Decrease in Engineering accumulated interest Capitalisati
31 December Increase in the during the the current 31 December input and interest capitalised in on rate for
Project name Budget 2013 current year current year year 2014 budget (i) capitalised 2014 2014 Source of fund
Internal fund and
Yichang ultrathin electronic glass project 320,000,000 211,049,240 120,119,605 (151,007) - 331,017,838 85% 3,601,169 3,440,969 5.85% bank loan
Qingyuan high-performance ultrathin electronic Internal fund and
glass project 471,660,000 28,936,268 300,260,624 - - 329,196,892 82% 1,202,823 1,202,823 4.20% bank loan
Hebei float 900T tech-innovation project 341,871,140 - 220,273,582 - (13,542,415) 206,731,167 5% - - - Internal fund
Dongguan Solar Glass Phase I and II
improvement project 396,410,000 225,650,441 1,141,777 - (28,569,840) 198,222,378 12% - - - Internal fund
Dongguan Solar Glass Phase I and II 2*250T Internal fund and
project renovation 250,000,000 - 151,377,587 - - 151,377,587 38% 1,196,184 1,196,184 5.41% bank loan
Dongguan PV Tech 200MV PV-tech Battery Internal fund and
Expansion project 697,000,000 198,993,042 80,458,740 (142,035,354) - 137,416,428 90% 30,773,834 3,056,248 5.23% bank loan
Chengdu Float 700T line tech-renovation 106,053,391 - 137,950,346 - (12,903,766) 125,046,580 2% - - - Internal fund
Sichuan energy-saving project Phase III 222,817,517 - 181,157,416 (59,673,629) - 121,483,787 84% - - - Internal fund
Electronic Silicon products expansion project Internal fund and
with annual capacity of 1000 tons 112,485,200 - 99,239,835 (21,200,105) - 78,039,730 66% 969,380 969,380 5.24% bank loan
Internal fund and
Xianning energy-saving glass project 264,672,252 138,872,425 121,217,114 (200,810,311) - 59,279,228 96% 10,397,416 6,263,274 6.25% bank loan
Wujiang new energy distributed generation
project 76,320,000 - 52,761,779 - - 52,761,779 83% - - - Internal fund
Internal fund and
Wujiang float glass project 845,630,000 58,282,399 18,009,109 (5,014,124) (445,852) 70,831,532 99% 20,120,444 - - bank loan
Suzhou PV distributed generation project 50,122,360 - 36,670,408 - - 36,670,408 73% - - - Internal fund
Internal fund and
Wujiang energy glass expansion project 500,000,000 389,766,964 129,765,964 (503,329,892) - 16,203,036 94% 6,321,397 2,038,546 5.40% bank loan
Yichang 700MW silicon slice expansion Internal fund and
project phase III 1,980,000,000 80,510,116 254,791,896 (332,122,906) - 3,179,106 26% 15,243,032 4,704,433 5.24% bank loan
Internal fund and
Yichang Polycrystalline silicon technical project 1,780,525,000 1,525,226,129 56,755,875 (1,557,920,954) (24,061,050) - 99% 31,349,486 10,609,884 5.24% bank loan
Internal fund and
Others 1,208,770,000 84,533,230 211,092,213 (225,535,607) - 70,089,836 - 14,099,011 1,016,708 - bank loan
2,941,820,254 2,173,043,870 (3,047,793,889) (79,522,923) 1,987,547,312 135,274,176 34,498,449
(i)The proportion of project expenditure incurred to the budget is determined by the accumulative expenditures incurred divided by the total budget. Some of the projects are
transferred to property, plant, and equipment because the construction is completed.
(ii)The budget and actual expenditures incurred for these kinds of projects include cost of acquiring land use rights. The balance of construction in progress does not include the
costs of acquiring land-use right.
105
CSG Annual Report 2014
(b)Provision for impairment of Construction in Progress
31 December Increase in the Decrease in the 31 December
Project name 2013 current year current year 2014 Reason for provision
Yichang Polycrystalline
silicon technical project 145,232,803 - (145,232,803) -
Dongguan Solar Glass
Phase I and II
improvement project 34,169,351 - (1,094,235) 33,075,116 .
The equipment is obsolete.
Provision is determined by
the difference between
Wujiang float glass carrying amount and
project - 19,876,460 - 19,876,460 estimated net selling price.
179,402,154 19,876,460 (146,327,038) 52,951,576
(12)Intangible assets and development expenditure
Exploitation
Land use rights Patents rights Others Total
Cost
31 December 2013 930,748,447 93,906,914 4,456,536 21,017,195 1,050,129,092
Increase in the
current year
Acquisition - 24,061,050 - 2,644,107 26,705,157
Internal
- 17,368,060 - - 17,368,060
development
Others 342,483 - - - 342,483
31 December 2014 931,090,930 135,338,024 4,456,536 23,659,302 1,094,544,792
Accumulated
amortisation
31 December 2013 66,982,288 26,893,388 2,104,160 7,609,248 103,589,084
Increase in the
current year
106
CSG Annual Report 2014
Provision 18,986,162 7,686,846 400,641 4,085,269 31,158,918
31 December 2014 85,968,450 34,580,234 2,504,801 11,694,517 134,748,002
Provision for
impairment loss
31 December 2013 - 13,201,347 - 9,133 13,210,480
31 December 2014 - 13,201,347 - 9,133 13,210,480
Carrying amount
31 December 2014 845,122,480 87,554,443 1,951,735 11,957,652 946,586,310
31 December 2013 863,766,159 53,812,179 2,352,376 13,398,814 933,329,528
In 2014, the amortisation of intangible assets amounted to RMB 31,158,918(2013: RMB 33,603,131).
As at 31 December 2014, ownership certificates of land use right (“Land ownership Certificates”) for certain land use
rights of the Group with carrying amounts of approximately RMB 17,966,349 (cost: RMB 18,273,829) had not yet been
obtained by the Group (as at 31 December 2013, carrying amount: RMB 18,134,263, cost: RMB 18,273,829). The
Company’s management are of the view that there is no legal restriction for the Group to apply for and obtain the Land
Ownership Certificates and has no adverse effect on the Group’s business operation. The management estimates that the
land use right certificates can be obtained within two years.
Research expenditure is analysed below:
31 December 31 Increase in the 31 December
2013 current year Decrease in the current year 2014
Recognised as
Recognised as intangible
expense assets
Development expenditure 9,881,310 37,710,233 (12,547,827) (17,368,060) 17,675,656
In 2014, the total amount of research and development expenditures of the Group was RMB 208,139,482 (2013: RMB
190,986,572), including RMB 182,975,076 (2013: RMB 179,879,478) recorded in income statement for current period and
RMB 17,368,060(2013: RMB 4,836,076) recognized as intangible assets for current period. The development
expenditures accounted for 18% of total research and development expenditures(2013: 12%). As at 31 December 2014,
the intangible assets arising from internal research and development accounted for 8.45% of total of intangible assets
(2013: 6.61%).
(13)Goodwill
107
CSG Annual Report 2014
31 December Increase in the Decrease in the 31 December
2013 current year current year 2014
Goodwill 3,039,946 - - 3,039,946
(i) The goodwill arose from purchasing the minority shareholder equity from Tianjin CSG Architectural Glass Co., Ltd in
2007.
The goodwill allocated to the asset groups and groups of asset groups was summarised by operating segments as
Floating Glass and Architectural Glass segment.
The Company's management considered that the goodwill was not impaired at 31 December 2014.
The recoverable amount of asset groups and groups of asset groups is calculated using the estimated cash flows
determined according to the five-year budget approved by management. Management determines budgeted gross margin
and growth rate based on past experience and forecast on future market development. The discount rates used by
management are the pre-tax interest rates that are able to reflect the risks specific to the related asset groups.
(14)Deferred tax assets and liabilities
(a)Deferred income tax assets before offsetting
31 December 2014 31 December 2013
Deductible Deductible
temporary temporary
differences Deferred tax assets differences Deferred tax assets
Provision for asset
impairments 331,582,423 50,084,878 394,062,293 66,928,812
Tax loss 228,839,385 39,358,381 488,375,368 82,067,509
Government grants 118,438,100 17,765,715 74,376,594 18,168,759
Accrued expenses 11,695,801 1,856,243 18,704,822 2,746,933
Depreciation of fixed
assets 62,001,185 11,479,038 55,638,307 13,373,098
Impairment not yet
approved by the tax
authority 1,686,604 421,651 - -
754,243,498 120,965,906 1,031,157,384 183,285,111
Including:
Expected to reverse within one
year (inclusive) 33,245,693 90,581,639
Expected to be recovered after
one year 87,720,213 92,703,472
120,965,906 183,285,111
108
CSG Annual Report 2014
(b)Deferred income tax liabilities before offsetting
31 December 2014 31 December 2013
Taxable temporary Deferred tax Taxable temporary Deferred tax
differences liabilities differences liabilities
Depreciation of fixed
assets 148,485,447 23,330,396 90,877,625 19,136,896
Changes in fair value of
available-for-sale
financial assets(Note
4(8)) 127,174,500 31,044,915 98,349,984 22,910,046
Withholding income
tax(i) 96,760,660 4,838,033 190,630,093 10,749,040
372,420,607 59,213,344 379,857,702 52,795,982
Including:
Expected to reverse within one
year (inclusive) 38,566,869 38,509,926
Expected to be recovered after
one year 20,646,475 14,286,056
59,213,344 52,795,982
(i) In accordance with CIT Laws, if the subsidiaries in Mainland China remit dividends, which are realised after 1
January 2008, to those overseas subsidiaries within the Group, the overseas subsidiaries should pay the certain
withholding income tax for dividends received.
(c)Deductible temporary differences and deductible losses that are not recognised as deferred tax assets are analysed as
follows:
31 December 2014 31 December 2013
Deductible losses(i) 17,574,997 10,083,600
(i) The deductible tax losses not recognised as deferred tax assets mainly represented the tax losses of the Company
and some closed subsidiaries. The management expected that it was not probable that taxable profit would be available in
the future against which these deductible tax losses can be utilised, and accordingly, did not recognise the deferred tax
assets.
