CSG HOLDING CO., LTD.
ANNUAL REPORT 2017
Chairman of the Board:
CHEN LIN
April 2018
CSG Annual Report 2017
Section I Important Notice, Content and Paraphrase
Board of Directors and the Supervisory Committee of CSG Holding Co., Ltd. (hereinafter referred
to as the Company) and its directors, supervisors and senior executives hereby confirm that there
are no any fictitious statements, misleading statements, or important omissions carried in this report,
and shall take all responsibilities, individual and/or joint, for the facticity, accuracy and
completeness of the whole contents.
Ms. Chen Lin, Chairman of the Board, Mr. Pan Yonghong, responsible person in charge of
accounting and Ms.Wang Wenxin, principal of the financial department (accounting officer)
confirm that the Financial Report enclosed in this 2017 Annual Report is true, accurate and
complete.
Except for the following director, other directors personally attended the meeting of the Board of
Directors deliberating this Annual Report.
Director’ Title who
Director’ Name who did not Failure to attend the The name of the
did not attend in
attend in person meeting in person trustee
person
Zhang Jinshun Director Due to business trip Chen Lin
This report involves future plans and some other forward-looking statements, which shall not be
considered as virtual promises to investors. Investors are kindly reminded to pay attention to
possible risks.
Details of the risk factors and countermeasures of future development have been well-described in
this report, please find in Section IV Business Discussion and Analysis.
The deliberated and approved plan of profit distribution and capital reserve converted into share
capital in the Board Meeting is distributing cash dividend of RMB 0.5 (tax included) for every 10
shares to all shareholders based on 2,484,147,547 shares of the total share capital while dividends
will be distributed. Meanwhile the Company will transfer capital reserve into capital with 1.5 shares
for every 10 shares to all shareholders based on 2,484,147,547 shares of the total share capital.
This report is prepared both in Chinese and English. Should there be any inconsistency between the
Chinese and English versions, the Chinese version shall prevail.
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CSG Annual Report 2017
Content
Section I. Important Notice, Content and Paraphrase ...................................................................................... 1
Section II. Company Profile & Financial Highlights ......................................................................................... 4
Section III. Overview of the Company’s Business ............................................................................................. 8
Section IV. Business Discussion and Analysis .................................................................................................. 11
Section V. Important Events .............................................................................................................................. 33
Section VI. Changes in Shares and Particulars about Shareholders ............................................................. 50
Section VII. Particulars about Directors, Supervisors and Senior Executives and Employees ................... 62
Section VIII. Corporate Governance ................................................................................................................ 74
Section IX. Corporate Bonds ............................................................................................................................. 84
Section X. Financial Report ............................................................................................................................... 87
Section XI. Documents Available for Reference ............................................................................................ 307
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CSG Annual Report 2017
Paraphrase
Items Refers to Contents
Company, the Company, CSG or the Group Refers to CSG Holding Co., Ltd.
Foresea Life Refers to Foresea Life Insurance Co., Ltd.
Ultra-thin electronic glass Refers to The electronic glass with thickness between 0.1~1.1mm
Second-generation energy-saving glass Refers to Double silver coated glass
Third-generation energy-saving glass Refers to Triple silver coated glass
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CSG Annual Report 2017
Section II Company Profile & Financial Highlights
I. Company information
Code for A-share 000012 Code for B-share 200012
Short form for A-share Southern Glass A Short form for B-share Southern Glass B
Listing stock exchange Shenzhen Stock Exchange
Legal Chinese name of the Company 中国南玻集团股份有限公司
Abbr. of legal Chinese name of the
南玻集团
Company
Legal English name of the Company CSG Holding Co., Ltd.
Abbr. of legal English name of the
CSG
Company
Legal Representative Chen Lin
Registered Add. CSG Building, No.1, the 6th Industrial Road, Shekou, Shenzhen, P. R.C.
Post Code 518067
Office Add. CSG Building, No.1, the 6th Industrial Road, Shekou, Shenzhen, P. R.C.
Post Code 518067
Internet website www.csgholding.com
E-mail securities@csgholding.com
II. Person/Way to contact
Secretary of the Board Representative of security affairs
Name Yang Xinyu
CSG Building, No.1 of the 6th Industrial
Contacts add.
Road, Shekou, Shenzhen, P. R.C.
Tel. (86)755-26860666
Fax. (86)755-26860685
E-mail securities@csgholding.com
III. Information disclosure and preparation place
Securities Times, China Securities Journal, ShangHai Securities News, Securities
Newspapers for information disclosure
Daily and Hong Kong Comercial Daily
Website assigned by CSRC to release the
www.cninfo.com.cn
annual report
The place for preparation of the annual
Office of the Board of Directors
report
IV. Registration changes of the Company
Organization code Unified social credit code: 914403006188385775
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CSG Annual Report 2017
Changes of main business since listing (if
No changes
applicable)
Previous changes for controlling
No changes
shareholders (if applicable)
V. Other relevant information
CPA firm engaged by the Company
Name of CPA firm Asia Pacific (Group) CPAs (special general partnership)
Room 301, building 1, No. 9, Che Gong Zhuang Street, Xicheng District, Beijing,
Offices add. for CPA firm
China
Signing Accountants Pan Qian, Zhang Yan
Sponsor institute engaged by the Company for performing continuous supervision duties in the report period
□ Applicable √ Not applicable
Financial consultant engaged by the Company for performing continuous supervision duties in the report period
□ Applicable √ Not applicable
VI. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data for accounting policy changed and accounting
error correction or not
√Yes □ No
Retrospective adjustment or restatement reason: correction of accounting errors
Changes over
2016 2015
2017 last year (%)
Before adjusted After adjusted After adjusted Before adjusted After adjusted
Operating income (RMB) 10,879,400,746 8,974,083,407 8,974,083,407 21.23% 7,430,889,111 7,430,889,111
Net profit attributable to
shareholders of the listed 825,388,312 797,721,576 797,721,576 3.47% 532,653,110 532,653,110
company (RMB)
Net profit attributable to
shareholders of the listed
company after deducting 745,373,108 776,950,973 776,950,973 -4.06% 299,683,946 299,683,946
non-recurring gains and losses
(RMB)
Net cash flow arising from
2,463,446,156 2,240,852,120 2,240,852,120 9.93% 1,092,832,497 1,092,832,497
operating activities (RMB)
Basic earnings per share
0.35 0.38 0.33 6.06% 0.26 0.26
(RMB/Share)
Diluted earnings per share
0.35 0.38 0.33 6.06% 0.26 0.26
(RMB/Share)
Weighted average ROE (%) 10.15% 10.32% 10.33% -0.18% 6.72% 6.72%
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CSG Annual Report 2017
Changes over
As at 31 Dec. As at 31 Dec. 2016 the end of last As at 31 Dec. 2015
2017 year
Before adjusted After adjusted After adjusted Before adjusted After adjusted
Total assets (RMB) 19,535,002,368 16,979,235,630 17,146,815,630 13.93% 15,489,600,160 15,657,180,160
Net assets attributable to
shareholders of the listed 8,458,587,873 7,812,335,004 7,808,915,004 8.32% 7,645,810,997 7,642,390,997
company (RMB)
The total share capital of the company as of the previous trading day of
2,484,147,547
disclosure ( share )
Fully diluted earnings per share calculated with latest equity ( RMB/share ) 0.33
Reasons for Changes in Accounting Policies and Correction of Accounting Errors:
For details, please refer to “Section V. Important Events: VI. Comparing Accounting Statements, Accounting Estimates and
Accounting Methods with the Financial Statements of the Previous Year” and “Section X. Financial Statements: the 31st item of the
correction of accounting errors of previous report periods in V. Significant Accounting Policies and Accounting Error."
VII. Accounting Data Differences under Chinese Accounting Standards (CAS) and
International Financial Reporting Standards (IFRS) and Foreign Accounting Standards
1. Net Income and Equity Differences under CAS and IFRS
□ Applicable √ Not applicable
No such differences for the Report Period.
2. Net Income and Equity Differences under CAS and Foreign Accounting Standards
□ Applicable √ Not applicable
No such differences for the Report Period.
VIII. Main financial indexes by quarter
Unit: RMB
Q1 Q2 Q3 Q4
Operating income 2,284,820,940 2,659,516,921 2,846,570,536 3,088,492,349
Net profit attributable to shareholders of the listed
170,130,942 222,861,221 318,019,208 114,376,941
company
Net profit attributable to shareholders of the listed
149,271,133 211,674,111 278,181,102 106,246,762
company after deducting non-recurring gains and losses
Net cash flow arising from operating activities 435,937,189 583,952,265 768,209,238 675,347,464
Whether there are significant differences between the above-mentioned financial index or its total number and the relevant financial
index disclosed in the Company’s quarterly report and semi-annual report or not
□Yes √ No
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CSG Annual Report 2017
IX. Items and amounts of extraordinary gains/losses
√Applicable □ Not applicable
Unit: RMB
Item 2017 2016 2015 Note
Gains/losses from the disposal of non-current asset (including
-1,768,993 -1,759,358 2,441,151 --
the write-off that accrued for impairment of assets)
Governmental subsidy reckoned into current gains/losses (not
including the subsidy enjoyed in quota or ration according to
87,875,417 91,627,439 81,013,548 --
national standards, which are closely relevant to enterprise’s
business)
Gains on disposal of available-for-sale financial assets, gains
and losses from change of fair values of held-for-transaction
financial assets and financial liabilities except for the
effective hedge business related to normal business of the 427,636 -9,850,256 103,759,395 --
Company, and investment income from disposal of
transactional financial assets and liabilities and financial
assets available for sale
Other non-operating income and expenditure except for the
12,076,848 1,306,284 33,268,175 --
aforementioned items
Other gains/losses satisfied definition of extraordinary profit
-45,909,181 100,146,152 --
(gains)/loss
Less: Impact on income tax 16,209,135 14,327,585 86,288,731 --
Impact on minority shareholders’ equity (post-tax) 2,386,569 316,740 1,370,526 --
Total 80,015,204 20,770,603 232,969,164 --
During the reporting period, the Company did not exist in the case of a non recurrent profit and loss item defined as a regular profit
and loss project, which was defined and enumerated 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.
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CSG Annual Report 2017
Section III Overview of the Company’s Business
I. Main business of the Company in the report period
CSG is a leading domestic brand of energy-saving glass and a renowned brand of solar PV products and display devices. Its products
and technologies are very popular at home and abroad. Its main business covers R&D, manufacturing and sales of high quality float
glass and architectural glass, solar glass, silicon material, renewable energy products such as PV battery and modules, and new
materials and information display products such as ultra-thin electronic glass and display devices. It also provides one-stop services
such as project development, construction, operation and maintenance of solar photovoltaic power plants.
Flat glass industry
CSG now has 10 float glass production lines representing the most advanced technology in domestic market and 2 solar glass
production lines. The annual capacity of various high-grade float glass has reached more than 2.32 million tons and the annual
capacity of solar rolled glass has reached over 0.43 million tons. The Company owns quartz sand raw material bases in Jiangyou,
Sichuan Province and Yingde, Guangdong Province. The production bases for flat glass, solar glass of the Company located in
Dongguan, Chengdu, Langfang, Wujiang, and Xianning, which can produce various colors of high-grade float glass and ultra-clear
float glass with thickness from 1.3mm to 25mm. Those products are widely used in high-grade buildings, decoration and furniture,
mirror, automotive windshield, scanner, copier, PDP TV, rear-projection television, display devices and solar energy field, each
performance indicator of which has reached domestic advanced level.
The Company always adheres to innovation, transformation and upgrading, and further enhances the profitability of flat glass
industry by the implementation of differentiated competitive strategy. In 2017, the second-line technological transformation project
of the subsidiary Hebei CSG was successfully completed and entered commercial operations. The original float glass production line
was transformed into a structure with one melter and two production lines, which can simultaneously produce two types of float glass
to satisfy different specifications and requirements and thus significantly improve the flexibility of production line. The first-line
technological transformation project of its subsidiary Chengdu CSG has succeeded which is targeted to produce high quality auto
glass. The technology transformation and operation of such two production lines of float gloss shall further improve the competency
of CSG in the market of flat glass.
Architectural glass industry
As the nation's largest supplier of high-grade engineering and architectural glass, CSG has five architectural and energy-saving glass
processing centers which are located in Tianjin, Dongguan, Xianning, Wujiang and Chengdu. The Company possesses the world's
most advanced glass deep-processing equipment and testing instruments, and its products cover all kinds of architectural glass. R&D
and use of coating technology of the Company keep pace with the world and its technology of high end product is even of the world’s
leading level. Following the second generation of energy-saving glass products, the Company has successively developed the third
generation and multi-function energy-saving glass products with continuous improving energy-saving and heat-preservation effect.Its
high-quality energy-saving LOW-E insulating glass has occupied more than 50% of the domestic high-end market. At present, the
Company’s LOW-E coated insulating glass and LOW-E coated glass have reached annual capacity of more than 16.00 million square
meters and 36.00 million square meters respectively.
The Company’s quality management system for engineering and architectural glass has been respectively approved by organizations
of UK AOQC and Australia QAS. The product quality which meets the national standards of the US, the UK and Australia enables
CSG has an advantage in the international tendering and bidding. Since 1988, CSG's engineers and technicians have been
continuously participating in the formulation and compilation of various national standards and industry standards. Various
high-quality architectural glass of the Company has been used in many landmark buildings at home and abroad, such as Beijing
Capital International Airport, CCTV, Shanghai Oriental Fisherman's Wharf, China Resources Headquarters Building, Shenzhen
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CSG Annual Report 2017
KingKey100 Building, Shenzhen Bay Science and Technology Ecological Park, Ping An International Finance Centre, Anhui
Radio-Television New Center, Hangzhou International Airport, Yaxia Headquarters Building, Chengdu International Finance Centre,
Hangzhou Hampton and other more than ten Hilton Hotel, Hong Kong Four Seasons Hotel, Melbourne Airport, Midtown,
International Centre of Abu Dhabi.
Solar Energy industry
CSG has entered solar photovoltaic industry since 2005 and is one of enterprises which first enter the field in China. After more than
ten years of construction, operation and technological upgrading, CSG has built an industry chain in the world, covering high purity
polycrystalline silicon materials, silicon wafer, silicon solar cell and modules, and design and construction of solar photovoltaic
power plants, by which the Company ensures the stable quality and best cost-efficiency of its PV products to customers.
The Company now produces 9,000 ton/year of polycrystalline silicon, 2.2 GW/year of silicon wafer, 0.85GW/year of solar cell, and
0.4GW/year of modules. The quality and performance indicators of the Company's polysilicon have reached the advanced level in the
industry and it has reserved electronic-grade polysilicon production technology. Meanwhile, the Company is also promoting silicon
wafer project of Yichang CSG and technological innovation and expansion and reconstruction projects of solar cell module in
Dongguan in order to enhance the anti-risk capacity of its PV industry chain and drive the balanced, stable development of its PV
industry chain. When the projects are completed, the quality and performance indicators of the Company's silicon wafers and silicon
solar cells will be greatly increased and the general competitiveness of the chain will be further improved.
To perfect its solar energy chain, the Company established Shenzhen CSG PV Energy Co., Ltd., a wholly-owned subsidiary, in 2015,
of which the mainline business is to invest and develop solar photovoltaic power plants and extend CSG's solar energy industry to
cover highly value-added terminal applications. At the end of 2016, the Company newly established New Energy Application
Department to generally manage the investment, operation and maintenance of the Company's PV power plants and effectively
integrate internal assets, so as to enlarge and strengthen its solar energy business.
Electronic glass and display industry
The Company has built two complete chains of full-set out-cell touch panel from raw material, processing to touch panel integration
module, one of which is “glass coating → glass yellow light →FILM modules", and the other of which is "PET coating →FILM
yellow light →FILM module”, and one AG glass production line of “glass AG surface physical treatment-chemical Processing” with
its more than ten years of experience since 2000 when it established Shenzhen Nanbo Display Technology Co., Ltd. Its production
capacity covers glass coating, glass pattern processing, glass touch panel module, flexible material filming, flexible material pattern
processing, and full lamination of flexible touch panel display that holds a complete industry chain from ultra-thin sensor processing
and ultra-thin touch panel module assembly to achieve high definition display and ultra-narrow edge touch panel solutions, the main
products of which covers differential products of glass substrate composite coating like Anti-glare glass (AG), Anti-reflection glass
(AR), Anti-fingerprint glass (AF), Semi-translucent glass, Reflective and Semi-transparent Optics Coating Glass (RT), Diamond-like
carbon(DLC). CSG displays have become a supplier of high-quality electronic application materials for the touch industry, and touch
sensor and TP suppliers to provide customers with one-stop TP solutions.
The Company, with its more than 20 years of experience in float glass production and powerful technology and innovation team,
entered the ultra-thin electronic glass market in 2010 and gradually completed the nationwide strategic layout. There are four
production bases, namely Hebei Panel Glass, Yichang Nanbo Photoelectric Glass, Qingyuan CSG and Xianning CSG Photovoltaic
Glass. The production capacity ranks first in China. The quality of CSG’s aluminum and high-aluminum electronic glass between
0.2mm to 1.1mm has reached the domestic leading level, the performance of which is comparable to that of imported products,
breaking the monopoly of foreign technology. Currently, the products are widely used in mobile terminal cover glass, tempered glass
protective film, ITO conductive Glass, extending to the fields of high-speed rail, military industry, smart home and others.
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CSG Annual Report 2017
II. Major changes in main assets
1. Details of major changes in main assets
Main assets Note of major changes
Equity assets There was no significant change in equity assets in the report period.
Fixed assets There was no significant change in fixed assets in the report period.
Intangible assets There was no significant change in intangible assets in the report period.
Construction in progress There was no significant change in construction in progress in the report period.
2. Main overseas assets
□ Applicable √ Not applicable
III. Core Competitiveness Analysis
① The Company currently has built complete industrial chains in the industries it involved, which has complementary advantage. In
glass industry, the Company has set up the industry chain as quartz sand → high quality float glass → architectural energy-saving
glass. In the solar energy industry, the Company has finished the comprehensive construction of industry chain from high purity
polycrystalline silicon materials, silicon wafer processing to cell and its module, photovoltaic rolled glass, etc. and extended to
terminal application of PV power plant. With the improvement of technology in the chains, the industrial advantages emerged.
②The Company possesses a complete industry layout. At present, the Company has established large production bases in East China,
West China, South China, North China and Central China, which enables the Company to be closer to the market and serve the
market better.
③The Company has capability of technology innovation and product innovation. It owns independent intellectual property rights of
high-end float glass production process. The technology level of ultra-thin electronic glass is in the leading position in China. The
Company also keeps its R&D and production of energy-saving glass in line with the world’s advanced level, and its technique and
technology in the field of solar energy keep leading position in domestic market.
④The Company possesses high anti-risk capability. It has established a perfect internal control system. Meanwhile, the management
and control ability of account receivable and inventory stand in a high level within the industry. CSG’s new management team has an
international perspective and a more open management philosophy. It aims to achieve the transfer of capacity and continues to
expand new business fields along with the national policies of the Belt and Road based on the intensive development of CSG's main
business, making the Company be bigger and stronger, so as to be a comprehensive industrial group.
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CSG Annual Report 2017
Section IV. Business Discussion and Analysis
Since 2017, the global economic recovery has been gathered momentum by main economies. China’s economy has continued the
development tendency of seeking advancement in stability, constantly deepened the supply-side structural reform, steadily propelled
the tasks of de-capacity, de-leveraging, de-stocking, de-cost and addressing weakness, further promoted replacing old growth drivers
with new ones, and continuously improved the structure of economic development.
For CSG, the Year 2017 was not only a year serving as a connecting link between the preceding and the following, but also an
important year for effectuating its future development. Oriented by market demand, the Company carefully analyzed its competitive
advantages, took the initiative to transform business mode and update technologies, and improved operating quality by fine
management to realize the advancement in stability. In 2017, the operation revenue of the Company was RMB 10,879 million with
year-on-year increase of RMB 1,905 million and growth rate of 21.23%, the net profit was RMB 829 million, with year-on-year
increase of 24 million and growth rate of 3.04%, and the net profit attributable to the parent company was 825 million, with
year-on-year increase of 28 million and growth rate of 3.47%.
(I) Glass industry
Affected by the national environmental protection policies and supply-side reforms, each business segment of the Company faced
various opportunities and challenges. Therefore, the Company tried to exploit the development opportunities for each product in the
process of supply-side structural reform, the details of which were as follows.
Float glass: The overall growth rate of domestic housing starts in 2017 slightly slowed down. However, the total amount of
construction area still increased, as well as the booming production and sales in the auto market, export growth, and the favorable
demand for electrical glass and other industrial glass, float glass products got a rising market. The Company took this opportunity to
further strengthen overall management and control of sales, accurately grasp market conditions, strengthen industry synergy, promote
the differentiation of glass products, and further increase the market share of industrial glass. At the same time, it strengthened the
internal management, refined farming, continuous improvement of process technology, promoted energy conservation and
consumption reduction, tapping potential and increasing efficiency in an orderly manner. The key indicators such as the daily output
of glass and the yield rate of float glass were further improved. The growth of production and sales volume was stable. The revenue
increased by 32% and the profit increased by 99%.
Architectural glass: In 2017, architectural glass was affected by the sharp increase in the prices of bulk raw materials, especially
glass originals, and the growth of downstream fixed asset investment slowed down, its profitability was squeezed. Under this
pressure, the Company responded positively, adjusted its market strategy, strengthened industry synergy, strengthened
communication with customers, launched functional glass such as glass with the function of antireflection, electric heating and heat
preservation, and opened up new product application markets to achieve revenue growth by 5 %, but subject to the skyrocketing
prices of bulk materials, overall profitability of its architectural glass fell by 51%.
(II) Solar Energy industry
In 2017, the price of all types of photovoltaic products had a year-on-year decrease compared with the 2016 average price. In 2017,
the Company made an overall arrangement in advance and responded positively. Through the simultaneous production and project
construction model, the Company completed the technological transformation of polysilicon, silicon wafer, solar cell, and module, as
well as the expansion of production capacity, which enabled the Company's product quality continuously to improve and enter the
industry's advanced level. At the same time, by continuously exploiting internal capacity, the unit consumption of various materials
has decreased significantly, and the total non-silicon cost of each product has dropped significantly year-on-year. The construction of
solar power plants was also progressing as scheduled. The Company's installed capacity of the power plants has reached 128MW as
of the end of December 2017. The Company has actively explored the application fields such as photovoltaic power generation and
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CSG Annual Report 2017
BIPV (Building Integrated Photovoltaic), and further strengthened the industrial development. It realized annual revenue growth of
35% while net profit decrease of 12%.
