CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 Financial Report of Semi-annual Report 2017 (I) Auditors’ Report Whether the Semi-annual Report has been audited or not □ Yes √ No The Semi-annual Report of the Company has not been audited. (II) Financial Statements All figures in the Notes to the Financial Statements are in RMB. 1. Consolidated Balance Sheet Prepared by CSG Holding Co., Ltd. Unit: RMB Item Ending balance Beginning balance Current asset: Monetary capital 934,235,201 586,803,505 Settlement provision Outgoing call loan Financial assets measured at fair value with variations accounted into current income account Derivative financial assets Notes receivable 536,557,203 456,347,237 Account receivable 679,943,915 627,985,983 Prepayment 162,247,377 95,733,132 Insurance receivable Reinsurance receivable Provisions of Reinsurance contracts receivable Interest receivable Dividend receivable Other account receivable 33,559,090 33,229,149 Repurchasing of financial assets Inventories 630,593,776 477,780,925 Assets held for sales Non-current asset due in 1 year CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 Other current asset 249,369,319 199,905,577 Total of current asset 3,226,505,881 2,477,785,508 Non-current assets Loans and payment on other’s behalf disbursed Available-for-sale financial asset Expired investment in possess Long-term receivable Long-term share equity investment Investment real estates Fixed assets 11,773,502,135 11,457,972,991 Construction in process 1,259,425,371 1,362,096,377 Engineering goods Fixed asset disposal Production physical assets Gas & petrol Intangible assets 1,021,669,447 1,032,458,977 R&D expense 76,049,471 66,927,714 Goodwill 397,392,156 397,392,156 Long-term amortizable expenses 9,693,102 975,660 Differed income tax asset 84,697,210 96,451,854 Other non-current asset 81,346,840 87,174,393 Total of non-current assets 14,703,775,732 14,501,450,122 Total of assets 17,930,281,613 16,979,235,630 Current liabilities Short-term loans 2,399,694,000 4,017,869,662 Loan from Central Bank Deposit received and hold for others Call loan received Financial liabilities measured at fair value with variations accounted into Derivative financial liabilities Notes payable 114,500,000 20,000,000 Account payable 1,382,500,478 1,169,869,370 Prepayment received 201,549,137 142,330,979 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 Selling of repurchased financial assets Fees and commissions receivable Employees’ wage payable 173,186,321 193,372,239 Tax payable 87,961,271 115,592,616 Interest payable 98,184,696 78,225,904 Dividend payable 207,533,556 Other account payable 844,823,887 188,321,450 Reinsurance fee payable Insurance contract provision Entrusted trading of securities Entrusted selling of securities Liabilities held for sales Non-current liability due in 1 year 1,101,203,702 1,029,340,000 Other current liability 300,000 300,000 Total of current liability 6,611,437,048 6,955,222,220 Non-current liabilities Long-term borrowings 1,624,000,000 1,438,660,000 Bond payable Including:preferred stock Sustainable debt Long-term payable 838,871,670 Long-term payable employees’s remuneration Special payable Anticipated liabilities Differed income 420,880,301 422,993,254 Differed income tax liability 24,164,221 29,749,137 Other non-recurring liabilities Total of non-current liabilities 2,907,916,192 1,891,402,391 Total of liability 9,519,353,240 8,846,624,611 Owners’ equity Share capital 2,075,335,560 2,075,335,560 Other equity instruments Including:preferred stock Sustainable debt CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 Capital reserves 1,349,953,977 1,260,702,197 Less: Shares in stock Other comprehensive income 3,577,707 4,653,971 Special reserves 3,233,660 5,843,473 Surplus reserves 888,850,230 888,850,230 Common risk provision Undistributed profit 3,762,408,180 3,576,949,573 Total of owner’s equity belong to the parent company 8,083,359,314 7,812,335,004 Minor shareholders’ equity 327,569,059 320,276,015 Total of owners’ equity 8,410,928,373 8,132,611,019 Total of liability and owners’ equity 17,930,281,613 16,979,235,630 Legal Representative:Chen Lin CFO:Pan Yonghong Manager of the financial department:Wang Wenxin 2. Balance Sheet of the Parent Company Unit: RMB Item Ending balance Beginning balance Current asset: Monetary capital 559,161,574 302,841,481 Financial assets measured at fair value with variations accounted into current income account Derivative financial assets Notes receivable Account receivable Prepayment 1,750,000 16,880 Interest receivable Dividend receivable Other account receivable 3,416,514,546 3,863,121,029 Inventories Assets held for sales Non-current asset due in 1 year Other current asset Total of current asset 3,977,426,120 4,165,979,390 Non-current assets Available-for-sale financial asset CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 Expired investment in possess Long-term receivable 2,003,645,000 2,003,645,000 Long-term share equity investment 4,790,440,632 4,790,440,632 Investment real estates Fixed assets 23,798,714 26,073,848 Construction in process Engineering goods Fixed asset disposal Production physical assets Gas & petrol Intangible assets 1,167,664 1,393,454 R&D expense Goodwill Long-term amortizable expenses Differed income tax asset Other non-current asset Total of non-current assets 6,819,052,010 6,821,552,934 Total of assets 10,796,478,130 10,987,532,324 Current liabilities Short-term loans 1,690,000,000 3,495,163,044 Financial liabilities measured at fair value with variations accounted into Derivative financial liabilities Notes payable Account payable 34,528 317,874 Prepayment received Employees’ wage payable 42,237,698 18,380,010 Tax payable 1,019,727 1,804,568 Interest payable 8,767,301 3,794,646 Dividend payable 207,533,556 Other account payable 1,151,107,561 240,593,894 Liabilities held for sales Non-current liability due in 1 year 1,000,000,000 1,000,000,000 Other current liability CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 Total of current liability 4,100,700,371 4,760,054,036 Non-current liabilities Long-term borrowings 1,380,000,000 1,380,000,000 Bond payable Including:preferred stock Sustainable debt Long-term payable 649,823,518 Long-term payable employees’s remuneration Special payable Anticipated liabilities Differed income 16,280,660 12,035,040 Differed income tax liability Other non-recurring liabilities Total of non-current liabilities 2,046,104,178 1,392,035,040 Total of liability 6,146,804,549 6,152,089,076 Owners’ equity Share capital 2,075,335,560 2,075,335,560 Other equity instruments Including:preferred stock Sustainable debt Capital reserves 1,494,670,923 1,405,529,511 Less: Shares in stock Other comprehensive income Special reserves Surplus reserves 903,395,590 903,395,590 Undistributed profit 176,271,508 451,182,587 Total of owners’ equity 4,649,673,581 4,835,443,248 Total of liability and owners’ equity 10,796,478,130 10,987,532,324 3. Consolidated Income Statement Unit: RMB Item Balance of this period Balance of last period I. Total revenue 4,944,337,861 4,228,165,642 Incl. Business income 4,944,337,861 4,228,165,642 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 Interest income Insurance fee earned Fee and commission received II. Total business cost 4,502,642,030 3,720,133,533 Incl. Business cost 3,737,514,462 3,076,818,503 Interest expense Fee and commission paid Insurance discharge payment Net claim amount paid Net insurance policy reserves provided Insurance policy dividend paid Reinsurance expenses Tax and surcharge 61,745,775 33,485,783 Sales expense 156,344,731 128,564,831 Administrative expense 402,554,340 348,836,395 Financial expenses 143,374,027 133,353,393 Asset impairment loss 1,108,695 -925,372 Plus: gains from change of fair value (“-“for loss) Investment gains (“-“ for loss) -14,264,359 Incl. Investment gains from affiliates -14,264,359 Exchange gains (“-“ for loss) Other gains 23,674,234 III. Operational profit (“-“ for loss) 465,370,065 493,767,750 Plus: non-operational income 16,029,596 50,038,364 Incl. Income from disposal of non-current assets 57,734 248,642 Less: non-operational expenditure 732,592 661,628 Incl. Loss from disposal of non-current assets 129,490 19,984 IV. Gross profit (“-“ for loss) 480,667,069 543,144,486 Less: Income tax expenses 80,453,021 77,843,164 V. Net profit (“-“ for net loss) 400,214,048 465,301,322 Net profit attributable to the owners of parent 392,992,163 466,883,254 company Minor shareholders’ equity 7,221,885 -1,581,932 VI. Net amount of other gains after tax -1,076,264 508,053 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 Net amount of other gains after tax attributable to -1,076,264 508,053 owners of parent company (I) Other comprehensive income that will not be reclassified into gains/losses afterward 1. Change of net liability or asset of beneficiary plan from recalculating 2. The share of comprehensive income in invested entities under equity method which can not be reclassified into profit or loss (II) Other comprehensive income items that will be reclassified into gains/losses in the subsequent -1,076,264 508,053 accounting period 1. The share of comprehensive income in invested entities under equity method which can be reclassified into profit or loss afterward 2.Gains and losses from changes in fair value available for sale financial assets 3.Held-to-maturity investments reclassified to gains and losses of available for sale financial assets 4.The effective portion of cash flow hedges and losses 5.Translation differences in currency financial -1,076,264 508,053 statements 6.Other Net of profit of other comprehensive income attributable to Minority shareholders’ equity VII. Total of misc. incomes 399,137,784 465,809,375 Total of misc. incomes attributable to the owners of 391,915,899 467,391,307 the parent company Total misc gains attributable to the minor 7,221,885 -1,581,932 shareholders VIII. Earnings per share: (I) Basic earnings per share 0.19 0.22 (II) Diluted earnings per share 0.19 0.22 Legal Representative:Chen Lin CFO:Pan Yonghong Manager of the financial department:Wang Wenxin 4. Income Statement of the Parent Co. Unit: RMB CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 Items Balance of this period Balance of last period I. Revenue 27,295,266 1,077,394 Less:business cost 0 60,334 Tax and surcharge 5,136,944 94,720 Sales expense Administrative expense 70,540,224 61,812,557 Financial expenses 19,800,295 11,263,822 Asset impairment loss 7,706 -1,770,242 Plus: gains from change of fair value (“-“for loss) Investment gains (“-“ for loss) 399,280,607 Incl. Investment gains from affiliates 9,850,045 Other gains 18,000 II. Operational profit (“-“ for loss) -68,171,903 328,896,810 Plus: non-operational income 794,380 766,180 Incl. Income from disposal of non-current assets 1,800 Less: non-operational expenditure Incl. Loss from disposal of non-current assets III. Gross profit (“-“ for loss) -67,377,523 329,662,990 Less: Income tax expenses 0 -45,852 IV. Net profit (“-“ for net loss) -67,377,523 329,708,842 V. Net amount of other gains after tax (I) Other comprehensive income that will not be reclassified into gains/losses afterward 1. Change of net liability or asset of beneficiary plan from recalculating 2. The share of comprehensive income in invested entities under equity method which can not be reclassified into profit or loss (II) Other comprehensive income items that will be reclassified into gains/losses in the subsequent accounting period 1. The share of comprehensive income in invested entities under equity method which can be reclassified into profit or loss afterward 2.Gains and losses from changes in fair value available for sale financial assets CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 3.Held-to-maturity investments reclassified to gains and losses of available for sale financial assets 4.The effective portion of cash flow hedges and losses 5.Translation differences in currency financial statements 6.Other VI. Total of misc. incomes -67,377,523 329,708,842 VII. Earnings per share: (I) Basic earnings per share (II) Diluted earnings per share 5. Consolidated Cash Flow Statement Unit: RMB Item Balance of this period Balance of last period I. Net cash flow from business operation Cash received from sales of products and providing of 5,472,732,654 4,822,965,397 services Net increase of customer deposits and capital kept for brother company Net increase of loans from central bank Net increase of inter-bank loans from other financial bodies Cash received against original insurance contract Net cash received from reinsurance business Net increase of client deposit and investment Net increase of disposal of the financial assets measured by fair value with the changes included in the current gains and losses Cash received as interest, processing fee, and commission Net increase of inter-bank fund received Net increase of repurchasing business Tax returned 7,273,335 35,363,638 Other cash received from business operation 68,210,702 46,108,936 Sub-total of cash inflow from business activities 5,548,216,691 4,904,437,971 Cash paid for purchasing of merchandise and services 3,278,955,888 2,769,544,694 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 Net increase of client trade and advance Net increase of savings in central bank and brother company Cash paid for original contract claim Cash paid for interest, processing fee and commission Cash paid for policy dividend Cash paid to staffs or paid for staffs 617,464,364 529,127,685 Taxes paid 380,644,776 336,130,323 Other cash paid for business activities 251,262,209 222,914,920 Sub-total of cash outflow from business activities 4,528,327,237 3,857,717,622 Cash flow generated by business operation, net 1,019,889,454 1,046,720,349 II. Cash flow generated by investing Cash received from investment retrieving Cash received as investment profit Net cash retrieved from disposal of fixed assets, 44,820 617,985 intangible assets, and other long-term assets Net cash received from disposal of subsidiaries or other operational units Other investment-related cash received 24,039,200 29,699,884 Sub-total of cash inflow due to investment activities 24,084,020 30,317,869 Cash paid for construction of fixed assets, intangible 731,954,148 472,503,623 assets and other long-term assets Cash paid as investment 4,250,000 Net increase of loan against pledge Net cash received from subsidiaries and other 507,974,099 operational units Other cash paid for investment activities 31,475,182 21,764,586 Sub-total of cash outflow due to investment activities 763,429,330 1,006,492,308 Net cash flow generated by investment -739,345,310 -976,174,439 III. Cash flow generated by financing Cash received as investment 5,500,000 Incl. Cash received as investment from minor 5,500,000 shareholders Cash received as loans 1,452,919,750 4,443,422,252 Cash received from bond placing Other financing-related cash received 1,666,591,530 100,725,978 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 Subtotal of cash inflow from financing activities 3,119,511,280 4,549,648,230 Cash to repay debts 2,924,757,768 3,988,397,915 Cash paid as dividend, profit, or interests 123,450,004 693,264,874 Incl. Dividend and profit paid by subsidiaries to minor shareholders Other cash paid for financing activities 3,451,507 109,125,965 Subtotal of cash outflow due to financing activities 3,051,659,279 4,790,788,754 Net cash flow generated by financing 67,852,001 -241,140,524 IV. Influence of exchange rate alternation on cash and -912,613 559,892 cash equivalents V. Net increase of cash and cash equivalents 347,483,532 -170,034,722 Plus: Balance of cash and cash equivalents at the 584,566,990 574,744,877 beginning of term VI. Balance of cash and cash equivalents at the end of 932,050,522 404,710,155 term 6. Cash Flow Statement of the Parent Co. Unit: RMB Item Balance of this period Balance of last period I. Net cash flow from business operation Cash received from sales of products and providing of services Tax returned Other cash received from business operation 4,843,988 2,616,039 Sub-total of cash inflow from business activities 4,843,988 2,616,039 Cash paid for purchasing of merchandise and services Cash paid to staffs or paid for staffs 33,652,141 62,007,982 Taxes paid 6,095,316 39,306,033 Other cash paid for business activities 12,279,684 6,551,752 Sub-total of cash outflow from business activities 52,027,141 107,865,767 Cash flow generated by business operation, net -47,183,153 -105,249,728 II. Cash flow generated by investing Cash received from investment retrieving Cash received as investment profit 389,430,562 Net cash retrieved from disposal of fixed assets, 1,800 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 intangible assets, and other long-term assets Net cash received from disposal of subsidiaries or other operational units Other investment-related cash received 5,000,000 3,000,000 Sub-total of cash inflow due to investment activities 5,000,000 392,432,362 Cash paid for construction of fixed assets, intangible 565,260 117,326 assets and other long-term assets Cash paid as investment 175,755,000 Net cash received from subsidiaries and other 464,345,956 operational units Other cash paid for investment activities Sub-total of cash outflow due to investment activities 565,260 640,218,282 Net cash flow generated by investment 4,434,740 -247,785,920 III. Cash flow generated by financing Cash received as investment Cash received as loans 990,693,638 4,110,000,600 Cash received from bond placing Other financing-related cash received 1,806,455,260 326,432,420 Subtotal of cash inflow from financing activities 2,797,148,898 4,436,433,020 Cash to repay debts 2,496,723,365 3,608,000,600 Cash paid as dividend, profit, or interests 2,213,425 662,199,041 Other cash paid for financing activities Subtotal of cash outflow due to financing activities 2,498,936,790 4,270,199,641 Net cash flow generated by financing 298,212,108 166,233,379 IV. Influence of exchange rate alternation on cash and 855,016 -2,568,311 cash equivalents V. Net increase of cash and cash equivalents 256,318,711 -189,370,580 Plus: Balance of cash and cash equivalents at the 301,637,933 394,606,753 beginning of term VI. Balance of cash and cash equivalents at the end of 557,956,644 205,236,173 term CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 7. Statement of Change in Owners’ Equity (Consolidated) Amount of the Current Term RMB Amount of the Current Term Owners’ Equity Attributable to the Parent Company Other equity instruments Minority Items Other shareholders’ Total of owners’ Perpetua Less: Common Capital Special Surplus Retained Share capital Preferre l capital treasury comprehensi risk Total of equity Others reserve reserves reserves profit securitie stock ve income provision owners’ equity d share s I. Balance at the end of the previous 2,075,335,560 1,260,702,197 4,653,971 5,843,473 888,850,230 3,576,949,573 320,276,015 8,132,611,019 year Plus: change of accounting policy Correction of errors in previous periods Business combination under the same control Others II. Balance at the beginning of current 2,075,335,560 1,260,702,197 4,653,971 5,843,473 888,850,230 3,576,949,573 320,276,015 8,132,611,019 year III. Amount of change 89,251,780 -1,076,264 -2,609,813 185,458,607 7,293,044 278,317,354 in current term CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 (“-“ for decrease) (I) Total amount of the comprehensive -1,076,264 392,992,163 7,221,885 399,137,784 income (II) Capital paid in and 89,251,780 71,159 89,322,939 reduced by owners 1. Common shares invested by the shareholders 2. Capital invested by the owners of other equity instruments 3. Amounts of share-based payments 110,368 71,159 181,527 recognized in owners’ equity 4. Others 89,141,412 89,141,412 (III) Profit distribution -207,533,556 -207,533,556 1. Appropriations to surplus reserves 2. Appropriations to general risk provisions 3. Appropriations to owners (or -207,533,556 -207,533,556 shareholders) 4. Others CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 (IV) Internal carry-forward of owners’ equity 1. New increase of capital (or share capital ) from capital public reserves 2. New increase of capital (or share capital) from surplus reserves 3. Surplus reserves for making up losses 4. Others (V) Specific reserve -2,609,813 -2,609,813 1. Withdrawn for the 3,922,869 3,922,869 period 2. Used in the period 6,532,682 6,532,682 (VI) Others IV. Balance at the end of this term 2,075,335,560 1,349,953,977 3,577,707 3,233,660 888,850,230 3,762,408,180 327,569,059 8,410,928,373 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 Amount of Last Year Unit: RMB Amount of the same period of last year Owners’ Equity Attributable to the Parent Company Minority Other equity instruments Commo Items Other shareholders’ Total of owners’ Less: Preferr Perpetual Capital Special Surplus n risk Share capital treasury comprehensi Retained profit Total of equity ed capital Others reserve reserves reserves provisio stock ve income owners’ equity share securities n I. Balance at the end of the previous 2,075,335,560 1,261,391,272 2,967,772 15,437,498 859,122,330 3,431,556,565 3,080,480 7,648,891,477 year Plus: change of accounting policy Correction of errors in previous periods Business combination under the same control Others II. Balance at the beginning of current 2,075,335,560 1,261,391,272 2,967,772 15,437,498 859,122,330 3,431,556,565 3,080,480 7,648,891,477 year III. Amount of change in current term -689,075 1,686,199 -9,594,025 29,727,900 145,393,008 317,195,535 483,719,542 (“-“ for decrease) CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 (I) Total amount of the comprehensive 1,686,199 797,721,576 6,504,948 805,912,723 income (II) Capital paid in and 402,262 313,771,067 314,173,329 reduced by owners 1. Common shares invested by the 313,628,750 313,628,750 shareholders 2. Capital invested by the owners of other equity instruments 3. Amounts of share-based payments 402,262 142,317 544,579 recognized in owners’ equity 4. Others (III) Profit distribution 29,727,900 -652,328,568 -622,600,668 1. Appropriations to 29,727,900 -29,727,900 surplus reserves 2. Appropriations to general risk provisions 3. Appropriations to owners (or -622,600,668 -622,600,668 shareholders) 4. Others (IV) Internal CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 carry-forward of owners’ equity 1. New increase of capital (or share capital ) from capital public reserves 2. New increase of capital (or share capital) from surplus reserves 3. Surplus reserves for making up losses 4. Others (V) Specific reserve -9,594,025 -9,594,025 1. Withdrawn for the 6,930,650 6,930,650 period 2. Used in the period 16,524,675 16,524,675 (VI) Others -1,091,337 -3,080,480 -4,171,817 IV. Balance at the end of this term 2,075,335,560 1,260,702,197 4,653,971 5,843,473 888,850,230 3,576,949,573 320,276,015 8,132,611,019 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 8. Statement of Change in Owners’ Equity (Parent Co.) Amount of the Current Term Unit: RMB Amount of the Current Term Other equity instruments Less: Other Items Capital Special Surplus Retained Total of owners’ Perpetual Share capital Preferred treasury comprehensive capital Others reserve reserves reserves profit equity share stock income securities I. Balance at the end of the previous 2,075,335,560 1,405,529,511 903,395,590 451,182,587 4,835,443,248 Plus: change of accounting policy Correction of errors in previous periods Others II. Balance at the beginning of current 2,075,335,560 1,405,529,511 903,395,590 451,182,587 4,835,443,248 year III. Amount of change in current term 89,141,412 -274,911,079 -185,769,667 (“-“ for decrease) (I) Total amount of the comprehensive -67,377,523 -67,377,523 income (II) Capital paid in and reduced by 89,141,412 89,141,412 owners 1. Common shares invested by the shareholders 2. Capital invested by the owners of other equity instruments CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 3. Amounts of share-based payments recognized in owners’ equity 4. Others 89,141,412 89,141,412 (III) Profit distribution -207,533,556 -207,533,556 1. Appropriations to surplus reserves 2. Appropriations to general risk -207,533,556 -207,533,556 3. Others (IV) Internal carry-forward of owners’ equity 1. New increase of capital (or share capital ) from capital public reserves 2. New increase of capital (or share capital) from surplus reserves 3. Surplus reserves for making up losses 4. Others (V) Specific reserve 1. Withdrawn for the period 2. Used in the period (VI) Others IV. Balance at the end of this term 2,075,335,560 1,494,670,923 903,395,590 176,271,508 4,649,673,581 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 Amount of Last Year Uniit: RMB Amount of the same period of last year Other equity instruments Less: Other Items Capital Special Surplus Total of owners’ Perpetual Share capital Preferred treasury comprehensive Retained profit capital Others reserve reserves reserves equity share stock income securities I. Balance at the end of the previous 2,075,335,560 1,404,803,407 873,667,690 806,232,151 5,160,038,808 Plus: change of accounting policy Correction of errors in previous periods Others II. Balance at the beginning of current 2,075,335,560 1,404,803,407 873,667,690 806,232,151 5,160,038,808 year III. Amount of change in current term 726,104 29,727,900 -355,049,564 -324,595,560 (“-“ for decrease) (I) Total amount of the comprehensive 297,279,004 297,279,004 income (II) Capital paid in and reduced by owners 1. Common shares invested by the shareholders 2. Capital invested by the owners of other equity instruments CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 3. Amounts of share-based payments recognized in owners’ equity 4. Others (III) Profit distribution 29,727,900 -652,328,568 -622,600,668 1. Appropriations to surplus reserves 29,727,900 -29,727,900 2. Appropriations to general risk -622,600,668 -622,600,668 3. Others (IV) Internal carry-forward of owners’ equity 1. New increase of capital (or share capital ) from capital public reserves 2. New increase of capital (or share capital) from surplus reserves 3. Surplus reserves for making up losses 4. Others (V) Specific reserve 1. Withdrawn for the period 2. Used in the period (VI) Others 726,104 726,104 IV. Balance at the end of this term 2,075,335,560 1,405,529,511 903,395,590 451,182,587 4,835,443,248 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 III. Basic Information of the Company CSG Holding Co Ltd (the “Company”) was incorporated in September 1984, known as China South Glass Company, as a joint venture enterprise by Hong Kong China Merchants Shipping Co., LTD (香港招商局轮船股份有限公司), Shenzhen Building Materials Industry Corporation (深圳建筑材料工业集团公司), China North Industries Corporation (中国北方工业深圳公司) and Guangdong International Trust and Investment Corporation (广东国际信托投资公司). The Company was registered in Shenzhen, Guangdong Province of the People's Republic of China and its headquarter locates in Guangdong Province of the People's Republic of China. The Company issued RMB-dominated ordinary shares and foreign shares publicly in October 1991 and January 1992 respectively, and listed on Shenzhen Stock Exchange on February 1992. On 31 December 2015, the registered capital was RMB 2,075,335,560, with nominal value of RMB1 per share. The Company and its subsidiaries (collectively referred to as the “Group”) are mainly engaged in the manufacture and sales of glass and energy meterials with glass as the medium, the manufacture and sales of polysilicon and solar module, the construction and operation of photovoltaic plant and the manufacture and sales of electronic glass and display. The financial statements were authorised for issue by the board of directors on 22 August 2017. Details of major subsidiaries that were included in the financial statements in the period please refer to the Note. The new subsidiary included in the consolidation scope in the period was Zhijiang CSG PV New Energy Co., Ltd. (hereinafter referred to as "Zhijiang PV Company"). IV. Basis of the preparation of financial statements 1. Basis of the 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. 2. Going concern As at 30 June 2017, the Group had net current liabilities of about RMB 3.385 billion and committed capital expenditure of RMB 390 million. The directors of the Company have made an assessment that the Group has continued for many years and is expected to continue to generate sufficient cash flow from operating activities over the next 12 months. As at 30 June 2017, the net cash inflow from operation activities was approximately RMB 1.02 billion. The Group has maintained good relationship with banks so the Group has been able to successfully get adequate financing credit; As at 30 June 2017, the Group had unutilised internal banking facilities of approximately RMB 3.9 billion, In addition, the major shareholder of the Group is willing to provide the Group with interest-free loans of RMB 2 billion for the Group or through its designated parties. As of the date of this report, the shareholder has provided RMB 1.35 billion of interest-free loans. In addition, the Group also has other available financing channels, such as short-term financing bills, ultra-short –term financing notes, and medium term notes. The directors are of view that the above banking facilities and the support from the shareholder 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 this financial statement of the Company and the Group. CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 V. Significant accounting policies and accounting estimates 1. Statement of compliance with the Accounting Standards for Business Enterprises The financial statements of the Company for the first half year of 2017 truly and completely present the financial position as of 30 June 2017 and the operating results, cash flows and other information for the first half year of 2017 of the Group and the Company in compliance with the Accounting Standards for Business Enterprises. 2. Accounting period The Company’s accounting year starts on 1 January and ends on 31 December. 3. Operating cycle The Company’s operating cycle starts on 1 January and ends on 31 December. 4. Recording currency The recording currency is Renminbi (RMB). 5. Accounting process method of Business combinations under common and different controlling. (a)Business combinations involving entities under common control The assets and liabilities that the combining party obtains in a business combination shall be measured on the basis of their carrying amount in the combined party. As for the balance between the carrying amount of the net assets obtained by the combining party and the carrying amount of the consideration paid by it, the additional paid-in capital shall be adjusted. If the additional paid-in capital is not sufficient to be offset, the retained earnings shall be adjusted. Costs directly attributable to business combination are recorded into the profits and losses once incurred. Transaction costs attributed to issue equity securities or debt securities for business combination are recorded into initial recognition amounts of equity securities or debt securities. (b) Business combinations involving entities not under common control The cost of combination and identifiable net assets obtained by the acquirer in a business combination are measured at the fair value at the acquisition date. The excess of the cost of acquisition over the Group’s share of the fair value of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the Group’s share of fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the income statement. Costs directly attributable to business combination are included in the profits and losses once incurred. Transaction costs attributed to issue equity securities or debt securities for business combination are recorded into initial recognition amounts of equity securities or debt securities. 