109
CSG Annual Report 2014
(d)The tax losses for which no deferred tax assets were recognised will expire in the following years:
31 December 2014 31 December 2013
2015 5,878,284 1,239,309
2016 5,224,377 8,102,695
2017 - 741,596
2018 - -
2019 6,472,336 -
17,574,997 10,083,600
(e)The net balances of deferred tax assets and liabilities after offsetting are as follows:
31 December 2014 31 December 2013
Net deferred income Net deferred income
tax assets Temporary differences tax assets Temporary differences
or liabilities and deductible tax loss or liabilities and deductible tax loss
Deferred tax assets 103,781,894 643,634,824 164,787,158 945,930,458
Deferred tax liabilities 42,029,332 261,811,933 34,298,029 294,630,776
(15)Other non-current assets
31 December 2014 31 December 2013
Prepayment of land premium 6,510,000 6,510,000
Prepayment for software upgrading 1,149,084 -
7,659,084 6,510,000
(16)Provision for asset impairments
Decrease in the current year
Increase in Disposal of Transfer of
31 December the current subsidiarie assets into fixed 31 December
2013 year Reverse s Written-off assets 2014
Provision for bad debts 4,315,531 4,746,373 (832,094) (3,124) (121,261) - - 8,105,425
110
CSG Annual Report 2014
Including: Provision for
bad debts
of
accounts
receivabl
e 3,956,082 4,496,929 (756,443) - (121,261) - 7,575,307
- Provision for
bad debts
of other
receivable
s 359,449 249,444 (75,651) (3,124) - - 530,118
Provision for
impairment of
inventories 4,135,028 992,794 - - (2,304,985) - 2,822,837
Provision for
impairment of fixed
assets 50,645,536 487,048 - - (4,071,620) 145,232,803 192,293,767
Provision for
impairment of
construction in
progress 179,402,154 19,876,460 - - (1,094,235) (145,232,803) 52,951,576
Provision for
impairment of
intangible assets 13,210,480 - - - - - 13,210,480
251,708,729 26,102,675 (832,094) (3,124) (7,592,101) - 269,384,085
(17)Short-term borrowings
(a)Categorization of short-term borrowings
31 December 2014 31 December 2013
Guaranteed(i) 276,123,175 139,743,800
Unsecured 81,000,000 185,000,000
Short-term finance bonds (ii)(iii) 1,600,000,000 1,100,000,000
1,957,123,175 1,424,743,800
(i) As at 31 December 2014, short-term loans of certain subsidiaries of the Company amounting to RMB 276,123,175(31
December 2013: RMB 139,743,800) were guaranteed by the Company, of which the minority shareholders provided a
back to back guarantee to the Company amounting to RMB 5,346,960 (31 December 2013: RMB 13,577,007).
111
CSG Annual Report 2014
(ii) Approved by file No. [2013]CP20 of Inter Bank Market Trading Association, the Company is entitled to issue short-term
financial bonds with the limit of RMB1,100,000,000, which expires on 25 January 2015.
The Company issued short-term bonds of RMB 700,000,000 on 27 June 2014 for the second time in 2014. The bons
above matured on 27 June 2015, with an annual interest rate of 5.10%.
The Company issued short-term bonds of RMB 400,000,000 on 25 August 2014 for the third time in 2014. The bons
above matured on 25 August 2015, with an annual interest rate of 5.10%.
(iii) Approved by file No. [2013]CP20 of Inter Bank Market Trading Association, the Company is entitled to
issue short-term financial bonds with the limit of RMB1,100,000,000, which expires on 14 January 2016.
The Company issued short-term bonds of RMB 500,000,000 on 14 March 2014 for the first time in 2014. The bons above
matured on 14 March 2015, with an annual interest rate of 5.65%. Until the balance sheet date, such short-term bonds
has been repaid.
As at 31 December 2014, the interest of short-term borrowings varied from 2.10% to 6.00%(31 December 2013: 3.50% to
6.15%).
(18)Trade acceptance notes
31 December 2014 31 December 2013
Bank acceptance notes 3,500,000 4,429,188
All notes payable are due within one year.
(19)Accounts payable
31 December 2014 31 December 2013
Account payable for materials 439,372,650 451,221,943
Account payable for equipment 297,341,486 269,562,625
Account payable for constructions 161,767,036 183,742,269
Account payable for freight 39,476,466 56,828,669
Account payable for water and electricity 17,886,165 11,473,944
Others 4,694,073 8,786,999
960,537,876 981,616,449
As at 31 December 2014, the amount of accounts payable over 1 year was approximately RMB 135,951,066 (31
December 2013: RMB 94,719,853), which mainly comprised of payables for construction work. As the construction work
had not passed the final acceptance test yet, the balance was not yet settled.
112
CSG Annual Report 2014
(20)Advances from customers
31 December 2014 31 December 2013
Advances from customers 113,994,747 160,689,070
The aging of balances was substantively within 1 year.
(21)Employee benefits payable
31 December 2014 31 December 2013
Short-term employee benefits payable(a) 159,038,971 160,236,136
Defined contribution plans payable(b) 1,392 5,488
Termination benefits payable(c) - 6,135,614
159,040,363 166,377,238
(a)Short-term employee benefits
Increase in Decrease in
31 December the current the current 31 December
2013 year year 2014
Wages and salaries, bonus,
allowances and subsidies 92,068,628 712,242,014 (707,843,882) 96,466,760
Social security contributions 1,592 27,164,546 (27,165,375) 763
Including: Medical insurance 1,296 21,298,841 (21,299,532) 605
Work injury insurance 181 4,323,800 (4,323,860) 121
Maternity insurance 115 1,541,905 (1,541,983) 37
Housing funds 1,688,347 33,140,802 (33,017,936) 1,811,213
Labour union funds and employee
education funds 13,677,569 10,814,409 (10,931,743) 13,560,235
Management bonus(i) 52,800,000 56,200,000 (61,800,000) 47,200,000
160,236,136 839,561,771 (840,758,936) 159,038,971
Pursuant to the resolution at 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 was based on the annual return on net assets and the
net profit for the year. During the year, management bonuses amounting to RMB 56,200,000 (2013: RMB 71,800,000)
were accrued and charged to profit and loss.
113
CSG Annual Report 2014
(b)Defined contribution plans payable
31 December Increase in the current 31 December
Decrease in the current year
2013 year 2014
Basic pensions 5,121 71,541,431 (71,545,342) 1,210
Unemployment
insurance 367 5,637,078 (5,637,263) 182
5,488 77,178,509 (77,182,605) 1,392
(c)Termination benefits payable
31 December 2014 31 December 2013
Other termination benefits (i) - 6,135,614
(i)Other termination benefits referred to the economic compensation paid by the Group for the resignation of Shenzhen
CSG Float Glass Co., Ltd.
(22)Taxes payable
31 December 2014 31 December 2013
Enterprise income tax payable 31,803,614 103,256,466
Value-added tax payable 13,020,627 29,120,147
Housing property tax payable 3,062,512 12,493,565
Individual income tax payable 2,417,752 2,446,051
Educational surcharge payable 1,451,458 4,201,672
City maintenance and construction tax payable 1,151,060 2,905,195
Others 4,306,585 6,331,607
57,213,608 160,754,703
(23)Interest payable
31 December 2014 31 December 2013
Interest of long-term borrowings with periodic payments of
interest and return of principal at maturity 1,063,746 1,501,744
114
CSG Annual Report 2014
Interest for corporate bonds 21,205,379 21,205,379
Interest payable for short-term borrowings 4,304,657 1,398,983
Interest payable for short-term financing 47,983,200 36,661,428
74,556,982 60,767,534
(24)Other payables
31 December 2014 31 December 2013
Guarantee deposits received from construction contractors 56,379,162 65,810,543
Accrued cost of sales(ii) 29,715,316 23,158,690
Payment made on behalf of Shenzhen CSG Float Glass Co.,
Ltd.(i) 25,471,189 -
Payable for contracted labour costs 12,588,566 8,000,696
Dispatching capital for industrial production(iii) 10,000,000 -
Temporary receipts 5,017,670 6,144,727
Deposit for disabled 2,280,516 1,073,491
Withholding income tax 1,744,586 2,597,520
Advance received for dispose of a subsidiary - 450,000,000
Others 4,072,973 344,916
147,269,978 557,130,583
(i) It represented the payment made to external third parties arising from undertaking the rights of debtor and creditor.
(ii) It represented various fees already incurred but without invoices, including water and electricity fee, professional
service fee, and travelling expenses.
It represented the loan from Yichang Municipal Finance Bureau borrowed by the subsidiary Yichang CSG Silicon Co. Ltd.
("Yichang CSG") as dispatching capital for industrial production in October of 2014, with an amount of RMB 10,000,000.
The loan is interest free.
Most of the other payables are due within 1 year.
(25)Current portion of non-current liabilities
31 December 2014 31 December 2013
115
CSG Annual Report 2014
Current portion of long-term borrowings
- Guaranteed(i) 123,283,550 106,074,515
- Unsecured - 293,775,200
Current portion of non-current liabilities(ii) 1,995,783,205 -
2,119,066,755 399,849,715
(i) The loans were guaranteed by the Company in favour of the subsidiaries, of which RMB 5,284,000(31 December
2013: RMB 10,931,447 were back to back guaranteed by the minority shareholders of the subsidiaries of the
Company.
(ii) Current portion of non-current liabilities represented corporate bonds payable.
Amortization of
31 December Interest accrued at premium and Repayment in 31 December
2013 par value discount current year 2014
Corporate
bonds 1,991,041,175 106,600,000 4,742,030 (106,600,000) 1,995,783,205
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
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 RMB 2 billion.
The Corporate Bonds include RMB 1 billion that will mature in 5 years (“5 year Bonds”) and another RMB 1 billion that will
mature in 7 years (“7 year Bonds”). The 7 year Bonds holders have a put option over the Company to repurchase at the
end of the fifth year. The Corporate Bonds carries at fixed interest rate of 5.33% per year, with interest paid annually. The
Bonds are recorded at actual discounted issuing amount, and the effective interest rate is 5.59% annually.
(26)Other non-current liabilities
31 December Increase in the Decrease in the 31 December
2013 current year current year 2014
Provisions
Others 300,000 - - 300,000
116
CSG Annual Report 2014
(27)Long-term borrowings
31 December 2014 31 December 2013
Guaranteed (i) 187,817,820 302,904,204
Unsecured 196,000,000 -
383,817,820 302,904,204
As at 31 December 2014, loans of certain subsidiaries of the Company were guaranteed by the Company, and the
minority shareholders of the subsidiaries of the Company provided a back to back guarantee to the Company amounting
to RMB 5,284,000 (2013: RMB 74,536,483). The interest should be paid monthly or quarterly. The principals will be repaid
between January 2016 and August 2018.
As at 31 December 2014, the interest of long term borrowings varied from 5.70% t0 6.15%(31 December 2013: 3.87% to
6.4%).
(28)Bonds payable
31 December Accrued Amortized 31 December
2013 Interest Paid interest Reduction 2014
Corporate (1,995,783,205)
bonds 1,991,041,175 106,600,000 4,742,030 (106,600,000) -
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 RMB 2 billion.
The Corporate Bonds include RMB 1 billion that will mature in 5 years (“5 year Bonds”) and another RMB 1 billion that will
mature in 7 years (“7 year Bonds”). The 7 year Bonds holders have a put option over the Company to repurchase at the
end of the fifth year. In 2014, the Company reclassified corporate bonds into current portion of non-current liabilities.