(III) Electronic glass and display industry
In 2017, the Company attached great importance to improve the quality of electronic glass so as to keep playing its leading role in the
industry and get closer to international advanced level. At the same time, it strengthened the promotion of high-alumina glass market,
especially the promotion of the terminal market, and gradually tapped into the main mobile terminal manufacturers in China. With
the stability of the process, the entire production chain of the display business was opened up, and the production and sales volume of
each product increased substantially. The annual revenue of the electronic glass and display industry increased by 102%, achieving a
net profit of RMB 59 million, a substantial increase of 487%.
II. Main business analysis
1. Overview
Unit: RMB
Items 2017 2016 Range of Change Analysis of reasons
Operating income 10,879,400,746 8,974,083,407 21.23% Mainly due to the increase of sales
Operating costs 8,216,358,372 6,562,214,373 25.21% Mainly due to the increase of sales
Mainly due to the increase in
Sales expenses 336,131,723 301,815,090 11.37% transportation costs and employee
compensation
Mainly due to the increase in
Administration expenses 919,329,772 766,589,059 19.92% employee compensation and R&D
expenses
Mainly due to the increase of R&D
Including:R&D expenses 330,677,375 285,129,442 15.97%
investment
Mainly due to the increase in interest
Financial expenses 315,961,080 265,820,569 18.86%
expenses
Mainly due to the increase in cash
Net cash flow arising from
2,463,446,156 2,240,852,120 9.93% received from sales of goods and
operating activities
provision of labor services.
Net cash flow arising from Mainly due to the reduction of cash
-1,220,130,334 -1,606,225,665 -24.04%
investment activities received by subsidiaries
Mainly due to the decrease in cash
Net cash flow arising from paid for repayment of borrowings
634,295,928 -626,361,427 --
financing activities this year and the implementation of
equity incentives
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CSG Annual Report 2017
2. Revenue and cost
(1) Constitution of operation revenue
Unit: RMB
2017 2016
Increase/decrease
Ratio in operation Ratio in operation
Amount Amount y-o-y
revenue revenue
total of operating
10,879,400,746 100% 8,974,083,407 100% 21.23%
income
According to industry
Glass industry 7,051,910,295 64.82% 6,302,630,843 70.23% 11.89%
Solar energy
3,125,611,234 28.73% 2,320,237,216 25.85% 34.71%
industry
Electronic glass &
873,868,480 8.03% 433,457,290 4.83% 101.60%
Display industry
Others 58,687,566 0.54% 22,581,871 0.25% 159.89%
Amount of
-230,676,829 -2.12% -104,823,813 -1.17% 120.06%
unutilized
According to product
Glass products 7,051,910,295 64.82% 6,302,630,843 70.23% 11.89%
Solar energy
3,125,611,234 28.73% 2,320,237,216 25.85% 34.71%
products
Electronic glass &
873,868,480 8.03% 433,457,290 4.83% 101.60%
Display products
Others 58,687,566 0.54% 22,581,871 0.25% 159.89%
Amount of
-230,676,829 -2.12% -104,823,813 -1.17% 120.06%
unutilized
According to region
Mainland China 9,506,249,433 87.38% 7,971,929,246 88.83% 19.25%
H.K. China 434,551,436 3.99% 135,128,604 1.51% 221.58%
Europe 26,534,686 0.24% 25,914,385 0.29% 2.39%
Asia (excluding
Mainland China and 848,958,711 7.80% 614,806,258 6.85% 38.09%
H.K.)
Australia 37,937,222 0.35% 37,437,349 0.42% 1.34%
North America 6,030,936 0.06% 134,941,952 1.50% -95.53%
Other regions 19,138,322 0.18% 53,925,613 0.60% -64.51%
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CSG Annual Report 2017
(2) List of the industries, products or regions exceed 10% of the operating income or operating profits of
the Company
√Applicable □ Not applicable
Unit: RMB
Increase/decrease Increase/decrease Increase/decrease
Operating
Operating cost Gross profit ratio of operating of operating cost of gross profit
revenue
revenue y-o-y y-o-y ratio y-o-y
According to industry
Glass products 7,051,910,295 5,218,006,026 26.01% 11.89% 13.78% -1.22%
Solar energy
3,125,611,234 2,513,477,557 19.58% 34.71% 43.70% -5.03%
products
According to product
Glass products 7,051,910,295 5,218,006,026 26.01% 11.89% 13.78% -1.22%
Solar energy
3,125,611,234 2,513,477,557 19.58% 34.71% 43.70% -5.03%
products
According to region
Mainland China 9,506,249,433 7,145,720,399 24.83% 19.25% 22.05% -1.73%
Under the circumstances that the statistical standards for the Company’s main business data adjusted in the report period, the
Company's main business data in the recent year is calculated based on adjusted statistical standards at the end of the report period
□ Applicable √ Not applicable
(3) Whether the Company’s goods selling revenue higher than the service revenue
Whether the Company’s goods selling revenue higher than the service revenue
√Yes □ No
Increase/decrease
Industry Item Unit 2017 2016
y-o-y (%)
Sales volume 10,000-ton 264 236 11.86%
Flat glass Output 10,000-ton 270 234 15.38%
Inventory 10,000-ton 9 3 200%
Sales volume 10,000-M2 3,027 2,976 1.71%
Architectural glass Output 10,000-M2 3,045 2,999 1.53%
Inventory 10,000-M2 49 58 -15.52%
Sales volume ton 34,315 29,495 16.34%
Electronic glass Output ton 32,073 30,532 5.05%
Inventory ton 2,212 4,614 -52.06%
Polysilicon Sales volume ton 2,434 2,510 -3.03%
14
CSG Annual Report 2017
Output ton 8,101 7,074 14.52%
Inventory ton 122 280 -56.43%
Sales volume 10,000-piece 34,779 24,916 39.59%
Silicon wafer Output 10,000-piece 34,840 25,403 37.15%
Inventory 10,000-piece 156 283 -44.88%
Sales volume MW 540 320 68.75%
Solar cell Output MW 733 394 86.04%
Inventory MW 15 13 15.38%
Reasons for y-o-y relevant data with over 30% changes
√Applicable □ Not applicable
1. The increase in flat glass inventory was mainly due to the increase of output.
2. The decrease in the inventory of electronic glass was mainly due to the increase in sales.
3. The decrease in polysilicon inventory is mainly because the internal use of polysilicon increased, the stock decreased.The
production and sales of silicon wafers and solar cells was mainly due to the Company’s internal technological transformation and
expansion of production capacity which led to an increase in output.
(4) Fulfillment of significant sales contracts signed by the Company up to the report period
□ Applicable √ Not applicable
(5) Constitution of operation cost
Constitution of operation cost of main business
Industry classification
Unit: RMB
2017 2016
Increase/decrease
Industry Item Ratio in operation Ratio in operation
Amount Amount y-o-y
cost cost
Raw material 3,950,753,501 76.28% 3,490,284,457 76.83% 13.19%
Labor wages 483,035,118 9.33% 429,777,957 9.46% 12.39%
Glass industry
Manufacturing
745,385,164 14.39% 622,885,161 13.71% 19.67%
costs
Raw material 407,632,245 62.46% 164,264,376 54.19% 148.16%
Electronic glass
Labor wages 76,167,671 11.67% 41,457,372 13.68% 83.73%
& Display
industry Manufacturing
168,846,577 25.87% 97,396,154 32.13% 73.36%
costs
Solar energy Raw material 2,045,079,539 82.00% 1,312,414,211 75.92% 55.83%
industry Labor wages 193,384,939 7.75% 172,281,138 9.97% 12.25%
15
CSG Annual Report 2017
Manufacturing
255,426,988 10.24% 243,978,054 14.11% 4.69%
costs
Product classification
Unit: RMB
2017 2016
Increase/decrease
Product Item Ratio in operation Ratio in operation
Amount Amount y-o-y
cost cost
Raw material 3,950,753,501 76.28% 3,490,284,457 76.83% 13.19%
Labor wages 483,035,118 9.33% 429,777,957 9.46% 12.39%
Glass products
Manufacturing
745,385,164 14.39% 622,885,161 13.71% 19.67%
costs
Raw material 407,632,245 62.46% 164,264,376 54.19% 148.16%
Electronic glass
Labor wages 76,167,671 11.67% 41,457,372 13.68% 83.73%
& Display
products Manufacturing
168,846,577 25.87% 97,396,154 32.13% 73.36%
costs
Raw material 2,045,079,539 82.00% 1,312,414,211 75.92% 55.83%
Solar energy Labor wages 193,384,939 7.75% 172,281,138 9.97% 12.25%
products
Manufacturing
255,426,988 10.24% 243,978,054 14.11% 4.69%
costs
(6)Whether the consolidated scope changed during the report period
√ Yes □No
On October 11, 2017, the Group established a subsidiary company, CHINA CSG （AUSTRALIA）PTY LTD. As of December 31,
2017, the Group who holds 100% of its shares has not invested yet.
(7)Major changes or adjustment in business, product or service of the Company in the report period
□ Applicable √ Not applicable
(8)Major customers and major suppliers
Major customers of the Company
Total sales to the top five customers (RMB) 1,500,493,031
Proportion in total annual sales volume for top five customers 13.79%
Related party sales volume in total annual sales volume for top five customers accounted for the
0
proportion of total annual sales
Information of the top five customers of the Company
16
CSG Annual Report 2017
Serial Name of customer Sales volume (RMB) Proportion in total annual sales
1 Customer A 494,783,375 4.55%
2 Customer B 377,115,114 3.47%
3 Customer C 288,125,076 2.65%
4 Customer D 182,974,269 1.68%
5 Customer E 157,495,197 1.45%
Total -- 1,500,493,031 13.79%
Other statement of main customers
□ Applicable √ Not applicable
Major suppliers of the Company
Total purchase amount from the top five suppliers (RMB) 1,239,729,973
Proportion in total annual purchase amount from the top five suppliers 14.75%
Related party purchase amount in total annual purchase amount from the top five suppliers
0
accounted for the proportion of total annual purchase amount
Information of the top five suppliers of the Company
Proportion in total annual
Serial Name of supplier Purchase amount (RMB)
purchase
1 Supplier A 422,959,179 5.04%
2 Supplier B 332,874,011 3.96%
3 Supplier C 193,237,278 2.30%
4 Supplier D 157,616,197 1.87%
5 Supplier E 133,043,308 1.58%
Total -- 1,239,729,973 14.75%
Other statement of main suppliers
□ Applicable √ Not applicable
3. Expenses
Unit: RMB
2017 2016 Increase/decrease y-o-y Note of major changes
Sales expense 336,131,723 301,815,090 11.37% --
Management expense 919,329,772 766,589,059 19.92% --
Financial expense 315,961,080 265,820,569 18.86% --
4. R&D expenses
√Applicable □ Not applicable
17
CSG Annual Report 2017
The Company always emphasizes research and development of new products, new technology and new craft, and R & D aims to
close to the market, production and industry.
R&D investment of the Company
2017 2016 Ratio of change
Number of R & D personnel (person) 134 134 --
Ratio of number of R&D personnel 1.11% 1.16% -0.05%
Amount of R & D investment (RMB) 368,237,629 341,553,966 7.81%
Ratio of the R&D investment to the operating income 3.38% 3.81% -0.43%
Amount of the capitalized R&D investment (RMB) 43,122,431 23,213,785 85.76%
Ratio of the capitalized R&D investment to the R&D
11.71% 6.80% 4.91%
investment
Reason of remarkable changes over the last year of the ratio of the total R&D investment amount to the operating income
□ Applicable √ Not applicable
Reason of substantial change of the ratio of the R&D investment capitalization and its reasonable explanation
□ Applicable √ Not applicable
5. Cash flow
Unit: RMB
Item 2017 2016 Increase/decrease y-o-y
Subtotal of cash in-flow from operation activity 12,256,615,740 10,492,184,098 16.82%
Subtotal of cash out-flow from operation activity 9,793,169,584 8,251,331,978 18.69%
Net cash flow from operation activity 2,463,446,156 2,240,852,120 9.93%
Subtotal of cash in-flow from investment activity 192,127,040 372,941,656 -48.48%
Subtotal of cash out-flow from investment activity 1,412,257,374 1,979,167,321 -28.64%
Net cash flow from investment activity -1,220,130,334 -1,606,225,665 -24.04%
Subtotal of cash in-flow from financing activity 8,129,917,929 9,762,174,851 -16.72%
Subtotal of cash out-flow from financing activity 7,495,622,001 10,388,536,278 -27.85%
Net cash flow from financing activity 634,295,928 -626,361,427 --
Net increased amount of cash and cash equivalent 1,875,186,175 9,822,113 18,991.47%
Main reasons for y-o-y major changes in aspect of relevant data
√Applicable □ Not applicable
The increase of cash in-flow from financing activity was mainly due to the decrease in cash paid for debt service this year and the
implementation of equity incentives.
Net increased amount of cash and cash equivalent increased mainly because the Company increased its cash reserves and strategic
capital reserves to reduce liquidity risk.
18
CSG Annual Report 2017
Notes to the reason of the significant differences between the net cash flow from the operating activities and the net profits of the
year during the report period
√Applicable □ Not applicable
Adjustment for the difference between net profit and amount of cash flow from operation activity for the year as follows:
Unit: RMB
Net profit 828,636,035
Plus: impairment of assets 69,399,755
Depreciation of fixed assets 957,475,579
Amortization of intangible assets 43,884,166
Net change in safe production costs -2,618,535
Amortization of long-term deferred expenses 1,072,529
Share-based pay for employees 8,194,695
Net loss/ (gains) on disposal of fixed assets and intangible assets 1,768,993
Financial expenses 314,603,596
Investment (loss) / income -427,636
Deferred income tax assets decrease /( increase) 15,578,992
Decrease in deferred income tax liabilities -8,833,183
Decrease /( increase) in inventories -201,257,769
Increase in operating receivables -206,859,922
Increase in operating payables 642,828,861
Net cash flow from operating activities 2,463,446,156
III. Analysis of the non-core business
√Applicable □ Not applicable
Unit: RMB
Amount Ratio in total profit Note for the reason Sustainable or not
Investment income 427,636 0.04% Mainly investment income No
Mainly generated by provision for impairment
Asset impairment 69,399,755 6.97% No
of long-term assets
Non-operating
20,763,042 2.08% Mainly government subsidy income No
income
Non-operating Mainly due to the disposal of non-current
5,152,591 0.52% No
expense assets
mainly government subsidy income resulted
Other income 84,341,814 8.47% No
by non-operating income reclassification
19
CSG Annual Report 2017
IV. Assets and liabilities
1. Major changes of assets and liabilities composition
Unit: RMB
As at 31 Dec. 2017 As at 31 Dec. 2016
Proportion Proportion Change of
Notes of major changes
Amount in total Amount in total proportion
assets assets
Mainly because the Company
increased its cash reserves and
Monetary fund 2,462,605,764 12.61% 586,803,505 3.42% 9.19%
strategic capital reserves to
reduce liquidity risk
Accounts
638,238,290 3.27% 627,985,983 3.66% -0.39%
receivable
Inventory 685,895,317 3.51% 477,780,925 2.79% 0.72%
Fix assets 11,540,769,697 59.08% 11,457,972,991 66.82% -7.74%
Construction in
1,417,624,618 7.26% 1,362,096,377 7.94% -0.68%
process
Short-term loans 3,704,630,909 18.96% 4,017,869,662 23.43% -4.47%
Long-term loans 1,554,120,000 7.96% 1,438,660,000 8.39% -0.43%
2. Assets and liabilities measured at fair value
□ Applicable √ Not applicable
3. Limited asset rights as of the end of the report period
Item Limited amount Limited reason
Margin deposit deposited when the Company applies for a letter of credit issued
Money funds 2,852,599
by the bank and applies for loans from the bank.
Fix assets 2,369,789,041 Limited financing lease
Total 2,372,641,640
V. Investment
1. Overall situation
√Applicable □ Not applicable
Investment in the report period Investment in the same period of last Changes
20
CSG Annual Report 2017
(RMB) year ( RMB)
1,412,257,374 1,979,167,321 -28.64%
2. The major equity investment obtained in the report period
□ Applicable √ Not applicable
21
CSG Annual Report 2017
3. The major ongoing non-equity investment in the report period
√Applicable □ Not applicable
Unit: RMB 0,000
Accumulativ
e amount Accumulative Date of
Fixed Amount Reasons for not Index of
actually revenue disclosure
Way of asset Industry invested in Expected achieving the planned disclosure
Project invested by Source of funds Progress of project (ongoing projects) achieved by (if
investment investme involved the report return progress and the (if
the end of the end of the applicable
nt or not period expected return applicable)
the report report period )
period
To add a new cold-hydrogenation line
in Yichang CSG, which can produce
Yichang CSG
electronic grade polysilicon on basis
upgrading &
of the solar grade polysilicon device,
expansion
and meanwhile, add correspondent
project of
Own funds and systems of reduction, rectification,
electronic Manufac Notice
borrowings from recycle and utilities, so as to boost the Revenue could not be March
grade Self-built Yes turing 3,445 20,566 22,481 0 number:
financial actual capacity of polysilicon up to calculated separately. 31, 2015
polysilicon industry 2015-009
institutions 12,000 tons/year (including 2,500
and
tons/year for electronic grade
cold-hydrogen
polysilicon and 9,500 tons/year for
ation technical
solar energy grade polysilicon). At
upgrading
present, the cold-hydrogenation line
has been constructed.
Yichang CSG Manufac Own funds and CSG has added 1GW capacity of January Notice
The rest 500MW has
to add a 1GW Self-built Yes turing 36,173 45,674 borrowings from high-efficient polysilicon wafer to 14,853 671 06, 2016, number:
not started yet.
silicon wafer industry financial achieve 2.2GW capacity of April 16, 2016-001、
22
CSG Annual Report 2017
project institutions polysilicon wafer. Construction of the 2016 2016-018
first 500 MW capacity of polysilicon
wafer was completed in September
2017.
CSG plans to construct a PV power
plant within two years from 2016 to
2017. Its wholly-owned subsidiary,
Shenzhen CSG PV Energy Co., Ltd.
will self-build 200MW and the
Own funds and remaining 140MW will be
PV power Manufac Notice
borrowings from constructed by CSG with Qibin Part of the project has January
plant Self-built Yes turing 9,529 24,908 4,344 634 number:
financial Group. During 2016 to 2017, been completed. 22, 2016
investment industry 2016-006
institutions Shenzhen CSG PV developed and
built a total of 78MW of photovoltaic
power stations, including 58MW of
distributed photovoltaic power plants
and 20MW of centralized
photovoltaic power plants.
The Company plans to construct a 4
million square meters PV glass
4 million production line for new type ultra-thin
square meters LCD display. The line is also
Own funds and
light guide Manufac provided with a capacity of higher No income for the Notice
borrowings from May 21,
plate and PV Self-built Yes turing 37,131 51,458 strength ultra-thin electronic glass 10,543 0 project is in the number:
financial 2016
glass industry than CSG Qingyuan. The equity of construction period. 2016-025
institutions
production Xianning Feng Wei Technology Co.,
line Ltd. has been acquired within the
report period and the project is under
construction.
23
CSG Annual Report 2017
Cold repair upgrading has been
performed for the first line of
Cold repair Own funds and Chengdu CSG. The line will be
Manufac
upgrading of borrowings from upgraded to be a professional, high
Self-built Yes turing 5,784 9,498 2,228 2,461 -- --
the first line of financial quality industrial thin glass line,
industry
Chengdu CSG institutions featured 2mm series automobile glass
while also covering 1.6mm. The
project was completed in April 2017.
Cold repair The former 900T line of float glass of
Own funds and
upgrading of Manufac Hebei CSG was upgraded to produce
borrowings from
the second Self-built Yes turing 381 17,721 2mm~19mm glass wafer. The project 1,510 3,425 -- --
financial
line (900T) of industry was started on August 18, 2016 and
institutions
Hebei CSG was completed in February 2017.
Plan to establish a production line for
Hebei Panel
medium-alumina ultra-thin electronic
Glass project
glass in Hebei Panel Glass, using
of Manufac No gains as the Notice
clean natural gas as the fuel, and October
medium-alumi Self-built Yes turing 319 1,266 Own funds 0 0 project is in the number:
produce 0.33mm～1.1mm 29, 2014
na ultra-thin industry construction period. 2014-030
medium-alumina ultra-thin glass with
electronic
float process. The project was still in
glass
preparation.
Plan to increase two coating glass
production lines and support By now, part of the
Expansion on
insulating glass capacity. When the project has been
energy-saving Manufac Notice
project is completed, the annual completed and the December
glass capacity Self-built Yes turing 0 21,239 -- 0 0 number:
capacities of wide flat coated glass revenue was not 25, 2010
of Wujiang industry 2010-046
and coated insulating glass will rise calculated
Project
by 3 million square meters and 1.2 individually.
million square meters respectively.
24
CSG Annual Report 2017
The wide flat coated glass line of 3
million square meters has been
completed, and the others will be
invested according to market
situations.
Yichang CSG Plan to build a crystalline silicon solar
700MW Manufac cell production line with annual Notice
The project was December
crystalline Self-built Yes turing 0 0 -- capacity of 700MW. The project was 0 0 number:
suspended. 25, 2010
silicon solar industry suspended and further investment will 2010-046
cell project be based on actual industry situations.
Expanding Plan to expand the solar module
500MW solar Manufac production line with annual capacity Notice
The project was January
module Self-built Yes turing 0 0 -- of 500MW. The project was 0 0 number:
suspended. 18, 2011
project in industry suspended and further investment will 2011-003
Dongguan be based on actual industry situations.
The Company plans to construct a
module workshop in Xianning, Hubei
Relocation Province, of which the final capacity
and equipment will be 500MW. By relocation of
upgrading of some of the module equipment of its
Manufac Notice
the solar subsidiary, Dongguan CSG PV The project was April 16,
Self-built Yes turing 0 0 -- 0 0 number:
module Technology Co., Ltd. and purchase of suspended. 2016
industry 2016-018
production some new equipment, the first stage
line in capacity of the Xianning workshop
Dongguan will be 300MW and, afterwards, it
will be expanded to 500MW as
required by the market conditions.
Solar online Manufac The Company plans to construct an The project was April 16, Notice
Self-built Yes 0 0 -- 0 0
self-cleaning turing online self-cleaning coated glass line suspended. 2016 number:
25
CSG Annual Report 2017
coated glass industry in Dongguan. 2016-018
project of
Dongguan
CSG
The Company plans to construct an
architectural glass plant in Negeri
Malaysia-inve
Manufac Sembilan, Malaysia. The Phase I Notice
sted The project was April 16,
Self-built Yes turing 0 0 -- capacity of the newly-built plant will 0 0 number:
architectural suspended. 2016
industry be 1,200,000 square meters insulating 2016-018
glass plant
glass and 1,000,000 square meters
single coated glass.