6. Basis of preparation of consolidated financial statements The 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. CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 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. Confirmation standard of cash and cash equivalent 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. Translating of foreign currency operations and foreign currency report form (a) Foreign currency transactions Foreign currency transactions are translated into RMB using the exchange rates prevailing at the dates of the transactions. At the balance sheet date, monetary items denominated in foreign 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 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 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 instruments (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. Available-for-sale financial assets Available-for-sale financial assets are non-derivative financial assets that are either designated in this category or not classified in any of the other categories at initial recognition. Available-for-sale financial assets are included in other current assets on the balance sheet if management intends to dispose of them within 12 months after the balance sheet date. (ii) Recognition and measurement Financial assets are 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 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 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. 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. Other financial liabilities in the Group mainly include payables, borrowings and bonds payable. Changes in fair value of financial liabilities at fair value through profit or loss are recognized in the income statement. CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 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 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. Recognition standard impairment and receivables (1) Bad debt provision on receivable accounts with major amount individually The basis or amount for individually significant receivables Basis of recognition or standard amount of Receivables that are is individually greater than 20 million. individually significant Receivables that are individually significant are subject to separate impairment assessment. A provision for impairment of the receivable is recognized if there is objective evidence Basis of bad debt provision that the Group will not be able to collect the full amounts according to the original terms. (2) Receivables that are provided for provision based on their credit risk characteristics Name of the portfolio Basis of bad debt provision Portfolio 1 according to percentage of balance method Portfolio 2 according to percentage of balance method CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 Accounts on aging analysis basis in the portfolio: □Applicable √Non-applicable Accounts on percentage basis in the portfolio: √Applicable □Non-applicable Percentage of provision for Percentage of provision for other Name of the portfolio accounts receivable(%) receivables(%) Portfolio 1 2% 2% Portfolio 2 2% 2% Accounts on other basis in the portfolio: □Applicable √Non-applicable (3) The method of provision for impairment of receivables that are individually significant Reason for providing bad debt A provision for impairment of the receivable is recognized if there is objective evidence that individually: the Group will not be able to collect the full amounts according to the original terms. The provision for impairment of the receivable is established at the difference between the Basis of bad debt provision: carrying amount of the receivable and the present value of estimated future cash flows. 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. Classified as assets 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 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 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 signed with other parties legally binding sale agreement and approval has been obtained, is expected to the sale will 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 the 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, which are presented separately in the balance sheet. A discontinued operation is a component of the Group that either has been disposed of or is classified as held for sale, and is separately identifiable operationally and for financial reporting purposes, and satisfies one of the following conditions: (1) represents a separate major line of business or geographical area of operations; (2) is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations; and (3) is a subsidiary acquired exclusively with a view to resale. Earnings from discontinued operations stated in the income statement include operating profit and loss and disposal gains and losses. 13. Long-term equity investments Long-term equity investments comprise the Company’s long-term equity investments in its subsidiaries, and the Group’s long-term equity investments in its associates. Subsidiaries are the investees over which the Company is able to exercise control. Associates are the investees that the Group has significant influence on their financial and operating policies. Investments in subsidiaries are measured using the cost method in the Company’s financial statements, and adjusted by using the equity method when preparing the consolidated financial statements. Investments in associates are accounted for using the equity method. 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. CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 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. 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. 14. Fixed assets (1) Recognition and initial measurement Fixed assets comprise buildings, machinery and equipment, motor vehicles and others. 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 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 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. (2) Depreciation Categories Depreciation method Depreciation age (year) Salvage Value Rate (%) Annual depreciation rate (%) Houses & buildings straight-line method 20–35 5% 2.71% ~ 4.75% Equipment & machinery straight-line method 8–15 5% 4.75%~11.88% Transportation straight-line method 5–8 0% 12.50%~20% equipment and others 15. 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. 16. Borrowing costs The borrowing costs that are directly attributable to the acquisition and construction of a fixed asset that needs a substantially long period of time 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 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 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 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. 17. Intangible assets (1) Pricing of intangible assets Intangible assets including land use rights and, patents and exploitation rights, intangible assets are measured at cost. (a)Land use rights Land use rights are 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) If the recoverable amount of intangible asset is less than its carrying value, the carrying value is deducted to recoverable amount. (2) 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 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; CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 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. 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. 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. 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. 20. Employee benefits (1) Short-term employee benefits accounting method 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 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 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. (2)Post-employment benefits accounting method 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 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. (3)Termination benefits accounting method 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. The termination benefits expected to be paid within one year since the balance sheet date are classified as current liabilities. 21. 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. The provision expected to be paid within one year since the balance sheet date are classified as current liabilities. CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 22. Revenue recognition The amount of revenue is determined in accordance with the fair value of the consideration received or receivable for the Sale of goods and services in the ordinary course of the Group’s activities. Revenue is shown net of discounts, rebates and returns. 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 glass, and products related to solar energy, new energy applications and electronic glass and display. 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. 23. Government grants (1)Judgment basis and accounting method of government grants related to an asset 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. Government grants related to the assets are offset against the carrying amount of the underlying assets or recognized as deferred income and are accounted for in profit or loss in a reasonable and systematic manner within the useful life of the relevant assets. (2) Judgment basis and accounting method of government grants related to income Government grants related to income which are used to compensate for the related costs or losses during the subsequent period are CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 recognized as deferred income and are recognized in the current profit or loss or related expenses for the period of recognition of the relevant cost expense or loss. The relevant expenses or losses incurred, directly included in the current profits and losses or offset the relevant costs. Similar government grants use the same presentation. Government grants related to daily activities are incorporated into operating profit, while those unrelated to daily activities are incorporated into non - operating income and expenditure. 25. 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 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: deferred income tax assets and deferred income tax liabilities are related to the income tax levied by the same the same taxation authority on the same taxpayer in the group; that tax payer within the Group has a legally enforceable right to offset current tax assets against current tax liabilities. 25. Leases (1) Accounting method of operating lease 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. Lease income under an operating lease is recognised as revenue on a straight-line basis over the period of the lease. (2) Accounting method of financing lease A lease that transfers substantially all the risks and rewards incidental to ownership of an asset is a finance lease. An operating lease is CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 a lease other than financing lease. 26. Other significant accounting policies and accounting estimates 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 is subject to sufficient taxable income that is 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 estimation and actual results for next accounting period, so significant adjustments may be made to the carrying amount of fixed assets in balance sheet. CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 (e)Goodwill impairment The Group tests annually whether goodwill has suffered any impairment. The recoverable amount of asset groups and groups of asset groups is the present value of the future cash flows expected to be derived from them. These calculations require use of estimates (Note 4 (12)). If management revises the gross margin that is used in the calculation of the future cash flows of asset groups and groups of asset groups, and the revised gross margin is lower than the one currently used, the Group would need to recognise further impairment against goodwill. If management revises the pre-tax discount rate applied to the discounted cash flows, and the revised pre-tax discount rate is higher than the one currently applied, the Group would need to recognise further impairment against goodwill. If the actual gross margin/pre-tax discount rate is higher/lower than management’s estimates, the impairment loss of goodwill previously provided for is not allowed to be reversed by the Group 27. Changes in significant accounting policies and accounting estimates (1) Changes in significant accounting policies √Applicable □Not applicable The content and reasons of accounting policy changes Approval procedure Remarks The Ministry of Finance promulgated the revised Accounting Standard for Business Enterprises No. 16 - Government Grants on May 10, 2017. The Company has adopted Board of directors No influence the above guidelines to prepare the semi-annual financial statements for 2017. The Ministry of Finance promulgated the revised Accounting Standard for Business Enterprises No. 16 - Government Grants on May 10, 2017. The Company has adopted the above guidelines to prepare the semi-annual financial statements for 2017. It had no effect on the Group's consolidated balance sheet and the Company's balance sheet as at 31 December 2016 and the consolidation and the Company's income statement for the six months ended 30 June 2016. (2)Changes in significant accounting estimates □Applicable √ Not applicable 28. Others Safety production costs According to relevant regulations of the Ministry of Finance and National Administration of Work Safety, a subsidiary of the Group which is engaged in producing and selling polysilicon appropriates safety production costs on following basis: (a) 4% for revenue below RMB10 million (inclusive) of the year; CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 (b) 2% for the revenue between RMB10 million to RMB100 million (inclusive) of the year; (c) 0.5% for the revenue between RMB100 million to RMB1 billion (inclusive) of the year; (d) 0.2% for the revenue above RMB1 billion of the year. The safety production costs is mainly used for the overhaul, renewal and maintenance of safety facilities. The safety production costs are charged to costs of related products or profit orloss when appropriated, and safety production costs in equity account are credited correspondingly. When using the special reserve, if the expenditures are expenses in nature, the expenses incurred are offset against the special reserve directly when incurred. If the expenditures are capital expenditures, when projects are completed and transferred to fixed assets, the special reserve should be offset against the cost of fixed assets, and a corresponding accumulated depreciation are recognised. The fixed assets are no longer be depreciated in future. 