(29)Deferred revenue
31 December 2014 31 December 2013
117
CSG Annual Report 2014
Government grants 444,909,519 432,364,880
Government grants are analysed below:
Non-operating
31 December Increase in income in 31 December Assets/
Government grants 2013 current year current year 2014 Income related
Tianjin CSG Golden Sun
Project(i) 46,366,000 20,240,000 (2,764,205) 63,841,795 Asset-related
Dongguan CSG Golden Sun
Project(ii) 33,583,584 20,950,000 (2,933,584) 51,600,000 Asset-related
Hebei CSG Golden Sun
Project(iii) 31,810,000 16,500,000 (2,415,500) 45,894,500 Asset-related
Xianning CSG Golden Sun
Project(iv) 60,104,917 - (3,030,500) 57,074,417 Asset-related
Infrastructure compensation
for Wujiang CSG Glass
Co., Ltd(v) 54,191,230 868,804 (3,306,523) 51,753,511 Asset-related
YIichang Photoconductive
glass project(vi) 41,719,660 - - 41,719,660 Asset-related
Yichang Silicon products
project (vii) 33,046,875 - (2,812,500) 30,234,375 Asset-related
Yichang CSG crucible
11,843,870 (726,290) 14,586,362
project(viii) 3,468,782 Asset-related
Sichuan energy-saving glass
17,091,540 (1,654,020) 15,437,520
project(ix) - Asset-related
Group Coating Film
(625,000) 11,167,800
experimental project(x) 11,792,800 - Asset-related
Enterprise supporting fund for
Xianning CSG Glass Co., (35,000,000) 28,632,400
Ltd.(xi) 63,632,400 - Income related
Asset-related/
27,182,004 (2,169,143) 32,967,179
Others 7,954,318 Income related
432,364,880 69,981,904 (57,437,265) 444,909,519
(i) The allowance was granted by Tianjin Municipal Government. The allowance was used for establishing
PV power station by Tianjin CSG Architectural Glass Co., Ltd.("Tianjin project"). When the facilities
118
CSG Annual Report 2014
were set up, they belonged to Tianjin CSG. The allowance will be credited to income statement in 20
years, the useful life of the PV power station.
(ii) The allowance was granted by Dongguan Municipal Government. The allowance was used for
establishing PV power station by Dongguan CSG Architectural Glass Co. Ltd. ("Dongguan project").
When the facilities were set up, they belonged to Dongguan CSG. The allowance will be credited to
income statement in 20 years, the useful life of the PV power station.
(iii) The allowance was granted by Langfang Municipal Government. The allowance was used for
establishing PV power station by Hebei CSG Glass Co., Ltd.("Hebei project"). When the facilities were
set up, they belonged to Hebei CSG. The allowance will be credited to income statement in 20 years,
the useful life of the PV power station.
(iv) The allowance was granted by Xianning Municipal Government. The allowance was used for
establishing PV power station by Xianning CSG Glass Co Ltd.("Xianning project"). When the facilities
were set up, they belonged to Xianning CSG. The allowance will be credited to income statement in 20
years, the useful life of the PV power station.
(v) The allowance was infrastructure compensation granted by Wujiang municipal government, and will be
credited to income statement in 15 years, the shortest operating period as committed by the Group.
(vi) The allowance was granted by Wujiang municipal government, and will be credited to income
statement in 15 years, in accordance with the minimum operating period committed by the Group.
(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， which will be amortised by 15 years according to the useful life of the
converting station.
(viii) It represented the government supporting fund obtained by Yichang Silicon from the acquiring of the
assets and liabilities of Crucible project of Yichang Hejing Photoelectric Ceramic Co., LTD. The
proceeds would be amortized and credited to income statement by 15 years after related assets were
put into use.
(ix) It represented the funds granted by Chengdu local government for energy glass project. It will be
amortised and credited to income statement in 15 years, in accordance with the minimum operating
period committed by the Group.
(x) The allowance was granted by Shenzhen City Development and Reform Commission for the
development of Group Coating Film experimental project. The grant will be amortised and credited to
income statement by 20 years in the estimated useful life of the relevant fixed assets.
119
CSG Annual Report 2014
(xi) The allowance was granted by Hubei Xianning Economic Development Management Centre.
According to the document Xian Kai Cai Fa [2012] No. 3 issued by the Centre, the allowance was used
to support the development of Xianning CSG from 2012 to 2015.
(30)Share capital
Movements for the year ended 31 December 2014
New issues
31 December during the Bonus 31 December
2013 year issue Capitalisation Others Sub-total 2014
PRC public shares 1,312,751,568 - - - - - 1,312,751,568
Domestically listed foreign shares 762,583,992 - - - - - 762,583,992
2,075,335,560 - - - - - 2,075,335,560
Movements for the year ended 31 December 2014
New issues
2012 during the Bonus 31 December
31 December year issue Capitalisation Others Sub-total 2013
PRC public shares 1,312,751,568 - - - - - 1,312,751,568
Domestically listed foreign shares 762,583,992 - - - - - 762,583,992
2,075,335,560 - - - - - 2,075,335,560
The par value of the PRC public shares is RMB 1, and that of domestically listed foreign shares is HKD 1.
(31)Capital surplus
Increase in the Decrease in the
31 December 2013 current year current year 31 December 2014
Capital premium 1,345,264,670 - - 1,345,264,670
Other capital surplus 186,246 1,370,018 (6,730,027) (5,173,763)
Effects of the change in investees’
other equity applying the equity
method 27,047 324,568 - 351,615
Share-based payment 2,409,421 - - 2,409,421
Transfer from the balance of
capital surplus recognised under
previous accounting system (2,250,222) - - (2,250,222)
Disposal of odd lots - 1,045,450 - 1,045,450
Purchase of minority interest - - (6,730,027) (6,730,027)
1,345,450,916 1,370,018 (6,730,027) 1,340,090,907
120
CSG Annual Report 2014
Increase in the Decrease in the
31 December 2012 current year current year 31 December 2013
Capital premium 1,345,264,670 - - 1,345,264,670
Other capital surplus (291,652) 477,898 - 186,246
Effects of the change in investees’
other equity applying the equity
method - 27,047 - 27,047
Share-based payment 1,958,570 450,851 - 2,409,421
Transfer from the balance of
capital surplus recognised under
previous accounting system (2,250,222) - - (2,250,222)
1,344,973,018 477,898 - 1,345,450,916
(a)The reason for the decrease of Capital reserve–other in current year is the acquisition of minority interest, with the
detail as follows:
(i) On 25 December 2013, the Company purchased 6.03% of the equities of Yichang Silicon, the subsidiary of the
Company, from Yichang LiYuan Sci-Tech Development Co. , Ltd. The share transfer procedures were completed
on 20 January 2014, and the Company thus held 100% equities of Yichang Silicon. The adjustment to capital
surplus due to such transaction is set out as below:
Acquisition cost-
Cash paid for acquisition of minority interests 55,914,931
Less: Share of identifiable net assets in the subsidiary continually
calculated at the proportion of increased part of shares which the
Company is entitled to as of the date of consolidation (54,151,067)
Increase capital surplus of the Group's consolidated statements 1,763,864
(ii) On 9 June 2014, the Company purchased 25% equities of Xianning CSG Glass Co Ltd, the subsidiary of the
Company, from Jinfeng Co.,Ltd. The share transfer procedures were completed on 25 June 2014, and the
Company thus held 100% equities of Xianning CSG. The adjustment to capital surplus due to such transaction is
set out as below:
Acquisition cost-
Cash paid for acquisition of minority interests 69,030,000
Less: Share of identifiable net assets in the subsidiary continually
calculated at the proportion of increased part of shares which the
Company is entitled to as of the date of consolidation (64,063,837)
Increase capital surplus of the Group's consolidated statements 4,966,163
121
CSG Annual Report 2014
(32)Other comprehensive income
Other comprehensive income in Balance Sheet Other comprehensive income in Income Statement for the year ended 31 December 2014
Less: Reclassification of Attributable to
Attributable to previous other equity holders Attributable to
equity holders of Actual amount comprehensive income of the minority
31 December the Company after 31 December before tax for to profit or loss in current Less: Income Company after shareholders
2013 tax 2014 current year year tax expenses tax after tax
Other comprehensive income items which will be
reclassified subsequently to profit or loss
Gains or losses arising from changes in fair
value of available-for-sale financial assets (69,051,669) 53,081,559 (15,970,110) 59,886,100 6,237,748 (13,042,289) 53,081,559 -
Finance incentives for energy and technical
transformation 2,550,000 - 2,550,000 - - - - -
Differences on translation of foreign currency
financial statements (1,935,731) 1,834,748 (100,983) 1,284,714 - - 1,834,748 (550,034)
(68,437,400) 54,916,307 (13,521,093) 61,170,814 6,237,748 (13,042,289) 54,916,307 (550,034)
Other comprehensive income in Income Statement for the Year Ended 31 December
Other comprehensive income in Balance Sheet 2013
Less: Attributabl
Reclassification of Attributable to e to
Attributable to previous other equity holders minority
equity holders of Actual amount comprehensive of the sharehold
31 December the Company 31 December before tax for income to profit or Less: Income Company ers after
2012 after tax 2013 current year loss in current year tax expenses after tax tax
Other comprehensive income items which will be
reclassified subsequently to profit or loss
Gains or losses arising from changes in fair value of
available-for-sale financial assets (78,908,671) 9,857,002 (69,051,669) 12,804,541 - (2,947,539) 9,857,002 -
Finance incentives for energy and technical
- -
transformation 2,550,000 - 2,550,000 - - -
Differences on translation of foreign currency financial
(2,953,513) -
statements 1,017,782 (2,953,513) (1,935,731) - (2,953,513) -
(75,340,889) 6,903,489 (68,437,400) 9,851,028 - (2,947,539) 6,903,489 -
122
CSG Annual Report 2014
(33)Special reserve
31 December Increase in the Decrease in the 31 December
2013 current year current year 2014
Safety production reserve 14,503,860 3,007,776 (2,948,810) 14,562,826
The subsidiary of Yichang CSG is a high risk chemical production enterprise. Therefore, the Company
appropriated such reserve in accordance with relevant regulations.
(34)Surplus reserve
31 December Increase in the Decrease in the 31 December
2013 current year current year 2014
Statutory surplus reserve 645,386,491 57,533,672 - 702,920,163
Discretionary surplus reserve 127,852,568 - - 127,852,568
773,239,059 57,533,672 - 830,772,731
1 January
2013 Increase in the Decrease in the 31 December
(Restated) current year current year 2013
Statutory surplus reserve 558,554,348 86,832,143 - 645,386,491
Discretionary surplus reserve 127,852,568 - - 127,852,568
686,406,916 86,832,143 - 773,239,059
In accordance with the Company Law and the Company’s Articles of Association, the Company should appropriate 10% of
net profit for the year to the statutory surplus reserve, and the Company can cease appropriation when the statutory
surplus reserve accumulates to more than 50% of the registered capital. The statutory surplus reserve can be used to
make up for the loss or increase share capital after approval from the appropriate authorities. The Company accrued
statutory surplus reserve at the amount of RMB 57,533,672, 10% of the net profit, in 2014. (2013: RMB 86,832,143,
accrued at 10% of the net profit).
The Company appropriates for the discretionary surplus reserve after the shareholders’ meeting approves the
proposal from the Board of Directors. The discretionary surplus reserve can be used to make up for the loss
or increase the share capital after approval from the appropriate authorities. The Company did not appropriate
to discretionary surplus reserve during the year.