Total -- -- -- 92,762 192,330 -- -- 55,959 7,191 -- -- --
26
CSG Annual Report 2017
4. Financial assets investment
(1) Securities investment
□ Applicable √ Not applicable
There was no securities investment during the report period.
(2) Derivative investment
□ Applicable √ Not applicable
There was no derivative investmen during the report period.
5. Use of raised fund
□ Applicable √ Not applicable
There was no such case during the report period.
VI. Sales of major assets and equity
1. Sales of major assets
□ Applicable √ Not applicable
2. Sales of major equity
□ Applicable √ Not applicable
VII. Analysis of main holding companies and joint -stock company companies
√Applicable □ Not applicable
Particular about main subsidiaries and joint -stock companies which have influence on the Company's net profit by over 10%
Unit: RMB
Name of Registered Operating
Type Main business Total assets Net Assets Operating revenue Net profit
company capital profit
Development,
Chengdu CSG manufacture and
Subsidiary 260 million 949,189,013 549,644,544 963,867,411 185,820,075 159,097,192
Glass Co., Ltd. sales of various
special glass
Development and
Xianning CSG manufacture and
Subsidiary 235 million 785,113,404 357,755,489 751,277,647 116,921,901 108,893,438
Glass Co., Ltd. sales of various
special glass
27
CSG Annual Report 2017
Manufacture and
Hebei CSG USD 48.06
Subsidiary sales of various 851,819,366 403,636,180 514,294,709 45,984,764 39,667,572
Glass Co., Ltd. million
special glass
Manufacture and
Wujiang CSG 565.04
Subsidiary sales of various 1,621,247,482 754,661,872 1,572,799,222 187,183,576 168,221,000
Glass Co., Ltd. million
special glass
Dongguan
CSG Deep processing
Subsidiary 240 million 1,016,566,291 468,852,301 945,665,074 44,682,681 41,741,286
Architectural of glass
Glass Co., Ltd.
Wujiang CSG
East China Deep processing
Subsidiary 320 million 847,522,945 434,693,963 618,437,486 27,594,863 25,231,336
Architectural of glass
Glass Co., Ltd.
Tianjin CSG Development,
Energy producing and sales
Subsidiary 336 million 716,090,383 508,894,065 691,154,038 13,881,247 16,299,105
Conservation of energy-saving
Glass Co., Ltd special glass
Manufacture and
Dongguan
sales of
CSG Solar Subsidiary 480 million 1,261,708,908 695,384,759 1,025,683,430 112,938,282 114,344,586
Solar-Energy Glass
Glass Co., Ltd.
products
Manufacture and
Yichang CSG
sales of high purity 1,467.98
Polysilicon Subsidiary 3,957,515,821 1,419,974,626 1,800,167,542 216,991,855 220,704,106
silicon material million
Co., Ltd.
products
Shenzhen
Manufacture and
Nanbo Display Joint-stock
sales of display 143 million 1,614,937,532 788,622,997 563,191,871 23,175,445 14,127,081
Technology company
device products
Co., Ltd.
CSG
(Hongkong) Investment and HKD 1
Subsidiary 84,410,779 48,099,751 350,102,367 16,970,070 14,186,621
Investment trading million
Co., Ltd.
Particular about subsidiaries obtained or disposed in report period
□ Applicable √ Not applicable
Notes of main subsidiaries and joint-stock companies
Affected by the Country’s macroeconomic policies, the products of the flat glass industry rose in selling price this year, when the
output increased, the profit increased. The price of raw materials for the architectural glass industry rose, so a certain level of profit
was maintained by measures such as cost reduction and efficiency increase. Affected by price fluctuations in the industrial chain
market, the profit of solar energy section were under pressure. The business and process technology of the subsidiary company of
electronic glass Qingyuan Energy-saving, as well as display business were stable, and the entire production chain production line was
28
CSG Annual Report 2017
opened up. The output and sales volume of each product increased significantly, so the profit increased.
VIII. Structured main bodies controlled by the Company
□ Applicable √ Not applicable
IX. Outlook of the Company’s future development
1. Tendency of development of the industries the Company involved
Flat glass industry
In 2017, under the background of supply-side reform, the efforts to cut overcapacity of flat glass industry further intensified,
especially more stringent environmental protection, energy consumption and other comprehensive standards were imposed in the
second half of the year, which accelerated the elimination of backward production capacity. Downstream market, affected by real
estate regulatory policy, had a slackening demand growth. Overall, the supply and demand in glass industry was basically balanced
with a rise in profitability. In 2018, it is predicated that the real estate policy will not be eased, which means that the demand of glass
will be mostly the same as 2017. As for the supply, production capacity will only fall down under the continuing policy of
overcapacity cut. More stringent emission standards probably implementing and environmental taxes imposing will increase
environmental protection costs of glass industry, resulting in a rise in market prices, which is beneficiary to CSG who always lays
emphasis on environmental protection and possesses related equipment.
Architectural glass industry
As the national economy enters “New Normal”, significant slowdown in fixed asset investment and skyrocket price in upstream float
glass made overall profitability of architectural glass industry decline. The architectural glass industry is facing a more severe market
situation in the short term.
But in the long run, energy-saving glass is the key of building energy conservation whose penetration has been over 80% in
developed countries but less than 15% in China so far. In recent years, Chinese government has expanded more efforts to popularize
green building. According to Action Plan of Promoting Production and Application of Green Building Material jointly issued by
Ministry of Industry and Information Technology and Ministry of Housing and Urban-Rural Development, the ratio of green building
material applied will be significantly increased and its quality will be improved dramatically. The proportion of green building
material will take up 30% in new building, 50% in green building, 70% in pilot project, and 80% in renovating existing building.
High-end energy saving glass as an important part in green building has a huge market demand and the prospects for its development
are worth looking forward to.
Solar energy PV industry
A continuing rebound from 2012 has driven photovoltaic industry to a booming phrase. China’s PV market has ranked NO.1 globally
for five consecutive years while the production of PV components the global number one for eleven consecutive years, both of which
made China worthy of the name “The Strongest Country in Producing and Applying PV Products”. Up to the end of 2017, PV
capacity in China reached 130GW, surpassing the basic objective in “13th Five-Year Plan” of Energy Development that realizing
110GW of solar power generation in 2020. Driven by the national green energy policy and skyrocket in PV market, China’s PV
industry will continue to expand.
According to “13th Five-Year Plan of Solar Energy Development”, it is expected to achieve grid parity through PV by 2020. Thus
the technical revolution will be the main theme and the driving force for the following development of PV industry, which means that
the industry competition will be more intense and the industry shuffle will intensify. The industry resource and advantage will
integrate into the enterprises with innovative technology and strong power, thus “the stronger are getting stronger”.
Electronic glass and display device industry
29
CSG Annual Report 2017
In reference to the industry forecast presented by Touch Display Research, the operating revenue of displayer will continue to grow
globally in the following ten years but the growth will slow down gradually. In this process, OLED whose display technology is the
most competitive will gradually hold the dominant position in the whole industry. Looking at the analysis given by research
institution HIS, we can find that the conventional IFT-LCD has been in an oversupply state and the manufacturers are carrying out
the price war. Instead, the conventional and flexible OLED hasn’t been popularized, so the enterprises who master its technology of
mass production will take up the top of blue sea market. With the development and maturity of OLED technology, its market quota
will expand between 2018 and 2020, especially the technology of flexible OLED who has a folding intelligent terminal form will be
the revolutionary technology and give itself an advantage in the future.
Ultrathin electronic glass is one of the key materials of touch display industry, its core technology was mastered by few developed
countries in the past and its high-end market has been monopolized by foreign enterprises such as Corning and Asahi Glass. As the
expansion of capacity in domestic ultrathin electronic glass enterprises represented by CSG, the product’s quality and performance
have been improved and promoted constantly, thus domestic brands have gradually replaced foreign ones in medium and high market.
At present, though display industry has pulled through the period of explosive growth and marched into market stability, the fast
promotion of 5G communication network technique is expected to drive the increasing demands of double-sided glass for mobile
phones in the next few years, which will be the new opportunity and chance for domestic ultrathin glass enterprises to develop.
2. Development Strategy
The future development strategy of the Company is continuing to deepen culture and strengthen advantageous businesses of the
Company such as flat glass, architectural glass, solar energy PV and electronic glass and display devices. Through management
improvement, market integration, acceleration of internationalization, realize leap-forward development of all business sectors of the
Company, it will greatly improve the industrial position of all sectors, and development into a respected international first-class
enterprise.
3. Business Plan of 2018
①Improve functions of headquarters, realize general planning management, promote centralized purchase, lean management, exploit
its potential and increase efficiency, and ensure the completion of operation construction objective of the Company in 2018;
② Improve R&D capacity, build up R&D talent team, and maintain the technical innovation advantage of the Company in the
industry;
③ Create open, equal, fair and initiative enterprise culture, and strengthen core cohesion of the Company;
④ Strengthen talent management, establish remuneration incentive system related to the performance, improve company incentive
mechanism, strengthen employee training, and introduce more high-quality talents;
⑤ Rationally plan asset-liability ratio level and ensure controllable financial risk;
⑥ Vigorously conduct potential exploiting and efficiency increase activity, realize energy saving and consumption reduction, and
strengthen competitiveness of the Company;
⑦ Improve information level of the Company, and create the world first-class information management platform.
4. Capital Requirements, Plan and Sources
In 2018, CSG capital expenditure budget is about RMB 2.5 billion, which was mainly used in the project construction of photovoltaic
power plant investment project, increasing electronic glass and display device business capacity to achieve industry and product
extension, flat glass technology transformation architectural glass process technological upgrading and informatization construction
project. The capital is mainly from self-owned capital of CSG, borrowings from financial institutions and the raised funds from
public issuance of corporate bonds.
5. Risks and Countermeasures
In 2018, in the face of “New Normal” of domestic economic development and “New CSG” construction task of the Company, the
Company will face the following risks and challenges:
30
CSG Annual Report 2017
① In 2017, under the efforts of the Board of Directors and all employees, daily operation of the Company entered normal and stable
operation. However, the Company still faces the risk of insufficient reserves of senior talents for the long-term development of the
Company. To cope with aforesaid risks, the Company will take the following measures:
A. Construct new corporate culture of CSG as soon as possible, establish an kind of open, equal, fair and enterprising corporate
culture, and reinforce internal core cohesion of employees;
B. Establish remuneration incentive system which related to performance and improve employee incentive mechanism;
C. Strengthen internal employee training, introduce external high-quality talent, and rapidly establish a high-quality talent team;
D. Establish sustainable talent recruitment, cultivation, utilization, retaining, and development management system; create a
future-oriented human resource production, development, supply system that can support the future development of CSG.
②The flat glass and architectural glass industry continue to face the pressure of downward demand and excess capacity, the solar
energy and PV industry will face the risk of industrial integration and price fluctuation, display devices and electronic glass industry
will encounter the risk of accelerated technical upgrading and slow demand on electronic product. To cope with aforesaid risks, the
Company will take the following measures:
A. In the flat glass industry, the Company will accelerate the technical upgrading and reform of existing production line to realize
differential operation, expand industrial scale and strengthen industrial competitiveness through industrial M&A;
B. In architectural glass industry, the Company will strengthen the development of high-end market and overseas market, actively
develop traditional residence market, and at the same time, maintain the industrial advantageous position of the Company through
market-oriented extension of industrial chain;
C. In solar energy PV industry, the Company will increase technology and production capacity of silicon wafer, raise the productive
and technological level of polysilicon, enhance the support for downstream construction of photovoltaic power plants, and reduce the
risk of price fluctuations of upstream silicon materials and other products.
D. In electronic glass and display devices industry, the Company will strengthen research and development of new technology, new
product, maintain its technical leading advantage in the industry, and further improve the product quality of ultra-thin electronic glass,
so as to rapidly develop terminal market and improve industrial profitability.
③ Since 2017, the market price of glass and solar energy PV industrial has had great fluctuation. At the same time, the prices of
upstream raw materials have fluctuated, and the current rising labor costs have brought risks to the Company's operations. To cope
with risk, the Company will take the following measures:
A. Vigorously exploit potential and increase efficiency, and effectively implement energy saving and consumption reduction;
B. Focus on the market change, and lock the price of bulk commodity at proper time;
C. Utilize bulk purchase advantage to reduce purchase cost;
D. Improve automatic production level, raise labor productivity.
④ Risk of fluctuation of foreign exchange rate: At present, nearly 12.73% of the sales revenue of the Company is from overseas, in
the future, the Company will further develop overseas business, and therefore, the fluctuation of exchange rate will bring certain risk
to the operation of the Company. To cope with such risk, the Company will settle exchange in time and use safe and effective risk
evading instrument and product to relatively lock exchange rate and reduce the risk caused by fluctuation of exchange rate.
X. Reception of research, communication and interview
1. Particulars about research, communication and interview in the report period
√Applicable □ Not applicable
Reception time Way Type Basic information index of investigation
31
CSG Annual Report 2017
Details can be found in the Record Chart of the Investor Relation Activity
2017-5-10 Field research Institute
disclosed on Juchao website (www.cninfo.com.cn) on 11 May 2017.
Reception times 1
Number of reception institutions 8
Number of reception person 0
Number of other reception 0
Disclosed, released or let out major undisclosed
No
information
32
CSG Annual Report 2017
Section V. Important Events
I. Profit distribution plan of common shares and capitalization of capital reserve plan of the
Company
Implementation or adjustment of profit distribution plan in the report period, cash dividend plan and converting capital reserve into
share capital in particular
√ Applicable □Not applicable
The profit distribution plan for 2016 was approved by Annual General Shareholders’ Meeting of 2016 held on 22 May 2017 which
distributed distributing cash dividend of RMB 1.00 (tax included) for every 10 shares to all shareholders and transferred capital
reserve into capital with 1.5 shares for every 10 shares to all shareholders. Notice of the distribution was published on China
Securities Journal, Securities Times, ShangHai Securities News and Hong Kong Commercial Daily on 11July 2017, and the profit has
been distributed.
Special explanation on cash dividend policy
Satisfy regulations of General Meeting or requirement of Article of Association (Yes/No) Yes
Well-defined and clearly dividend standards and proportion (Yes/No) Yes
Completed relevant decision-making process and mechanism (Yes/No) Yes
Independent directors perform duties completely and play a proper role (Yes/No) Yes
Minority shareholders have ample opportunities and their legitimate rights and interests are effectively
Yes
protected (Yes/No)
Condition and procedures are compliance and transparent while the cash bonus policy adjusted or changed
Yes
(Yes/No)
Statement on profit distribution plan and capitalization of capital reserve plan of the Company in nearly three years (including the
report period)
Statement on profit distribution plan and capitalization of capital reserve plan of the Company in 2017: based on 2,484,147,547
shares of the total share capital while dividends will be distributed, distributing cash dividend of RMB 0.5 (tax included) for every 10
shares to all shareholders. Meanwhile the Company will transfer capital reserve into capital with 1.5 shares for every 10 shares to all
shareholders based on 2,484,147,547 shares of the total share capital.
Statement on profit distribution plan and capitalization of capital reserve plan of the Company in 2016: based on 2,075,335,560
shares of the total share capital while dividends will be distributed, distributing cash dividend of RMB 1.00 (tax included) for every
10 shares to all shareholders. Meanwhile the Company will transfer capital reserve into capital with 1.5 shares for every 10 shares to
all shareholders based on 2,075,335,560 shares of the total share capital.
Statement on profit distribution plan and capitalization of capital reserve plan of the Company in 2015: based on 2,075,335,560
shares of the total shares while dividends will be distributed, distributing cash dividend of RMB 3.00 (tax included) for every 10
shares to all shareholders. In 2015, the Company did not transfer capital reserve into capital.
Cash dividend in latest three years (including the report period)
Unit: RMB
33
CSG Annual Report 2017
Net profit Ratio in net profit
attributable to attributable to
Amount for cash shareholders of shareholders of Proportion for cash
Year for bonus cash dividend by
dividend (tax listed company in listed company dividend by other
shares other ways
included) consolidation contained in ways
statement for bonus consolidation
year statement (%)
2017 124,207,377 825,388,312 15.05% 0 0%
2016 207,533,556 797,721,576 26.02% 0 0%
2015 622,600,668 532,653,110 116.89% 0 0%
The Company gains profits in the report period and the retained profit of parent company is positive but no plan of cash dividend
proposed
□ Applicable √ Not applicable
II. Proposal of profit distribution preplan or share conversion from capital public reserve in
the report period
√Applicable □ Not applicable
Distributing bonus shares for every 10 shares (share) 0
Distributing cash dividend for every 10 shares (tax included) (RMB) 0.5
Shares added for every 10-share base (Share) 1.5
Equity base for distribution preplan (share) 2,484,147,547
Total amount distribution in cash (RMB) (tax included) 124,207,377
Profit available for distribution (RMB) 529,327,954
Cash distributing accounted for the proportion of the total amount of profit distribution (%) 100%
Particular about cash dividend in the period
If the Company's development stage is not easy to distinguish but there are major capital expenditure arrangements, when the profit
is distributed, the proportion of cash dividends in this profit distribution should be at least 20%.
Details of proposal of profit distribution preplan or share conversion from capital public reserve
According to the financial report audited by Asia Pacific (Group) CPAs (special general partnership), the net profit attributable to
equity holders of the Company in consolidated statement was RMB 825,388,312 and combined capital reserve was 1,306,381,765
in 2017. Since cash dividend distribution bases on the distributable profit of parent company, the Company took 10% of the net
profit as stationary surplus reserve which was RMB 32,084,102 based on the net profit RMB 320,841,025 of parent company
statement 2017. Profit available for distribution in 2017 was RMB 529,327,954.
The Board of Directors proposed to distribute every shareholder RMB 0.5 (including tax) for each 10 shares based on the amount
2,484,147,547 shares, and the total amount distribution is RMB 124,207,377 (including tax), and transfer capital reserve into
capital with 1.5 shares for every 10 shares to all shareholders based on 2,484,147,547 shares of the total share capital. With total
transferred amount of 372,622,132 shares, the total share capital of the Company will be changed from 2,484,147,547 shares to
2,856,769,679 shares. Board of directors consider that this proposal of profit distribution meet the specification of Corporation
34
CSG Annual Report 2017
Law, Accounting Standard for Enterprises and Articles of Association. The above profit distribution preplan must be submitted to
the 2017Annual General Meeting of shareholders.
III. Implementation of commitment
1. Commitments completed by the actual controllers, the shareholders, the related parties, the purchasers,
the Company or the other related parties during the report period and those hadn’t been completed
execution by the end of the report period
√Applicable □ Not applicable
Type of Commit-ment Commit- Implement-
Commitments Promisee Content of commitments
commitments date ment term ation
The Company has
implemented share merger
reform in May 2006. Till
June 2009, the share of the
original non-tradable
shareholders which holding
over 5% total shares of the
Company had all released.
Therein, the original
non-tradable shareholder
Shenzhen International
By the end of
Holdings (SZ) Limited and
the report
The original Xin Tong Chan Industrial
period, the
non-tradable Development (Shenzhen)
above
Commitments shareholder Shenzhen Co., Ltd. both are
shareholders
for International Holdings Commitment of wholly-funded subsidiaries
2006-5-22 N/A of the
Share Merger (SZ) Limited and Xin share reduction to Shenzhen International
Company had
Reform Tong Chan Industrial Holdings Limited
strictly carried
Development (hereinafter Shenzhen
out their
(Shenzhen) Co., Ltd. International for short)
promises.
listed in Hong Kong united
stock exchange main board.
Shenzhen International
made commitment that it
would strictly carry out
related regulations of
Securities Law,
Administration of the
Takeover of Listed
Companies Procedures and
Guiding Opinions on the
Listed Companies’ Transfer
35
CSG Annual Report 2017
of Original Shares Released
from Trading Restrictions
issued by CSRC during
implementing share
decreasingly-held plan and
take information disclosure
responsibility timely.
Foresea Life Insurance Co.,
Ltd., Shenzhen Jushenghua
Co., Ltd. and Chengtai
Group Co., Ltd. issued
By the end of
detailed report of equity
During the the report
change on 29 June 2015, in
period period, the
Commitment of which, they undertook to
when above
Foresea Life horizontal keep independent from CSG
Commitments in Foresea shareholders
Insurance Co., Ltd,, competition, in aspects of personnel,
report of Life of the
Shenzhen Jushenghua affiliate assets, finance, organization 2015-6-29
acquisition or remains the Company had
Co., Ltd. and Chengtai Transaction and set-up and business as long
equity change largest strictly carried
Group Co., Ltd. capital as Foresea Life Insurance
shareholder out their
occupation remained the largest
of the promises.
shareholder of CSG.
Company
Meanwhile, they made
commitment on regularizing
related transaction and
avoiding industry
competition.
Commitments in
assets Not applicable
reorganization
Commitments in
initial public
Not applicable
offering or
re-financing
CSG has promised not to
During the
provide loans and other
implementa The
forms of financial assistance
Equity incentive tion of the commitment
The listed company for restricted stocks for the 2017-10-10
commitment equity is in normal
incentive targets under this
incentive performance.
plan, including providing
plan
guarantees for their loans.
Other
commitments
for medium and Not applicable
small
shareholders
36
CSG Annual Report 2017
Completed on
Yes
time(Yes/No)
If the
commitments is
not fulfilled on
Not applicable
time, explain the
reasons and the
next work plan
2. If there are assets or projects of the Company, which has profit forecast and the report period is still in
forecasting period, the Company should explain reasons why they reach the original profit forecast
□ Applicable √ Not applicable
IV. Particular about non-operating fund of listed company which is occupied by controlling
shareholder and its affiliated enterprises
□ Applicable √ Not applicable
There was no non-operating fund of listed company which is occupied by controlling shareholder and its affiliated enterprises in the
report period.
V. Explanation from Board of Directors, Supervisory Committee and Independent Directors
(if applicable) for “Non-standard audit report” of the period that issued by CPA
□ Applicable √ Not applicable
VI. Particulars about the changes in aspects of accounting policy, accounting estimate and
calculation method compared with the financial report of last year
√Applicable □ Not applicable
On August 18, 2017, the 2nd Meeting of the 8th Session of the Board of Directors reviewed and approved the Proposal for changing
Accounting Policy, which was based on the request of the notice issued by the Ministry of Finance on the issuance of the revised
“Enterprise Accounting Standards No. 16—Government Grants” (Finance and Accounting [2017] No. 15), and revised financial
statement presentation. “Other Income” item should be presented separately above “Operating Profit” item in the income statement.
The "Other Income" items are separately presented on the "Operating Profit" item. Since January 1, 2017, government subsidies
related to daily activities of enterprises have been reclassified from "Non-operating Income" item to "Other Income" item. The
comparative financial statements of the year 2016 were not restated.