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. VI. Taxation 1. The main categories and rates of taxes Tax items Tax basis Tax rate Taxable value added amount (Tax payable is calculated Value added tax (“VAT”) using the taxable sales amount multiplied by the effective 6%-17% tax rate less current period’s deductible VAT input ) Urban construction tax Total VAT, Business tax and GST 1%-7% Enterprise income tax Taxable income 0%-25% Educational surtax Total VAT, Business tax and GST 3%-5% Resource tax Quantities of Silica sold RMB 3 per ton 2. Tax incentives The main tax incentives the Group is entitled to are as follows: Tianjin Energy Conservation Glass Co., Ltd. (“Tianjin Energy Conservation”) passed review on a high and new tech enterprise in 2015 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 2015. CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 Dongguan CSG Architectural Glass Co., Ltd. (“Dongguan CSG”) passed review on a high and new tech enterprise in 2016 and obtained the Certificate of High and New Tech Enterprise, the period of validity is three years. It applies to 15% tax rate for three years since 2016. Wujiang CSG North-east Architectural Glass Co., Ltd. (“Wujiang CSG”) passed 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. It is on a review of high and new tech enterprise at present, and temporarily applies to 15% income tax rate for the period. Dongguan CSG Solar Glass Co., Ltd. (“Dongguan CSG Solar”) passed 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. It is on a review of high and new tech enterprise at present, and temporarily applies to 15% income tax rate for the period. Yichang CSG Silicon Co., Ltd. (“Yichang CSG Silicon”) passed 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. It is on a review of high and new tech enterprise at present, and temporarily applies to 15% income tax rate for the period. Dongguan CSG PV-tech Co., Ltd. (“Dongguan CSG PV-tech”) passed review on a high and new tech enterprise in 2016 and obtained the Certificate of High and New Tech Enterprise, the period of validity is three years. It applies to 15% tax rate for three years since 2016. Hebei Shichuang Glass Co., Ltd. (“Hebei Shichuang”) passed review on a high and new tech enterprise in 2016 and obtained the Certificate of High and New Tech Enterprise, the period of validity is three years. It applies to 15% tax rate for three years since 2016. Wujiang CSG Glass Co., Ltd. (“Wujiang CSG”) was recognised as a high and new tech enterprise in 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. It is on a review of high and new tech enterprise at present, and temporarily applies to 15% income tax rate for the period. Xianning CSG Glass Co Ltd. (“Xianning CSG”) 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. It is on a review of high and new tech enterprise at present, and temporarily applies to 15% income tax rate for the period. Xianning CSG Energy-Saving Glass Co., Ltd. (“Xianning CSG Energy-Saving”) was recognised as a high and new tech enterprise in 2015, 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 2015. Yichang CSG Photoelectric Glass Co., Ltd. (“Yichang CSG Photoelectric”) was recognised as a high and new tech enterprise in 2015, 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 2015. Shenzhen CSG Display was recognised as a high and new tech enterprise in 2015, 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 2015. Yichang CSG Display Co., Ltd (“Yichang CSG Display”) was recognised as a high and new tech enterprise in 2016, and obtained the Certificate of High and New Tech Enterprise, and the period of validity was three years. It applies to 15% tax rate for three years since CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 2016. Qingyuan CSG New Energy-Saving Materials Co., Ltd. (“Qingyuan CSG Energy-Saving”) was recognised as a high and new tech enterprise in 2016, and obtained the Certificate of High and New Tech Enterprise, and the period of validity was three years. It applies to 15% tax rate for three years since 2016. Sichuan CSG Energy Conservation Glass Co., Ltd. (“Sichuan CSG Energy Conservation”) obtains enterprise income tax preferential treatment for Western Development, and temporarily calculates enterprise income tax at a tax rate of 15% for the period. Chengdu CSG Glass Co., Ltd. (“Chengdu CSG”) obtains enterprise income tax preferential treatment for Western Development, and temporarily calculates enterprise income tax at a tax rate of 15% for the period. Qingyuan CSG New Energy Co., Ltd. (“Qingyuan CSG New Energy”), Suzhou CSG PV Energy Co., Ltd. (“Suzhou CSG PV Energy”), Jiangsu Wujiang CSG New Energy Co., Ltd. (“Wujiang CSG New Energy”), and Yichang CSG New Energy Co., Ltd. (“Yichang CSG New Energy”) are public infrastructure project specially supported by the state in accordance with the Article 87 in Implementing Regulations of the Law of the People's Republic of China on Enterprise Income Tax, and can enjoy the tax preferential policy of “three-year exemptions and three-year halves”, that is, starting from the tax year when the first revenue from production and operation occurs, the enterprise income tax is exempted from the first to the third year, while half of the enterprise income tax is collected for the following three years. Qingyuan CSG New Energy, Suzhou CSG PV Energy and Wujiang CSG New Energy started to carry out operations in 2015, while Yichang CSG New Energy started operation in 2016. The applicable enterprise income tax rate for them is 0% for the period. In addition, pursuant to the document Fogang Guo Shui Shui Tong [2015] No. 2489, the VAT for photovoltaic power generation of Qingyuan CSG New Energy is subject to the refund upon collection policy. 3. Others Some subsidiaries of the Group have used the “exempt, credit, refund” method on goods exported and the refund rate is 5%-17%. VII. Notes to the consolidated financial statements 1. Cash at bank and on hand Unit: RMB Item Balance at the end of the period Balance at the beginning of the period Cash on hand 27,530 17,239 Cash at bank 932,022,992 584,549,751 Other cash balances 2,184,679 2,236,515 Total 934,235,201 586,803,505 Including: Total overseas deposit 19,394,575 12,956,226 Other cash balances include margin deposits for the application of opening letter of credit and loan from the bank, amounting to RMB 2,184,679 (31 Dec. 2016: RMB 2,236,515), which is restricted cash. CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 2. Notes receivable (1) Notes receivable listed by classification Unit: RMB Item Balance at the end of the period Balance at the beginning of the period Bank acceptance notes 248,524,397 138,557,412 Trade acceptance notes 288,032,806 317,789,825 Total 536,557,203 456,347,237 (2) Notes receivable which has been endorsed or discounted at the end of the term by the Company but not yet due at balance sheet date Unit: RMB Amount of recognition termination Amount of not terminated recognition at the Item at the period-end period-end Bank acceptance notes 1,647,228,930 Trade acceptance notes 181,790,787 Total 1,647,228,930 181,790,787 3. Accounts receivable (1) Accounts receivable disclosed by category Unit: RMB End of term Beginning of term Book balance Bad debt provision Book balance Bad debt provision Categories Propor Propor Book value Propor Propor Book value Amount Amount Amount Amount tion % tion % tion % tion % Accounts receivable withdrawn bad debt provision 684,955,960 98% 13,168,976 2% 671,786,984 631,863,585 98% 12,187,534 2% 619,676,051 according to credit risks characteristics Account receivable with 12,404,070 2% 4,247,139 34% 8,156,931 12,590,789 2% 4,280,857 34% 8,309,932 minor individual amount but bad CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 debt provision is provided Total 697,360,030 100% 17,416,115 2% 679,943,915 644,454,374 100% 16,468,391 3% 627,985,983 Accounts receivable with large amount individually and bad debt provisions were provided □ Applicable √ Non-applicable Accounts receivable on which bad debt provisions are provided on age analyze basis in the portfolio □ Applicable √ Non-applicable Accounts receivable on which bad debt provisions are provided on percentage analyze basis in a portfolio √Applicable □ Non-applicable Unit: RMB Closing balalnce Name of portfolio Accounts receivable Bad debt provision Proportion % Portfolio 1 684,955,960 13,168,976 2% Portfolio 2 Total 684,955,960 13,168,976 2% (2) Accounts receivable withdraw, reversed or collected during the reporting period The withdrawal amount of the bad debt provision during the report period was of RMB 5,374,252. The amount of the reversed or collected part during the report period was of RMB 4,358,997. (3) The actual write-off accounts receivable Unit: RMB Item Write-off amount Accounts receivable 67,531 (4) Top 5 of the closing balance of the accounts receivable colleted according to the arrears party As at 30 June 2017, the top 5 of the closing balance of the accounts receivable colleted according to the arrears party were collected and analyzed as follows: Balance Provision for bad debts Percentage in total accounts receivable balance Total balances for the five 169,168,209 (3,383,364) 24% largest accounts receivable CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 4. Advances to suppliers (1) Listed by aging analysis Unit: RMB Closing balance Opening balance Age Proportion Proportion Amount Amount ratio (%) ratio (%) within 1 year 148,306,533 91% 80,819,387 84% 1-2 years 13,940,844 9% 14,913,745 16% Total 162,247,377 -- 95,733,132 -- As at 30 June 2017, advances to suppliers ageing over one year amount to RMB13,940,844 (31 December 2016: RMB14,913,745). They were mainly the advances of materials, and the payment had not been selected because the materials had not been received. (2) Top 5 of the closing balance of the advances to suppliers colleted according to the target As at 30 June 2017, the top five largest advances to supplies are set out as below: Balance Percentage in total advances balance Total advances for the five largest advances 58,816,501 36% 5. Other account receivable (1) Other accounts receivable disclosed by category: Unit: RMB Closing balance Openning balance Bad debt Book balance Bad debt provision Book balance Categories provision Book value Book value Propor Propor Propor Propor Amount Amount Amount Amount tion % tion % tion % tion % Other accounts receivable withdrawn bad debt 34,326,598 100% 767,508 2% 33,559,090 33,903,217 100% 674,068 2% 33,229,149 provision according to credit risks characteristics Total 34,326,598 100% 767,508 2% 33,559,090 33,903,217 100% 674,068 2% 33,229,149 Statement on categories of other receivable accounts: Other accounts receivable with large amount and were provided bad debt provisions individually at end of period. CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 □ Applicable √ Non-applicable Other accounts receivable in the portfolio on which bad debt provisions were provided on age analyze basis □ Applicable √ Non-applicable Other accounts receivable in the portfolio on which bad debt provisions were provided on percentage basis √ Applicable □ Non-applicable Unit: RMB Closing balance Name of portfolio Other receivable accounts Bad debt provision proportion% portfolio 1 34,326,598 767,508 2% Total 34,326,598 767,508 2% Explanation for determining the basis of the portfolio: Other accounts receivable in the portfolio on which bad debt provisions were provided on other basis □ Applicable √ Non-applicable (2) Accounts receivable withdraw, reversed or collected during the reporting period The withdrawal amount of the bad debt provision during the report period was of RMB127,208. The amount of the reversed or collected part during the report period was of RMB 33,768. (3) Other accounts receivable classified by the nature of accounts Unit: RMB Nature Closing balance Opening balance Refundable deposits 6,953,820 6,121,403 Payments made on behalf of other parties 23,225,811 25,019,422 Petty cash 1,389,488 959,785 Export tax rebates receivable 805,438 755,372 Others 1,952,041 1,047,235 Total 34,326,598 33,903,217 (4) Top 5 of the closing balance of the other accounts receivable collated according to the arrears party Unit: RMB Proportion of the Name of the total year end Closing balance of companies Nature Closing balance Ages balance of the bad debt provision Industrial accounts receivable (%) Government agency Independent third 11,067,754 1 to 3 years 32% 221,355 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 A party Independent third W Within 1 year Company B 4,268,347 12% 85,367 party Independent third Within 1 year Company C 3,183,029 9% 63,661 party Independent third Within 1 year Company D 1,900,000 6% 38,000 party Government agency Independent third Within 1 year 1,196,150 3% 23,923 E party Total -- 21,615,280 -- 62% 432,306 6. Inventories (1) Categories of inventory Unit: RMB Closing balance Opening balance Items Impairment Impairment Book balance Book value Book balance Book value provision provision Raw materials 254,363,351 1,480,641 252,882,710 166,639,254 2,025,446 164,613,808 Product in process 20,325,740 20,325,740 18,893,651 18,893,651 Products in stock 330,050,877 3,147,241 326,903,636 274,559,889 6,347,741 268,212,148 Material in 30,481,690 30,481,690 26,061,318 26,061,318 circulation Total 635,221,658 4,627,882 630,593,776 486,154,112 8,373,187 477,780,925 (2) Inventory impairment provision Unit: RMB Increased this term Decreased this term Categories Opening balance Closing balance Withdrawal Other Reverse or write-off Other Raw materials 2,025,446 544,805 1,480,641 Products in stock 6,347,741 3,200,500 3,147,241 Total 8,373,187 3,745,305 4,627,882 Details of inventory impairment provision as following: Basis for provision for decline in the value of inventories Reasons of reversal of the decline in the value of inventories in the period CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 Finished goods The amount of carrying amount less net realisable value due to Sold decline in price of products Raw materials The amount of book value less net realisable value due to sluggish Used or damaged raw materials 7. Other current assets Unit: RMB Item Closing balance Opening balance VAT to be offset 186,548,195 150,317,894 Asstes held for sale 40,049,163 40,049,163 Enterprise income tax prepaid 1,590,919 1,325,723 VAT input to be recognised 21,181,042 8,212,797 Total 249,369,319 199,905,577 8. Fixed assets (1) Particulars of fixed assets Unit: RMB Machinery and Motor vehicles Items Buildings Total equipment and others I. Original book value: 1. Opening balance 3,911,336,527 11,699,296,248 201,923,067 15,812,555,842 2. Increased amount of the period (1) Acquisition 1,007,850 7,963,289 2,988,342 11,959,481 (2) Transfers from construction in progress 70,349,000 851,590,771 1,185,606 923,125,377 (3) Increase from enterprise combination (4) Others 731,040 1,858,203 472,773 3,062,016 3. Decreased amount of the period (1)Disposal or retirement 495,370 2,576,058 3,071,428 (2) Others 3,695,395 282,254,513 285,949,908 4. Closing balance 3,979,729,022 12,277,958,628 203,993,730 16,461,681,380 II. Accumulative depreciation and accumulative amortization CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 1. Opening balance 629,946,237 3,287,606,208 172,265,020 4,089,817,465 2. Increased amount of the period (1) Withdrawal 61,506,196 408,580,685 11,232,619 481,319,500 3. Decreased amount of the period (1)Disposal or retirement 378,003 2,461,513 2,839,516 (2) Transferred to construction in progress 1,895,250 138,978,164 140,873,414 4. Closing balance 689,557,183 3,556,830,726 181,036,126 4,427,424,035 III. Depreciation reserves 1. Opening balance 264,765,386 264,765,386 2. Increased amount of the period (1) Withdrawal 3. Decreased amount of the period (1)Disposal or retirement (2) Others 4,010,176 4,010,176 4. Closing balance 260,755,210 260,755,210 IV. Book value 1. Closing book value 3,290,171,839 8,460,372,692 22,957,604 11,773,502,135 2. Opening book value 3,281,390,290 8,146,924,654 29,658,047 11,457,972,991 (2) Fixed asset not licensed yet Unit: RMB Items Book value Reason for not granted Have submitted the required documents and are in the process of Buildings 910,163,588 application, or the related land use right certificate pending During January to June 2017, the depreciation amount provided for fixed assets was RMB 481,319,500 (January to June 2016: RMB 421,993,622), and the amount of depreciation expenses charged to cost of sales, selling and distribution expenses, general and administrative expenses and construction in progress was RMB 448,195,663, RMB 482,108, RMB 