123
CSG Annual Report 2014
(35)Undistributed profits
2014 2013
Undistributed profits at the beginning of
the year (before adjustment) 3,907,802,144 2,665,777,580
Adjustment - 104,227,302
Undistributed profits at the beginning of
the year (after adjustment) 3,907,802,144 2,770,004,882
Add: Net profits attributable to the equity
shareholders of the Company 873,653,030 1,535,929,739
Less: Appropriation to statutory surplus
reserves (57,533,672) (86,832,143)
Dividends to ordinary shares (622,600,668) (311,300,334)
Undistributed profits at end of year 4,101,320,834 3,915,992,483
As at 31 December 2014, included in the undistributed profits, RMB715,870,900 was subsidiaries’ surplus reserve
attributable to the Group (31 December 2013: RMB 730,054,385), among which RMB 58,634,502 (2013: RMB
72,870,930) was appropriated by the subsidiaries and attributable to the Group in 2014 and RMB 72,817,987(2013: RMB
41,709,715) in surplus reserve was transferred out in 2014 due to disposal of subsidiaries.
Pursuant to the resolution of board of directors of the Company on 14 April 2014, the Company paid cash
dividend of RMB 3 (tax inclusive) for each 10 shares based on total shares of 2,075,335,560, with cash
dividend distributed in a total of RMB 622,600,668.
(36)Revenue and cost of sales
2014 2013
Revenue from main operations 6,975,782,507 7,663,179,548
Revenue from other operations 68,720,138 70,616,566
7,044,502,645 7,733,796,114
2014 2013
Cost of sales from main operations 5,282,531,266 5,470,796,940
Cost of sales from other operations 40,688,124 30,503,717
5,323,219,390 5,501,300,657
124
CSG Annual Report 2014
(a)Revenue and cost of main operations
Revenue and cost of main operations analysed by product are set out below:
2014 2013
Revenue Cost Revenue Cost
Floating glass 3,618,711,310 3,092,620,314 3,958,217,805 3,104,282,050
Engineer glass 3,028,041,544 2,059,740,779 2,854,745,532 1,956,957,342
Solar panel and parts 1,087,053,989 890,895,075 945,054,866 814,673,607
Fine glass - - 794,643,237 481,426,660
Elimination (758,024,336) (760,724,902) (889,481,892) (886,542,719)
6,975,782,507 5,282,531,266 7,663,179,548 5,470,796,940
(b)Other revenue and cost
2014 2013
Revenue from Cost of sales from Revenue from Cost of sales from
other operations other operations other operations other operations
Sale of raw materials 55,052,841 39,225,539 50,353,649 21,622,360
Leasing income 13,667,297 4,334,084 20,262,917 8,881,357
Others 68,720,138 40,688,124 70,616,566 30,503,717
55,052,841 39,225,539 50,353,649 21,622,360
(37)Taxes and surcharges
2014 2013
Business tax 160,870 455,227
City maintenance and construction tax 16,573,798 24,521,529
Educational surcharge 15,656,695 21,823,359
Others 772,441 1,059,880
33,163,804 47,859,995
125
CSG Annual Report 2014
(38)Selling and distribution expenses
2014 2013
Freight expenses 117,746,160 106,828,789
Employee benefits 88,007,236 89,558,604
Travelling expenses 9,878,808 13,271,862
Entertainment expenses 9,295,926 11,276,621
Vehicle use fee 6,944,405 8,968,094
Compensation 6,297,720 3,839,291
General office expenses 5,842,255 7,109,244
Rental expenses 5,064,210 6,203,531
Depreciation expenses 1,294,660 1,626,728
Others 15,348,975 18,712,011
265,720,355 267,394,775
(39)General and administrative expenses
2014 2013
Employee benefits 177,723,427 236,610,572
Research and development expenses 182,975,076 179,879,478
Taxation Expenses 51,565,821 50,268,540
Depreciation expenses 77,380,138 61,197,041
General office expenses 19,729,998 22,238,006
Amortisation of intangible assets 31,158,918 33,603,131
Water and electricity expense 5,617,643 14,771,713
Canteen costs 6,132,201 10,872,951
Travelling expenses 7,455,219 6,293,313
Rental expenses 5,185,678 7,297,589
Vehicle use fee 5,208,239 6,032,421
Entertainment expenses 6,444,187 6,406,463
Labour unior funds 9,122,427 11,309,395
Others 12,073,117 24,540,647
597,772,089 671,321,260
126
CSG Annual Report 2014
(40)Financial expenses
2014 2013
Loan interest 252,183,762 270,041,796
Less: Borrowing costs capitalized (34,498,449) (37,392,318)
Interest expenses 217,685,313 232,649,478
Amortization of corporate bond issue costs 4,742,030 4,416,887
Less: Interest income (3,200,872) (4,723,169)
Exchange losses/(gains) 4,915,912 (2,502,167)
Others 7,389,051 8,480,673
231,531,434 238,321,702
(41)Expenses by nature
The cost of sales, selling expenses and general and administrative expenses in the income statements are listed
as follows by nature:
2014 2013
Changes in inventories of finished goods and work in
progress (9,086,546) 56,035,217
Consumed raw materials and low value consumables, etc. 2,411,697,076 2,724,727,895
Fuel fee 1,192,958,476 1,173,848,197
Employee benefits 730,013,316 839,456,171
Depreciation and amortization expenses 729,364,110 644,074,024
Water and electricity expense 608,529,625 418,211,432
Freight expenses 117,746,160 106,828,789
Taxation Expenses 51,565,821 50,268,540
General office expenses 36,833,364 40,585,572
Travelling expenses 21,560,882 23,993,959
Entertainment expenses 16,377,321 18,515,449
Vehicle use fee 14,310,899 17,051,049
Rental 10,249,888 13,501,120
Labour union funds 9,122,427 11,309,395
Compensation 6,297,720 3,839,291
Others 239,171,295 297,770,592
6,186,711,834 6,440,016,692
127
CSG Annual Report 2014
(42)Investment income
2014 2013
Cash dividend earned during the holding period of
available-for-sale financial assets 98,640 432,000
Gains from disposal of long-term equity investment(Note
5(1)) 311,247,064 926,639,137
Gains from disposal of available-for-sale financial assets 6,912,150 -
Gain from long-term equity investment under equity
10,181,795
method(Note 4(9)(a)) 305,002
328,439,649 927,376,139
There is no significant restriction on the remittance of investment income to the Group.
(43)Asset impairment losses
2014 2013
Provision for bad debts 3,914,279 (1,798,966)
Provision for inventories 992,794 2,575,770
Impairment of fixed assets 487,048 7,718,170
Impairment of construction in in in progress 19,876,460 54,125,723
Impairment of intangible assets - 1,745,531
25,270,581 64,366,228
(44)Non-operating income
Amount
of non-recurring
gain and loss
2014 2013 included in 2014
Gain on disposal of non-current assets 4,194,755 4,330,610 4,194,755
Including: Gains on disposal of fixed assets 4,194,755 4,330,610 4,194,755
Government grants(a) 90,223,936 115,138,161 90,223,936
Default income 34,099 6,317,040 34,099
128
CSG Annual Report 2014
Insurance indemnities(b) - 72,000,000 -
Compensation income 1,247,768 2,367,157 1,247,768
Funds unpayable 13,937,174 12,877,467 13,937,174
Others 4,190,279 3,657,079 4,190,279
113,828,011 216,687,514 113,828,011
(a)Government grants are analysed below:
2014 2013 Category
Asset-income
Government grants amortization(Note 4(29)) 57,437,265 46,873,843 related
Industry supporting fund 14,040,801 51,575,788 Income related
Advanced energy saving 6,985,967 - Income related
Government awards fund 6,782,155 3,353,990 Income related
Subsidies for research and development 2,321,440 1,709,980 Income related
Interest subsidy for technical reform 439,046 8,010,000 Income related
Energy saving subsidy 20,000 1,000,000 Income related
Others 2,197,262 2,614,560 Income related
90,223,936 115,138,161
(b)On 18 August 2013, a fire occurred to Dongguan CSG PV-tech Co., Ltd. Due to such fire losses, PICC
Property and Casualty Company Limited (PPICCP&C) Shenzhen branch had settled such claim and paid a
compensation of RMB 72,000,000, which was received in January of 2014.
(45)Non-operating expenses
Amount
of non-recurring
gain and loss
2014 2013 included in 2014
Losses on disposal of non-current assets 21,917,537 140,789,846 21,917,537
Including: Losses on disposal of fixed assets 21,917,537 140,789,846 21,917,537
Compensation 282,005 8,000,000 282,005
Donation 23,000 160,000 23,000
Other 4,287,621 3,166,417 4,287,621
129
CSG Annual Report 2014
26,510,163 152,116,263 26,510,163
(i) On 31 October 2010, the Company signed EQUITY TRANSFER CONTRACT OF 100% EQUITIES IN
HAINAN WENCHANG QUARTZ SAND MINE with Hainan AVIC Special Glass materials Co.,Ltd. Wenchang
mine owned Farmland occupation tax payable upon incorporation totalling RMB 2,549,914 due to negligence
to notify by tax authorities and untimely tax payment. As both parties had disagreement in regard to the
assumption of tax payment obligation, Hainan AVIC Special Glass materials Co.,Ltd. filed a lawsuit to the
court in 10 July 2014. A dispute agreement was reached between both parties though mutual negotiation, the
Company paid RMB 2,700,000 in a lump sum.
(46)Income tax expenses
2014 2013
Current income tax calculated by tax laws and related
regulations 30,269,559 267,507,522
Deferred income tax 13,548,198 (7,643,032)
43,817,757 259,864,490
The reconciliation from income tax calculated based on the applicable tax rates and total profit presented in the
consolidated financial statements to the income tax expenses is listed below:
2014 2013
Total profit 983,582,489 1,935,178,887
Income tax calculated at applicable tax rates 137,323,189 414,765,434
Effect of change in tax rates 3,285,273 -
Costs, expenses and losses not deductible for tax purposes 6,693,566 8,170,361
Income not subject to tax (2,570,108) (129,958,948)
Utilisation of previously unrecognised tax losses - (38,723,365)
Temporary differences for which no deferred income tax asset
was recognised for current period (7,093,777) -
Write off temporary differences for which deferred income tax
asset was recognised for previous period 2,775,665 -
Adjustment in income tax expenses in prior years(i) (77,854,087) -
Repay the prior year’s income tax adjustment (23,579,997) -
Withholding tax on subsidiaries’ profit to be distributed 4,838,033 5,611,008
Income tax expenses 43,817,757 259,864,490
130
CSG Annual Report 2014
(i)In 2011 and 2012, Chengdu CSG Glass Co., Ltd. applied to pay income tax at a preferential rate of 15% as
stipulated in west development policies in encouraging the enterprises, but the tax authority made no
approval thereof, so Chengdu CSG Glass Co., Ltd. paid income tax at a rate of 25% in 2011, 2012 and 2013.
Tax authority granted a preferential rate of 15% when 2013 filling was completed in May of 2015.
(47)Earnings per share
(a)Basic earnings per share
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.
2014 2013
Consolidated profit attributable to equity holders of the
Company 873,653,030 1,535,929,739
Weighted average number of ordinary shares in issue 2,075,335,560 2,075,335,560
Basic earnings per share 0.42 0.74
Including:
-Earnings per share for continuing operations 0.42 0.69
-Earnings per share for discontinued operations(Note 11) 0.00 0.05
(b)Diluted earnings per share
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
for the year ended 31 December 2014(2013: Nil), accordingly the diluted earnings per share equalled basic
earnings per share.