On April 20, 2018, the 5th Meeting of the 8th Session of the Board of Directors reviewed and approved the Proposal for changing
Accounting Policy, which was based on the request of the Notification of the issuance of No. 42 of Enterprise Accounting Standards:
Non-current Assets Held for Sale, Disposal Group and Termination of Operation(Finance and Accounting [2017] No. 13) and the
Notification on Reversing and Issuing the Formats of Common Enterprise Financial Statements (Finance and Accounting [2017] No.
30), issued by the Ministry of Finance, and revised financial statement presentation. The “Asset Disposal Income” was added to the
profit statement, the “Gain/loss resulting from the disposal of non-current assets” which was originally booked in “Non-business
income” and “Non-business Expenditure” was listed in “Asset disposal gain” and the comparable data during the comparable period
37
CSG Annual Report 2017
would be adjusted. Two items, (I) Net profit from continuous operation” and “(II) Net profit from terminated operation”, will
respectively reflect the net profit involved with continuous operation and terminated operation.
The Company has conducted necessary communication with the accounting firm on this matter.
VII. Description of major accounting errors within report period that need retrospective
restatement
□ Applicable √ Not applicable
There were no major accounting errors within report period that need retrospective restatement.
VIII. Description of changes in consolidation statement’s scope compared with the financial
report of last year
√Applicable □ Not applicable
On October 11, 2017, the Group established a subsidiary company, CHINA CSG （AUSTRALIA）PTY LTD. As of December 31,
2017, the Group who holds 100% of its shares has not invested yet.
IX. Engaging and dismissing of CPA firm
CPA firm engaged
Name of domestic CPA firm Asia Pacific (Group) CPAs (special general partnership)
Remuneration for domestic CPA firm (RMB 0,000) 300
Continuous life of auditing service for domestic CPA firm 0
Name of domestic CPA Pan Qian, Zhang Yan
Continuous life of auditing service for domestic CPA 0
Whether changed accounting firms in this period or not
√ Yes □ No
Whether changed the accounting firm during the audit period or not
√ Yes □ No
Whether performed the approval process when changed the accounting firm or not
√ Yes □ No
Detailed explanation of changing accounting firm
The interim meeting of the eighth session of the Board of Directors and the first extraordinary general meeting of shareholders in 2018
reviewed and passed the "Proposal on Changing Accounting Firm." The Company plans to hire Asia Pacific (Group) CPAs (special
general partnership) as the Company's 2017 annual financial audit agency and internal control audit agency. For details, please refer to
the announcements (2018-004 , 2018-011) published in China Securities Journal, Securities Times, Shanghai Securities News,
Securities Daily, Hong Kong Commercial Daily and http://www.cninfo.com.cn on February 28, 2018 and March 15, 2018.
Appointment of internal control auditing accounting firm, financial consultant or sponsor
√Applicable □ Not applicable
Asia Pacific (Group) CPAs (special general partnership) was engaged as audit institute of internal control for the Company in the
report period, and contracted charges was RMB 0.30 million (not including traveling and accommodation expenses).
38
CSG Annual Report 2017
X. Particular about the Company suspended from the stock market listing and delisting after
the disclosure of the annual report
□ Applicable √ Not applicable
XI. Issues related to bankruptcy and reorganization
□ Applicable √ Not applicable
XII. Significant lawsuits and arbitrations
□ Applicable √ Not applicable
XIII. Penalty and rectification
□ Applicable √ Not applicable
XIV. Integrity of the Company and its controlling shareholders and actual controllers
□ Applicable √ Not applicable
XV. Implementation of the Company’s stock incentive plan, employee stock ownership plan
or other employee incentives
√Applicable □ Not applicable
On Oct. 10, 2017, the 3rd Meeting of the 8th Board of Directors of the Company deliberated and approved 2017 Restricted A- shares
Incentive Plan of CSG Holding Co., Ltd (Draft )and its summary, the Management Method of the Implementation and Review of
2017 Restricted A-shares Incentive Plan of CSG Holding Co., Ltd and the Resolution on Applying the General Meeting of
Shareholders to Authorize the Board of Directors to Deal With the Related Matters on the Company’s 2017 Restricted A-shares
Incentive Plan. The above contents are detailed in the Announcement of the Resolution on the Third Meeting of the Eighth Session of
the Board of Directors published inwww.cninfo.com.cn (Announcement No.: 2017-063). The Company’s independent directors
issued independent opinions on the issues involved with restricted A- shares incentive plan.
On Oct. 26, 2017, the Company convened the 5th Extraordinary General Meeting in 2017, which deliberated and approved the above
three proposals. The Resolution on Adjusting the Object and Quantity Granted of 2017 Restricted A-share Incentive Plan and the
Resolution on Firstly Granted Restricted Shares to the Object of 2017 Restricted A-share were deliberated and approved on the
21stprovisional meeting of the eighth session board of directors convened on Dec. 11th, 2017. It determined to grant 97,511,654
restricted shares to 454 objects on Dec. 22, 2017, with price at RMB4.28/share. The reserved restricted shares was 17,046, 869
shares.
The granting of shares was completed on Dec. 25, 2017 and the specific content was detailed in the Announcement on Completing
the First Granting of 2017 Restricted Shares disclosed in www.cninfo.com.cn on Dec. 22, 2017 (Announcement No.:2017-079).
According to the relevant provisions of the "Accounting Standards for Business Enterprises", the implementation of the Company's
restricted stock will have a certain impact on the Company's financial status and operating results in the next few years. The results
are based on the annual audit report issued by the accounting firm.
39
CSG Annual Report 2017
XVI. Major related transaction
1. Related transaction with routine operation concerned
□ Applicable √ Not applicable
There was no related transaction with routine operation concerned in the report period.
2. Related transaction with acquisition of assets or equity, sales of assets or equity concerned
□ Applicable √ Not applicable
There was no related transaction with acquisition of assets or equity, sales of assets or equity concerned in the report period.
3. Related transaction with jointly external investment concerned
□ Applicable √ Not applicable
There was no related transaction with jointly external investment concerned in the report period.
4. Credits and liabilities with related parties
□ Applicable √ Not applicable
There were no credits and liabilities with related parties in the report period.
5. Other major related transaction
□ Applicable √ Not applicable
There was no other major related transaction in the report period.
XVII. Significant contracts and their implementation
1. Trusteeship, contracting and leasing
(1) Trusteeship
□ Applicable √ Not applicable
No trusteeship for the Company in the report period.
(2) Contract
□ Applicable √ Not applicable
No contract for the Company in the report period.
(3) Leasing
□ Applicable √ Not applicable
40
CSG Annual Report 2017
No leasing for the Company in the report period.
2. Major guarantees
√Applicable □ Not applicable
(1) Guarantee
Unit: RMB 0,000
Particulars about the external guarantee of the Company (Barring the guarantee for subsidiaries)
Guarante
Related
Actual date of Complete e for
Announce Actual
Name of the Company Guarantee happening (Date Guarantee Guarantee implemen related
ment guarantee
guaranteed limit of signing type term tation or party
disclosure limit
agreement) not (Yes or
date
no)
Guarantee of the Company for the subsidiaries
Guarante
Related
Actual date of Complete e for
Announce Actual
Name of the Company Guarantee happening (Date Guarantee Guarantee implemen related
ment guarantee
guaranteed limit of signing type term tation or party
disclosure limit
agreement) not (Yes or
date
no)
Chengdu CSG Glass Joint liability
2017-07-31 5,000 2017-08-16 5,000 1 year No No
Co.,Ltd. guarantee
Dongguan CSG
Joint liability
Architectural Glass 2017-07-31 11,200 2017-08-11 10,000 1 year No No
guarantee
Co., Ltd.
Dongguan CSG
Joint liability
Architectural Glass 2017-01-13 18,000 2017-02-09 13,000 1 year No No
guarantee
Co., Ltd.
Xianning CSG Glass Joint liability
2017-07-31 7,000 2017-08-11 2,000 1 year No No
Co., Ltd. guarantee
Xianning CSG Glass Joint liability
2017-07-31 10,000 2017-09-12 1,000 1 year No No
Co., Ltd. guarantee
Sichuan CSG Energy
Joint liability
Conservation Glass 2017-07-31 7,000 2017-08-11 2,000 1 year No No
guarantee
Co., Ltd.
Sichuan CSG Energy
Joint liability
Conservation Glass 2017-01-23 5,000 2017-04-11 2,000 1 year No No
guarantee
Co., Ltd.
Wujiang CSG Glass Joint liability
2016-08-12 10,000 2017-03-07 5,000 1 year No No
Co., Ltd. guarantee
Wujiang CSG Glass Joint liability
2017-11-27 10,000 2017-11-30 3,000 1 year No No
Co., Ltd. guarantee
41
CSG Annual Report 2017
Wujiang CSG East
Joint liability
China Architectural 2016-08-12 10,000 2017-04-28 6,000 1 year No No
guarantee
Glass Co., Ltd.
Wujiang CSG East
Joint liability
China Architectural 2017-11-27 10,000 2017-11-30 3,000 1 year No No
guarantee
Glass Co., Ltd.
Wujiang CSG East
Joint liability
China Architectural 2017-07-31 10,000 2017-09-14 10,000 1 year No No
guarantee
Glass Co., Ltd.
Dongguan CSG Solar Joint liability
2017-07-31 15,000 2017-12-14 3,300 1 year No No
Glass Co., Ltd. guarantee
Yichang Nanbo Joint liability
2017-05-31 3,648 2017-06-02 3,600 1 year No No
Display Co., Ltd. guarantee
Tianjin CSG
Joint liability
Energy-Saving Glass 2016-08-12 10,000 2017-02-14 2,000 1 year No No
guarantee
Co., Ltd.
Dongguan CSG Joint liability
2017-05-22 10,000 2017-06-15 4,680 1 year No No
PV-tech Co., Ltd. guarantee
Yichang CSG Joint liability
2017-08-07 6,600 2017-08-25 4,000 1 year No No
Polysilicon Co., Ltd. guarantee
Yichang CSG Joint liability
2017-06-23 30,000 2017-07-10 5,000 1 year No No
Polysilicon Co., Ltd. guarantee
Qingyuan CSG New
Joint liability
Energy-Saving 2017-09-15 5,000 2017-09-22 3,410 1 year No No
guarantee
Materials Co., Ltd.
Zhanjiang CSG New Joint liability
2017-07-31 9,000 2017-09-26 9,000 3 years No No
Energy Co., Ltd. guarantee
Xianning CSG
Joint liability
Photovoltaic Glass 2016-08-12 30,000 2017-01-03 19,000 3 years No No
guarantee
Co., Ltd.
Xianning CSG
Joint liability
Photovoltaic Glass 2017-07-31 20,000 2017-09-07 3,500 3 years No No
guarantee
Co., Ltd.
Yichang Nanbo
Joint liability
Photoelectric Glass 2017-05-22 5,472 2017-05-26 5,400 3 years No No
guarantee
Co., Ltd.
Yichang Nanbo
Joint liability
Photoelectric Glass 2016-12-14 2,432 2017-05-23 2,400 1 year No No
guarantee
Co., Ltd.
Yichang Nanbo 2017-05-22 10,032 2017-05-31 10,000 Joint liability 3 years No No
42
CSG Annual Report 2017
Photoelectric Glass guarantee
Co., Ltd.
Yichang CSG Joint liability
2017-05-22 20,000 2017-06-22 19,000 3 years No No
Polysilicon Co., Ltd. guarantee
Dongguan CSG Joint liability
2017-11-27 20,000 2017-12-20 20,000 3 years No No
PV-tech Co., Ltd. guarantee
Wujiang CSG Glass Joint liability
2017-08-28 30,000 2017-09-13 30,000 3 years No No
Co., Ltd. guarantee
Xianning CSG Glass Joint liability
2017-08-28 25,000 2017-09-18 25,000 3 years No No
Co., Ltd. guarantee
Dongguan CSG Solar Joint liability
2017-08-07 20,000 2017-09-22 20,000 3 years No No
Glass Co., Ltd. guarantee
Yichang CSG Joint liability
2017-06-23 20,000 2017-06-28 20,000 3 years No No
Polysilicon Co., Ltd. guarantee
Sichuan CSG Energy
Joint liability
Conservation Glass 2017-09-25 15,000 2017-09-30- 15,000 3 years No No
guarantee
Co., Ltd.
Hebei CSG Glass Co., Joint liability
2017-10-10 20,000 2017-10-30 20,000 3 years No No
Ltd. guarantee
Chengdu CSG Glass Joint liability
2017-09-25 20,000 2017-09-28 20,000 3 years No No
Co.,Ltd. guarantee
Qingyuan CSG New
Joint liability
Energy-Saving 2016-08-12 5,000 2016-12-14 735 1 year Yes No
guarantee
Materials Co., Ltd.
Wujiang CSG Glass Joint liability
2016-08-12 10,000 2017-04-01 2,000 1 year Yes No
Co., Ltd. guarantee
Xianning CSG
Joint liability
Energy-saving Glass 2016-01-05 10,000 2016-03-17 1,200 3 years Yes No
guarantee
Co., Ltd.
Wujiang CSG East
Joint liability
China Architectural 2016-12-14 10,000 2017-05-22 1,000 1 year Yes No
guarantee
Glass Co., Ltd.
Wujiang CSG East
Joint liability
China Architectural 2015-06-15 15,000 2016-01-28 10,000 1 year Yes No
guarantee
Glass Co., Ltd.
Dongguan CSG
Joint liability
Architectural Glass 2017-01-13 18,000 2017-02-09 7,000 1 year Yes No
guarantee
Co., Ltd.
Xianning CSG Glass 2016-08-12 10,000 2016-08-16 800 Joint liability 1 year Yes No
43
CSG Annual Report 2017
Co., Ltd. guarantee
Xianning CSG
Joint liability
Energy-saving Glass 2016-08-12 10,000 2016-08-16 2,600 1 year Yes No
guarantee
Co., Ltd.
Dongguan CSG
Joint liability
Architectural Glass 2016-08-12 11,200 2016-08-19 10,000 1 year Yes No
guarantee
Co., Ltd.
Sichuan CSG Energy
Joint liability
Conservation Glass 2016-03-23 13,000 2016-04-16 2,000 1 year Yes No
guarantee
Co., Ltd.
Dongguan CSG Solar Joint liability
2016-03-23 15,000 2016-08-19 1,400 1 year Yes No
Glass Co., Ltd. guarantee
Dongguan CSG Solar Joint liability
2016-03-23 15,000 2016-08-19 417 1 year Yes No
Glass Co., Ltd. guarantee
Dongguan CSG Solar Joint liability
2016-03-23 15,000 2016-08-19 1,483 1 year Yes No
Glass Co., Ltd. guarantee
Dongguan CSG
Joint liability
Architectural Glass 2016-08-12 11,200 2016-08-19 10,000 1 year Yes No
guarantee
Co., Ltd.
Total amount of actual
Total amount of approving
occurred guarantee for
guarantee for subsidiaries in report 397,952 376,925
subsidiaries in report period
period (B1)
(B2)
Total balance of actual
Total amount of approved
guarantee for subsidiaries at
guarantee for subsidiaries at the 460,384 326,290
the end of reporting period
end of reporting period (B3)
(B4)
Guarantee of subsidiaries for subsidiaries
Guarante
Related
Actual date of Complete e for
Announce Actual
Name of the Company Guarantee happening (Date Guarantee Guarantee implemen related
ment guarantee
guaranteed limit of signing type term tation or party
disclosure limit
agreement) not (Yes or
date
no)
Total amount of guarantee of the Company( total of three abovementioned guarantee)
Total amount of approving Total amount of actual
guarantee in report period 397,952 occurred guarantee in report 376,925
(A1+B1+C1) period (A2+B2+C2)
Total amount of approved Total balance of actual
guarantee at the end of report 460,384 guarantee at the end of 326,290
period (A3+B3+C3) report period (A4+B4+C4)
The proportion of the total amount of actual guarantee in the net
38.57%
assets of the Company(that is A4+ B4+C4)
44
CSG Annual Report 2017
Including:
Amount of guarantee for shareholders, actual controller and its
0
related parties(D)
The debts guarantee amount provided for the guaranteed parties
0
whose assets-liability ratio exceed 70% directly or indirectly(E)
Proportion of total amount of guarantee in net assets of the
0
Company exceed 50%(F)
Total amount of the aforesaid three guarantees(D+E+F) 0
The Company shall bear joint and several liabilities in guarantee
Explanations on possibly bearing joint and several liquidating
range if the subsidiaries fail to fulfill the obligation of
responsibilities for undue guarantees (if any)
repayment.
Explanations on external guarantee against regulated procedures Nil
(2) Illegal external guarantee
□ Applicable √ Not applicable
No Illegal external guarantee in the report period.
3. Entrust others to manage cash assets
(1) Entrusted Financing
√Applicable □ Not applicable
Overview of Entrusted Financing in the report period
Unit: RMB 0,000
Overdue outstanding
Type Sources of funds Amount of occurrence Unexpired balance
amount
Bank financial products Own funds 49,600 0 0
Brokerage financial
Own funds 5,000 5,000 0
products
Total 54,600 5,000 0
The specific circumstances of high-risk entrusted financing with large individual amount or low security, poor liquidity, and no cost
protection
□ Applicable √ Not applicable
Entrusted financing appears to be unable to recover the principal or there may be other circumstances that may result in impairment
□ Applicable √ Not applicable
(2) Entrusted loans
□ Applicable √ Not applicable
The Company had no entrusted loans in the report period.
45
CSG Annual Report 2017
4. Other material contracts
□ Applicable √ Not applicable
No other material contracts for the Company in the report period.
XVIII. Social responsibilities
1. Performance of social responsibilities
2017Annual Social Responsibilities Report of CSG was the 10th year the Company consecutively released social responsibilities
report. The report emphasized the year of 2017, systemically formulated the Company concrete actions of how to positively perform
the social duties, and the efforts to implement the scientific development perspective, build a harmonious society, and advance the
sustainable development of economic society. See the full report on www.cninfo.com.cn.
2. Circumstances related to environmental protection
Whether the listed company and its subsidiaries belong to the key pollutant discharge units announced by the environmental
protection department
Name of
Numb Exhaust Implementatio
Name of major Emission Total
Way of er of vent n of pollutant Approved Excessive
Company ro pollutants and concentratio amount of
emission Exhau distributio emission total emission emissions
subsidiary characteristic n emission
st vent n standards
contaminants
Dust≤30mg
《Emission st
Discharge a /m； Dust＜17t/ Particulates(D
andard of air
fter the trea soot≤40 m a；Soot≤33. ust, Soot):96. Reach th
Xianning Dust＼soot＼ pollutants for
tment of de g/m； 92/a；SO2≤ 82t/a；SO2:63 e dischar
CSG Glass SO2＼nitroge 16 Chimney flat glass indu
nitrification SO2≤200 144.64t/a；N 6.5t/a Nitroge ge standa
Co., Ltd. n oxide stry》
and dust r mg/m； Ox≤251.85t n oxides: 111 rd.
(GB26453-201
emoval NOx≤350 /a。 3.89t/a
1)
mg/m；
Construction and operation of pollution prevention and control facilities
The Company has built flue gas dust removal and denitrification system on production lines. The system runs normally, and the
emission of exhaust gas meets regulations.
The environmental impact assessment of construction projects and other environmental protection license
In 2017, the project for the construction of a photoconductive material production line for light guide plates of Xianning CSG
Photovoltaic Glass Co., Ltd. was newly launched, and environmental impact assessments have been carried out and approved.The
secondary companies have effectively carrying out the “Three Simultaneous” procedures for all other new and old projects, and have
been rewarded with the pollutant discharge license within the validity period. They timely declared the pollutant discharge, carried
out the monitoring and reporting of pollutant discharge and paid the pollutant discharge fee according to the relevant regulations of
the state.
46
CSG Annual Report 2017
Emergency response plan system of environment incident
In accordance with the national requirements, all secondary companies prepared emergency environmental response plan for
environment incident, organized and carried out expert evaluation and put on record in the local environmental protection department
as required, conducted the emergency drill against environmental incidents. And there were no major environmental incidents
occurred throughout the year.
Environmental self-monitoring scheme
In accordance with provisions of national laws and regulations and the requirements put forward in the assessment documents of the
environment impact of construction project and reply, the secondary companies built on-line monitoring equipment for waste water
and waste gas which are put into operation normally. They compared and reviewed the effectiveness of the on-line monitoring facilities
on a regular basis. Besides, they also entrusted the third party units to carry out the manual monitoring of the environment and fully
monitor the discharge of the pollutants.
Other environmental information to be disclosed
Those key monitored secondary companies above municipal level disclosed their environment protection status and made regular
updating through websites, display cards, environmental information platform and other ways.
Other information related to environment protection
CSG always attaches great importance to environmental protection work, actively fulfills its social responsibility, adheres to the
development road of energy saving, emission reduction, low carbon and environmental protection. It made remarkable achievements
in daily environmental management and the reduction of pollutant discharge, and was praised by the government department. For
example, Xianning CSG was awarded with the title of “2017 Environmental Protection Outstanding Unit in High-Tech Zone” by the
Work Committee of Xianning New Technology Industry Development Zone and the Management Committee of Xianning High-tech
Industrial Development Zone.
XIX. Statement on other important matters
√Applicable □ Not applicable
1. The Termination of Non-public offering of A-share
The Company convened the first interim shareholders’ meeting on July 2, 2015, which deliberated and approved the Proposal of
Non-public Offering of A-share to Specific Investors and related Proposals. The resolution on the non-public offering of shares of the
Company was valid within twelve months after it has been approved by the shareholders’ meeting.
As of July 2, 2016, the Company’s proposal of non-public offering of A-share hadn’t obtained a written approval document from the
China Securities Regulatory Commission. As a result, the proposal of non-public offering of A-share was lapsed automatically
according to the related provisions of China Securities Regulatory Commission and Shenzhen Stock Exchange. The Company
publicized the Accouchement of CSG on the Expiration of the Proposal of Non-public Offering of A-share on July 4, 2016
(Announcement No.:2016-030).
Afterwards, the Company and the sponsor institution respectively submitted the application for withdrawing the application for
non-public offering of shares. On Feb. 7, 2017, the Company received the Notification of China Securities Regulatory Commission
on Terminating the Application for Administration Permission (No.[2017]17) ,according to which, China Securities Regulatory
Commission decided to terminate the examination of the Company’s application for non-public offering of shares. The Company
publicized the Announcement on Receiving the Notification of China Securities Regulatory Commission to Terminate the Application
47
CSG Annual Report 2017
for Administration Permission On Feb. 8, 2017 (Announcement No.:2017-009).
2. Short-term Financing Bills
On Dec.14, 2016, the second extraordinary shareholders’ general meeting of 2016 of CSG deliberated and approved the proposal of
the offering and registration of short-term financing bills, and agreed the Company’s registration and issuance of short-term financing
bills with a total amount of RMB 2.7 billion, which could be issued by stages within period of validity of the registration according to
the Company’s actual demands for funds and the status of inter-bank funds. However, the term of each issue shall not be longer than
one year and the registered quota shall not exceed 40 percent of the Company’s net assets.