31,885,617, and RMB 756,112 (January to June 2016: RMB 385,642,218, RMB 506,576, RMB 26,989,222, RMB 8,855,606), respectively. During January to June 2017, the cost of fixed assets transferred from construction in progress amounted to RMB 923,125,377 (January to June 2016: RMB 901,652,337). CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 9. Construction in process (1)Particulars of construction in process Unit: RMB Closing balance Opening balance Item Impairment Impairment Book balance Book value Book balance Book value provision provision Yichang 1GW silicon 346,209,311 346,209,311 95,011,027 95,011,027 slice project Yichang CSG Display 305,291,976 18,170,650 287,121,326 274,342,571 14,160,474 260,182,097 panel display project Xianning CSG Photoelectric Glass 221,147,847 221,147,847 41,267,876 41,267,876 project Hebei float 600T 120,324,473 120,324,473 tech-innovation project Zhanjiang PV PV power 53,766,946 53,766,946 8,855,560 8,855,560 station project Wujiang float glass 70,357,072 19,876,460 50,480,612 70,178,986 19,876,460 50,302,526 project Dongguan Solar Glass Phase I and II 78,970,995 33,075,116 45,895,879 78,970,995 33,075,116 45,895,879 improvement project Sichuan energy-saving 10,493,107 10,493,107 13,005,928 13,005,928 project Phase III Dongguan PV 250MW module capacity 10,141,901 10,141,901 expansion project Dongguan PV 100MV cell production capacity 8,343,263 8,343,263 expansion project Yichang 700MW silicon 2,018,255 2,018,255 1,775,641 1,775,641 slice expansion project Wujiang Photovoltaic Packaging Materials 1,693,809 1,693,809 1,583,553 1,583,553 Project Xianning energy-saving 1,354,508 1,354,508 1,083,430 1,083,430 glass project Dongguan PV Tech 1,146,672 1,146,672 8,224,072 8,224,072 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 200MW PV-tech Battery Expansion project Yichang 5000T electronic-grade 171,211,288 171,211,288 polysilicon project Chengdu float 550T line 102,304,740 102,304,740 tech-renovation Hebei float 900T 388,627,081 388,627,081 tech-innovation project Heyuan PV tech 11MV distributed generation 85,126,446 85,126,446 project others 99,287,462 99,287,462 87,639,233 87,639,233 Total 1,330,547,597 71,122,226 1,259,425,371 1,429,208,427 67,112,050 1,362,096,377 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 (2) Movement of significant project Unit: RMB Capitalizin Investmen Accumulate Including: Transferred g rate of Opening Increased Other Closing t on of interest Projects Budget into fixed Progress interest Fund recourse balance this term decreases balance budget interest capitalized assets this (%) capitalized this term period % Yichang 1GW Internal fund and 1,073,209,600 95,011,027 251,392,592 194,308 346,209,311 48.00% 65.00% 3,371,909 2,825,684 4.41% silicon slice project bank loan Yichang CSG Internal fund and Display panel 1,970,000,000 274,342,571 54,407,827 23,194,679 263,743 305,291,976 55.00% 65.00% 2,691,886 1,694,243 4.11% bank loan display project Xianning CSG Photoelectric Glass 510,000,000 41,267,876 180,424,957 544,986 221,147,847 54.00% 70.00% 3,030,956 3,030,956 4.75% Internal fund and project bank loan Hebei float 600T tech-innovation 181,250,000 120,324,473 120,324,473 2.00% 2.00% Internal fund and project bank loan Zhanjiang PV PV power station 130,000,000 8,855,560 44,911,386 53,766,946 40.00% 45.00% 918,139 139,762 4.57% Internal fund and project bank loan Wujiang float glass Internal fund and 919,891,000 70,178,986 431,588 253,502 70,357,072 100.00% 100.00% 20,120,444 project bank loan Dongguan Solar Glass Phase I and 396,410,000 78,970,995 78,970,995 80.00% 80.00% Internal fund II improvement CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 project Sichuan energy-saving 222,817,517 13,005,928 2,512,821 10,493,107 99.00% 99.00% Internal fund project Phase III Dongguan PV 250MW module Internal fund and 28,000,000 10,329,122 187,221 10,141,901 36.00% 50.00% 45,374 45,374 4.80% capacity expansion bank loan project Dongguan PV 100MV cell Internal fund and 15,000,000 8,343,263 8,343,263 56.00% 70.00% 37,327 37,327 4.80% production capacity bank loan expansion project Yichang 700MW Internal fund and silicon slice 697,000,000 8,224,072 7,077,400 1,146,672 100.00% 100.00% 32,015,800 bank loan expansion project Wujiang Photovoltaic Internal fund and 1,980,000,000 1,775,641 242,614 2,018,255 76.00% 100.00% 17,594,454 4.41% Packaging bank loan Materials Project Xianning Internal fund and energy-saving 565,119,318 1,583,553 137,080 26,824 1,693,809 95.00% 100.00% 6,321,397 bank loan glass project Dongguan PV Tech 200MW PV-tech 295,270,606 1,083,430 373,576 68,594 33,904 1,354,508 99.00% 100.00% 11,306,278 Battery Expansion Internal fund and project bank loan Yichang 5000T Internal fund and 698,396,700 171,211,288 46,327,655 216,595,546 943,397 30.00% 35.00% 7,177,033 3,967,498 4.41% electronic-grade bank loan CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 polysilicon project Chengdu float 550T 200,000,000 102,304,740 57,219,831 159,524,571 92.00% 100.00% Internal fund line tech-renovation Hebei float 900T tech-innovation 124,000,000 388,627,081 4,503,619 393,130,700 100.00% 100.00% 4,211,893 1,057,593 4.94% Internal fund and project bank loan Heyuan PV tech Internal fund and 11MV distributed 91,610,000 85,126,446 1,021,587 86,141,345 1,834 4,854 94.00% 100.00% 325,704 325,704 5.00% bank loan generation project Internal fund and others 1,046,953,400 87,639,233 46,885,679 36,185,701 98,339,211 67,530,341 910,042 bank loan Total 11,144,928,141 1,429,208,427 827,276,849 923,125,377 2,812,302 1,330,547,597 -- -- 176,698,935 14,034,183 -- CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 10. Intangible assets (1) Particulars of intangible assets Unit: RMB Item Land use rights Patents Mineral rights Others Total I. Original book value: 1. Opening balance 1,026,603,700 199,922,986 4,456,536 23,548,047 1,254,531,269 2. Increased amount of the period (1) Acquisition 2,856,020 13,539 2,869,559 (2) Internal R &D 6,097,439 6,097,439 (3) Increase from enterprise combination 3. Decreased amount of the period (1)Disposal 4. Closing balance 1,026,603,700 208,876,445 4,456,536 23,561,586 1,263,498,267 II. Total accrued amortization 1. Opening balance 128,007,677 57,225,743 3,306,083 20,322,309 208,861,812 2. Increased amount of the period (1) Withdrawal 9,813,201 7,601,215 200,321 2,141,791 19,756,528 3. Decreased amount of the period (1)Disposal 4. Closing balance 137,820,878 64,826,958 3,506,404 22,464,100 228,618,340 III. Impairment provision 1. Opening balance 13,201,347 9,133 13,210,480 2. Increased amount of the period (1) Withdrawal 3. Decreased amount of the period (1)Disposal 4. Closing balance 13,201,347 9,133 13,210,480 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 IV. Book value 1. Closing book value 888,782,822 130,848,140 950,132 1,088,353 1,021,669,447 2. Opening book value 898,596,023 129,495,896 1,150,453 3,216,605 1,032,458,977 At the end of the period, the intangible assets arising from internal research and development accounted for 10.20% of total of intangible assets. (2) Land use right not licensed yet Unit: RMB Item Book value Reason for not granted Land 5,595,776 in the process During Jan.-Jun. 2017, the amortisation of intangible assets amounted to RMB 19,756,528 (Jan.-Jun. 2016: RMB 16,315,423). As at 30 June 2017, ownership certificates of land use right (“Land ownership Certificates”) for certain land use rights of the Group with carrying amounts of approximately RMB 5,595,776 (cost: RMB 6,586,712) had not yet been obtained by the Group (as at 31 December 2016, carrying amount: RMB 5,718,191, cost: RMB 6,586,712). The Company’s management is 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. 11. Development expenditure Unit: RMB The decrease amount in the period The increased Item Opening balance Recognised as Transfer in gains and Closing balance amount in the period intangible assets losses Development 66,927,714 15,642,633 6,097,439 423,437 76,049,471 expenditure Total 66,927,714 15,642,633 6,097,439 423,437 76,049,471 During Jan.-Jun. 2017, the total amount of research and development expenditures of the Group was RMB 166,809,377 (Jan.-Jun. 2016: RMB 155,478,325), including RMB 151,590,181 (Jan.-Jun. 2016: RMB 127,759,895) recorded in income statement for current period and RMB 6,097,439 were recognized as intangible assets (Jan.-Jun. 2016: nil). As at 30 June 2017, the intangible assets arising from internal research and development accounted for 10.2% of the total of book value of intangible assets (31 December 2016: 9.51%). 12. Goodwill (1)Book value of goodwill Unit: RMB CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 Name of the companies or Opening balance Increased this term Decreased this term Closing balance goodwill item Tianjing CSG Energy-saving 3,039,946 3,039,946 Company Shenzhen Display Company 4,857,406 4,857,406 Xianning Fengwei Company 389,494,804 389,494,804 Total 397,392,156 397,392,156 The goodwill allocated to the asset groups and groups of asset groups from Tianjing CSG Energy-saving was summarised by operating segments as Architectural Glass segment. The goodwill allocated to the asset groups and groups of asset groups from Shenzhen CSG Displayand Xianning CSG Photoelectric are summarised by operating segments as Electronic Glass and Display segment. The Company's management considered that the goodwill was not impaired as at 30 June 2017. The recoverable amount of asset groups is determinded by net present value of estimated future cash flows which is determined according to the five-year budget approved by management. The cashflow exceed five years is forcasted by using growth rates not exceeding similar long-term average growth rates of each asset group’s industry. The discount rates used are the pre-tax interest rates that are able to reflect the risks specific to the related asset groups. 13. Long-term expenses to be amortized Unit: RMB Item Opening balance Increased this term Amortized this term Closing balance Expenses to be amortized 975,660 9,496,897 779,455 9,693,102 Total 975,660 9,496,897 779,455 9,693,102 14. Deferred income tax asset/deferred income tax liabilities (1) Deferred income tax assets had not been off-set Unit: RMB Closing balance Opening balance Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax difference assets difference assets Provision for asset 400,092,300 60,026,145 410,272,182 61,899,046 impairments Deductible loss 137,896,780 22,522,859 164,790,392 28,883,903 Government grants 130,489,613 20,809,503 129,722,993 20,654,199 Accrued expenses 66,241,073 11,953,528 81,018,069 12,352,386 Depreciation of fixed 26,759,268 7,741,138 28,241,461 6,320,146 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 assets Total 761,479,034 123,053,173 814,045,097 130,109,680 (2) Deferred income tax liabilities had not been off-set Unit: RMB Closing balance Opening balance Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax difference liabilities difference liabilities Depreciation of fixed 347,335,276 62,520,184 396,118,583 63,406,963 assets Total 347,335,276 62,520,184 396,118,583 63,406,963 (3) The net balances of deferred tax assets or liabilities Unit: RMB Off-set amount of Closing balance of Off-set amount of Opening balance of deferred income tax deferred income tax deferred income tax deferred income tax Item assets and liabilities at assetsor liabilities after assets and liabilities at assetsor liabilities after the period-end off-set the period-beginning off-set Deferred tax assets 38,355,963 84,697,210 33,657,826 96,451,854 Deferred tax liabilities 38,355,963 24,164,221 33,657,826 29,749,137 (4) Details of unrecognised deferred income tax assets Unit: RMB Item Closing balance Opening balance Deductible losses 410,872,906 342,455,782 Total 410,872,906 342,455,782 (5) Deductible losses of unrecognized deferred income tax assets will due the following years Unit: RMB Year Closing balance Opening balance Note 2018 年 54,100,000 54,100,000 2019 年 82,300,000 82,300,000 2020 年 94,430,197 94,430,197 2021 年 111,625,585 111,625,585 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 2022 年 68,417,124 Total 410,872,906 342,455,782 -- The deductible loss of the unrecognized deferred income tax assets is mainly attributable to the Company and some of the subsidiaries which have been closed. The management of the Company can not expect the Company and the subsidiaries to generate sufficient taxable income which can be used to deduct such deductible losses in the future. Therefore, deferred income tax assets are not recognized. 15. Other non-current assets Unit: RMB Item Closing balance Opening balance Prepayment for equipment and software 74,836,840 69,945,550 upgrading expenses VAT input to be offset 10,718,843 Prepayment for lease of land use rights 6,510,000 6,510,000 Total 81,346,840 87,174,393 16. Short-term loans (1) Categories of short-term loans Unit: RMB Item Closing balance Opening balance Guaranteed loan 709,694,000 367,618,369 Unsecured loan 1,690,000,000 1,650,251,293 Ultra-short-term finance bonds (iii) 2,000,000,000 Total 2,399,694,000 4,017,869,662 (i) On 17 May 2016, the Company issued the Phase II ultra-short-term financial bonds of RMB900,000,000 for 2016, with the maturity data of 13 February 2017 and annual rate of 4.18%.As at the reporting date, such short-term bonds had been repaid. On 2 August 2016, the Company issued the Phase III ultra-short-term financial bonds of RMB600,000,000 for 2016, with the maturity data of 1 May 2017 and annual rate of 3.67%. On 1 September 2016, the Company issued the Phase IV ultra-short-term financial bonds of RMB500,000,000 for 2016, with the maturity data of 2 June 2017 and annual rate of 3.50%. (ii) As at 30 June 2017, the Company provided its subsidiaries with guarantee for the short-term borrowings of RMB 709,694,000 (31 December 2016: RMB 367,618,369), and the Company had no counter guarantee from minority shareholders of subsidiaries (31 December 2016: Nil). (iii) As at 30 June 2017, the interest of short-term borrowings varied from 2.70% to 5.00% (31 December 2016: 2.70% to 4.79%). CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 17. Notes payable Unit: RMB Category Closing balance Opening balance Bank acceptance notes 114,500,000 20,000,000 Total 114,500,000 20,000,000 18. Accounts payable (1)Particulars of accounts payable Unit: RMB Item Closing balance Opening balance Account payable for materials 833,168,302 747,769,987 Account payable for equipments 281,497,857 233,779,329 Account payable for constructions 171,181,012 100,246,462 Account payable for freight 57,741,846 40,916,380 Account payable for water and electricity 33,639,900 44,602,055 Others 5,271,561 2,555,157 Total 1,382,500,478 1,169,869,370 (2) Significant accounts payable due for over one year Unit: RMB Item Closing balance Unpaid reason Account payable for construction and As the construction work had not passed the final 98,986,756 equipments. acceptance test yet, the balance was not yet settled. Total 98,986,756 -- As at 30 June 2017, the amount of accounts payable over 1 year was approximately RMB 98,986,756 (31 December 2016: RMB 140,385,720), which mainly comprised payables for construction and equipment. As the construction work had not passed the final acceptance test yet, the balance was not yet settled. 