(48)Notes to consolidated cash flow statements
(a)Cash received relating to other operating activities
2014 2013
Interest income 3,200,872 4,723,169
Government grants 32,786,671 68,264,318
Return of the pledged deposit 1,920,865 7,283,211
Others 6,735,737 2,739,786
44,644,145 83,010,484
131
CSG Annual Report 2014
(b)Cash paid relating to other operating activities
2014 2013
Freight expenses 141,435,653 113,444,136
Canteen costs 33,754,076 40,258,218
General office expenses 32,538,996 33,039,420
Research and development expenses 21,809,474 19,125,674
Travelling expenses 21,797,036 22,715,580
Entertainment expenses 17,282,575 17,517,291
Vehicle use fee 14,600,357 16,356,356
Maintainance fee 11,282,311 16,498,724
Rental expenses 10,249,888 13,501,119
Insurance 10,099,993 6,056,319
Bank fees 7,810,394 7,007,653
Consulting fee 7,199,200 6,179,099
Compensation 6,297,720 3,839,291
Others 174,434,138 59,211,806
510,591,811 374,750,686
(c)Cash received relating to other investing activities
2014 2013
Consideration receivable for dispose of subsidiary 330,000,000 -
Receivables of equity transfer price - 540,000,000
Receivables of insurance indemnities 72,000,000 -
Government grants received relating to assets 62,573,599 253,398,160
Received deposit 9,431,381 82,885,853
Trial production revenue from constructions in progress 26,311,056 11,229,265
Default income related to disposal of a subsidiary - 6,317,040
507,724,341 893,830,318
(d)Cash paid relating to other investing activities
2014 2013
Return of consideration receivable for dispose of subsidiary - 21,800,000
Deposit paid - 64,643,573
Trial production expenditures from constructions in
progress 95,729,500 43,889,940
95,729,500 130,333,513
132
CSG Annual Report 2014
(e)Cash received relating to other financing activities
2014 2013
Amounts due from related parties 19,610,000 436,613,233
Return of notes deposit - 23,463,087
Proceeds from selling of fractional share 1,045,448 -
20,655,448 460,076,320
(f)Cash payments relating to other financing activities
2014 2013
Repayment of interest-free loan to government - 68,634,600
Commission related to borrowings and notes - 1,992,649
Acquisition of minority interest 124,944,930 -
124,944,930 70,627,249
(49) Supplementary information of the cash flow statement
(a)Reconciliation from net profit to cash flows from operating activities
2014 2013
Net profit 939,764,732 1,675,314,397
Add: Provisions for asset impairment 25,270,581 64,366,228
Depreciation of fixed assets 698,205,192 666,726,289
Amortisation of intangible assets 31,158,918 33,603,131
Safety production reserve 3,007,776 3,400,550
Employee service cost relating to share based payment - 692,644
Net losses on disposal of fixed assets and intangible
17,722,782
assets 136,459,236
Income from insurance indemnities - (72,000,000)
Financial expenses 217,685,313 237,066,365
Investment income (328,439,649) (927,376,139)
Decrease/(Increase) in deferred tax assets 14,279,079 (6,946,821)
Increase/(Decrease) in deferred tax liabilities (403,566) (696,211)
Increase in inventories (10,655,715) (41,135,247)
Increase in operating receivables (62,612,305) (33,298,622)
Increase/(Decrease) in operating payables (138,723,928) (37,308,265)
Net cash flows from operating activities 1,406,259,210 1,698,867,535
133
CSG Annual Report 2014
(b)Net increase / (decrease) in cash and cash equivalents
2014 2013
Cash at the end of the year 156,838,260 276,450,868
Less: Cash at the beginning of the year (276,450,868) (447,736,536)
Net decrease in cash (119,612,608) (171,285,668)
(c)Cash and cash equivalents
31 December 2014 31 December 2013
Cash on hand
-Cash on hand 17,163 32,108
-Cash comprise bank deposits that can be readily drawn on
demand 156,633,575 276,313,987
-Other cash balances hat can be readily drawn on demand. 187,522 104,773
Cash balance at end of year 156,838,260 276,450,868
(d)Disposal of subsidiaries
2014 2013
Cash received from disposal of subsidiaries in current year
Including: Shenzhen CSG Display Technology Co., Ltd. - 426,413,663
Shenzhen CSG Float Glass Co., Ltd. 468,000,000 -
Less: Cash held by subsidiary on the date which control
losses
Including: Shenzhen CSG Display Technology Co., Ltd. - (144,986,958)
Shenzhen CSG Float Glass Co., Ltd. (4,839,877) -
Add: Advance received relating to disposal of
-
subsidiary in 2012 20,000,000
Net proceeds from disposal of subsidiaries 463,160,123 301,426,705
Disposal of net assets of subsidiaries
2014 2013
Current assets 57,070,456 387,511,636
Non-current assets 900,746,922 1,005,855,405
134
CSG Annual Report 2014
Current liabilities (333,839,442) (733,154,470)
Non-current liabilities (17,225,000) (260,798,500)
606,752,936 399,414,071
(50)Monetary items denominated in foreign currencies
31 December 2014
Foreign currency Exchange
balances rates Balances in RMB
Cash at bank and on hand-
USD 745,338 6.1190 4,560,723
HKD 2,419,462 0.7889 1,908,714
AUD 3,494,099 5.0174 17,531,292
EUR 371,052 7.4556 2,766,415
JPY 19 0.0514 1
26,767,145
Accounts receivable-
USD 4,076,148 6.1190 24,941,950
EUR 1,577,296 7.4556 11,759,688
JPY 577,480 0.0514 29,682
36,731,320
Short-term borrowings
USD 11,835,800 6.1190 72,423,260
EUR 2,278,000 7.4556 16,983,857
89,407,117
Current portion of non-current liabilities-
USD 1,028,520 6.1190 6,293,514
Accounts payable-
USD 4,283,460 6.1190 26,210,492
EUR 3,735,786 7.4556 27,852,526
54,063,018
Other payables-
EUR 10,000 7.4556 74,556
135
CSG Annual Report 2014
5 Changes in the scope of consolidation
(1) Disposal of subsidiaries
(a) Related information of disposal of subsidiaries in current year is summarized as below;
Disposal Disposal Disposal Timing for Basis for Difference between disposal The amount of other
consideration percentage method Control right determining timing consideration and disposed comprehensive income related to
losing for Control right investment and corresponding equity investment of original
losing net asset shares in such subsidiary transferred into
subsidiary at consolidated investment gains or losses.
Subsidiaries statements level
An irrevocable
equity transfer
agreement is
Shenzhen CSG signed, with related
Float Glass Co., procedures
Ltd. 918,000,000 100% Sales April of 2014 completed 311,247,064 -
136
CSG Annual Report 2014
(b)Gains or losses arising from disposal and related cash flow information are set out as below
(i)Shenzhen CSG Float Glass Co., Ltd.
Gains or losses arising from disposal are calculated as below:
Amount
Consideration received from the disposal 918,000,000
Less: Net assets of Shenzhen CSG Float Glass Co., Ltd. at date of disposal (606,752,936)
Other comprehensive income recognized in profit or loss -
Investment gains on disposal 311,247,064
(2)Changes in the scope of consolidation due to other reasons
On 11 March 2014, the Company signed an agreement with Truly Wealth Limited to acquire its 2% shares as owned in
China Southern Glass (Australia) Limited. The share transfer procedures were completed on 1 April 2014, thus the
Company's shares in China Southern Glass (Australia) Limited increased to 51% from 49%, and obtained controls over the
latter since the date of acquisition.
6.Interest in other entities
(1)Interest in subsidiaries
(a)Composition of the Group
Major Shareholding (%)
business Place of
location registration Scope of business Direct Indirect
Chengdu, the Chengdu, the Development, production and sales of
Chengdu CSG Glass Co., Ltd. PRC PRC specialized glass 75% -
Development, production and sales of
Sichuan CSG Energy Chengdu, the Chengdu, the specialized glass and processed
Conservation PRC PRC glass 75% -
Tianjin Energy Conservation Glass Tianjin, the Tianjin, the Development, production and sales of
Co. Ltd PRC PRC specialized energy-efficient glass 75% 25%
Dongguan CSG Architectural Dongguan, Dongguan,
Glass Co., Ltd. the PRC the PRC Processed glass 75% 25%
Dongguan CSG Solar Glass Co., Dongguan, Dongguan,
Ltd. the PRC the PRC Production and sales of solar glass 75% 25%
137
CSG Annual Report 2014
Yichang, the Yichang, the Production and sales of silicon related
Yichang CSG Silicon Co., Ltd. PRC PRC materials 75% 25%
Wujiang CSG North-east Wujiang, the Wujiang, the
Architectural Glass Co., Ltd. PRC PRC Processed glass 75% 25%
Dongguan, Dongguan, Production and sales of solar battery
Dongguan CSG PV-tech Co., Ltd. the PRC the PRC and applications 99.66% 0.34%
Yongqing, the Yongqing, the Production and sales of specialized
Hebei CSG Glass Co., Ltd. PRC PRC glass 75% 25%
Wujiang, the Wujiang, the Production and sales of specialized
Wujiang CSG Glass Co., Ltd. PRC PRC glass 100% -
China Southern Glass (Hong
Kong) Limited Hong Kong Hong Kong Trading and investment holding 100% -
Yongqing, the Yongqing, the Production and sales of ultra-thin
Hebei Sichuan Glass Co., Ltd. PRC PRC electronic glass 100% -
Xianning, the Xianning, the Production and sales of specialized
Xianning CSG Glass Co Ltd. PRC PRC glass 75% 25%
Xianning CSG Energy Xianning, the Xianning, the
Conservation Glass Co Ltd. PRC PRC Processed glass 75% -
Qingyuan CSG Energy Saving Qingyuan, Qingyuan, Production and sales of ultra-thin
New Materials Co.,Ltd the PRC the PRC electronic glass 100% -
China Southern Glass (Australia)
Limited Australia Australia Glass trading 49% 2%
Yichang CSG photoelectric Glass Yichang, the Yichang, the Production and sales of ultra-thin
Co, Ltd. PRC PRC electronic glass 73.58% -
Jiangyou CSG Mining Develop Jiangyou, the Jiangyou, the Production and sales of silica and
Co.Ltd. PRC PRC by-products 100% -
(b)Subsidiaries with major minority interests
Total profit or loss
attributable to Dividends
minority distributed to
Shareholding shareholders for minority interests for Minority interest as
of minority the year ended 31 the year ended 31 at 31 December
Subsidiaries shareholders December 2014 December 2014 2014
Chengdu CSG Glass Co., Ltd. 25% 24,556,984 (35,401,547) 97,706,531
Sichuan CSG Energy
Conservation Glass Co Ltd. 25% 24,423,679 (20,148,492) 76,406,226
Xianning CSG Energy
Conservation Glass Co Ltd. 25% 15,935,158 - 71,367,864
China Southern Glass
(Australia) Limited 49% 3,452,191 (812,752) 4,337,372
Yichang CSG photoelectric
Glass Co, Ltd. 26.42% (3,074,543) - 52,487,013
Yingde Hongsheng Silica Sand
Mine. Co., Ltd. 25% 818,233 - 2,581,379
66,111,702 (56,362,791) 304,886,385
138
CSG Annual Report 2014
The major financial information of the significant non-fully-owned subsidiaries of the Group is listed below:
31 December 2014 31 December 2013
Current Non-current Current Non-current Non-current Current Non-current Total
assets assets Total assets liabilities liabilities Total liabilities Current assets assets Total assets liabilities liabilities liabilities