3. Ultra-short-term financing bills
On 10 December 2014, the First Extraordinary Shareholders’ General Meeting 2014 of CSG Holding Co., Ltd deliberated and
approved the proposal of application for registration and issuance of ultra-short-term financing bills with registered capital of RMB 4
billion at most and validity within 2 years. On 21 May 2015, National Association of Financial Market Institutional Investors
(NAFMII) held the 32nd registration meeting of 2015, in which NAFMII decided to accept the registration of the Company’s
ultra-short-term financing bills, amounting to RMB 4 billion and valid for two years. China Merchants Bank Co., Ltd., Shanghai
Pudong Development Bank Co., Ltd., Industrial Bank Co., Ltd., China CITIC Bank Co., Ltd. and China Agriculture Bank Co., Ltd.
were joint lead underwriters of these ultra-short-term financing bills, which could be issued by stages within period of validity of the
registration. On 17 May 2016, the Company issued the second batch of ultra-short-term financing bills for the year of 2016 with total
amount of RMB 0.9 billion and valid term of 270 days at the issuance rate of 4.18%, which has been redeemed on 13 February 2017.
On 2 August 2016, the Company issued the third batch of ultra-short-term financing bills for the year of 2016 with total amount of
RMB 0.6 billion and valid term of 270 days at the issuance rate of 3.67%, which has been redeemed on 1 May 2017. On Sep. 1, 2016,
the Company issued the forth batch of ultra-short-term financing bills for the year of 2016 with total amount of RMB 0.5 billion and
valid term of 270 days at the issuance rate of 3.5%, which has been redeemed on 2 June 2017.
For details, please refer to www.chinabond.com.cn and www.chinamoney.com.cn.
4. Perpetual bonds
On April 15, 2016, the Shareholders’ General Meeting 2015 of CSG deliberated and approved the proposal of application for
registration and issuance of perpetual bonds, and agreed the Company to register and issue perpetual bonds with total amount of
RMB 3.1 billion which could be issued by stages within period of validity of the registration according to the Company’s actual
demand for funds and the capital status of inter-bank market.
5. Medium-term notes
On 10 December 2014, the First Extraordinary Shareholders’ General Meeting 2014 of CSG Holding Co., Ltd deliberated and
approved the proposal of application for registeration and issuance of medium term notes with total amount of RMB 1.2 billion at
most. On 21 May 2015, National Association of Financial Market Institutional Investors (NAFMII) held the 32nd registration
meeting of 2015, in which NAFMII decided to accept the registration of the Company’s medium term notes, amounting to RMB 1.2
billion and valid for two years. China Merchants Bank Co., Ltd. and Shanghai Pudong Development Bank Co., Ltd. were joint lead
underwriters of these medium term notes which could be issued by stages within period of validity of the registration.On 10 July
2015, the Company issued the first batch of medium term notes with total amount of RMB 1.2 billion and valid term of 5 years at the
issuance rate of 4.94%, which will be redeemed on 14 July 2020.
On April 15, 2016, the Shareholders’ General Meeting of 2015 of CSG deliberated and approved the proposal of application for
registration and issuance of medium term notes with total amount of RMB 0.8 billion, which could be issued by stages within period
of validity of the registration according to the Company’s actual demands for funds and the status of inter-bank funds. On 2 March
48
CSG Annual Report 2017
2018, National Association of Financial Market Institutional Investors (NAFMII) held the 14th registration meeting of 2018, in which
NAFMII decided to accept the registration of the Company’s medium term notes, amounting to RMB 0.8 billion and valid for two
years. Shanghai Pudong Development Bank Co., Ltd. and China CITIC Bank Corporation Limited were joint lead underwriters of
these medium term notes which could be issued by stages within period of validity of the registration.
On May 22, 2017, the Shareholders’ General Meeting of 2016 of CSG deliberated and approved the proposal of application for
registration and issuance of medium term notes with total amount of RMB 1 billion, which could be issued by stages within period of
validity of the registration according to the Company’s actual demands for funds and the status of inter-bank funds.
For details, please refer to www.chinabond.com.cn and www.chinamoney.com.cn.
XX. Significant events of subsidiaries of the Company
□ Applicable √ Not applicable
49
CSG Annual Report 2017
Section VI. Changes in Shares and Particulars about Shareholders
I. Changes in Share Capital
1. Changes in Share Capital
Unit: Share
Before the Change Increase/Decrease in the Change (+, -) After the Change
Capitalization
Proportion New shares Bonus Proportion
Amount of public Others Subtotal Amount
(%) issued shares (%)
reserve
I. Restricted shares 12,736,888 0.61% 97,511,654 0 -12,475,982 85,035,672 97,772,560 3.94%
1. State-owned shares
2. State-owned legal
person’s shares
3. Other domestic shares 12,736,888 0.61% 97,511,654 0 -12,475,982 85,035,672 97,772,560 3.94%
Including: Domestic
legal person’s shares
Domestic natural
12,736,888 0.61% 97,511,654 0 -12,475,982 85,035,672 97,772,560 3.94%
person’s shares
4. Foreign shares
Including: Foreign legal
person’s shares
Foreign natural
person’s shares
II. Unrestricted shares 2,062,598,672 99.39% 0 311,300,333 12,475,982 323,776,315 2,386,374,987 96.06%
1. RMB Ordinary shares 1,300,128,680 62.65% 0 196,912,735 12,475,982 209,388,717 1,509,517,397 60.77%
2. Domestically listed
762,469,992 36.74% 0 114,387,598 0 114,387,598 876,857,590 35.30%
foreign shares
3. Overseas listed
foreign shares
4. Others
III.Total shares 2,075,335,560 100% 97,511,654 311,300,333 0 408,811,987 2,484,147,547 100%
Reason for equity changes
√Applicable □Not applicable
1. Within the report period, the total shares of the Company rose by 97,511,654 due to the implementation of restricted share
incentive plan.
2. The total share of the Company rose by 311,300,333 due the implementation of the implementation of 2016 profit distribution and
capitalization of capital reserve.
3. Due to changes in the posts of directors, supervisors and other senior management of the Company, the restricted shares held by
50
CSG Annual Report 2017
the senior management of the Company were adjusted consequently according to the provisions of the Shenzhen branch of the China
Securities Registration and Shenzhen Branch of China Securities Depository and Clearing Corporation Limited and as a result, the
restricted shares and non-restricted shares of the Company changed accordingly.
Approval on equity changes
√Applicable □Not applicable
1. 2016 profit distribution and the capitalization of capital reserve propose was deliberated and approved on the 19th Meeting of the
7th Session of Board of Directors held on Apr. 27, 2017 and 2016 Annual General Meeting of Shareholders held on May 22, 2017.
2. The restricted share incentive plan of the Company were deliberated and approved on the 3rd Meeting of the 8th Session of b Board
of Directors and the 3rd Meeting of the 8th Session of Supervisor Committee convened on Oct. 10. 2017, and eventually deliberated
and approved on the 5th Extraordinary General Meeting of Shareholders of 2017 convened on Oct. 26, 2017.
Transfer of ownership of changes in shares
√Applicable □Not applicable
1. The A-share registration date for 2016 annual profit distribution and the capitalization of capital reserve was on Jul. 19, 2017 and
the ex-dividend date was Jul. 19, 2017. A-shares bonus (or capitalized) were directly recorded in the stockholders’ A-share accounts
on July 19, 2017. The registration date and ex-dividend date of B shares were July 21, 2017 and July 19, 2017 respectively. B-shares
bonus (or capitalized) were directly recorded in shareholders’ B-share accounts on Jul. 21, 2017.
2. The first granting date of the company’s restricted stock incentive plan is Dec. 11, 2017, and the first granted restricted shares
shall not permitted for trading until Dec. 25, 2017.
3. On Jan. 11, 2017, Mr. Zhao Peng was elected as the employee representative supervisor of the 7th Session of the Supervisor
Committee of the Company in the First Staff Congress of the Company and therefore 75% or 1875 shares of the Company held by
him were classified as executive locked stocks. On Apr. 13, 2017, Mr. Zhao Peng was elected as the employee representative
supervisor of 8th of the Supervisor Committee of the Company in the Second Staff Congress of the Company in 2017 and therefore
75% or 1875 shares of the Company held by him were reclassified as executive locked stocks. Due to the profit distribution and
capitalization of capital reserve on Jul. 21, 2017, the shares held by Mr. Zhao Peng rose by 375 shares and 75% or 281 shares added
were classified as executive locked stocks.
4. On Feb. 23, 2017, the interim meeting of the 7th Session of Board of Directors of the Company deliberated and approved the
Proposal for Employing Senior Management in which Mr. Li Weinan was elected as Vice President of the Company. And as a result,
75% or 225,000 shares held by him was classified as executive locked stocks. On May 2, 2017, the 1st Meeting of the 8th Session of
Board of Directors of the Company deliberated and approved the Proposal for Employing the New Session of Senior Management
where Mr. Li Weinan was elected as Vice President of the Company. And as a result, 75% or 225,000 shares held by him were
classified as executive locked stocks. Due to the profit distribution and capitalization of capital reserve on Jul. 19, 2017, the shares
held by Mr. Li Weinan rose by 45,000 shares and 75% or 33, 750 added were classified as executive locked stocks.
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common
shareholders of Company in the latest year and period
√Applicable □ Not applicable
51
CSG Annual Report 2017
Please refer to the main accounting data and financial indicators in this report for the details of the impact of stock changes.
Other information necessary to be disclosed or need to be disclosed under requirement from security regulators
□Applicable √ Not applicable
2. Changes of restricted shares
√Applicable □ Not applicable
Unit: Share
Number of Number of Number of Number of
Shareholder shares shares new shares shares
Restriction reasons Released date
s’ name restricted at released in restricted in restricted at
Period-begin the Year the Year Period-end
On 15 November 2016, Zeng Nan
who used to be chairman of the Board
of Directors of the Company resigned
Zeng Nan 4,500,388 4,500,388 0 0 from his office. According to relevant 2017-5-16
requirements, all the shares held by
him had to be locked up for six
months.
On 15 November 2016, Wu Guobin
who used to be CEO of the Company
resigned from his office. According to
Wu Guobin 1,810,000 1,810,000 0 0 2017-5-16
relevant requirements, all the shares
held by him had to be locked up for
six months.
On 15 November 2016, Luo Youming
who used to be CFO of the Company
Luo resigned from his office. According to
1,790,000 1,790,000 0 0 2017-5-16
Youming relevant requirements, all the shares
held by him had to be locked up for
six months.
On 15 November 2016, Ke Hanqi
who used to be vice president of the
Company resigned from his office.
Ke Hanqi 1,730,000 1,730,000 0 0 2017-5-16
According to relevant requirements,
all the shares held by him had to be
locked up for six months.
On 15 November 2016, Zhang Fan
who used to be vice president of the
Zhang Fan 1,530,000 1,530,000 0 0 Company resigned from his office. 2017-5-16
According to relevant requirements,
all the shares held by him had to be
52
CSG Annual Report 2017
locked up for six months.
On 15 November 2016, Zhang
Bozhong who used to be vice
president of the Company resigned
Zhang
114,000 114,000 0 0 from his office. According to relevant 2017-5-16
Bozhong
requirements, all the shares held by
him had to be locked up for six
months.
On 16 November 2016, Ding Jiuru
who used to be Secretary of the Board
of Directors of the Company resigned
Ding Jiuru 1,050,000 1,050,000 0 0 from his office. According to relevant 2017-5-17
requirements, all the shares held by
him had to be locked up for six
months.
On 12 August 2016, Zhou Hong who
used to be Secretary of the Board of
Directors of the Company resigned
Zhou Hong 212,500 212,500 0 0 from her office. According to relevant 2017-2-13
requirements, all the shares held by
her had to be locked up for six
months.
According to the
implementation of
the Company's
restricted stock
equity incentive plan
to implement the
Awarded equity incentives on
Chen Lin 0 0 3,207,639 3,207,639 lifting of the
December 11, 2017
restriction period,
after the ban is lifted,
the shares held by the
executives will be
locked according to
relevant policies.
According to the
implementation of
the Company's
Awarded equity incentives on restricted stock
Lu Wenhui 0 0 2,405,729 2,405,729
December 11, 2017 equity incentive plan
to implement the
lifting of the
restriction period,
53
CSG Annual Report 2017
after the ban is lifted,
the shares held by the
executives will be
locked according to
relevant policies.
Executive locked
stocks of 258,750
will be locked up for
a long time.
According to the
implementation of
Executive locked stocks of 258,750 the Company's
shares and 2,291,170 shares of equity restricted stock
Li Weinan 0 0 2,549,920 2,549,920
incentives awarded on December 11, equity incentive plan
2017 to implement the
lifting of the
restriction period,
after the ban is lifted,
the shares added will
be locked according
to relevant policies.
According to the
implementation of
the Company's
restricted stock
equity incentive plan
to implement the
Awarded equity incentives on
He Jin 0 0 1,600,000 1,600,000 lifting of the
December 11, 2017
restriction period,
after the ban is lifted,
the shares held by the
executives will be
locked according to
relevant policies.
According to the
implementation of
the Company's
restricted stock
Awarded equity incentives on
Yang Xinyu 0 0 2,291,170 2,291,170 equity incentive plan
December 11, 2017
to implement the
lifting of the
restriction period,
after the ban is lifted,
54
CSG Annual Report 2017
the shares held by the
executives will be
locked according to
relevant policies.
According to the
implementation of
Core the Company's
Managemen Awarded equity incentives on restricted stock
0 0 62,410,653 62,410,653
t Team (108 December 11, 2017 equity incentive plan
persons) to implement the
lifting of the
restriction period
According to the
Technology implementation of
and the Company's
Business Awarded equity incentives on restricted stock
0 0 23,305,293 23,305,293
Backbone December 11, 2017 equity incentive plan
(341 to implement the
persons) lifting of the
restriction period
Executive locked stocks of of 2156
Zhao Peng 0 0 2,156 2,156 Long-term locked
shares
Total 12,736,888 12,736,888 97,772,560 97,772,560 -- --
Note: In case the unlocking conditions of the restricted stock incentive plan is satisfied, the restricted shares Unlock in three phases
after 12 months from the date of grant: 40% of the restricted stocks will be available for circulation within the period (from the first
trading day following the lock-up period of 12 months to the last trading day of lock-up period of 24 months), 30% of the restricted
stocks will be available for circulation within the period (from the first trading day following the lock-up period of 24 months to the
last trading day of the lock-up period of 36 months), and 30% of the restricted stocks will be available for circulation within the
period (from the first trading day following the lock-up period of 36 months to the last trading day of the lock-up period of 48
months).
II. Issuance and listing of Securities
1. Security issued (excluding preferred stock) in the report period
√Applicable □ Not applicable
Number of
Name of stock and Issue price
permitted Transaction
its derivative Issue date (or interest Issue volume Listing date
trading termination date
securities rate)
transactions
Stock class
Southern Glass A December 11, 2017 4.28 97,511,654 December 25, 97,511,654
55
CSG Annual Report 2017
2017
Explanation of the issuance of securities (excluding preferred shares) during the reporting period
On Oct. 10, 2017, the 3rd Meeting of the 8th Board of Directors of the Company deliberated and approved 2017 Restricted A- shares
Incentive Plan of CSG Holding Co., Ltd (Draft )and its summary, the Management Method of the Implementation and Review of
2017 Restricted A-shares Incentive Plan of CSG Holding Co., Ltd and the Resolution on Applying the General Meeting of
Shareholders to Authorize the Board of Directors to Deal With the Related Matters on the Company’s 2017 Restricted A-shares
Incentive Plan. The above contents are detailed in the Announcement of the Resolution on the Third Meeting of the Eighth Session of
the Board of Directors published inwww.cninfo.com.cn (Announcement No.: 2017-063). The Company’s independent directors
issued independent opinions on the issues involved with restricted A- shares incentive plan.
On Oct. 26, 2017, the Company convened the 5th Extraordinary General Meeting in 2017, which deliberated and approved the above
three proposals. The Resolution on Adjusting the Object and Quantity Granted of 2017 Restricted A-share Incentive Plan and the
Resolution on Firstly Granted Restricted Shares to the Object of 2017 Restricted A-share were deliberated and approved on the
21stprovisional meeting of the eighth session board of directors convened on Dec. 11th, 2017. It determined to grant 97,511,654
restricted shares to 454 objects, with price at RMB 4.28/share. The reserved restricted shares was 17,046, 869 shares.
The granting of shares was completed on Dec. 25, 2017 and the specific content was detailed in the Announcement on Completing
the First Granting of 2017 Restricted Shares disclosed in www.cninfo.com.cn on Dec. 22, 2017 (Announcement No.:2017-079).
2. Particulars about changes of total shares and shareholder structure as well as changes of assets and
liability structure
√Applicable □ Not applicable
1. Statement on profit distribution plan and capitalization of capital reserve plan of the Company in 2016: based on 2,075,335,560
shares of the total share capital while dividends will be distributed, distributing cash dividend of RMB 1.00 (tax included) for every
10 shares to all shareholders. Meanwhile the Company will transfer capital reserve into capital with 1.5 shares for every 10 shares to
all shareholders based on 2,075,335,560 shares of the total share capital. The program was completed on July 21, 2017.
2. During the report period, the Company issued 97,511,654 restricted stocks to 454 incentive targets. The initial grant date for this
restricted stock was December 11, 2017, and the share capital was increased to 2,484,147,547 shares after the grant was completed. The
listing date for the initial grant of shares was December 25, 2017.
3. Existing internal staff shares
□ Applicable √ Not applicable
III. Particulars about shareholder and actual controller of the Company
1. Amount of shareholders of the Company and particulars about shares holding
Unit: Share
Total preference
Total shareholders at Total preference
Total shareholders at shareholders with
the end of the month shareholders with voting
the end of the report 165,330 157,660 N/A voting rights recovered N/A
before this annual rights recovered at end of
period at end of the month
report disclosed report period (if
before this annual
56
CSG Annual Report 2017
applicable) report disclosed (if
applicable)
Shareholder with above 5% shares hold or top 10 shareholders
Full name of Shareholders Nature of Proportion Total shares Changes in Amou Amount of Number of share
shareholder of shares held at the report period nt of un-restricted pledged/frozen
held (%) end of report restrict shares held
Share Amount
period ed
status
shares
held
Domestic non
Foresea Life Insurance Co., Ltd.
state-owned 14.84% 368,685,276 48,089,384 368,685,276
– Haili Niannian
legal person
Domestic non
Foresea Life Insurance Co., Ltd.
state-owned 3.77% 93,616,606 12,210,862 93,616,606
– Universal Insurance Products
legal person
Domestic non
Shenzhen Jushenghua Co., Ltd. state-owned 2.76% 68,484,938 8,932,818 68,484,938 pledged 68,484,915
legal person
Domestic non
Foresea Life Insurance Co., Ltd.
state-owned 2.06% 51,197,756 6,677,968 51,197,756
– Own Fund
legal person
Central Huijin Asset State-owned
1.84% 45,782,995 5,971,695 45,782,995
Management Ltd. legal person
China Galaxy International
Foreign legal
Securities (Hong Kong) Co., 1.30% 32,396,045 3,703,833 32,396,045
person
Limited
China Merchants Securities State-owned
1.05% 26,056,708 -4,060,347 26,056,708
(HK) Co., Limited legal person
Domestic non
Shenzhen International Holdings
state-owned 0.93% 23,000,000 3,000,000 23,000,000
(SZ) Limited
legal person
VANGUARD EMERGING
Foreign legal
MARKETS STOCK INDEX 0.61% 15,272,911 1,992,119 15,272,911
person
FUND
Domestic
Wang Heng 0.54% 13,505,541 8,552,035 13,505,541
natural person
Strategic investors or general legal N/A
person becomes top 10 shareholders
due to shares issued (if applicable)
57
CSG Annual Report 2017
Explanation on associated Among shareholders as listed above, Foresea Life Insurance Co., Ltd.-Haili Niannian, Foresea
relationship among the aforesaid Life Insurance Co., Ltd.-Universal Insurance Products, Foresea Life Insurance Co., Ltd.-Own
shareholders Fund are all held by Foresea Life Insurance Co., Ltd. Shenzhen Jushenghua Co., Ltd. is a
related legal person of Foresea Life Insurance Co., Ltd. and Chengtai Group Co., Ltd., another
related legal person of Foresea Life Insurance Co., Ltd, which held 31,769,094 shares via
China Galaxy International Securities (Hong Kong) Co., Limited.
Except for the above-mentioned shareholders, It is unknown whether other shareholders
belong to related party or have associated relationship regulated by the Management
Regulation of Information Disclosure on Change of Shareholding for Listed Companies.
Particular about top ten shareholders with un-restrict shares held
Amount of un-restrict Type of shares
Shareholders’ name shares held at
Type Amount
year-end
Foresea Life Insurance Co., Ltd. – Haili Niannian 368,685,276 RMB ordinary shares 368,685,276
Foresea Life Insurance Co., Ltd. – Universal Insurance
93,616,606 RMB ordinary shares 93,616,606
Products
Shenzhen Jushenghua Co., Ltd. 68,484,938 RMB ordinary shares 68,484,938
Foresea Life Insurance Co., Ltd. – Own Fund 51,197,756 RMB ordinary shares 51,197,756
Central Huijin Asset Management Ltd. 45,782,995 RMB ordinary shares 45,782,995
China Galaxy International Securities (Hong Kong) Co., Domestically listed
32,396,045 32,396,045
Limited foreign shares
Domestically listed
China Merchants Securities (HK) Co., Limited 26,056,708 26,056,708
foreign shares
Shenzhen International Holdings (SZ) Limited 23,000,000 RMB ordinary shares 23,000,000
VANGUARD EMERGING MARKETS STOCK INDEX Domestically listed
15,272,911 15,272,911
FUND foreign shares
Wang Heng 13,505,541 RMB ordinary shares 13,505,541
Among shareholders as listed above, Foresea Life Insurance Co., Ltd.-Haili Niannian, Foresea
Life Insurance Co., Ltd.-Universal Insurance Products, Foresea Life Insurance Co., Ltd.-Own
Fund are all held by Foresea Life Insurance Co., Ltd. Shenzhen Jushenghua Co., Ltd. is a related
Statement on associated legal person of Foresea Life Insurance Co., Ltd. and Chengtai Group Co., Ltd., another related
relationship or consistent action legal person of Foresea Life Insurance Co., Ltd, which held 31,769,094 shares via China Galaxy
among the above shareholders: International Securities (Hong Kong) Co., Limited.
Except for the above-mentioned shareholders, It is unknown whether other shareholders belong
to related party or have associated relationship regulated by the Management Regulation of
Information Disclosure on Change of Shareholding for Listed Companies.