19. Advances from customers (1) List of advance from customers Unit: RMB Item Closing balance Opening balance Advances from customers 201,549,137 142,330,979 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 Total 201,549,137 142,330,979 20. Employee benefits payable (1) List of Employee benefits payable Unit: RMB Items Opening balance Increased this term Decreased this term Closing balance I. Short-term employee 193,166,719 598,752,219 618,819,592 173,099,346 benefits II. Welfare after departure- defined 205,520 53,146,283 53,264,828 86,975 contribution plans Total 193,372,239 651,898,502 672,084,420 173,186,321 (2) List of short-term employee benefits Unit: RMB Items Opening balance Increased this term Decreased this term Closing balance 1. Wages and salaries, bonuses, 159,601,219 506,010,114 548,380,471 117,230,862 allowances and subsidies 2. Social security contributions 50,331 23,386,459 23,369,781 67,009 Including: Medical insurance 31,340 20,305,292 20,282,053 54,579 Work injury insurance 12,677 2,271,511 2,275,803 8,385 Maternity insurance 6,314 809,656 811,925 4,045 3. Housing funds 2,603,791 26,571,506 26,290,058 2,885,239 4.Labour union funds and 15,571,378 7,084,140 8,025,385 14,630,133 employee education funds 5.Management bonus for 15,340,000 35,700,000 12,753,897 38,286,103 performance Total 193,166,719 598,752,219 618,819,592 173,099,346 (3) List of defined contribution plans payable Unit: RMB Items Opening balance Increased this term Decreased this term Closing balance 1. Basic pensions 192,780 51,126,025 51,239,954 78,851 2. Unemployment insurance 12,740 2,020,258 2,024,874 8,124 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 Total 205,520 53,146,283 53,264,828 86,975 According to the decision of the fifth meeting of the seventh session of the board of directors held on 31 March 2015, the Board approved that it will appraise the management team based on quarterly net assets income rate and reward the management team by taking quarterly total net profit after tax as the base. The Group withheld management performance award of RMB 35,700,000 (Jan.-Jun. 2016: 43,750,000). 21. Tax payable Unit: RMB Item Closing balance Opening balance Value-added-tax payable 37,988,909 41,919,187 Corporate income tax payable 31,122,623 46,726,185 Individual income tax payable 3,956,884 3,755,374 Urban maintenance and construction tax 2,859,336 3,482,715 Property tax payable 4,223,103 10,998,756 Education surcharge payable 2,334,721 3,351,165 Others 5,475,695 5,359,234 Total 87,961,271 115,592,616 22. Interest payable Unit: RMB Item Closing balance Opening balance Interest payable for long-term borrowings 716,363 4,800,133 Interest for corporate bonds 37,309,995 10,660,000 Interest payable for short-term borrowings 2,897,716 2,289,987 Interest for ultra-short-term financing 32,854,763 bonds Interest payable for medium-term notes 57,260,622 27,621,021 Total 98,184,696 78,225,904 23. Dividends payable Unit: RMB Item Closing balance Opening balance Common stock dividend 207,533,556 Total 207,533,556 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 24. Other account payable (1) List of other account payable by nature Unit: RMB Item Closing balance Opening balance Interest-free borrowings 626,342,837 Guarantee deposits received from 64,868,546 69,156,801 construction contractors Accrued cost of sales 40,511,663 47,671,047 Temporary collection of payment for land 39,350,245 28,098,000 transfer Industrial production scheduling funds 31,000,000 Payable for contracted labour costs 16,551,623 17,467,346 Temporary receipts 13,218,776 14,022,924 Deposit for disabled 4,036,351 3,509,947 Others 8,943,846 8,395,385 Total 844,823,887 188,321,450 24. Other account payable (1) List of other account payable by nature Unit: RMB Item Closing balance Opening balance Guarantee deposits received from 64,868,546 69,156,801 construction contractors Accrued cost of sales 40,511,663 47,671,047 Temporary collection of payment for land 39,350,245 28,098,000 transfer Interest-free borrowings 681,000,000 Payable for contracted labour costs 16,551,623 17,467,346 Temporary receipts 13,218,776 14,022,924 Deposit for disabled 4,036,351 3,509,947 Others 8,943,846 8,395,385 Total 868,481,050 188,321,450 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 25. Non-current liabilities due within one year Unit: RMB Item Closing balance Opening balance Long-term borrowing due within 1year 29,340,000 Bonds payable due within 1year 1,000,000,000 1,000,000,000 Long-term accounts payable within one year 101,203,702 Total 1,101,203,702 1,029,340,000 (i)According to the China Securities Regulatory Commission license [2010] No.1369 published by the China Securities Regulatory Commission, the Company issued the corporate bonds on 20 October 2010, with a par value of RMB2 billion. The Corporate Bonds include RMB1 billion that will mature in 5 years (“5 year Bonds”) and another RMB1 billion that will mature in 7 years (“7 year Bonds”). The 7 year Bonds holders have a put option over the Company to repurchase at the end of the fifth year. The Corporate Bonds carries at fixed interest rate of 5.33% per year, with interest paid annually. The bonds are recognised at the actual amount of discount bonds, with the actual annual rate of 5.59%. 5-year bonds have been repaid on 19 October 2015, no 7-year bonds shall be resold by investors, and are matured on 19 October 2017. (ii)As of June 30, 2017, the Company signed a sell and leaseback agreement with a third-party finance leasing company. As a result of the Company's failure to transfer the fixed asset-related risks, it constituted a mortgage loan. In which: the amount required to be repaid within one year was shown as non-current liabilities due within one year - long term payable due within one year". 26. Other current liability Unit: RMB Items Closing balance Opening balance Others 300,000 300,000 Total 300,000 300,000 27. Long-term borrowings (1) Categories of long-term borrowings Unit: RMB Items Closing balance Opening balance Guaranteed loan 244,000,000 58,660,000 Unsecured loan 180,000,000 180,000,000 Medium-term notes 1,200,000,000 1,200,000,000 Total 1,624,000,000 1,438,660,000 Approved by file No. [2015] MTN225 of Inter Bank Market Trading Association, the Company is entitled to issue medium-term notes with the limit of RMB 1,200,000,000, which expires on 28 May 2017. The Company issued medium-term notes of RMB 1,200,000,000 on 14 July 2015 for the first time in 2015. The notes above matured CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 on 14 July 2020, with an annual interest rate of 4.94%. As at 30 June 2017, the interest of long term borrowings varied from 4.51% to 4.94% (31 December 2016: 4.51% to 4.94%). 28. Long term payables (1) Long-term payables by nature of payment Unit: RMB Items Closing balance Opening balance Interest-free loan 649,823,518 0 Mortgage loan 189,048,152 0 Total 838,871,670 0 On 22 November 2016, the Company received a letter from its shareholder, Jushenghua, stating that to support the Group’s steady operation and development, Jushenghua, as the shareholder of the Company, would like to offer interest-free borrowings with the total amount of RMB 2,000,000,000 to the Company or through related parties designated by it. As of the date of this report, the shareholder has provided RMB 700,000,000 of interest-free loans (amortized cost of RMB 650,000,000). 29. Deferred revenue Unit: RMB Items Opening balance Increased this term Decreased this term Closing balance reason Government grants 422,993,254 12,800,000 14,912,953 420,880,301 Total 422,993,254 12,800,000 14,912,953 420,880,301 -- Government grants are analysed below: Unit: RMB Included in Increase in Related to assets Item in debt Opening balance non-business Other changes Closing balance current period or income income Tianjin CSG Golden Sun 57,092,011 1,687,446 55,404,565 Related to assets Project (i) Dongguan CSG Golden 46,079,250 1,375,500 44,703,750 Related to assets Sun Project (ii) Hebei CSG Golden Sun 46,750,000 1,375,000 45,375,000 Related to assets Project (iii) Xianning CSG Golden 51,013,417 1,515,250 49,498,167 Related to assets Sun Project (iv) Infrastructure compensation for 43,670,435 2,020,768 41,649,667 Related to assets Wujiang CSG Glass CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 Co., Ltd (v) Qingyuan Energy-saving 23,259,167 1,235,001 22,024,166 Related to assets project (vi) Yichang Silicon products 24,609,375 1,406,250 23,203,125 Related to assets project (vii) Yichang CSG silicon slice auxiliary project 13,890,609 634,323 13,256,286 Related to assets (viii) Sichuan energy-saving 12,129,480 827,010 11,302,470 Related to assets glass project (ix) Group coating film experimental project 9,035,040 754,380 8,280,660 Related to assets (x) Yichang expert silicon 3,906,547 132,876 3,773,671 Related to assets project (xi) Yichang semiconductor 3,666,667 133,334 3,533,333 Related to assets silicon project (xi) Shenzhen CSG Display 53,371,082 1,267,239 52,103,843 Related to assets project (xiii) Xianning photoelectric infrastructure 7,800,000 7,800,000 Related to assets construction fund (xiv) Related to assets Others 34,520,174 5,000,000 462,588 85,988 38,971,598 and income Total 422,993,254 12,800,000 14,826,965 85,988 420,880,301 -- (i)The allowance was granted by Tianjin Municipal Government. The allowance was used for establishing PV power station by Tianjin CSG Architectural Glass Co., Ltd. The facilities belonged to Tianjin CSG upon completion. The allowance will be credited to income statement in 20 years, the useful life of the PV power station. (ii)The allowance was granted by Dongguan Municipal Government. The allowance was used for establishing PV power station by Dongguan CSG Architectural Glass Co., Ltd. The facilities belonged to Dongguan CSG upon completion. The allowance will be credited to income statement in 20 years, the useful life of the PV power station. (iii)The allowance was granted by Langfang Municipal Government. The allowance was used for establishing PV power station by Hebei CSG Glass Co., Ltd. ("Hebei CSG"). When the facilities were set up, they belonged to Hebei CSG. The allowance will be credited to income statement in 20 years, the useful life of the PV power station. (iv)The allowance was granted by Xianning Municipal Government. The allowance was used for establishing PV power station by Xianning CSG Glass Co Ltd. The facilities belonged to Xianning CSG upon completion. The allowance will be credited to income statement in 20 years, the useful life of the PV power station. CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 (v)The allowance was infrastructure compensation granted by Wujiang municipal government, and will be credited to income statement in 15 years, the shortest operating period as committed by the Group. (vi)The allowance was a pilot project for strategic emerging industry clusters development, which was used to establish high performance ultra-thin electronic glass production lines by Qingyuan CSG. The allowance will be credited to income statement in 10 years, the useful life of the production line. (vii)The balance represented amounts granted to Yi Chang CSG Silicon Materials Co., Ltd. by Yichang City Dongshan Development Corporation under the provisions of the investment contract signed between the Group and the Municipal Government of Yi Chang. The proceeds were designed for the construction of electricity transformer and the pipelines. Yichang 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 amortised 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. (xi) It represented the funds granted by Hubei local government for inport discount complement and international corporation special subsidy. The grant will be amortised and credited to income statement by 12 and 14 years (xii) It represented the special subsidy of Yichang National Regional Strategic Emerging Industry Development Pilot Project II, which is used to complement Yichang CSG Silicon “Hubei semiconductor silicon preparative technique project laboratory”. The grant will be amortised and credited to income statement by 15 years (xiii)It represented the business combinations involving enterprises not under common control and the increase in deferred income arising from incorporating the deferred income of Shenzhen CSG Display into the consolidated scope. (xiv) It represented the funds granted by Department of Hubei Xianning High-tech Industrial Park Administrative Committee for infrastructure construction which will be amortised by 10 years according to the useful life of the production line. 30. Share Capital Unit: RMB Changed in the report period (+,-) Opening Closing Issuing of new Transferred balance Bonus shares Others Sub-total balance shares from reserves Total of capital 2,075,335,560 2,075,335,560 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 shares The par value of the RMB-denominated ordinary shares is RMB1, and that of domestically listed foreign shares is HKD1. 31. Capital surplus Unit: RMB Items Opening balance Increased this term Decreased this term Closing balance Capital premium 1,345,264,670 1,345,264,670 Other capital surplus -84,562,473 89,251,780 4,689,307 Total 1,260,702,197 89,251,780 1,349,953,977 Other capital reserve increased was mainly attributable to the interest-free loans provided by the shareholder, Shenzhen Jushenghua Co., Ltd. to the Company. Capital reserve increased of RMB 89,141,412 when interest of the loans was calculated on equity transactions. 32. Other comprehensive income Unit: RMB Occuring in current period Less: Amount transferred into Amount profit and loss in the Opening Less: After-tax After-tax Closing Item incurred current period that balance income attribute to attribute to balance before recognized into tax the parent minority income other expense company shareholder tax comprehensive income in prior period II. Other comprehensive income reclassified into profit and loss in 4,653,971 -1,076,264 -1,076,264 3,577,707 future Differences on translation of foreign 2,103,971 -1,076,264 -1,076,264 1,027,707 currency financial statements Finance incentives for energy and 2,550,000 2,550,000 technical transformation Total of other comprehensive income 4,653,971 -1,076,264 -1,076,264 3,577,707 33. Special reserves Unit: RMB Items Opening balance Increased this term Decreased this term Closing balance CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 Safety production cost 5,843,473 3,922,869 6,532,682 3,233,660 Total 5,843,473 3,922,869 6,532,682 3,233,660 34. Surplus reserves Unit: RMB Items Beginning of term Increased this term Decreased this term End of term Statutory surplus reserve 760,997,662 760,997,662 Discretionary surplus reserve 127,852,568 127,852,568 Total 888,850,230 888,850,230 35. Retained earnings Unit: RMB Items The current period The same period of last year Retained earnings at the end of last year before 3,576,949,573 3,637,206,565 adjustment Retained earnings at the beginning of this year 3,576,949,573 3,431,556,565 after adjustment Add: net profits belonging to equity holders of the 392,992,163 466,883,254 Company Less: Dividends payable 207,533,556 622,600,668 Retained earnings in the end 3,762,408,180 3,275,839,151 36. Revenue and cost Unit: RMB Occurred in current term Occurred in previous term Item Revenue Cost Revenue Cost Revenue from main operations 4,914,535,874 3,730,914,851 4,184,209,383 3,052,534,128 Revenue from other operations 29,801,987 6,599,611 43,956,259 24,284,375 Total 4,944,337,861 3,737,514,462 4,228,165,642 3,076,818,503 37. Tax and surcharge Unit: RMB Item Occurred in current term Occurred in previous term City maintenance and construction tax 15,364,494 12,602,639 Educational surcharge 11,927,211 10,367,308 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 Housing property tax 14,797,102 5,421,344 Land use rights 11,043,223 3,273,686 Business tax 2,411,686 1,073,483 Others 6,202,059 747,323 Total 61,745,775 33,485,783 38. Selling Expenses Unit: RMB Items Occurred in current term Occurred in previous term Freight expenses 76,391,481 59,381,190 Employee benefits 49,496,703 43,288,837 Entertainment expenses 5,674,868 5,179,120 Travelling expenses 5,113,500 4,811,124 Vehicle use fee 3,531,901 3,414,236 Rental expenses 3,029,551 2,588,324 General office expenses 1,536,282 2,001,995 Depreciation expenses 482,108 506,576 Others 11,088,337 7,393,429 Total 156,344,731 128,564,831 39. Administrative Expenses