Chengdu CSG
Glass Co., Ltd. 72,598,205 818,530,242 891,128,447 219,009,505 281,292,818 500,302,323 153,254,850 1,314,348,228 1,467,603,078 357,060,741 487,813,805 844,874,546
Sichuan CSG
Energy
Conservation
Glass Co Ltd. 71,926,599 556,538,831 628,465,430 118,073,003 204,767,520 322,840,523 - - - - - -
Xianning CSG
Glass Co Ltd. - - - - - - 189,344,114 1,101,964,691 1,291,308,805 443,280,759 420,370,737 863,651,496
Xianning CSG
Energy
Conservation
Glass Co Ltd. 80,177,475 579,883,664 660,061,139 240,732,351 133,857,295 374,589,646 - - - - - -
Yichang CSG
photoelectric
Glass Co, Ltd. 39,943,879 398,767,782 438,711,661 177,328,186 62,719,660 240,047,846 19,118,549 274,320,416 293,438,965 120,418,311 42,719,660 163,137,971
Yingde
Hongsheng
Silica Sand
Mine. Co., Ltd. 7,084,585 27,102,119 34,186,704 23,872,946 -- 23,872,946 13,875,152 29,074,958 42,950,110 35,897,575 - 35,897,575
China Southern
Glass
(Australia) Co
Ltd 17,678,078 992,581 18,670,659 9,818,877 - 9,818,877 - - - - - -
2014 2013
Total comprehensive Cash flows from Total comprehensive Cash flows from operating
Revenue Net profit income operating activities Revenue Net profit income activities
Chengdu CSG Glass Co., Ltd. 849,743,395 98,227,937 98,227,937 150,778,733 1,342,125,679 222,200,154 222,200,154 398,822,562
Sichuan CSG Energy
Conservation Glass Co Ltd. 528,901,934 97,694,716 97,694,716 156,414,586 - - - -
Xianning CSG Glass Co Ltd. 692,081,745 23,635,632 23,635,632 96,533,882 360,650,554 35,973,353 35,973,353 (12,149,831)
Xianning CSG Energy
Conservation Glass Co Ltd. 281,365,538 51,130,378 51,130,378 69,840,198 - - - -
Yichang CSG photoelectric
Glass Co, Ltd. 1,608,439 (11,637,179) (11,637,179) (5,497,914) 56,585 (3,699,006) (3,699,006) (10,909,761)
Yingde Hongsheng Silica Sand
Mine. Co., Ltd. 30,828,921 3,261,223 3,261,223 9,209,531 16,617,771 73,447 73,447 (445,154)
China Southern Glass
(Australia) Co Ltd 85,052,465 7,045,289 7,045,289 1,206,613 - - - -
139
CSG Annual Report 2014
140
CSG Annual Report 2014
(2)Interest in associates
(a)General information of significant associates
Whether
Major strategic to
business Place of Nature of the Group's
location registration business activities Shareholding (%)
Direct Indirect
Associates-
Shenzhen CSG Display Shenzhen, Shenzhen,
Technology Co., Ltd. the PRC the PRC Manufacturing Yes 44.70% -
31 December 2014 31 December 2013
Shenzhen CSG Display Technology Shenzhen CSG Display
Co., Ltd. Technology Co., Ltd.
Current assets 347,033,778 336,301,462
Non-current assets 1,430,207,838 1,309,641,511
Total assets 1,777,241,616 1,645,942,973
Current liabilities 551,890,216 511,094,400
Non-current liabilities 187,877,492 61,178,275
Total liabilities 739,767,708 572,272,675
Minority interests - -
Equity attributable to equity holders of the
1,037,473,908 1,073,670,298
Company
Shares of net assets in proportion (i) 463,349,301 479,930,623
Adjustments
-Goodwill 288,274,242 288,274,242
Carrying amount of investment in associates 751,623,543 768,204,865
Revenue 614,918,196 54,120,887
Net profit 20,871,310 (298,893)
Other comprehensive income - -
Total comprehensive income 20,871,310 (298,893)
Dividends received from associates by the Group
for the current year 26,235,366 -
141
CSG Annual Report 2014
(b)Summarised financial information of significant joint ventures
(i) The Group calculates the shares of net assets in proportion of the shareholdings and based on the amount attributable
to the parent company of the associates in their consolidated financial statements, which has taken into account the
impact of both the fair value of the identifiable assets and liabilities of the associates upon the acquisition of investment
and accounting policy unifying.
(7)Segment information
The reportable segments of the Group are the business units that provide different products or service. Different
businesses require different technologies and marketing strategies, the Group, therefore, separately manages the
production and operation of each reportable segment and evaluates their operating results respectively, in order to make
decisions about resources to be allocated to these segments and to assess their performance.
The Group identified 3 reportable segments as follows:
- Flat glass segment, being engaged in the production and sales of float glass products and the silica for
the production thereof
- Engineering glass segment, being engaged in the production and sales of engineering glass products
- Solar Energy Segment, being engaged in the production and sales of polycrystalline silicon and solar
battery and applications
Inter-segment transfer prices are measured by reference to selling prices to third parties.
The assets are allocated based on the operations of the segment and the physical location of the asset. The liabilities are
allocated based on the operations of the segment. Expenses indirectly attributable to each segment are allocated to the
segments based on the proportion of each segment’s revenue.
142
CSG Annual Report 2014
(a)Segment information as at and for the year ended 31 December 2014 and as at 31 December 2014 is as follows:
Floating glass Engineer glass Solar energy Others Unallocated Elimination Total
Revenue from external customers 2,933,548,694 3,024,711,288 1,085,396,301 - 846,362 - 7,044,502,645
Inter-segment revenue 734,737,733 29,045,544 17,550,404 - - (781,333,681) -
Interest income 534,436 841,040 167,683 578 1,657,135 - 3,200,872
Interest expenses (60,077,966) (23,444,007) (21,823,898) - (112,339,442) - (217,685,313)
Investment income from associates and
joint ventures - - - - 10,181,795 - 10,181,795
Asset impairment reversal (21,482,665) (2,049,444) (1,735,511) - (2,961) - (25,270,581)
Depreciation and amortization expenses (355,778,217) (226,517,924) (139,801,027) - (7,266,942) - (729,364,110)
Total profit / (loss) 200,612,430 608,214,797 60,784,368 (2,683) 111,273,011 2,700,566 983,582,489
Income tax expenses 33,345,752 (93,844,735) (3,436,910) - 20,118,136 - (43,817,757)
Net profit / (loss) 233,958,182 514,370,062 57,347,458 (2,683) 131,391,147 2,700,566 939,764,732
Total assets 6,636,642,993 3,674,868,086 3,859,034,314 212,745 946,050,167 - 15,116,808,305
Total liabilities 1,142,992,137 842,289,281 477,829,490 2,502,814 3,997,746,433 - 6,463,360,155
Non-cash expenses other than depreciation
and amortisation - - - - 324,568 - 324,568
Long-term equity investments in associates
and joint ventures - - - - 751,623,543 - 751,623,543
Additions of non-current assets other than
long-term equity investments 1,000,613,512 372,536,444 - 542,445,604 - 75,306 - 1,915,543,533
143
CSG Annual Report 2014
(b)Segment information as at and for the year ended 31 December 2013 and as at 31 December 2013 is as follows:
Engineer
Floating glass glass Fine glass Solar energy Others Unallocated 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 expenses (103,662,331) (29,136,604) (13,065,285) (43,858,285) - (42,926,973) - (232,649,478)
Investment income from associates and
joint ventures - - - - - 305,002 - 305,002
Asset impairment (loss)/reversal (35,368,139) 51,572 (349,332) (29,481,478) - 781,149 - (64,366,228)
Depreciation and amortization expenses (341,076,904) (196,175,819) (64,613,506) (92,358,284) (558) (6,104,349) - (700,329,420)
Total profit / (loss) 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 / (loss) 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
Non-cash expenses other than
depreciation and amortisation - - (692,644) - - - - (692,644)
Long-term equity investments in
associates and joint ventures - - - - - 770,037,176 - 770,037,176
Additions of non-current assets other
than long-term equity investments 1,047,584,896 449,515,039 396,772,401 465,204,405 - 18,285,912 - 2,377,362,653
144
CSG Annual Report 2014
The Group’s revenue from external customers domestically and in foreign countries or geographical areas, and the total
non-current assets other than financial assets and deferred tax assets located domestically and in foreign countries or
geographical areas are as follows:
Revenue from external customers 2014 2013
Mainland 6,404,516,048 6,690,537,041
Hong Kong 33,952,873 294,007,546
Europe 132,787,154 302,596,199
Asia (other than Mainland and Hong Kong) 304,252,167 277,198,638
Australia 85,052,465 93,580,675
North America 81,199,816 55,770,796
Other region 2,742,122 20,105,219
7,044,502,645 7,733,796,114
Total non-current assets 31 December 2014 31 December 2013
Mainland 13,501,317,408 12,455,585,431
Hong Kong 12,788,090 12,848,333
Australia 584,516 -
13,514,690,014 12,468,433,764
The Group has a large number of customers, and no revenue from a single customer exceed 10% or more of the Group’s
revenue.
(8)Related parties and related party transactions
(1)The parent company
The Company regard no entity is the parent company.
(2)The subsidiaries companies
The general information and other related information of the subsidiaries is set out in Note 6.
(4)Information of associates
145
CSG Annual Report 2014
The general information and other related information of the associates is set out in Note 6.
(4)Related party transactions
(a)Sales and purchases of goods, provision and receipt of services
Sales of goods and rendering of services:
2014 2013
Percentage Percentage
Nature of Pricing of similar of similar
Related party transaction policies Amount transactions Amount transactions
Shenzhen CSG
Display
Technology Co., Sales of fine Refer to
Ltd. glass market price 10,801,134 0.15% 449,514 0.01%
China South Glass
(Australia) Sale of engineer Refer to
Limited glass market price - - 6,397,245 0.08%
(b)Lease
The group as a lessor:
Category of the leased Lease income Lease income
Name of lessee asset recogonized in 2014 recogonized in 2013
Shenzhen CSG Display
Technology Co., Ltd. Plant 912,000 912,000
(c)Remuneration of key management
2014 2013
Payroll 6,135,800 6,688,500
146
CSG Annual Report 2014
(5)Receivables from and payables to related parties
31 December 2014 31 December 2013
Provision for Provision for
Book value bad debts Book value bad debts
Accounts Shenzhen CSG Display
receivable Technology Co., Ltd. 421,124 (8,422) 544,391 -
China Southern Glass
(Australia) Limited - - 3,653,741 -
421,124 (8,422) 4,198,132 -
Other Shenzhen CSG Display
receivables Technology Co., Ltd. - - 20,491,742 -
(6)Commitments inrelation to related parties
ThecommitmentsinrelationtorelatedpartiescontractedforbutnotyetnecessarytoberecognisedonthebalancesheetbytheGrou
pasatthebalancesheetdateareasfollows:：
Lease
31December2014 31December2013
-Rentout
Shenzhen CSG
Display
Technology 4,560,000
Co.,Ltd. 3,648,000
9.Contingency
Nil.