Explanation on shareholders
involving margin business (if N/A
applicable)
58
CSG Annual Report 2017
Whether the company’s top 10 common shareholders and the top 10 shareholders of ordinary shares subject to unlimited sales have
agreed to buy back transactions during the reporting period
□Yes √ No
2. Controlling shareholder of the Company
The nature of controlling shareholders: No holding body
The type of controlling shareholder: Not exist
Explanation on the Company without controlling shareholder
Currently the Company has no controlling shareholder. Foresea Life Insurance Co., Ltd. is the Company's largest shareholder that has
totally held 519,824,469 shares of the Company via Foresea Life Insurance Co., Ltd.–Haili Niannian, Foresea Life Insurance Co.,
Ltd.–universal insurance products, Foresea Life Insurance Co., Ltd.–own fund, Foresea Life Insurance Co., Ltd.–a combination of its
own funds together with Huatai till the end of the report period, which accounts for 20.93% of the Company’s total shares; its related
legal person Shenzhen Jushenghua Co., Ltd. held 68,484,938 shares, which accounts for 2.76% of the Company’s total shares; its
related legal person Chengtai Group Co., Ltd. held 40,876,749 shares of B-share via China Galaxy International Securities (Hong
Kong) Co., Ltd and Guosen Securities (Hong Kong) Brokerage Co., Limited, which accounts for 1.65% of the Company’s total shares.
Foresea Life Insurance and its related legal persons totally held 25.33% of the Company’s total shares, which is less than 30%,
meanwhile, the number of directors recommended by Foresea Life Insurance and its related legal persons was no more than half of
total number of the Company’s board of directors.
Other shareholders of the Company hold less than 5% of the shares.
Changes of controlling shareholders in the report period
□ Applicable √ Not applicable
3. Actual controller of the Company
The nature of actual controller: no actual controller
The type of actual controller: Not exist
Explanation on the Company without actual controller
Currently the Company has no controlling shareholder. Foresea Life Insurance Co., Ltd. is the Company's largest shareholder that has
totally held 519,824,469 shares of the Company via Foresea Life Insurance Co., Ltd.–Haili Niannian, Foresea Life Insurance Co.,
Ltd.–universal insurance products, Foresea Life Insurance Co., Ltd.–own fund, Foresea Life Insurance Co., Ltd.–a combination of its
own funds together with Huatai till the end of the report period, which accounts for 20.93% of the Company’s total shares; its related
legal person Shenzhen Jushenghua Co., Ltd. held 68,484,938 shares, which accounts for 2.76% of the Company’s total shares; its
related legal person Chengtai Group Co., Ltd. held 40,876,749 shares of B-share via China Galaxy International Securities (Hong
Kong) Co., Ltd and Guosen Securities (Hong Kong) Brokerage Co., Limited, which accounts for 1.65% of the Company’s total shares.
Foresea Life Insurance and its related legal persons totally held 25.33% of the Company’s total shares, which is less than 30%,
meanwhile, the number of directors recommended by Foresea Life Insurance and its related legal persons was no more than half of
total number of the Company’s board of directors.
Shareholders with over 10% shares held in ultimate controlling level
√Yes □No
Natural person
Shares held in ultimate controlling level
59
CSG Annual Report 2017
Whether to obtain the right of abode in other countries
Shareholders Nationality
or regions
Yao Zhenhua China No
Major occupations and duties Chairman of Shenzhen Baoneng Investment Group Co., Ltd.
Situation of holding domestic and abroad
N/A
listed companies over the past 10 years
Changes of actual controller in the report period
□ Applicable √ Not applicable
Property right and controlling relationship between the largest shareholder and the Company is as follow:
Yao Zhenhua
Shenzhen Baoneng Investment Group Co.,
Shenzhen Zheshang Baoneng
Shenzhen Baoneng Shenzhen Baoyuan Logistics
Industry Investment partnership
Chuangying Investment
Company Limited
67.40% 30%
0.68%
1.92%
Shenzhen Shenzhen Shenyue Shenzhen Kaixinheng Co., Ltd. Jinfeng Tongyuan Co,.
100%
Jushenghua Co., Holding Co., Ltd. Yueshang Ltd.
51% 20% 19.80% 4.6% 4.6%
Shenzhen
Hualitong
100%
Foresea Life Insurance Co., Ltd.
2.76%
Chengtai Group
Co., Ltd.
CSG Holding
1.65% Co., Ltd. 20.93%
60
CSG Annual Report 2017
Actual controller controlling of the Company by entrust or other assets management
□Applicable √Not applicable
4. Particulars about other legal person shareholders holding over 10% shares
□ Applicable √ Not applicable
5. Limitation on share reduction of controlling shareholders, actual controllers, Recombination party and
other commitment subjects
□ Applicable √ Not applicable
61
CSG Annual Report 2017
Section VII. Particulars about Directors, Supervisors, Senior
Executives and Employees
I. Changes of shares held by directors, supervisors and senior executives
Amount
Shares Amount of
of shares
End date held at shares Other Shares held
Working Start of office decrease at
Title Sex Age term period- increased in changes
Name status dated of d in this period-end(
office begin this period (share) Share)
term period
(Share) (Share)
(Share)
Chairman of Currently 2016-11- 2020-05-
Chen Lin Female 46 3,207,639 3,207,639
the Board in office 19 02
Secretary of
the Party
Wang Committee, Currently 2016-01- 2020-05-
Male 54
Jian Deputy in office 21 02
Chairman of
the Board
Jin Independent Currently 2016-12- 2020-05-
Male 61
Qingjun Director in office 14 02
Zhan Independent Currently 2016-12- 2020-05-
Male 54
Weizai Director in office 14 02
Zhu Independent Currently 2017-05- 2020-05-
Male 54
Guilong Director in office 02 02
Zhang Currently 2017-05- 2020-05-
Director Male 53
Jinshun in office 02 02
Ye Currently 2016-01- 2020-05-
Director Female 46
Weiqing in office 21 02
Cheng Currently 2016-01- 2020-05-
Director Female 36
Xibao in office 21 02
Pan Director & Currently 2017-02- 2020-05-
Male 49
Yonghong CEO in office 23 02
Chairman of
Zhang Currently 2017-01- 2020-05-
the supervisory Female 49
Wandong in office 13 02
board
Li Xinjun Supervisor Currently Male 50 2017-01- 2020-05-
62
CSG Annual Report 2017
in office 13 02
Zhao Currently 2017-01- 2020-04-
Supervisor Male 56
Peng in office 11 13
Lu Executive Vice Currently 2017-02- 2020-05-
Male 55 2,405,729 2,405,729
Wenhui President in office 23 02
Li Currently 2017-02- 2020-05-
Vice president Male 56 2,636,170 2,636,170
Weinan in office 23 02
Currently 2018-04- 2020-05-
Li Cuixu Vice president Male 43
in office 08 02
Currently 2018-04- 2020-05-
He Jin Vice president Male 46 1,600,000 1,600,000
in office 08 02
Yang Secretary of Currently 2017-05- 2020-05-
Male 38 2,291,170 2,291,170
Xinyu the Board in office 02 02
Independent Post 2012-04- 2017-05-
Fu Qilin Male 63
Director leaving 17 02
Chairman of
Long Post 2011-04- 2017-01-
the supervisory Male 62
Long leaving 15 13
board
Hong Post 2011-04- 2017-01-
Supervisor Male 63
Guo’an leaving 15 13
Yan Post 2014-03- 2017-01-
Supervisor Male 50
Wendou leaving 15 11
Total -- -- -- -- -- -- 12,140,708 12,140,708
II. Changes of directors, supervisors and senior executives
√Applicable □ Not applicable
Name Title Type Date Reason
Deputy
Wang Jian Chairman of the Be elected 2017-09-15 Election of deputy chairman of board
Board
Independent
Zhu Guilong Be elected 2017-05-02 Election the Board of Directors
Director
Zhang Jinshun Director Be elected 2017-05-02 Election the Board of Directors
Pan Yonghong Director Be elected 2017-05-02 Election the Board of Directors
Zhao Peng Supervisor Be elected 2017-01-11 Election of employee supervisor
Executive Vice Senior management employed by the Board
Lu Wenhui Be employed 2017-02-23
President of Directors
63
CSG Annual Report 2017
Senior management employed by the Board
Li Weinan Vice president Be employed 2017-02-23
of Directors
Senior management employed by the Board
Li Cuixu Vice president Be employed 2018-04-08
of Directors
Senior management employed by the Board
He Jin Vice president Be employed 2018-04-08
of Directors
Secretary of the Secretary employed by the Board of
Yang Xinyu Be employed 2017-05-02
Board Directors
Independent
Fu Qilin Post leaving 2017-05-2 The change of the board of directors
Director
Chairman of the
Long Long supervisory Post leaving 2017-01-13 Resigned
board
Hong Guo’an Supervisor Post leaving 2017-01-13 Resigned
Yan Wendou Supervisor Post leaving 2017-01-11 Resigned
III. Post-holding
Major professional background, working experience of directors, supervisors and senior executive and their major responsibility in
the Company at present
Chen Lin: took posts of General Manager Assistant in Shenzhen Juhua Investment and Development Co., Ltd., Department Manager,
General Manager Assistant, and Deputy General Manager in Shenzhen Shum Yip Logistics Group Co., Ltd. At present, she is
Deputy General Manager in Shenzhen Shum Yip Logistics Group Co., Ltd., Chairman of the Board of Supervisors of Foresea Life
Insurance Co., Ltd. and Chairman of Board of Supervisors of Xinjiang Qianhai United Property & Casualty Insurance Co., Ltd.,
Executive Director and General Manager of Shenghua Credit Co., Ltd., Chairman of Board of Shenzhen Baoyuan Logistics Co., Ltd,
Supervisor of Shenzhen Jushenghua Co., Ltd., Director of Guangdong Shaoneng Group Co., Ltd., Chairman of the Board of Baoneng
Automobile Co., Ltd., Chairman of the Board of Qoros Automobile Co., Ltd. and Chairman of the Board of the Company.
Wang Jian: took posts of General Manager and Executive Director of China North Industries Tianjin Corporation, General Manager
and senior consultant of China North Vehicle Co., Ltd., and Deputy Chairman and Chairman of Shanghai Nonferrous Metals
E-Commerce Co., Ltd., General Manager of investment management department of China North Industries Corporation, Chairman of
the Board of Chengdu Yinhe Dynasty Hotel Co., Ltd., Deputy Chairman of the Board of Shenzhen Baoyin Electricity Co., Ltd.,
Chairman of the Board of North Property Development Company Limited. At present he is Secretary of the Party Committee and
Deputy Chairman of the Company.
Jin Qingjun: took posts of the lawyer of Zhongxin Lawyer Firm and the partner of Xinda Lawyer Firm. He currently serves as the
partner of King & Wood Mallesons, the Independent Director of Invesco Great Wall Fund Management Company Limited,
Independent Director of Guo Tai Jun An Securities, Independent Director of Bank of Tianjin Co., Ltd, Independent Director of
Sino-Ocean Land Holdings Limited, Independent Director of Times Property Holding Limited, Director of Konka Group Co., Ltd,
External Supervisor of China Merchants Bank Co., Ltd, and Independent Director of the Company.
Zhan Weizai: took posts of Vice Manager of the financial department of Donghui Industrial Co., Ltd, General Manager Assistant of
Shenzhen Xili Hotel, Director and Chief Financial Officer of Shenzhen Qiaoshe Industry Co.,Ltd.., the Leader of the audit & law
department of Shenzhe Truism (Group) Company and Vice General Manager of Sinosafe General Insurance Company Limited. He
currently holds the post of Supervisor of Shenzhen Dewo Industrial Development Co., Ltd, Supervisor of Shenzhen Dewo
64
CSG Annual Report 2017
Investment Development Co., Ltd, Chairman of Board and Manager of Huazhang Investment Holding Co., Ltd, Independent Director
of Shenzhen Neptunus Bioengineering Co., Ltd., Independent Director of Hubei Zhenhua Chemical Co., Ltd, Independent Director
of Shenzhen Longood Intelligent Electric Co., Ltd., Independent Director of Shenzhen Liantronics Co., Ltd and Independent Director
of the Company.
Zhu Guilong: took posts of the researcher of the Institute of Forecasting and Development at Hefei University of Technology.
Currently, he is a professor and doctoral tutor of the School of Business Administration, South China University of Technology, and
holds a concurrent post of the Vice Chairman of Systems Engineering Society of China, Executive Director of Chinese Association
For Science of Science and S&T Policy, the Vice Chairman of Guangdong Institute of Technical Economy and Management
Modernization, and Guangdong Economic Society, the Independent Director of GRG BANKING EQUIPMENT CO., LTD., the
Independent Director of Jiangsu Saifutian Steel Cable Co., Ltd., Independent Director of Guangzhou Kingmed Diagnostics Group
Co., Ltd., and the Independent Director of the Company.
Zhang Jinshun: took posts of member of the Party Committee and Deputy President of the head office of Ping An Bank, as well as
Chairman of Board of Ping An Trust Co., Ltd. and the Secretary of the Party Committee. He currently serves as Deputy Chairman of
the Board of Shenzhen Baoneng Investment Group Co., Ltd., President and CEO of Shenzhen jushenghua Co., Ltd., Chairman of
Board of Foresea Life Insurance Co., Ltd., and Director of the Company.
Ye Weiqing: took posts of the Financial Administrator, Senior Vice President and Director of Shenzhen Baoneng Investment Group
Co., Ltd. At present, she is the Chairman of Board and General Manager of Shenzhen Jushenghua Co., Ltd., Director of Foresea Life
Insurance Co., Ltd., Chairman of Board and General Manager of Baoneng Real Estate Co., Ltd., Chairman of Board of Baoneng
South China Investment Co., Ltd, Executive Director and General Manager of Shenzhen Shining Asset Management Co., Ltd, the
Executive Director and General Manager of Qianhai E-payment Co., Ltd, Chairman of Board and General Manager of Shenzhen
Laihua Property Development Co., Ltd, Chairman of Board and General Manager of Shenzhen Liujin Plaza Investment Co., Ltd, the
Chairman of Board and General Manager of Shenzhen Shum Yip Logistics Center Investment Development Co., Ltd., Chairman of
Board and the Director of Shenzhen Baoneng Jianye Property Co., Ltd, Chairman of Board and General Manager of Shenzhen
Baoneng Century Property Development Co., Ltd. Chairman of Board and General Manager of All City Co., Ltd, Chairman of Board
and General Manager of Shenzhen Hualitong Investment Co., Ltd, Director of Shenzhen Baoyuan Logistics Co., Ltd, Chairman of
Board of Baoneng Hotel Investment Co., Ltd, Chairman of Board of Qinglan Industry(Shenzhen) Co., Ltd, Chairman of Board and
General Manager of Shenzhen Zhonglin Industry Development Co., Ltd, Director of Shenzhen Baoneng Investment Group Co., Ltd.
Director of Jonjee Hi-tech Industrial & Commercial Holding Co., Ltd., Director of Shenzhen Shum Yip Logistics Group Co., Ltd.
and Director of the Company.
Cheng Xibao: took posts of Deputy Manager and Manager of financial department of Huizhou Olympic Garden Co., Ltd., which is a
subsidiary of China Sports Group Industry, Manager of financial department of Shenzhen Xuansheng Investment Co., Ltd., which is
a subsidiary of Foxconn, and Manager, Vice President, Executive Vice President of financial department, President Assistant and
Vice President of Shenzhen Baoneng Investment Group Co., Ltd. At present, she is Vice President of Shenzhen Baoneng Investment
Group Co., Ltd. and Vice President of Shenzhen Jushenghua Co., Ltd., Vice President of Baoneng City Development and
Construction Group Co., Ltd., the Supervisor of Xinjiang Qianhai United Property & Casualty Insurance Co., Ltd., Director of
Foresea Life Insurance Co., Ltd. Director of Baoneng Automobile Co., Ltd., Director of Qoros Automobile Co., Ltd., Supervisor of
Guizhou Baoneng Automobile Co., Ltd. and Director of the Company.
Pan Yonghong: took posts of Director, Chief Financial Officer and General Manager of China Resources Cement Investment
Limited, General Manager and President of China Resources Cement Holdings Limited and Senior Vice President of China
Resources Asset Management Limited. He currently serves as Director of the Company and Chief Executive Officer of the
Company.
Zhang Wandong: took the post of the certified lawyer of Grandall (Shenzhen) Law Firm. She currently serves as the certified
lawyer of Guangdong Shu Jin Law Firm, Supervisor of Zhejiang Ruizhen Logistics Co., Ltd., Supervisor of Shanghai Jiajin Logistics
Co., Ltd., Supervisor of Zhejiang Ruizhen Supply China Management Co., Ltd., Supervisor of Yancheng Ruizhen Logistics Co., Ltd.,
65
CSG Annual Report 2017
Director of Shenzhen Sinotrix Software Co.,Ltd. and Chairman of the supervisory board of the Company.
Li Xinjun: took the post of the Chief Financial Officer of Shenzhen Zhongshanglong Industrial Co., Ltd. He currently serves as the
General Manager of Shenzhen Zhongzhun Certified Tax Agent Co., Ltd., Chairman of Board of Zhongzhun Certified Public
Accountants (Shenzhen) Office and Supervisor of the Company.
Zhao Peng: took posts of General Manager Assistant of Libi Composite Plastics (Shenzhen) Co., Ltd., Assistant to the Chairman of
Shenzhen Wanji Group Co., Ltd., Director of Kongfujia Wine Co., Ltd., General Manager of Shenwei Pharmaceutical Co., Ltd., Vice
General Manager and General Manager of Shenzhen Engineering, a subsidiary of the Company, the Assistant of the General
Manager and Vice General Manager of Wujiang Engineering, a subsidiary of the Company, the Assistant of the General Manager of
Tianjin Engineering, the original subsidiary of the Company and the Manager of the Research, Development and Investment
Management Department, the Operation Management Department and the Strategy Development Department of the Company. He
currently holds the post of the Director of the Strategy Department of the Company and the Employee Supervisor of the Company.
Mr. Lu Wenhui: took posts of Vice General Manager of the Company and General manager of Float Glass Business Department of
the company, the vice president of the company and the general manager of the Engineering and Automotive Glass Business
Department of the company, the chief economy expert of the company, the manager of Enterprise Operation Department, the vice
president of the Solar Business Department, the vice president of the company and the president of the Fine Glass Business
Department, and the president of Shenzhen Monitor Company, a subsidiary company. At present, he is the executive vice president
and the president of the Intelligent Electronic Display Business Department.
Li Weinan: took posts of the manager of the company’s Securities Investment Department and the manager of Operation
Department, the assistant of the company’s president and the general manager of Dongguan Solar Energy Company, the general
manager of Dongguan PV, the general manager of CSG (Yichang), the executive vice president of the company, the president of the
Solar Business Department, and the president of the Electronic Glass and Display Parts Department. He is presently the vice
president of the company.
Li Cuixu: took posts of the director of the Safety Production Department of Hebei Shijiazhuang New Cast Pipe Co., Ltd., the project
manager, assistant general manager and deputy general manager of the Investment and Management Department of China North
Industrial Company. He is present the vice president of the company.
He Jin: took posts of a senior economy expert.He has been the general manager of CSG (Shenzhen) Float Glass Co., Ltd., the vice
president of Float Glass Department, the general manager of CSG (Dongguan) Solar Glass Co., Ltd., the general manager of CSG
(Chengdu) Co., Ltd. and the general manager of CSG (Qingyuan) Energy Saving New Material Co., Ltd. He is currently the assistant
president of the company, the president of the Flat Panel and Electronic Glass Department and the vice president of the company.
Yang Xinyu: took posts of the Securities Department of Beijing Jindu Law Firm, the risk control director of the Law Department of
Honghua International Medical Holding Co., Ltd and the assistant of the chairman of the board. He is currently the secretary of the
board of directors, the assistant president and the director of the Audit and Supervision Department.
Post-holding in shareholder’s unit
√Applicable □ Not applicable
Received remuneration
Position in shareholder’s Start dated of End date of
Name Name of shareholder’s unit from shareholder’s unit
unit office term office term
or not
Chairman of Supervisory
Foresea Life Insurance Co., Ltd. Apr. 2012 -- Yes
Chen Lin Committee
Shenzhen Juhua Investment and Supervisor Jul. 2016 -- No
66
CSG Annual Report 2017
Development Co., Ltd.
General Manager of
Wang Jian China North Industrial Corporation Investment and Operation Apr. 2012 Sep.2017 Yes
Department
Chairman of Board and
Shenzhen Jushenghua Co., Ltd. Nov. 2009 -- No
Ye Weiqing General Manager
Foresea Life Insurance Co., Ltd. Director Feb. 2012 -- No
Chen Xibao Shenzhen Jushenghua Co., Ltd. Vice President Mar. 2016 -- No
Zhang Shenzhen Jushenghua Co., Ltd. President & CEO Jan. 2016 Yes
Jinshun Foresea Life Insurance Co., Ltd. Chairman of Board Sep. 2017 No
Note of
post-holding
in N/A
shareholder’
s unit
Post-holding in other unit
√Applicable □Not applicable
Start dated of Received remuneration
End date of
Name Name of other units Position in other unit n office term
office term from other unit or not
Shenzhen Shum Yip Logistics Group Deputy General
May 2003 -- No
Co., Ltd. Manager
Xinjiang Qianhai United Property & Chairman of the Board Jul. 2016
-- No
Casualty Insurance Co., Ltd. of Supervisors
Executive Director & Sep. 2015
Shenghua Credit Co., Ltd. -- No
Chen Lin General Manager
Shenzhen Baoyuan Logistics Co., Ltd. Chairman of the Board June 2010 -- No
Guangdong Shaoneng Group Co., Ltd. Director Nov. 2015 -- Yes
Baoneng Automobile Co., Ltd. Chairman of the Board Dec. 2017 -- No
Qoros Automobile Co., Ltd. Chairman of the Board Dec. 2017 -- No
Chengdu Yinhe Dynasty Hotel Co.,
Chairman of the Board Apr. 2012 Sep. 2017 No
Ltd.,
Deputy Chairman of the
Wang Jian Shenzhen Baoyin Electricity Co., Ltd. Sep. 2012 Sep. 2017 No
Board
North Property Development
Chairman of the Board May, 2014 Sep. 2017 No
Company Limited
King & Wood Mallesons Partner Sep. 2002 -- Yes
Jin Qingjun
Invesco Great Wall Fund Management Independent director April 2003 -- Yes
67
CSG Annual Report 2017
Company Limited
Guo Tai Jun An Securities Independent director Jan. 2013 -- Yes
Bank of Tianjin Co., Ltd. Independent director Mar. 2017 -- Yes
Sino-Ocean Land Holdings Limited Independent director Mar. 2016 -- Yes
Times Property Holding Limited Independent director Oct. 2015 -- Yes
Konka Group Co., Ltd. Director May 2015 -- Yes
China Merchants Bank Co., Ltd. External supervisor Oct. 2014 -- Yes
Shenzhen Dewo Industrial June 2010
Supervisor -- No
Development Co., Ltd,
Shenzhen Dewo Investment Sep. 2011
Supervisor -- No
Development Co., Ltd.