Unit: RMB Items Occurred in current term Occurred in previous term Research and development expenses 151,590,181 127,759,895 Employee benefits 135,166,127 113,606,280 Depreciation expenses 31,885,617 26,989,222 Amortisation of intangible assets 19,756,528 16,315,423 General office expenses 12,640,569 10,148,252 Taxation Expenses 17,604,458 Labour unior funds 7,083,212 4,948,671 Entertainment expenses 4,800,751 3,889,174 Travelling expenses 4,486,643 4,446,174 Water and electricity expense 4,529,626 5,086,006 Canteen costs 4,404,253 3,667,235 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 Vehicle use fee 2,966,987 2,527,549 Rental expenses 2,457,132 1,403,376 Others 20,786,714 10,444,680 Total 402,554,340 348,836,395 40. Finance Expenses Unit: RMB Items Occurred in current term Occurred in previous term Loan interest 157,228,769 134,008,214 Less: Capitalised interest 14,034,183 6,183,391 Interest expenses 143,194,586 127,824,823 Less: Interest income 4,186,712 3,301,921 Exchange losses 2,109,890 4,217,530 Others 2,256,263 4,612,961 Total 143,374,027 133,353,393 41. Asset impairment loss Unit: RMB Items Occurred in current term Occurred in previous term I. Provision for bad debts 1,108,695 -878,514 2. Provision for inventory depreciation -46,858 Total 1,108,695 -925,372 42. Investment income Unit: RMB Items Occurred in current term Occurred in previous term Long-term equity investment accounted by equity method -14,264,359 Total -14,264,359 43. Other gains Unit: RMB Source of other gains Occurred in current term Occurred in previous term Industry supporting fund 12,600,000.00 N/A Government awards fund 4,323,546.00 N/A CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 Subsidies for research and development 6,479,492.00 N/A Energy saving subsidy 128,116.00 N/A Others 143,080.00 N/A Total 23,674,234.00 N/A 44. Non-operating income Unit: RMB Occurred in current Occurred in previous Amount of non-recurring gain and loss Items term term included in the report period Total of gains from disposal of 57,734 248,642 57,734 non-current assets Incl.:Gain on disposal of fixed assets 57,734 248,642 57,734 Government grants 14,826,965 47,606,029 14,826,965 Compensation income 146,436 462,552 146,436 Funds unpayable 520 171,592 520 Others 997,941 1,549,549 997,941 Total 16,029,596 50,038,364 16,029,596 45. Non-operating expenses Unit: RMB Amount of non-recurring Occurred in previous Items Occurred in current term gain and loss included in term the report period Total of loss from disposal of non-current assets 129,490 19,984 129,490 Incl. Loss from disposal of fixed assets 129,490 19,984 129,490 Donation 199,999 40,000 199,999 Loss on compensations 407,332 Others 403,103 194,312 403,103 Total 732,592 661,628 732,592 46. Income tax expenses (1) List of income tax expenses Unit: RMB Items Occurred in current term Occurred in previous term CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 Current income tax 74,283,293 57,280,962 Deferred income tax 6,169,728 20,562,202 Total 80,453,021 77,843,164 (2) Adjustment process of accounting profit and income tax expense Unit: RMB Items Occurred in current term Total profit 480,667,069 Current income tax expense accounted by tax and relevant regulations 66,102,580 Costs, expenses and losses not deductible for tax purposes 723,999 Influence of deductible temporary difference or deductible losses of 17,012,930 unrecognized deferred income tax assets Final settlement of the previous year's income tax adjustment -3,386,488 Income tax expenses 80,453,021 47. Other comprehensive income The details can be found in notes to the financial statements. 48. Items of the cash flow statement (1)Cash received relating to other operating activities Unit: RMB Items Occurred in current term Occurred in previous term Government grant 23,674,234 22,515,577 Interest income 4,186,712 3,301,921 Others 40,349,756 20,291,438 Total 68,210,702 46,108,936 (2)Cash paid relating to other operating activities Unit: RMB Items Occurred in current term Occurred in previous term Transportation expense 68,348,981 61,146,471 Canteen cost 21,140,169 19,735,042 Office expenses 16,993,639 13,568,857 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 R&D fees 26,795,302 19,470,201 Travelling expenses 12,971,903 11,839,397 Entertainment expenses 11,650,156 10,603,096 Vehicle use fee 7,589,416 7,147,877 Repairing fees 9,445,635 6,426,568 Rental expenses 4,103,767 4,439,417 Insurance expenses 6,679,946 4,823,957 Financing Commission 2,256,263 4,612,961 Others 63,287,032 59,101,076 Total 251,262,209 222,914,920 (3)Cash received relating to other investing operating activities Unit: RMB Items Occurred in current term Occurred in previous term Government grants received relating to assets 12,800,000 3,600,000 Collection trusted 11,239,200 11,239,200 Received repayment 14,860,684 Total 24,039,200 29,699,884 (4)Cash paid relating to other investing activities Unit: RMB Items Occurred in current term Occurred in previous term Payment for collection trusted 15,300,000 Payment for deposit and margin 31,475,182 6,464,586 Total 31,475,182 21,764,586 (5)Cash received relating to other financing activities Unit: RMB Items Occurred in current term Occurred in previous term Received interest free loan 1,381,000,000 Received mortgage loan 278,400,000 Received return money from the original 88,567,811 affiliated company Shenzhen CSG Display Collection of income tax of dividends of 7,289,494 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 A-share & B-share Collection 2,490,239 Received deposit and margin 4,701,291 4,868,673 Total 1,666,591,530 100,725,978 (6)Cash paid relating to other financing activities Unit: RMB Items Occurred in current term Occurred in previous term Cash paid for financing lease of the original affiliated company Shenzhen 109,125,965 CSG Display Payment of income tax of dividends of 1,701,507 A-share & B-share Cash paid for Commission fee 1,750,000 Total 3,451,507 109,125,965 49. Supplement notes of cash flow statement (1) Supplement notes of cash flow statement Unit: RMB Supplementary Info. Amount of this term Amount of last term 1. Net profit adjusted to cash flow of business operation -- -- Net profit 400,214,048 465,301,322 Add: Provisions for assets impairment 1,108,695 -925,372 Depreciation of fixed assets, 480,563,388 413,138,016 gas and petrol depreciation production goods depreciation Amortisation of intangible assets 19,756,528 16,315,423 Losses on disposal of fixed assets , intangible assets and other long-term assets 71,756 -228,658 (“-“ for gains) Finance expenses 143,194,586 127,824,823 (“-“ for gains) Investment 14,264,359 loss(“-“ for gains) Decrease in deferred tax assets 11,754,644 21,032,799 (“-“ for increase) CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 Increase of deferred income tax liability (“-“ for decrease) -5,584,916 -470,597 Decrease of inventory (“-“ for increase) -152,812,851 -9,920,347 Decrease of operational receivable items (“-“ for increase) -132,167,898 -30,401,660 Increase of operational payable items (“-“ for decrease) 253,791,474 30,790,241 Net cash flow generated by business operation 1,019,889,454 1,046,720,349 2. Major investment and financing operation not involving with -- -- cash 3. Net change of cash and cash equivalents -- -- Balance of cash at period end 932,050,522 404,710,155 Less: Initial balance of cash 584,566,990 574,744,877 Net increasing of cash and cash equivalents 347,483,532 -170,034,722 (2) Formation of cash and cash equivalents Unit: RMB Items Closing balance Opening balance I. Cash 932,050,522 584,566,990 Incl: Cash on hand 27,530 17,239 Cash at bank without restriction 932,022,992 584,549,751 others without restriction III. Balance of cash and cash equivalents at th end of the period 932,050,522 584,566,990 50. Assets of ownership or use right restricted Unit: RMB Item Ending book value Reason for restriction It’s the Company’s guarantee deposit for the application of opening letter of Monetary fund 2,184,679 credit and loan from the bank, which was restricted monetary fund. Total 2,184,679 -- 51. Foreign currency monetary items (1) Foreign currency monetary items Unit: RMB Closing balance of foreign Closing Item Exchange rate currency balance convert to RMB Cash at bank and on hand -- -- 40,648,532 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 Incl: USD 4,578,142 6.7744 31,014,165 EUR 700 7.7496 5,425 HKD 10,986,291 0.8679 9,535,002 AUD 17,434 5.2099 90,829 JPY 51,421 0.0605 3,111 Accounts receivable -- -- 118,258,690 Incl: USD 16,372,361 6.7744 110,912,922 EUR 946,785 7.7496 7,337,205 HKD 9,866 0.8679 8,563 Short-term borrowings 65,092,500 Incl: HKD 75,000,000 0.8679 65,092,500 Accounts payable 98,782,030 Incl: USD 11,116,217 6.7744 75,305,700 HKD 306 0.8679 266 EUR 1,105,322 7.7496 8,565,803 JPY 246,450,595 0.0605 14,910,261 VIII. Changes in the scope of consolidation 1. The new subsidiary included in the consolidation scope in the period was Zhijiang CSG PV New Energy Co., Ltd. (hereinafter referred to as "Zhijiang PV Company"). IX. Interest in other entities 1. Interest in subsidiary (1) Composition of the Group Major business Shareholding (%) Way of Name of subsidiary Place of registration Scope of business location Direct Indirect acquicition Development, production and Chengdu CSG Glass Co., Ltd. Chengdu, the PRC Chengdu, the PRC 75% 25% Establishment sales of specialized glass Development, production and Sichuan CSG Energy Conservation Chengdu, the PRC Chengdu, the PRC sales of specialized glass and 75% 25% Split-off processed glass Development, production and Tianjin Energy Conservation Glass Co. Ltd Tianjin, the PRC Tianjin, the PRC sales of specialized 75% 25% Establishment energy-efficient glass CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 Dongguan CSG Architectural Glass Co., Ltd. Dongguan, the PRC Dongguan, the PRC Glass deep processing 75% 25% Establishment Production and sales of solar Dongguan CSG Solar Glass Co., Ltd. Dongguan, the PRC Dongguan, the PRC 75% 25% Establishment glass Production and sales of Dongguan CSG PV-tech Co., Ltd. Dongguan, the PRC Dongguan, the PRC high-tech green cell products 100% Establishment and modules Production and sales of High Yichang CSG Polysilicon Co., Ltd. Yichang, the PRC Yichang, the PRC 75% 25% Establishment purity silicon materials Wujiang CSG North-east Architectural Glass Co., Ltd. Wujiang, the PRC Wujiang, the PRC Glass deep processing 75% 25% Establishment Production and sales of Hebei CSG Glass Co., Ltd. Yongqing, the PRC Yongqing, the PRC 75% 25% Establishment specialized glass Production and sales of Wujiang CSG Glass Co., Ltd. Wujiang, the PRC Wujiang, the PRC 100% Establishment specialized glass Trading and investment China Southern Glass (Hong Kong) Limited Hong Kong Hong Kong 100% Establishment holding Production and sales of Hebei Panel Glass Co., Ltd. Yongqing, the PRC Yongqing, the PRC 100% Establishment ultra-thin electronic glass Production and sales of Xianning CSG Glass Co Ltd. Xianning, the PRC Xianning, the PRC 75% 25% Establishment specialized glass Xianning CSG Energy Conservation Glass Co Ltd. Xianning, the PRC Xianning, the PRC Glass deep processing 75% 25% Split-off Production and sales of Qingyuan CSG Energy Saving New Materials Co.,Ltd Qingyuan, the PRC Qingyuan, the PRC 100% Establishment ultra-thin electronic glass Shenzhen CSG Display Technology Co., Ltd. Shenzhen, the PRC Shenzhen, the PRC Glass for display device 60.80% Acquisition Photoelectric glass and Xianning CSG Photoelectric Glass Co., Ltd. Xianning, the PRC Xianning, the PRC 37.50% 62.50% Acquisition high-alumina glass (2)The significant non-fully-owned subsidiaries of the Group Unit: RMB Total profit or loss Dividends distributed Shareholding Minority interest attributable to minority to minority interests Subsidiaries of minority as at 30 June shareholders for the year for the year ended 30 shareholders 2017 ended 30 June 2017 June 2017 Shenzhen CSG Display Technology Co., Ltd. 39.20% 5,787,351 311,685,657 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 (3) The major financial information of the significant non-fully-owned subsidiaries of the Group Unit: RMB Closing balance Opening balance Name of Current Non-current Current Non-current Total Current Non-current Current Non-current Total Subsidiary Total assets Total assets assets assets liabilities liabilities liabilities assets assets liabilities liabilities liabilities Shenzhen CSG Display 262,179,100 1,347,074,249 1,609,253,349 505,674,968 314,316,352 819,991,320 211,285,238 1,338,686,341 1,549,971,579 541,303,424 233,139,941 774,443,365 Technology Co., Ltd. Unit: RMB Occurred in current term Occurred in previous term Name of Total Cash flows from Total comprehensive Cash flows from Subsidiary Revenue Net profit Revenue Net profit comprehensive operating income operating activities income activities Shenzhen CSG Display 228,993,498 14,924,574 14,924,574 27,884,582 37,282,745 -4,023,839 -4,023,839 19,571,109 Technology Co., Ltd. CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 X. Risk related to financial instrument 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 is 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 30 June 2017 the carrying amounts in RMB equivalent of the Group’s assets and liabilities denominated in foreign currencies are summarized below: 30 June 2017 USD HKD Others Total Financial assets denominated in foreign currency- Cash at bank and on hand 31,014,165 9,535,002 99,365 40,648,532 Receivables 110,912,922 8,563 7,337,205 118,258,690 141,927,087 9,543,565 7,436,570 158,907,222 Financial liabilities denominated in foreign currency- Short-term borrowings - 65,092,500 - 65,092,500 Payables 75,305,700 266 23,476,064 98,782,030 75,305,700 65,092,766 23,476,064 163,874,530 31 December 2016 USD HKD Others Total Financial assets denominated in foreign currency- Cash at bank and on hand 24,360,614 5,551,402 840,393 30,752,409 Receivables 105,742,398 - 6,917,969 112,660,367 130,103,012 5,551,402 7,758,362 143,412,776 Financial liabilities denominated in foreign currency- 81 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 Short-term borrowings - 67,087,500 - 67,087,500 Payables 74,140,797 275 24,217,998 98,359,070 74,140,797 67,087,775 24,217,998 165,446,570 As at 30 June 2017, if the currency had weakened/strengthened 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 5,662,818 (31 December 2016: approximately RMB 4,756,788) lower/ higher for various financial assets and liabilities denominated in USD. As at 30 June 2017, if the currency had strengthened /weakened by 10% against the HKD while all other variables had been held constant, the Group’s net profit for the year would have been approximately RMB 4,721,682 (31 December 2016: approximately RMB 5,230,592) higher/lower for various financial assets and liabilities denominated in HKD. Other changes in exchange rate had no significant influence on the Group's operating activities. (b) Interest rate risk The Group's interest rate risk arises from long-term interest bearing 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 30 June 2015, the Group’s long-term interest-bearing debt at variable rates and fixed rates as illustrated below: 30 June 2017 31 December 2016 Debt at fixed rates 1,570,000,000 1,380,000,000 Debt at variable rates 54,000,000 58,660,000 1,624,000,000 1,438,660,000 The Group continuously monitors the interest rate position of the Group. Increases in interest rates will increase the cost of new borrowing and the interest expenses with respect to the Group’s outstanding floating rate borrowings, and therefore could have a material adverse effect on the Group’s financial position. The Group makes adjustments timely with reference to the latest market conditions, which includes increasing/decreasing long-term fixed rate debts at the anticipation of increasing/decreasing interest rate. (2) Credit risk Credit risk is managed on the grouping basis. Credit risk mainly arises from cash at bank, notes receivable, accounts receivable 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. 