10.Commitments
(1)Capital commitments
CapitalexpenditurescontractedforbytheGroupatthebalancesheetdatebutarenotyetnecessarytoberecognisedonthebalances
heetareasfollows:
147
CSG Annual Report 2014
31December2014 31December2013
Buildings,machineryandequipment 195,050,992 589,482,656
(2)Fulfilmentofpreviouscommitment
Thecommitmentrelatingtocapitalexpendituresandexternalinvestmentsat31December2013hasbeenfulfilledasagreed.
11.Discontinued operation
On 11 September 2013, the Company signed an irrevocable equity transfer agreement with a third party, Jin Shi Dai
Investment (Shenzhen) Co., Limited. (“Jin Shi Dai”), to fully transfer all equities that it held in Shenzhen CSG Float Glass
Co., Ltd., and such transfer was completed on 30 April 2014. Thus the control over Shenzhen CSG Float Glass Co., Ltd.
was lost in that month.
The operating results of the discontinued operations above are as follows:
2014 2013
Revenue of discontinued operations 15,302,711 1,443,179,940
Less: Costs and expenses of discontinued operations (19,613,739) (1,226,087,428)
Total (loss)/profit of discontinued operations (4,311,028) 217,092,512
Less: Income taxes of discontinued operations 1,077,757 (31,024,434)
Net (loss)/profit of discontinued operations (3,233,271) 186,068,078
Including: Net profit Attributable to equity holders of the
Company (3,233,271) 112,812,253
12.Events occurring after the balance sheet date
(a)Dividend distribution after the balance sheet date
Amount
Dividend authorized to declare 1,037,667,780
In accoundance with the resolution at the Board of Directions’ meeting on 27 March 2015, the Board of Directors proposed
a dividend of RMB1,037,667,780 to be paid to the sharsholders, which is not recorded as liability in the financial
148
CSG Annual Report 2014
statements for the current year.
13.Financial instrument and risk
The Group's activities expose it to a variety of financial risks: market risk (primarily currency risk and interest rate risk),
credit risk and liquidity risk. The Group's overall risk management programme focuses on the unpredictability of financial
markets and seeks to minimise potential adverse effects on the Group's financial performance.
(1)Market risk
(a)Foreign exchange risk
The Group’s major operational activities are carried out in Mainland China and a majority of the transactions are
denominated in RMB. However, some of the export business are settled in foreign currency. Besides, the Group is
exposed to foreign exchange risk arising from the recognised assets and liabilities, and future transactions denominated
in foreign currencies, primarily with respect to US dollars and Euro. The Group monitors the scale of foreign currency
transactions, foreign currency assets and liabilities, and adjust settlement currency of export business, to furthest reduce
the currency risk.
As at 31 December 2014, the carrying amounts in RMB equivalent of the Group’s assets and liabilities denominated in
foreign currencies are summarized below:
31 December 2014
USD Others Total
Financial assets denominated in foreign currency-
Cash at bank and on hand 4,560,723 3,083,144 7,643,867
Receivables 24,941,950 11,789,354 36,731,304
29,502,673 14,872,498 44,375,171
Financial liabilities denominated in foreign
currency-
Short-term borrowings 72,423,260 16,983,857 89,407,117
Payables 26,210,492 27,927,082 54,137,574
Current portion of non-current liabilities 6,293,514 - 6,293,514
104,927,266 44,910,939 149,838,205
31 December 2013
USD Others Total
Financial assets denominated in foreign currency
-
149
CSG Annual Report 2014
Cash at bank and on hand 14,432,704 4,532,123 18,964,827
Accounts receivable 16,420,171 1,146,757 17,566,928
30,852,875 5,678,880 36,531,755
Financial liabilities denominated in foreign
currency-
Short-term borrowings 52,695,525 37,536,513 90,232,038
Accounts payable 13,140,063 23,890,708 37,030,771
Long-term borrowings 6,270,784 - 6,270,784
Current portion of non-current liabilities 71,638,575 - 71,638,575
143,744,947 61,427,221 205,172,168
As at 31 December 2014, if the currency had strengthened /weakened by 10% against the USD while all other variables
had been held constant, the Group’s net profit for the year would have been approximately RMB 6,411,090(31 December
2013: approximately RMB 9,595,826) higher/lower for various financial assets and liabilities denominated in USD. Other
changes in exchange rate had no significant influence on the Group's operating activities.
(b)Interest rate risk
The Group's interest rate risk arises from long-term interest bearing borrowings including long-term borrowings and bonds
payable. Financial liabilities issued at floating rates expose the Group to cash flow interest rate risk. Financial liabilities
issued at fixed rates expose the Group to fair value interest rate risk. The Group determines the relative proportions of its
fixed rate and floating rate contracts depending on the prevailing market conditions. As at 31 December 2014, the Group’s
long-term interest-bearing debt at variable rates and fixed rates as illustrated below:
31 December 2014 31 December 2013
Debt at fixed rates 1,995,783,205 1,991,041,175
Debt at variable rates 383,817,820 302,904,204
2,379,601,025 2,293,945,379
The Group continuously monitors the interest rate position of the Group. Increases in interest rates will increase the cost
of new borrowing and the interest expenses with respect to the Group’s outstanding floating rate borrowings, and
therefore could have a material adverse effect on the Group’s financial position. The Group makes adjustments timely with
reference to the latest market conditions, which includes increasing/decreasing long-term fixed rate debts at the
anticipation of increasing/decreasing interest rate.
As at 31 December 2014, if interest rates on the floating rate borrowings had risen/fallen by 50 basis points while all other
variables had been held constant, the Group’s net profit would have decreased/increased by approximately RMB
1,631,226 (2013: about RMB 1,287,342).
150
CSG Annual Report 2014
(2)Credit risk
Credit risk is managed on the grouping basis. Credit risk mainly arises from cash at bank, notes receivable, accounts
receivable and other receivables, etc.
The Group expects that there is no significant credit risk associated with cash at bank since they are deposited at
state-owned banks and other medium or large size listed banks. Management does not expect that there will be any
significant losses from non-performance by these counterparties. Furthermore, as the Group’s bank acceptance notes
receivable are generally accepted by the state-owned banks and other large and medium listed banks, the management
believes the credit risk should be limited.
In addition, the Group has policies to limit the credit exposure on accounts receivable, other receivables and trade
acceptance notes receivable. The Group assesses the credit quality of and sets credit limits on its customers by taking
into account their financial position, the availability of guarantee from third parties, their credit history and other factors
such as current market conditions. The credit history of the customers is regularly monitored by the Group. In respect of
customers with a poor credit history, the Group will use written payment reminders, or shorten or cancel credit periods, to
ensure the overall credit risk of the Group is limited to a controllable extent.
(3)Liquidity risk
Cash flow forecasting is performed by each subsidiary of the Group and aggregated by the Group’s finance department in
its headquarters. The Group’s finance department at its headquarters monitors rolling forecasts of the Group's short-term
and long-term liquidity requirements to ensure it has sufficient cash reserve, while maintaining sufficient headroom on its
undrawn committed borrowing facilities from major financial institutions so that the Group does not breach borrowing limits
or covenants on any of its borrowing facilities to meet the short-term and long-term liquidity requirements.
As stated in Note 2(1) above, as at 31 December 2014, the Group had net current liabilities of approximately RMB
4,200,000,000 billion and committed capital expenditures of approximately RMB 176,000,000. Management will
implement the following measures to ensure the liquidation risk limited to a controllable extent:
(a) The Group will have steady cash inflows from operating activities;
(b) The Group will pay the debts that mature and finance the construction projects through the existing bank facilities;
and
(c) The Group will closely monitoring the payment of construction expenditure in terms of payment time and amount.
The financial liabilities of the Group at the balance sheet date are analysed by their maturity date below at their
undiscounted contractual cash flows :
31 December 2014
Within 1 year 1 to 2 years 2 to 5 years Over 5 years Total
151
CSG Annual Report 2014
Short-term borrowings 2,005,285,324 - - - 2,005,285,324
Payables 1,185,864,836 - - - 1,185,864,836
Current portion of non-current
liabilities 2,233,956,338 - - - 2,233,956,338
Long-term borrowings 22,605,105 243,563,587 162,793,358 - 428,962,050
5,447,711,603 243,563,587 162,793,358 - 5,854,068,548
31 December 2013
Within 1 year 1 to 2 years 2 to 5 years Over 5 years Total
Short-term borrowings 1,442,478,875 - - - 1,442,478,875
Payables 1,604,631,381 - - - 1,604,631,381
Current portion of non-current
liabilities 410,672,685 - - 410,672,685
Long-term borrowings 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
(4)Fair value
(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
in current year.
Except for financial liabilities listed below, the carrying amount of the other financial assets and liabilities not measured at
fair value is a reasonable approximation of their fair value.
31 December 2014 31 December 2013
Carrying amount Fair value Carrying amount Fair value
Current portion of bonds
payable(i) 1,995,783,205 2,002,490,000 1,991,041,175 1,985,000,000
(i) The fair value of bonds payable that are traded in an active market is determined at the quoted price in the active
market.
(b)Financial instruments measured at fair value
152
CSG Annual Report 2014
Based on the lowest level input that is significant to the fair value measurement in its entirety, the fair value hierarchy has
the following levels:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly
(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 2014, the financial assets measured at fair value by the above three levels are analysed below:
Level 1 Level 2 Level 3 Total
Available-for-sale financial
assets-
Available-for-sale equity
instruments 145,568,100 - - 145,568,100
As at 31 December 2014, the available-for-sale equity instrument of the Group was the investment in Golden Glass(Note
4(8)), and the fair value was determined at the quoted price in the active market.
14.Capital management
The Group’s capital management policies aim to safeguard the Group’s ability to continue as a going concern entity in
order to provide returns for shareholders and benefits for other stakeholders, and to maintain an optimal capital structure
to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders,
refund capital to shareholders, issue new shares or sell assets to reduce debts.
The Group's total capital is calculated as ‘shareholder’s equity’ as shown in the consolidated balance sheet. The Group is
not subject to external mandatory capital requirements, and is not required to monitor capital on the basis of asset-liability
ratio.