Huazhang Investment Holding Co., Chairman of Board and May 2011
-- Yes
Zhan Ltd manager
Weizai Shenzhen Neptunus Bioengineering Aug. 2013
Independent director -- Yes
Co., Ltd.
Hubei Zhenhua Chemical Co., Ltd. Independent director Mar. 2015 -- Yes
Shenzhen Longood Intelligent Electric Oct. 2012
Independent director -- Yes
Co., Ltd.
Shenzhen Liantronics Co., Ltd. Independent director Nov. 2016 -- Yes
Professor and Doctoral
South China University of Technology Aug. 2000 -- Yes
tutor
GRG BANKING EQUIPMENT CO.,
Zhu Independent director Dec. 2017 -- Yes
LTD.
Guilong
Jiangsu Saifutian Steel Cable Co., Ltd. Independent director Aug. 2017 -- Yes
Guangzhou Kingmed Diagnostics
Independent director Nov. 2015 -- Yes
Group Co., Ltd.
Zhang Shenzhen Baoneng Investment Group Deputy Chairman of the
Mar. 2017 -- No
Jinshun Co., Ltd. Board
Baoneng South China Investment Co., Aug. 2017
Chairman of the Board -- No
Ltd.
Shenzhen Shining Asset Management Executive Director and Jun. 2015
-- No
Co., Ltd. General Manager
Ye Weiqing Executive Director and Jun. 2014
Qianhai E-payment Co., Ltd. -- No
General Manager
Shenzhen Laihua Property Chairman of Board and Nov. 2016
-- No
Development Co., Ltd. General Manager
Shenzhen Liujin Plaza Investment Co., Chairman of Board and Feb. 2014 -- No
General Manager
68
CSG Annual Report 2017
Ltd.
Shenzhen Shum Yip Logistics Center Chairman of Board and Feb. 2014
-- No
Investment Development Co., Ltd. General Manager
Shenzhen Baoneng Jianye Property Aug. 2013
Director -- No
Co., Ltd.
Shenzhen Baoneng Century Property Chairman of Board and Jul. 2013
-- No
Development Co., Ltd. General Manager
All City Co., Ltd. Chairman of Board and Apr. 2013
-- No
General Manager
Shenzhen Hualitong Investment Co., Chairman of Board and Mar. 2012
-- No
Ltd. General Manager
Shenzhen Baoyuan Logistics Co., Ltd. Director Jun. 2010 -- No
Baoneng Hotel Investment Co., Ltd. Chairman of Board Mar. 2010 -- No
Qinglan Industry (Shenzhen) Co., Ltd. Chairman of Board Jul. 2012 -- No
Baoning Property Co., Ltd. Chairman of Board and May 2012
-- No
General Manager
Shenzhen Zhonglin Industry Chairman of Board and May 2012
-- No
Development Co., Ltd. General Manager
Shenzhen Baoneng Investment Group Oct. 2013
Director -- No
Co., Ltd.
Jonjee Hi-tech Industrial & May 2016
Director -- No
Commercial Holding Co., Ltd.
Shenzhen Shum Yip Logistics Group Oct. 2003
Director -- No
Co., Ltd.
Shenzhen Baoneng Investment Group
Vice President Dec. 2017 -- Yes
Co., Ltd.
Baoneng City Development and
Vice President Dec. 2017 No
Construction Group Co., Ltd.
Xinjiang Qianhai United Property &
Supervisor Sep. 2016 -- No
Casualty Insurance Co., Ltd.
Chen Xibao Foresea Life Insurance Co., Ltd. Director Oct. 2017 -- No
Baoneng Automobile Co., Ltd. Director Mar. 2017 -- No
Qoros Automobile Co., Ltd. Director Dec. 2017 -- No
Guizhou Baoneng Automobile Co.,
Supervisor Jan. 2018 -- No
Ltd.
Li Weinan Yichang Hongtai Property Co., Ltd. Chairman of Board Nov. 2013 Dec. 2017 No
Guangdong Shu Jin Law Firm Certified lawyer Jan. 2010 -- Yes
Zhejiang Ruizhen Logistics Co., Ltd. Supervisor Dec. 2014 -- No
Zhang
Wandong Shanghai Jiajin Logistics Co., Ltd. Supervisor Jun. 2006 -- No
Zhejiang Ruizhen Supply China Supervisor May 2016 -- No
Management Co., Ltd.
69
CSG Annual Report 2017
Yancheng Ruizhen Logistics Co., Ltd. Supervisor Aug. 2017 -- No
Shenzhen Sinotrix Software Co.,Ltd. Director Jan. 2001 -- No
Shenzhen Renda Certified Tax Agent Dec. 2004
General Manager -- Yes
Co., Ltd.
Li Xinjun
Zhongzhun Certified Public Nov. 2010
Chairman of Board -- Yes
Accountants (Shenzhen) Office
Punishment of securities regulatory authority in the last three years to the Company’s current and retired directors, supervisors and
senior management during the report period
□ Applicable √ Not applicable
IV. Remuneration for directors, supervisors and senior executives
Decision-making procedures, recognition basis and payment for directors, supervisors and senior executives
1. Decision-making procedures: The allowances for independent directors, external directors from non-shareholder’s unit and
external supervisors are planned and proposed by the Remuneration &Assessment Committee of the Board and approved by the
Shareholders’ General Meeting after deliberation of the Board. Remuneration for senior executives is proposed by the Remuneration
&Assessment Committee of the Board and decided by the Board after discussion.
2. Confirmation basis of remuneration: The allowances for independent directors and external supervisors are confirmed based on
industry standards and real situation of the Company. The remuneration for senior executives implements floating reward mechanism
with reference to basic salary and business performance. Bonus for performance rewards is withdrawal by proportion quarterly
according to return on equity and based on the total net profit after taxation.
3. Actual remuneration payment: The allowances for each of the Company’s independent directors, external director from
non-shareholder’s unit and each external supervisor are RMB 0.10 million per year, paid by actual month of service. The total
remuneration for directors, supervisor and senior executives in the report period was RMB 13.3829 million.
Remuneration for directors, supervisors and senior executives of the Company within the report period
Unit: RMB0,000
Total Received
remuneration remuneration
Post-holding
Name Title Sex Age obtained from the from related party
status
Company before of the Company
taxation or not
Chairman of the Currently in
Chen Lin Female 46 0 Yes
Board office
Secretary of the
Party Committee, Currently in
Wang Jian Male 54 109.15 No
Deputy Chairman office
of the Board
Independent Currently in
Jin Qingjun Male 61 10.83 No
Director office
Independent Currently in
Zhan Weizai Male 54 10.83 No
Director office
Zhu Guilong Independent Male 54 Currently in 6.67 No
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CSG Annual Report 2017
Director office
Currently in
Zhang Jinshun Director Male 53 0 Yes
office
Currently in
Ye Weiqing Director Female 46 0 Yes
office
Currently in
Cheng Xibao Director Female 36 0 Yes
office
Currently in
Pan Yonghong Director & CEO Male 49 354.41 No
office
Chairman of the Currently in
Zhang Wandong Female 49 10 No
supervisory board office
Currently in
Li Xinjun Supervisor Male 50 10 No
office
Currently in
Zhao Peng Supervisor Male 56 87.36 No
office
Executive Vice Currently in
Lu Wenhui Male 55 280.56 No
President office
Currently in
Li Weinan Vice president Male 56 237.98 No
office
Currently in
Li Cuixu Vice president Male 43 0 No
office
Currently in
He Jin Vice president Male 46 135.47 No
office
Secretary of the Currently in
Yang Xinyu Male 38 85.03 No
Board office
Independent
Fu Qilin Male 63 Post leaving 0 No
Director
Chairman of the
Long Long Male 62 Post leaving 0 No
supervisory board
Hong Guo’an Supervisor Male 63 Post leaving 0 No
Yan Wendou Supervisor Male 50 Post leaving 0 No
Total -- -- -- -- 1,338.29 --
Directors and senior management of the company were granted equity incentives during the reporting period
√Applicable □Not applicable
Unit: Share
Number Number of The Market The Number of Number of The The
Name Title of shares shares exercise price at the number of shares restricted granting number of
outstandi already price of end of the restricted unlocked shares price of restricted
71
CSG Annual Report 2017
ng during exercised the report stocks held in this newly restricted stocks held
the report during the exercised period at the period granted stock at the end
period report shares (RMB / beginning during the (RMB / of the
period during the share) of the report share) period
report period period
period
(RMB /
share)
Chairman of
Chen Lin 0 0 -- -- 0 0 3,207,639 4.28 3,207,639
the Board
Executive
Lu Wenhui Vice 0 0 -- -- 0 0 2,405,729 4.28 2,405,729
President
Vice
Li Weinan 0 0 -- -- 0 0 2,291,170 4.28 2,291,170
president
Vice
He Jin 0 0 -- -- 0 0 1,600,000 4.28 1,600,000
president
Yang Secretary of
0 0 -- -- 0 0 2,291,170 4.28 2,291,170
Xinyu the Board
Total -- 0 0 -- -- 0 0 10,195,708 -- 10,195,708
Remarks (if any) The above restricted stocks held by directors and senior executives have not been unlocked.
V. Particulars of workforce
1. Number, professional composition and educational background of employees
Number of employees in the parent company (person) 141
Number of employees in major subsidiaries of the Company (person) 11,964
Total number of employees (person) 12,105
Total number of employees received salaries in the period (person) 12,105
Number of retired employees whose costs beared by the parent company and
0
its main subsidiaries (person)
Professional composition
Category of professional composition Number of professional composition (person)
Production personnel 8,835
Salesman 582
Technician 1,500
Financial personnel 116
Administrative personnel 1,072
72
CSG Annual Report 2017
Total 12,105
Educational background
Category of educational background Number (person)
Doctor 8
Master 184
Undergraduate 2,202
Junior college 2,343
Degree below junior college 7,368
Total 12,105
2. Staff remuneration policy
The Company adopted the salary management of basic pay plus performance pay, encouraged the staff to reach their employment
objectives and obtain high performance payment through their endeavor. Realize the salary system of linking the salary and
assessment results together via effective performance appraisal, and stimulate the positiveness of to strive to realize the enterprise
objectives by adjusting the income of staff with good and bad performance.
3. Staff training plan
The Company attached great importance to the team construction, thought highly of the training, allocated training fee for cultivating
employee’s skill, developing capabilities and promoting quality. The Company overall implemented training program for senior
management so as to offer a strong support for improving levels of education and skills for employees. As for the senior management,
middle management and junior employees, the Company formulated a personalized training plan for the purpose of adapting and
promoting the business development of CSG. Training and development will be the normalized important work of HR in the future,
which will receive more support from the Company.
4. Labor outsourcing
□ Applicable √ Not applicable
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CSG Annual Report 2017
VIII. Corporate Governance
I. Corporate governance of the Company
In strict compliance with the requirements of the relevant laws and regulation including The Company Law, Securities Law and Rule
of Governance for Listed Company, the Company has been putting efforts in improving the corporate governance, strengthening
management of information disclosure, regulating operation activities and establishing a modern corporate system. At present, the
system for corporate governance of the Company is basically perfect, operation is regulated, corporate governance is consummated,
which accord with the requirements of relevant documents on corporate governance of listed company issued by CSRS.
The Company has established the Information Disclosure Management System and promptly improved it in accordance with newly
issued laws and regulations, clarified the standards of insider information, and established inside information insider registration
system and record management system. In order to further strengthen the Company's internal information disclosure control, enhance
the disclosure consciousness of relevant personnel, and improve the quality of corporate information disclosure, in 2016, the
Company set up information Disclosure Committee, and formulate Rules for the implementation of the information disclosure
Committee. During the report period, the Company disclosed information with facticity, completeness, timeliness and fairness,
strictly fulfilled the responsibilities and obligations of information disclosure of listed companies to ensure that investors are able to
keep abreast of the Company's operation and development strategies. There was no regulatory punishment caused by information
disclosure in the report period. Meanwhile, the Company delivered the Inside Information Insider Table to Shenzhen Stock Exchange
when submitting periodic reports. It didn’t exist that insiders used the inside information to trade the Company’s shares before the
major sensitive information which could affect the Company’s share price was disclosed.
The Company has seriously implemented the requirements of the relevant regulatory to cash dividends. The Company formulated the
Return plan for Shareholders of CSG Holding Co., Ltd. in the Next Three Years (2015- 2017) according to relevant regulations ofthe
Notice of Further Implementation of Cash Dividends of the Listed Companies(ZJF No.: [2012] 37) and the Regulatory Guidelines of
Listed Companies No. 3 - Cash Dividends of Listed Companies(ZGZJHGGNo. [2013] 43) issued by China Securities Regulatory
Commission, further improved the Company’s decision-making and supervision mechanism for distribution of profits, and protected
the interests of investors.
During the report period, it did not exist that the Company provided the undisclosed information to the largest shareholder and actual
controller. And it did not exist that non-operating fund of listed company was occupied by the largest shareholder and its affiliated
enterprises.
Is there any difference between the actual condition of corporate governance and relevant regulations about corporate governance for
listed company from CSRC?
□Yes √ No
There are no differences between the actual condition of corporate governance and relevant regulations about corporate governance
for listed company from CSRC.
II. Independency of the Company relative to the largest shareholder’ in aspect of businesses,
personnel, assets, organization and finance
The Company has been absolutely independent in business, personal, assets, organization and financial from its substantial
shareholders ever since its establishment. The Company had an independent and complete business system and independent
management capability.
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CSG Annual Report 2017
1. In terms of business: The Company owns independent purchase and supply system of the raw resources, complete production
systems, independent sale system and customers. The Company is completely independent from the substantial shareholders in
business. The substantial shareholders and their subsidiaries do not engage any identical business or similar business as the
Company.
2. In terms of personnel: The Company established integrated management system of labor, personnel, salaries and the social security,
which were absolutely independent from its holding shareholder’s. Personnel of the managers, person in charge of the financial
and other executive managers are obtained remuneration from the Company since on duty in the Company, and never received
remuneration or take part-time jobs in large shareholders’ company and other enterprises controlled by large shareholders. The
recruitment and dismissal of Directors are conducted through legal procedure since the Company was listed and the manager has
been appointed or dismissed by Board of Directors. The Board of Directors and the Shareholders’ General Meeting have not
received any interference of decisions on personnel appointment and removal from the largest shareholders.
3. In terms of asset, the Company is able to operate business independently and enjoys full control over the production system,
auxiliary production system and facilities, land use right, industry property and non-patent technology owned or used by the
Company. The investments to the Company from largest shareholder are monetary assets, and the largest shareholder has never
occupy, damage or intervene to operation on these assets.
4. In terms of organization: The Company possessed sound corporate governance structure, established Shareholders’ General
Meeting, Board of Directors, Supervisory Committee, appointed general manager, and fixed related function departments. The
Company had been totally independent from its large shareholders in organization structure. The Company has its own office and
production sites that are different from those of the large shareholders. The largest shareholder and its related parties didn’t deliver
any operation plan and order to the Company, neither influence the independence on management of the Company by any forms.
5. In terms of finance: The Company has set up independent financial department, established independent accounting calculation
system and financial management system (included management system of its subsidiaries). The financial personnel of the Company
didn’t take part-time jobs in units of large shareholder or its subordinate units. The Company had independent bank accounts,
separated from the large shareholders. The Company is independent taxpayer, paid taxes independently according the laws and didn’t
pay mixed taxes with the large shareholders. The financial decision-making of the Company was independent, and the large
shareholders never interferred the usage of the Company’s capital. The Company never offered guarantee to their large shareholders
and its subordinate units and other related party. The largest shareholder and its related has never occupy or occupy disguised the
capital.
III. Horizontal competition
□ Applicable √ Not applicable
IV. Annual shareholders’ general meeting and extraordinary shareholders’ general meeting
convened in the report period
Annual Shareholders’ General Meeting in the report period
Ratio of
Date of
Session of meeting Type investor Date Index of disclosure
disclosure
participation
The First Extraordinary General Extraordinary General Announcement No.:
29.55% 2017- 01-13 2017-01-14
Shareholders’ Meeting of 2017 Shareholders’ Meeting 2017-003
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CSG Annual Report 2017
（www.cninfo.com.cn）
Announcement No.:
The Second Extraordinary General Extraordinary General
30.26% 2017-03-02 2017-03-03 2017-018
Shareholders’ Meeting of 2017 Shareholders’ Meeting
（www.cninfo.com.cn）
Announcement No.:
TheThird Extraordinary General Extraordinary General
29% 2017-05-02 2017-05-03 2017-033
Shareholders’ Meeting of 2017 Shareholders’ Meeting
（www.cninfo.com.cn）
Announcement No.:
Annual General Shareholders’ Annual General
29.07% 2017-05-22 2017-05-23 2017-035
Meeting of 2016 Shareholders’ Meeting
（www.cninfo.com.cn）
Announcement No.:
The Fourth Extraordinary General Extraordinary General
29.44% 2017-08-18 2017-08-19 2017-051
Shareholders’ Meeting of 2017 Shareholders’ Meeting
（www.cninfo.com.cn）
Announcement No.:
The Fifth Extraordinary General Extraordinary General
30.15% 2017-10-26 2017-10-27 2017-070
Shareholders’ Meeting of 2017 Shareholders’ Meeting
（www.cninfo.com.cn）
V. Responsibility performance of independent directors in the report period
1. The attending of independent directors to Board meetings and general shareholders’ meeting
The situation of independent directors attending the board of directors and shareholders' meetings
Name of Times of Board meeting Times of Times of Whether absent the
Times of Times of
independent supposed to attend in attending by entrusted Meeting for the second
Presence Absence
director the report period communication way presence time in a row or not
Jin Qingjun 20 5 15 0 0 No
Zhan Weizai 20 6 14 0 0 No
Zhu Guilong 14 4 10 0 0 No
Fu Qilin 6 2 4 0 0 No
Explanation of absence for the Board Meeting twice in a row
Not applicable
2. Objection for relevant events from independent directors
Whether independent directors came up with objection about the Company’s relevant matters or not
□ Yes √No
During the report period, the independent directors did not raise objections to the Company's related matters.
3. Other explanation about responsibility performance of independent directors
Whether the opinions from independent directors were adopted or not
√Yes □ No
Explanation of the opinions from independent directors which were adopted or not adopted
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CSG Annual Report 2017
In the report period, independent directors of the Company attended the board meetings and general shareholders’ meetings,
conscientiously performed their duties, and put forward constructive opinions or suggestions for the development of the Company
strictly according to the requirements of the Guidelines for Operation of the Listed Companies on Main Board of Shenzhen Stock
Exchange, the Listing Rules of Shenzhen Stock Exchange Stock, the Guidelines for Establishment of Independent Director
Mechanism for Listed Companies and the Article of Association. Each independent director seriously deliberated all motions of the
board of directors, gave independent opinions on significant operating management issues, engagement of senior management,
internal control construction and so on, which played a positive role in safeguarding the interests of the company and minority
shareholders.
VI. Duty performance of the special committees under the board during the reporting period
1. Performance of the audit committee of the Board
The Audit Committee of the Board of Directors of the Company is constituted with 5 directors, and 3 of them are independent
directors. The convoker is independent director. During the report period, according to demands of CSRC and Shenzhen Stock
Exchange, and regulations of Rules of Procedure of the Audit Committee of the Board of Directors, Procedure for Annual Report
Work of the Audit Committee, the committee paid attention to the construction of corporate internal control system, audited the
internal audit report and financial report periodically, diligently and faithfully. They performed the following duties:
①Deliberate the Company’s finanical statement and issue opinions
During the reporting period, in accordance with the requirements of the Securities Regulatory Commission, the Audit Committee
reviewed the relevant annual work plan for the audit of annual reports submitted by certified public accountants before the annual
audited certified public accountants entered the market, and provided guidance opinions; after the annual audit certified public
accountants issued preliminary audit opinions, the audit The committee reviewed the Company’s financial accounting statements
again and expressed opinions on the company’s adjustment of accounting errors and other related matters of the financial statements.
It is believed that this adjustment of accounting errors is conducive to a more fair and objective reflection of the company’s financial
status, and agrees to handle the correction of accounting errors. . At the same time, the basis, basis, principles, and methods for the
preparation of the Company's 2017 accounting statements are in compliance with the relevant provisions of national laws and
regulations, and in all major respects they fairly reflect the financial status of the Company on December 31, 2017 and its operating
results in 2017.
②Supervise the audit works conducted by the accountant firm
The Audit Committee communicated with the accounting firms and provides guidance and requirements for the annual financial
report audit work and the plans and arrangements for the internal control report audit work. After the CPA came into the audit, the
members of the Audit Committee kept close contact with the Company and the main project responsible personnel to understand the
progress of the audit work and the concerns of the accountants, and timely feedback to the company’s relevant departments to ensure
that the annual audit and information disclosure work was conducted as scheduled.
③ Summarize report on the audit works conducted by the accountant firm in previous year
Asia Pacific (Group) CPAs (special general partnership) strictly follows the China Auditing Standards and practices diligently, paying
attention to the communication with the management and the audit committee, which reflects strong professional knowledge, good
professional ethics and risk awareness. The firm successfully completed the company’s 2017 financial statement audit work and
internal control audit work, and the audit quality is trustworthy.
2. Performance of the remuneration and examination committee of the Board
The remuneration and examination committee of the Board of Directors of the Company is constituted with 5 directors, and 3 of
them are independent directors. The convoker is independent director.
①According to regulations of Rules of Procedure of The Remuneration and Appraisal Committee, the Remuneration and Appraisal
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CSG Annual Report 2017
Committee makes examination on the disclosed remuneration of the directors, supervisors and senior executives and thought it
accorded with the relevant laws and regulations of the remuneration and appraisal system of the Company.
②The remuneration and examination committee deliberated the relevant items of equity incentive, relevant beneficiary avoiding for
vote, and the deliberation results were submitted to the Board.
3. Performance of the nomination committee of the Board
The nomination committee of the Board of Directors of the Company is constituted with 5 directors, and 3 of them are independent
directors. The convoker is independent director.
①In the report period, nomination committee reviewed to determine candidates of by-election directors for 7th session of the Board,
and agreed to submit the deliberation to the Board and general meeting of shareholders.
②Nomination committee of the Board performed evaluation on the work of the Board, and believed that the directors of 7th session
of the Board abided by the State laws, administrative rules and regulation of Article of Association since they took office. They
attended or delegated to attend the Board Meeting and general meeting of shareholders on time, performed voting rights based on
relevant regulations, actively kept eyes on the management situation of the Company, and performed the duty of Directors diligently.