82 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 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 at 30 June 2017, the Group had net current liabilities of approximately RMB 3.385 billion and committed capital expenditures of approximately RMB 390 million. 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 as follows: 30 June 2017 Within 1 year 1 to 2 years 2 to 5 years Over 5 years Total Short-term borrowings 2,439,522,457 - - - 2,439,522,457 Notes payable 114,500,000 - - - 114,500,000 Accounts payable 1,382,500,478 - - - 1,382,500,478 Interest payable 98,184,696 - - - 98,184,696 Dividend payable 207,533,556 207,533,556 Other payables 844,823,887 - - - 844,823,887 Other current liabilities 300,000 - - 300,000 Non-current liabilities due 1,117,193,707 - - - 1,117,193,707 within one year Long-term borrowings 78,992,500 306,409,062 1,474,047,671 - 1,859,449,233 Long-term payables - 733,909,378 104,962,292 - 838,871,670 6,283,551,281 1,040,318,440 1,579,009,963 - 8,902,879,684 83 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 31 December 2016 Within 1 year 1 to 2 years 2 to 5 years Over 5 years Total Short-term borrowings 4,043,966,809 - - - 4,043,966,809 Notes payable 20,000,000 - - - 20,000,000 Accounts payable 1,169,869,370 - - - 1,169,869,370 Interest payable 78,225,904 - - - 78,225,904 Other payables 188,321,450 - - - 188,321,450 Other current liabilities 300,000 - - 300,000 Non-current liabilities due 1,068,336,787 - - - 1,068,336,787 within one year Long-term borrowings 73,188,850 290,439,172 1,287,871,345 - 1,651,499,367 6,642,209,170 290,439,172 1,287,871,345 - 8,220,519,687 XI. Disclosure of fair value 1. Fair value of financial assets and financial liabilities not measured at fair value The group’s financial assets and financial liabilities measured at amortized cost mainly include: accounts receivable, short-term borrowings, accounts payable, long term borrowings, bonds payable , long-term payables, ect. Except for financial liabilities listed below, the carrying amount of the other financial assets and liabilities not measured at fair value is a reasonable approximation of their fair value. 30 June 2017 31 December 2016 Carrying amount Fair value Carrying amount Fair value Financial liabilities - Corporate bonds payable 1,000,000,000 999,500,000 1,000,000,000 1,009,177,000 Medium term notes 1,200,000,000 1,257,000,000 1,200,000,000 1,175,308,800 2,200,000,000 2,256,500,000 2,200,000,000 2,184,485,800 The fair values of payables and medium-term notes are the present value of the contractually determined stream of future cash flows at the rate of interest applied at that time by the market to instruments of comparable credit status and providing substantially the same cash flows on the same terms, thereinto bonds payable belongs to Level 1 and medium term notes belong to Level 2. XII. Related party and related Transaction 1. Parent company of the Company The Company has no parent company. 2. Subsidiaries of the Company The information of subsidiaries of the Company can be found in Notes to the financial statement. 84 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 3. Joint venture of the Company Shenzhen Nanbo Display Technology Co., Ltd. was transferred to the subsidiary of the Company from joint venture on 3 June, 2016. The Company has no joint venture on 30 June 2017. 4. Other related parties Name of other related parties Relations between other related parties and the Company Shenzhen Jushenghua Co. Ltd. The person acting in concert of the Company's largest shareholder 5. Related transaction (1) Transaction of acquisition of goods, offering and reception of labor service List of selling goods/offering labor service Unit: RMB Related party Contents of related transaction Occurred in this term Occurred in previous term Shenzhen CSG Display Technology Co., Ltd. sales of goods 9,665,275 6. Others Commitments in relation to related parties The commitments in relation to related parties contracted for but not yet necessary to be recognised on the balance sheet by the Group as at the balance sheet date are as follows: On 22 November 2016, the Company received a letter from its shareholder, Jushenghua, stating that to support the Group’s steady operation and development, Jushenghua, as the shareholder of the Company, would like to offer interest-free borrowings with the total amount of RMB 2,000,000,000 to the Company or through related parties designated by it. For any borrowing drawn, its repayment date is negotiated by the Company and Jushenghua upon withdrawal.When a borrowing is due, if an extension is needed, the Company can apply to the actual lender based on the Company’s operation; where the actual lender agrees with the extension application, the term of the borrowing is extended accordingly. As of 30 June 2017, the shareholder had provided RMB 700,000,000 long-term interest-free loans and RMB 650,000,000 short-term interest-free loans. XIII. Commitments and contingency Capital expenditures commitments Capital expenditures contracted for by the Group at the balance sheet date but are not yet necessary to be recognised on the balance sheet are as follows: 30 June 2017 31 December 2016 Buildings,machinery and equipment 386,575,774 280,938,401 85 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 XIV. Other significant events 1. Segment information (1) Definition foundation and accounting policy of segment To meet operating strategies and requirements of business development, the Group adjusted its operating structure in the period. The Group’s management allocated resources, evaluated segment performance, updated reporting segment, and disclosed segment information according to revised operating segments in the period. Segment information of prior year had been restated in accordance with updated reporting segments. -Glass segment, being engaged in the production and sales of glass products and silica sand required for the production of glass -Solar Energy Segment, being engaged in the production and sales of polysilicon and solar modules, as well as construction and operation of photovoltaic power plants -Electronic glass and display Segment, being engaged in the production and sales of ultrathin electronic glass and display products 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. 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. (2)Financial information of segment Unit: RMB Electronic Item Glass Solar Energy glass and Others Unallocated Elimination Total display Revenue from external 3,206,687,159 1,369,755,550 367,265,891 629,261 4,944,337,861 customers Inter-segment revenue 18,599,065 18,083,108 198,902 26,666,005 -63,547,080 Interest income 491,062 2,397,326 56,932 3,528,724 -2,287,332 4,186,712 Interest expenses 70,412,931 37,231,830 15,045,705 22,791,452 -2,287,332 143,194,586 Asset impairment reversal 946,289 -62,414 217,114 7,706 1,108,695 Depreciation and 299,606,450 134,711,851 62,922,138 3,079,477 500,319,916 amortization expenses 86 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 Total profit 392,627,615 118,589,867 37,245,148 -773 -64,588,492 -3,206,296 480,667,069 Income tax expenses 52,290,936 13,020,016 15,176,880 -34,811 80,453,021 Net profit 340,336,679 105,569,851 22,068,268 -773 -64,553,681 -3,206,296 400,214,048 Total assets 8,982,177,389 4,952,619,591 2,968,323,479 134,388 1,027,026,766 17,930,281,613 Total liabilities 2,162,476,308 793,195,356 695,646,857 2,502,814 5,865,531,905 9,519,353,240 Additions of non-current assets other than 92,971,231 404,028,047 222,862,634 1,886,129 721,748,041 long-term equity investments (3) Other statement 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 Jan.-Jun. 2017 Jan.-Jun. 2016 Mainland 4,453,794,331 3,742,134,566 Hong Kong 159,110,247 46,568,633 Europe 10,469,923 34,282,849 Asia (other than Mainland and Hong Kong) 284,803,871 316,839,177 Australia 23,668,506 19,557,991 North America 9,235,672 64,008,117 Other region 3,255,311 4,774,309 4,944,337,861 4,228,165,642 Total non-current assets 30 June 2017 31 December 2016 Mainland 14,606,514,921 14,392,447,014 Hong Kong 12,563,601 12,551,254 14,619,078,522 14,404,998,268 The Group has a large number of customers, but no revenue from a single customer exceed 10% or more of the Group’s revenue. XV. Notes to Financial Statements of the Parent Company 1. Other accounts receivable (1) Other accounts receivable disclosed by category: Unit: RMB 87 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 Closing balance Openning balance Bad debt Bad debt Book balance Book balance Categories provision provision Book value Book value Propor Amou Propor Propor Propor Amount Amount Amount tion % nt tion % tion % tion % Other accounts receivable withdrawn bad debt provision 3,416,531,057 100% 16,511 0% 3,416,514,546 3,863,129,835 100% 8,806 0% 3,863,121,029 according to credit risks characteristics Total 3,416,531,057 100% 16,511 0% 3,416,514,546 3,863,129,835 100% 8,806 0% 3,863,121,029 Other accounts receivable with large amount and were provided bad debt provisions individually at end of period. □ Applicable √ Non-applicable Other accounts receivable in the portfolio on which bad debt provisions were provided on aging analysis basis □ Applicable √ Non-applicable Other accounts receivable in the portfolio on which bad debt provisions were provided on percentage basis √ Applicable □ Non-applicable Unit: RMB Closing balance Name of portfolio Other receivable accounts Bad debt provision proportion% portfolio 1 825,597 16,511 2% portfolio 2 3,415,705,460 Total 3,416,531,057 16,511 0% Explanation for determining the basis of the portfolio: Other receivable accounts in the portfolio on which bad debt provisions were provided on other basis □ Applicable √ Non-applicable (2) Accounts receivable withdraw, reversed or collected during the reporting period The amount of provision for bad debts during the report period was RMB 7,705. The amount of the reversed or collected part during the report period was RMB 0. (3) Other accounts receivable classified by the nature of accounts Unit: RMB Nature of accounts Ending book balance Beginning book balance Others 825,597 423,416 Accounts receivable of related party 3,415,705,460 3,862,706,419 88 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 Total 3,416,531,057 3,863,129,835 (4) Top 5 of the closing balance of the other accounts receivable collated according to the arrears party Unit: RMB Proportion of the total Closing Nature of Name of the company Closing balance Ages year end balance of the balance of bad accounts accounts receivable (%) debt provision Yichang CSG Polysilicon Co., Ltd. Subsidiary 1,304,538,480 Within 1 year 38% 0 Hebei CSG Glass Co., Ltd. Subsidiary 333,719,030 Within 1 year 10% 0 Qingyuan CSG Energy Conservation Subsidiary 298,547,212 9% 0 New Meterials Co., Ltd. Within 1 year Dongguan CSG PV-tech Co., Ltd. Subsidiary 226,825,146 Within 1 year 7% 0 Yichang CSG Display Co.,Ltd. Subsidiary 195,317,564 Within 1 year 6% 0 Total -- 2,358,947,432 -- 70% 2. Long-term equity investment Unit: RMB Closing balance Opening balance Item Impairment Impairment Book balance Book value Book balance Book value provision provision Investment in 4,805,440,632 15,000,000 4,790,440,632 4,805,440,632 15,000,000 4,790,440,632 subsidiaries Total 4,805,440,632 15,000,000 4,790,440,632 4,805,440,632 15,000,000 4,790,440,632 (1) Inventment in subsidiaries Unit: RMB Provision for Closing balance Opening Increase in Decrease in Invested company Closing balance impairment of the of impairment balance the term the term current period provision Chengdu CSG Glass Co., Ltd. 146,679,073 146,679,073 Sichuan CSG Energy Conservation 115,290,583 115,290,583 Tianjin Energy Conservation Glass Co. Ltd 242,902,974 242,902,974 Dongguan CSG Architectural Glass Co., Ltd. 193,618,971 193,618,971 Dongguan CSG Solar Glass Co., Ltd. 349,446,826 349,446,826 Yichang CSG Polysilicon Co., Ltd. 632,958,044 632,958,044 89 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 Wujiang CSG North-east Architectural Glass 251,313,658 251,313,658 Co., Ltd. Hebei CSG Glass Co., Ltd. 261,998,368 261,998,368 China Southern Glass (Hong Kong) Limited 85,742,211 85,742,211 Wujiang CSG Glass Co., Ltd. 562,179,564 562,179,564 Hebei Panel Glass Co., Ltd. 243,062,801 243,062,801 Jiangyou CSG Mining Development Co. 100,725,041 100,725,041 Ltd. Xianning CSG Glass Co Ltd. 177,041,818 177,041,818 Xianning CSG Energy Conservation Glass Co 161,281,576 161,281,576 Ltd. Qingyuan CSG Energy Saving New Materials 300,185,609 300,185,609 Co.,Ltd Shenzhen CSG Financial Leasing Co., 133,500,000 133,500,000 Ltd. Shenzhen CSG PV Energy Co., Ltd. 100,000,000 100,000,000 Shenzhen CSG Display Technology Co., Ltd. 542,027,830 542,027,830 Xianning CSG Photoelectric Glass Co., Ltd. 38,250,000 38,250,000 Others(ii) 167,235,685 167,235,685 15,000,000 Total 4,805,440,632 4,805,440,632 15,000,000 (2) Other notes As at June 30, 2017, long-term equity investment in subsidiaries contained the restricted stocks granted by the Company to the Employees of subsidiaries of the company, and the Company did not charge any fees for the restricted stocks which was deemed as an increase of costs of Long-term equity investment for subsidiaries by RMB 109,035,321 (31 December 2016: RMB109,035,321). The subsidiaries which have made provision for impairment were basically closed down in the previous year, and the provision for impairment for the long-term equity investment of them had been made by the Company according to the recoverable amount. 3. Operating income and operating costs Unit: RMB Occurred in this term Occurred in previous term Item Income Costs Income Costs Main business 0 0 0 0 Other business 27,295,266 0 1,077,394 60,334 90 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 Total 27,295,266 0 1,077,394 60,334 4. Investment income Unit: RMB Item Occurred in this term Occurred in previous term Long-term equity investment accounted by cost method 389,430,562 Long-term equity investment accounted by equity method 9,850,045 Total 399,280,607 XVI. Supplementary Information 1. Items and amounts of extraordinary profit (gains)/loss √Applicable □ Not applicable Unit: RMB Item Amount Note Gains/losses from the disposal of non-current asset (including the write-off that accrued for impairment -71,756 of assets) Governmental subsidy reckoned into current gains/losses (not including the subsidy enjoyed in quota 38,501,199 or ration according to national standards, which are closely relevant to enterprise’s business) Other non-operating income and expenditure except for the aforementioned items 541,795 Less: Impact on income tax 5,814,362 Impact on minority shareholders’ equity (post-tax) 1,109,957 Total 32,046,919 -- 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 2. Return on equity and earnings per share The weighted Earnings per share Profit in the report period average net basic earnings per diluted earnings per assets ratio share (RMB/share) share (RMB/share) Net profit attributable to shareholders of the listed company(RMB) 4.94% 0.19 0.19 Net profit attributable to shareholders of the listed company after 4.54% 0.17 0.17 deducting non-recurring gains and losses(RMB) 91 CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2017 3. Difference of accounting data under domestic and overseas accounting standards (1) Differences of the net profit and net assets disclosed in financial report prepared under international and Chinese accounting standards □ Applicable √ Not applicable (2) Difference of the net profit and net assets disclosed in financial report prepared under overseas and Chinese accounting standards □ Applicable √ Not applicable 92