As at 31 December 2014 and 2013, the Group's asset-liability ratio is as follows:
31 December 2014 31 December 2013
Total liabilities 6,463,360,155 6,677,954,195
Total assets 15,116,808,305 15,078,866,777
Asset-liability ratio 43% 44%
153
CSG Annual Report 2014
(15)Notes to the Company’s financial statements
(1)Other receivables
31 December 2014 31 December 2013
Amounts due from related parties 3,574,439,444 3,082,033,658
Others 359,148 211,101
3,574,798,592 3,082,244,759
Less: Provision for bad debts (7,183) (4,222)
3,574,791,409 3,082,240,537
(a)The ageing of other receivables is analysed as follows:
31 December 2014 31 December 2013
Within 1 year 3,574,798,592 3,082,244,759
1 to 2 years - -
Over 3 years - -
3,574,798,592 3,082,244,759
(b)Other receivables are analysed by category as follows:
31 December 2014 31 December 2013
Book value Provision for bad debts Book value Provision for bad debts
Provision
% of total Provision for % of total for bad
Amount balance bad debts Percentage Amount balance debts Percentage
Amounts that are
individually significant
and with specific
provision for bad
debts - - - - - - - -
Amounts that are not
individually significant
but with specific
provision for bad
debts - - - - - - - -
Provided for bad debts
by portfolio
-Related party 3,574,439,444 100% - - 3,082,033,658 100% - -
- Non-related parties 359,148 0% (7,183) 2% 211,101 0% (4,222) 2%
3,574,798,592 100% (7,183) 0.00% 3,082,244,759 100% (4,222) 0%
(c)For other receivable provided for bad debts by portfolio, the percentage of provision for the portfolio is as
follows
154
CSG Annual Report 2014
31 December 2014 31 December 2013
Book value Provision for bad debts Book value Provision for bad debts
Amount Amount Percentages Amount Amount Percentages
-Related party 3,574,439,444 - 3,082,033,658 -
- -
- Non-related parties 359,148 (7,183) 2% 211,101 (4,222)
2%
3,574,798,592 (7,183) 0% 3,082,244,759 (4,222)
0%
(d)As at 31 December 2014, the top 5 largest other receivables are analysed by debtor as follows:
Relationship with % of total
the Group Amount Aging balance
Yichang CSG Silicon Co., Ltd. Subsidiaries 1,484,307,915 Within 1 year 42%
Wujiang CSG Glass Co., Ltd. Subsidiaries 680,664,193 Within 1 year 19%
Dongguan CSG PV-tech Co., Ltd. Subsidiaries 203,523,677 Within 1 year 6%
Dongguan CSG Solar Glass Co., Ltd. Subsidiaries 189,487,185 Within 1 year 5%
Hebei CSG Glass Co., Ltd. Subsidiaries 187,078,813 Within 1 year 5%
2,745,061,783 77%
(2)Long-term equity investments
31 December 2014 31 December 2013
Subsidiaries(a) 4,387,840,415 4,705,853,218
Associates - without quoted price (b) 360,210,315 315,767,981
Less: Impairment provision for investments in
subsidiaries(a) (15,000,000) (55,000,000)
4,733,050,730 4,966,621,199
There is no significant restriction on sale of the long-term equity investments held by the Company.
155
CSG Annual Report 2014
(a) Subsidiaries
Movements for the year ended 31 December 2014
Additional Provision for Cash dividends
31 December 2013 31 December 2014
investment Decrease in impairment loss Others Provision for declared
Shenzhen CSG Float Glass Co., Ltd. 714,685,256 - - - (714,685,256) - - -
Chengdu CSG Glass Co., Ltd. 76,674,071 - - - - 76,674,071 - 106,204,641
Sichuan CSG Energy Conservation Glass
Co Ltd. 40,290,583 75,000,000 - - - 115,290,583 - 60,445,475
Tianjin Energy Conservation Glass
Co., Ltd 242,902,974 - - - - 242,902,974 - 79,465,910
Dongguan CSG Architectural Glass
Co., Ltd. 193,618,971 - - - - 193,618,971 - 73,052,140
Dongguan CSG Solar Glass Co., Ltd. 300,401,145 49,045,681 - - - 349,446,826 - -
Yichang CSG Silicon Co., Ltd. 577,043,114 55,914,930 - - - 632,958,044 - -
Yichang CSG photoelectric Glass
Co, Ltd. 98,597,200 58,864,000 - - - 157,461,200 - -
Wujiang CSG North-east Architectural Glass
Co., Ltd. 251,313,658 - - - - 251,313,658 - 76,469,129
Dongguan CSG PV-tech Co., Ltd. 308,122,789 - - - - 308,122,789 - 37,134,660
Hebei CSG Glass Co., Ltd. 261,998,368 - - - - 261,998,368 - 32,523,071
China Southern Glass (Hong Kong) Limited 85,742,211 - - - - 85,742,211 - -
Wujiang CSG Glass Co., Ltd. 462,179,564 100,000,000 - - - 562,179,564 - -
Hebei Sichuan Glass Co., Ltd. 243,062,801 - - - - 243,062,801 32,501,190
China Southern Glass (Australia) Limited - - - - 1,393,524 1,393,524 - -
Jiangyou CSG Mining Develop Co.Ltd. 40,725,041 60,000,000 - - - 100,725,041 - -
Xianning CSG Glass Co Ltd. 177,041,818 - - - - 177,041,818 - -
Xianning CSG Energy Conservation Glass Co
Ltd. 123,781,576 37,500,000 - - - 161,281,576 - -
Qingyuan CSG energy saving new materials
Co.,Ltd. 300,185,609 - - - - 300,185,609 - -
Others (iii) 207,486,467 - - - (41,045,682) 166,440,785 (15,000,000) -
4,705,853,218 436,324,611 - - (754,337,414) 4,387,840,415 (15,000,000) 497,796,216
156
CSG Annual Report 2014
(i)As at 31 December 2014, included in the investments in subsidiaries were deemed investment costs of RMB
103,730,921, the fair value of the equity instruments of the Company granted to the employee of the subsidiaries for their
serviced provided to the subsidiaries for which the Company did not charge the subsidiaries. (31 December 2013: RMB
112,679,926).
(ii) Others mainly included subsidiaries which were registered in Shenzhen but the production lines had been moved to
Dongguan. The operations of the subsidiaries have basically discontinued. The Company has made provision against the
long term investment in these subsidiaries based on their recoverable amount in previous years.
(b)Associates
Movements for the year ended 31 December 2014
Share of net Share of other Provision
31 December Additional Decrease in profit/(loss) under changes in Cash dividend Provision for 31 December
2013 investment investment equity method equity declared impairment loss Others 2014
Shenzhen CSG
Display
Technology Co.,
Ltd. 313,935,670 - - 71,783,908 726,103 (26,235,366) - - 360,210,315
China Southern
Glass (Australia)
Limited 1,832,311 - - 852,319 - (1,290,925) - (1,393,705) -
315,767,981 - - 72,636,227 726,103 (27,526,291) - (1,393,705) 360,210,315
The description
if the shareholding
Shareholding are not equal to the Provision for Provision accrued
Method (%) Voting rights (%) voting right impairment loss in current year
Shenzhen CSG
Display
Technology Co.,
Ltd. Equity method 44.70% 44.70% Nil - -
(3)Long-term receivables
31 December 2014 31 December 2013
Corporate bonds allocated to subsidiaries 1,411,290,000 1,571,900,000
Substantive long-term investment in subsidiaries 170,000,000 302,782,265
Trust loan to subsidiaries 55,000,000 120,000,000
1,636,290,000 1,994,682,265
Less: Provisions for impairment - (40,936,482)
1,636,290,000 1,953,745,783
157
CSG Annual Report 2014
Current year
Provision for writeoff
31 December Movements for 31 December impairment impairment
2013 current year 2014 loss loss
Chengdu CSG Glass Co., Ltd. 280,000,000 - 280,000,000 - -
Sichuan CSG Energy
Conservation Glass Co Ltd. 189,330,000 - 189,330,000 - -
Dongguan CSG PV-tech
Co., Ltd. 340,210,000 (120,000,000) 220,210,000 - -
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 North-east
Architectural Glass Co., Ltd. 75,898,262 (36,118,262) 39,780,000 - -
Qingyuan CSG energy saving
new materials Co.,Ltd. - 55,000,000 55,000,000 - -
Others 81,054,003 (41,274,003) 39,780,000 - 40,936,482
1,994,682,265 (358,392,265) 1,636,290,000 - 40,936,482
(4)Other payables
31 December 2014 31 December 2013
Subsidiaries 243,551,425 378,952,280
Advance received for dispose of a subsidiary - 450,000,000
Others 27,363,647 892,508
270,915,072 829,844,788
(5)Investment income
2014 2013
Gain from long-term equity investment under cost method 497,796,216 453,747,129
Gain from long-term equity investment under equity method 72,636,227 97,355,619
Investment income on disposal of equity interest 203,834,506 475,884,759
Cash dividends from available-for-sale financial assets
investment 82,653 331,344
774,349,602 1,027,318,851
Significant restrictions on repatriation of investment income do not exist.
158
CSG Annual Report 2014
CSG HOLDING CO., LTD.
Supplemental information
(All amounts are stated in RMB Yuan unless otherwise stated)
1. Breakdown of non-recurring gains and losses
2014 2013
Gains and losses of disposal of non-current asset 17,722,782 136,459,236
Income from insurance indemnities - (72,000,000)
Government subsidy recognised as gains and losses (90,223,936) (115,138,161)
Cash dividends from available-for-sale financial assets
investment (98,640) (432,000)
Gain from disposal of available for sales financial assets (6,912,150) -
Gains on disposal of long-term equity investment (311,247,064) (926,639,137)
Other non-operating income or expenses (14,816,694) (13,892,326)
Adjustment in income tax expenses in prior years(i) (77,854,087) -
(483,429,789) (991,642,388)
Effect of corporate income tax 20,318,806 48,004,628
Effect of minority interest (after tax) 28,347,800 13,674,996
Total non-recurring gains and losses (434,763,183) (929,962,764)
i.In 2011 and 2012, Chengdu CSG Glass Co., Ltd. applied to pay income tax at a preferential rate of 15% as stipulated in
west development policies in encouraging the enterprises, but the tax authority made no approval thereof, so Chengdu
CSG Glass Co., Ltd. paid income tax at a rate of 25% in 2011, 2012 and 2013. Tax authority granted a preferential rate of
15% when 2013 filling was completed in May of 2015.
Catalogue of Industries Encouraged to Develop in the Western Region as published by State Development and Reform
Commission took effect in 1 October 2014. Catalogue of Industries Encouraged includes Catalogue of Advantaged
Industries for Foreign Investment in Mid-west China (2013 amendment), and glass enterprise is included into the
advances industries in catalogue of industries of Sichuan. Therefore, income tax expenses were adjusted down.
(1)The basis of preparation of breakdown of non-recurring gains and losses
According to the Q&A on Disclosure of Information by Public Companies No1-Extraordinary gains and losses [2008],
extraordinary gains and losses are the gains and losses which are resulted from transactions/events. These transactions /
events are not incurred by the operation of the entity. In addition, although these affairs are incurred by the operation, the
amounts or the frequency of such transactions/events will lead to a misleading presentation of the normal performance
and profitability of the operation of the entity.
159
CSG Annual Report 2014
2. Return on equity and earnings per share
Weighted average Earnings per share
ROE (%) Basic earnings per share Diluted earnings per share
2014 2013 2014 2013 2014 2013
Net profit attributable to common
stock shareholders 10.61% 20.52% 0.42 0.74 0.42 0.74
Net profit less non-recurring gains
and losses attributable to common
stock shareholders 5.33% 8.10% 0.26 0.29 0.26 0.29
3. Supplementary information about changes in accounting policies
The Group changed related accounting policies and made retrospective reinstatement(please see Note 2(29)) based on
CAS 2 "Long-Term Equity Investments" and 7 other standards as issued by Ministry of Finance of the PRC in 2014, and,
at the same time, presented the consolidated and company balance sheet as at 1 January 2013.
160
CSG Annual Report 2014
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.
31 March 2015
161