4. Performance of the strategy committee of the Board
The strategy committee of the Board of Directors of the Company is constituted with 5 directors, and 1 of them is independent
directors.
As the special institution responsible for the long-term development strategy and significant investment decision-making, the strategy
committee made earnest research on the significant decisions affecting the Company’s development and issued relevant
recommendations according to the procedure rules of the strategy committee. During the reporting period, the committee considered
the profit distribution plan, and held the view that the profit distribution plan conformed to the requirements of the Company Law,
the Enterprise Accounting Principles and the Articles of Association, and agreed to submitted the same to the board and general
meeting for consideration. At the same time, the strategy committee considered issues concerning significant operation management,
guarantee for controlling subsidiaries, related transaction, and investment projects of the Company, which were submitted to the
board for consideration.
VII. Performance of the Supervisory Committee
During the report period, the Supervisory Committee found whether there was risk in the Company in the supervisory activities
□ Yes √ No
The Supervisory Committee had no objection on the supervised events during the report period.
VIII. Performance examination and incentives of senior management
The Board of Directors approved the incentive measure for outstanding achievement of management team as follows: performance
bonus of the Company’s management team will be calculated quarterly, when the quarter cumulative annualized return on equity
reaches 8%, the performance bonus will be calculated by 8% of the cumulative total of net profit (no deduction of minority interests,
the same below) in this quarter, when the quarter cumulative annualized return on equity exceeds 8%, the performance bonus will be
calculated based on 8% with a corresponding increase of 0.2% for every 1% increased, the performance bonus calculated in this
quarter should be the balance between the cumulative total bonus to be calculated in this quarter and the cumulative total bonus
obtained in the previous quarter; when the cumulative annualized return on equity in this quarter does not reach 8% but the single
quarter cumulative annualized return on equity reaches or exceeds 8%, the performance bonuses will be calculated based on the total
net profits in this quarter according to the above-mentioned calculating rules, otherwise, no performance bonus should be calculated
in this quarter.
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CSG Annual Report 2017
IX. Internal Control
1. Particulars about significant defects found in the internal control during the reportperiod
□ Yes √ No
1. Self-appraisal report of internal control
Disclosure date of full text of self-appraisal report of internal control 2018-4-23
More details found in ” Report of Internal Control of
Disclosure index of full text of self-appraisal report of internal control CSG for year of 2017” published on Juchao Website
(http://www.cninfo.com.cn)
The ratio of the total assets of the units included in the scope of evaluation
96%
to the total assets of the Company's consolidated financial statements
The ratio of the operating income of the units included in the scope of
evaluation to the operating income of the Company's consolidated financial 97%
statements
Standards of Defects Evaluation
Category Financial Reports Non-financial Reports
Major defects: Major defects:
A. Fraud of directors, supervisors and senior A. Major decision-making mistakes caused by
management; decision-making process of key business;
B. Ineffective control environment; B. Serious violation of state laws and regulations;
C. Invalid internal supervision; C. Serious brain drain of senior and middle
D. Major internal control defects found and management and or personnel at key technological
reported to the management but haven’t been posts;
corrected after a reasonable time; D. Major or significant defects found in the
E. Material misstatements are found by the external internal control evaluation have not been rectified
audit but haven’t been found in the process of and reformed;
internal control; E. The company's major negative news frequently
Qualitative criteria
F. Financial reports submitted during the reporting appears on media;
period completely cannot meet the needs and are Significant defects:
severely punished by regulatory agencies; A. Big deviation of execution caused by executive
G. Other major defects that may affect the report routine of key business;
users’ correct judgment. B. Regulatory authorities impose large amount of
Significant defects: fines because the violation of laws and regulations;
A. Defects or invalidation of important financial C.Defects or invalidation of important business’
control procedures; internal control procedures;
B. Significant misstatements are found by the Common defects: Other control defects except for
external audit but haven’t been found in the process major defects and significant defects.
of internal control;
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CSG Annual Report 2017
C. Financial reports submitted during the reporting
period have mistakes frequently;
D. Other significant defects that may affect the
report users’ correct judgment.
Common defects: Other control defects except for
major defects and significant defects.
Major defects: Major defects:
A. Amount of net profit affected by misstatements A. Amount of direct property loss: the direct loss
(based on consolidated statements): amount affected amount is equal to or greater than 30 million yuan;
by misstatements is equal to or greater than 3% of B.Group's reputation: major negative news spreads
net profit and the absolute amount is no less than 30 in numerous business areas or is widely reported
million yuan; by national media and causes significant damages
B. Amount of assets and liabilities affected by to the corporate reputation which takes more than
misstatements (based on consolidated statements): six months to be restored.
amount affected by misstatements is equal to or Significant defects:
greater than 1% of total assets. A. Amount of direct property loss: the direct loss
Significant defects: amount is equal to or greater than 20 million yuan
A. Amount of net profit affected by misstatements but less than 30 million yuan;
Quantitative standard (based on consolidated statements): not belong to B. Group's reputation: negative news spreads
major defects and amount affected by inside the industry or is reported or focused by
misstatements is equal to or greater than 2% of net local media and causes certain damages to the
profit and the absolute amount is no less than 20 corporate reputation which takes more than three
million yuan; months but less than six months to be restored.
B. Amount of assets and liabilities affected by Common defects:
misstatements (based on consolidated statements): A. Amount of direct property loss: defects except
amount affected by misstatements is equal to or for major and significant defects.
greater than 0.5% of total assets but less than 1% of B. Group's reputation: negative news spreads
total assets. within the group and causes minor damages to the
Common defects: Defects except for major and corporate reputation which takes less than three
significant defects. months to be restored.
Amount of significant
0
defects in financial reports
Amount of significant
defects in non-financial 0
reports
Amount of important
0
defects in financial reports
Amount of important
defects in non-financial 0
reports
80
CSG Annual Report 2017
Notes to other major issues related to internal control
In the period from 2012 to 2013, in order to attract CSG to further expand industrial investment in Yichang area and locate the
projects related to fine glass and ultra-thin electronic glass in Yichang, the people’s government of Yichang area had signed three
agreements with CSG in succession, according to which, the local government would offer related preferential policies to CSG so as
to support the related development of industries. Thereinto, the administration committee of Yichang Hi-tech Industrial Area
committed to offer a special government subsidy at RMB171.00 million to CSG, which should be used for the talent introduction and
resettlement by CSG in Yichang area. According to provisions of agreements alike, the company commissioned CSG (Yichang)
Silicon Material Co., Ltd., a wholly owned subsidiary of CSG, to receive such funds. The administration committee of Yichang
Hi-tech Industrial Area has appropriated full amount of such funds to CSG (Yichang) Silicon Material Co., Ltd.in the year of 2014.
Now, it is found out that, after receiving the above subsidy funds from the government of Yichang, CSG (Yichang) Silicon Material
Co., Ltd., not subject to the appropriable review and approval of involved authorities including the board of directors at that time,
immediately transferred such funds in full to Yichang Hongtai Properties Co., Ltd, which is jointly held and indirectly controlled by
some former natural top executives of our company and has no ownership relationship with our company. In that year, CSG did not
carry out any accounting treatment and disclosure in financial statements at the level of headquarters or in the consolidated financial
statements.
The company attached great importance to this problem. First, organized a special internal verification on the issue, fully understood
the relevant information, and interviewed the relevant government departments to understand the nature and purpose of such
government subsidy and related provisions on the use of such funds; Secondly, strengthened training and publicity of information
disclosure rules, and enhanced training and publicity to top management in the aspect of supervision rules and professional ethics;
Thirdly, integrated the internal control system of the company and strengthened internal supervision.
As of the issuance date of the report, the company did not find other internal control information which might have a significant
impact on the investors’ understanding of the internal control evaluation report or their evaluation of internal control of the company
or on the investment decisions made by investors.
X. Audit report of internal control
√Applicable □ Not applicable
Deliberations in Internal Control Audit Report
According to Guidelines of Enterprise Internal Control Audit and the relevant requirements of CICPA auditing standards, Asia
Pacific (Group) CPAs (special general partnership) (hereinafter referred to as AP) audited the effectiveness of internal control over
financial statements of the Company up to 31 December 2017, issued AP Ya-Kuai- A-He-Zi (2018) No. 0025 Internal Control Audit
Report and made the following opinions: AP thought that CSG Holding Co., Ltd. maintained effective internal control over
financial statements in all major aspects according to the Fundamental Norms of Enterprise Internal Control and relevant rules on
December 31, 2017.
Date of disclosing the internal
23 April 2018
control audit reports
Disclosure index of internal control More details can be found in 2017 Internal Control Audit Report of CSG released on Juchao
audit report Website (http://www.cninfo.com.cn)
Type of the auditor’s opinion Standard unqualified opinion
Whether there are major flaws in
No
the non-financial report or not
Whether the CPAs firm issued an Audit Report on Internal Control with non-standard opinion or not?
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CSG Annual Report 2017
□Yes √ No
Whether the Audit Report on Internal Control from the CPAs firm is in consistent with the Self-appraisal Report from the Board or
not?
√ Yes □ No
82
IX. Corporate Bonds
Whether the company has a public offering and is listed on the stock exchange, and the company bonds that have not been
fully paid or matured on the date of approval of the annual report
No
Short Bond Maturity Bond balance Interest Way of repayment of principal and
Name Issue date
name code date (RMB 0,000) rate interest
Using simple interest year - on - year, non
- compound interest, the interest is paid
Corporate bond 10 CSG
112022 2010-10-20 2017-10-20 0 5.33% once a year and the principal is paid at a
in 2010 of CSG 02
time once due, and the final interest is
paid together with the principal.
Corporate bond listing or
Shenzhen Stock Exchange
transfer trading place
Appropriate arrangements The corporate bond "10 CSG 02" established the sell-back option for investors, which was completed in
for investors 2015.
Interest payment and
The corporate bond “10 CSG 02” expired on October 20, 2017. The Company completed the bond
encashment of corporate
principal and the payment of interest between October 20, 2016 and October 19, 2017 on October 20,
bonds during the reporting
2017.
period
Implementation of the
special provisions
including option and
exchangeable terms of
issuers or investors
N/A
attached to corporate
bonds and the relevant
provisions during the
report period (if
applicable)
II. Informantion of bond trustee and credit rating institution
Bond trustee:
China Merchants 38-45 floor, Ablock, Jiangsu Building, Contact Nie
Name Office adds. Tel. 0755-82960984
Securities Co., Ltd. Yitian Road, Futian District, Shenzhen person Dongyun
Credit rating institution which tracks rating corporate bonds in the report period:
Name CCXR Office adds. 8 floor, Anji Building, 760 Tibet South Road, Huangpu District, Shanghai
If bond trustee and credit rating institution engaged by the Company changed in the report period, explain
the reason of the change, performance of the procedure, and the impact on the interest of investors etc. (if Not applicable
applicable)
III. The use of fund raised by corporate bonds
The use of fund raised by corporate bonds and performance of the The raised fund is in strict accordance with the relevant
procedure provisions.
Balance at the end of year 0
The operation of the special account for raised fund is
The operation of the special account for raised fund strictly accordance with the relevant provisions of
prospectus commitment.
Whether the use of raised fund is consistent with the purpose, plan of use
Consistent
and other agreements of prospectus commitment
83
IV. Information of the rating of corporation bonds
According to track rating of China Chengxin Securities Rating Co., Ltd. (Abbreviation “CCXR”) in 2017, the Company's
subject credit rating is AA +, rating outlook is stable, and the bonds credit rating of the current period is evaluated as AA +.
V. Trust mechanism, debt repayment plans and other debt repayment safeguards of
corporation bonds
During the report period, the trust mechanism, debt repayment plans and other debt repayment safeguards have not been
changed which are the same as the relevant commitments of raising instruction manual, the relevant implementations are as
follows:
I. Debt repayment plan
The Company established the annual and monthly plan for application of funds based on the payment arrangement for
coming due principal and interest of the corporation bonds, reasonably managed and allocated the funds so as to make sure
the due principal and interest be paid in time. The capital sources for paying the corporation bonds in the report period were
mainly the cash flow generated by the Company’s operating activities and the bank loans.
In 2017, the Company paid the principal and interest of corporation bond "10 CSG 02" on time.
II. Repayment safeguards for the Company’s bonds
In order to fully and effectively maintained the interests of the bondholders, the Company has made a series plans for the
timely and sufficient repayment for bonds in the report period, including confirming the specialized departments and
personnel, arranging the funds for repayment, establishing the management measures, achieving the organization
coordination, and strengthening information disclosure so as to form a set of safeguards to ensure the security payment of
bond.
(I) Establish the "Bondholders' Meeting Rules"
The Company has established the "Bondholders' Meeting Rules" for the corporation bonds in accordance with the "Pilot
Approach for the Issuance of Corporation Bonds", appointed the range, procedures and other important matters for
bondholders to exercise rights by bondholders' meeting and made reasonable institutional arrangements to ensure the
principal and interest of the corporation bonds be paid timely and sufficiently.
(II) Engage bond trustee
The Company has engaged China Merchants Securities Co., Ltd. as the trustee for the corporation bonds in accordance with
the "Pilot Approach for the Issuance of Corporation Bonds", and signed the "Bond Trusteeship Agreement". In the duration
of the corporation bonds, the bond trustee will maintain the interests of the Company’s bondholders according to the
agreement.
(III) Establish the specialized reimbursement working group and set up special account for debt repayment
The Company used the funds raised from the bond strictly in accordance with the "Financial Management System" and
"Financial Funds Management Approach". The Company has appointed the financial department to take the lead and take
charge of the repayment of corporation bonds, implement and arrange the repayment funds for principal and interest of
corporation bonds in the annual financial budget so as to ensure the principal and interest be paid on time and guarantee the
interests of bondholders. Within 15 working days before the annual interest pay day and annual principal pay day of
corporation bonds, the Company specially establishes a working group of which the members are composed of personnel
from the company's financial management department to take charge of the repayment of interests and other relevant work.
The Company guarantees the funds for payment of interest will be sent to the special repayment account three days before the
annual interest payment and the funds for cashing principle will be sent to the special repayment account one week before the
due date of corporation bonds, the special repayment account will pay both the principle and interest.
(IV) Improve profitability, strengthen funds management, and optimize debt structure
The Company has a rigorous financial system and a normative management system, account receivable turnover and
inventory turnover are in good status, the Company’s financial policies are steady, and the structure of assets and liabilities is
reasonable. The Company will continue its efforts to enhance the profitability of main business and the market
competitiveness of products so as to improve the Company 's return on assets; the Company also will continue to strengthen
the management of accounts receivable and inventory so as to improve accounts receivable turnover and inventory turnover,
and thereby enhance the Company 's ability to obtain cash.
(V) Strict information disclosure
The Company follows the principle of truly, accurately and completely disclosing information so that the Company’s debt
paying ability and use of proceeds can be under the supervision of the bondholders, bond trustee and shareholders to prevent
debt repayment risk.
(VI) Other safeguards
When the Company cannot pay interest and principal on time or has other breach of contracts, the Company will at least take
following measures:
1. Do not distribute profits to shareholders.
2. Postpone the implementation of capital expenditure projects such as major foreign investment, mergers and acquisitions.
84
VI. Information about the bond-holder meeting during the reporting period
There was no bond-holder meeting convened in the report period.
VII. Information about the obligations fulfilled by the bond trustee in the report period
The Company disclosed the "2010 Annual Corporate Bonds Trusteeship Transaction Report (2016)" prepared by China
Merchants Securities Co., Ltd. at Juchao website (http//www.cninfo.com.cn) on May 18, 2017.
VIII. The key accounting data and financial indicators of the latest two years to the end of the report
period
RMB 0,000
Item 2017 2016 Rate of change over the same period
Earnings before interest tax depreciation
and amortiation
231,334 213,158 8.48%
Flow rate 66% 38% 28%
Assets liabilities rate 55% 53% 2%
Speed ratio 57% 31% 26%
Total debt ratio of EBITDA 22% 24% -2%
Interest coverage ratio 3.81 4.44 -14.19%
Cash interest coverage ratio 9.38 10.36 -9.46%
interest coverage ratio of EBITDA 6.72 7.79 -13.74%
Loan repayment rate 100% 100% --
interest coverage ratio 100% 100% --
IX. Payment of principle and interest for other bonds and debt financing instruments
during the report period
1. On February 13, 2017, the Company completed the repayment of the second batch of ultra-short- term financing bills of
2016 with total amount of RMB 0.9 billion and annual rate of 4.18%, which were issued on May 7, 2016.
2. On May 1, 2017, the Company completed the repayment of the third batch of ultra-short- term financing bills of 2016 with
total amount of RMB 0.6 billion and annual rate of 3.67%, which were issued on August 2, 2016.
3. On June 2, 2017, the Company completed the repayment of the fourth batch of ultra-short- term financing bills of 2016
with total amount of RMB 0.5 billion and annual rate of 3.50%, which were issued on September 1, 2016.
X. Information about of bank credit and use, as well as repayment of bank loans during
the report period
In the report period, the Company gained bank credit of RMB 8,548.21 million and use quota of RMB 4,632.13 million and
repaid loans of RMB 2,154.11 million.
XI. Information about fulfillment of the stipulations or commitments specified in the
Prospectus of the issuance of the bonds during the report period
Not applicable
XII. Major matters occurring during the report period
Other major matters please refer to note nineteen “Explanation on other major matters ” in the fifth section “Important
Events” in this report.
85
XIII. Whether there is a guarantor of corporate bonds
□ Yes √ No
86
Section X. Financial Report
I. Report of the Auditors
Type of Auditor’s Opinion Standard and unqualified
Issue date of Report of the Auditors 20 April 2018
Name of Auditor’s organization Asia Pacific (Group) CPAs (special general partnership)
Reference number of Report of the Auditors Ya-Kuai- A-Shen-Zi (2018) No. 0118
Name of CPA Pan Qian, Zhang Yan
Auditor’s Report
To the shareholders of CSG Holding Co., Ltd.,
I. Opinion
We have audited the accompanying financial statements of CSG Holding Co., Ltd. (hereinafter “the Company”), which
comprise the Separate/Consolidated Statements of Financial Position as at 31 December 2017, and the Separate/Consolidated
Statements of profit or loss, the Separate/Consolidated Statements off changes in equity and the Separate/Consolidated
Statements of cash flows for the year then ended, and the notes to the financial statements.
In our opinion, the financial statements attached were prepared in line with the regulations of Accounting Standards for
Business Enterprises in all significant aspects which gave a true and fair view of the consolidated and parent financial
position of the Company as at Dec. 31, 2017 and the consolidated and parent business performance and cash flow of the
Company for 2017.
II. Basis of Opinion
We conducted our audit in accordance with Standards on Auditing for Certified Public Accountants. Our responsibility is to
express an opinion on these financial statements based on our audit. Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free
from material misstatement. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
III. Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period. These matters were addressed in the context of our audit of the financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We determine the
followings are key audit matters in need of communication in our report.
I) Impairment of fixed assets and the construction in progress
1. Matter description
As of December 31, 2017, the balance of fixed assets of the CSG Group was RMB 16.670 billion and book value was RMB
11.541 billion, the original value of the construction in progress was RMB 1.51 billion, and book value was RMB 1.42 billion.
Book value of fixed assets and construction in progress was 66.33%. By the end of the period, a total of RMB 375 million
was depreciated for fixed assets and construction in progress. For details, please refer to Note 4(9) and Note 4(10) of the
Financial Statements. The matter involves significant amount, and involves significant judgments and estimates made by the
management. Therefore, we consider the impairment provisions for fixed assets and construction in progress as key audit
matters.
2. Countermeasures of Audit
87
(1) Estimate the rationality and the effectiveness of its execution of the internal control system of the fixed assets and the
construction in progress;
(2) Check the asset impairment list of the construction in progress and the fixed assets, field survey and the fixed asset and
use or storage of projects under construction;
(3) Check the method and calculation basis for checking the recoverable amount;
communicate with the management layer, understand and estimate whether the accounting estimate of the management
layer about withdrawing the preparation for the impairment of assets is rational;
(4) Check whether the asset impairment perform relevant approval process;
(5) Review the confirmation of book values of the assets at the point of impairment, recalculate the recoverable amount and
the impaired amount, Check whether the asset impairment account of the Company is handled correctly and Estimate
whether the withdrawal of the asset impairment is rational and adequate.
(6) Check the presentation of financial statements and disclosure about the impairment of fixed assets and the constraction in
progress.
II) Prior period accounting error correction
1. Matter description
1. As of December 31, 2017, CSG’s consolidated statements of financial position listed a deferred income of RMB 171
million, which occurred and was received in 2014 but was not handled correctly the government subsidy special fund
for the introduction of talents. For details, see Note (32) of Annotation 2 Important Account Policies. This matter is for
all parties to pay attention to the accounting error correction. Therefore, we regard this matter as a key audit matter.
2. Countermeasures of Audit
(1)To understand the reasons for the formation of the matter, and to correct the situation of the previous accounts and to
obtain relevant audit evidence;
(2) Analyze the nature and use of government subsidy funds according to the supporting documents such as government
documents, receipt and payment vouchers that have been obtained, and understand the use of special funds;
(3) Check whether the accounting treatment and amount of the corrective matters are correct; whether the tax-related matters
comply with the relevant provisions of the relevant tax laws;
(4) Conduct interviews with relevant government agencies to understand the nature and uses of government subsidy funds
and related regulations regarding the use of funds;
(5) To understand the current status and follow-up arrangements of government subsidies for management;
(6) Check whether the government subsidy and the corresponding accounting title have been properly presented and
disclosed in the financial statements as required
IV. Other information
The management layer of the Company (hereinafter referred to as the management layer) shall be responsible for other
information, including the information covered in the financial report, but excludes financial statements and our audit report.
Our audit opinions on financial statements do not cover other information; we will not make the authentication conclusion on
other information in any form.
Combining our audit of the financial statement, our responsibility is to read other information, during which, we shall
consider that whether other information has any significant difference with the financial statement or the circumstance we
know during the audit or is there any significant misstatement.
Based on the work we already executed, if we confirm that there are significant misstatements in other information, we shall
report such a fact. On such aspect, there is nothing to report.
88
V. Management’s Responsibility for the Financial Statements
Management of the Company is responsible for the preparation and fair presentation of these financial statements in
accordance with the requirements of the Accounting Standards for Business Enterprises, and for such internal control as
management
determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether
due to fraud or error.
In preparing financial statements, the management layer is responsible for assessing the Company's sustained business
capability, disclosing matters related to continue operating，using the going-concern assumption unless management either
intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The governance layer is responsible for supervising the financial reporting process of the company.
VI. The responsibility of Certified Public Accountants for the financial statement auditing.
Our objective is to obtain reasonable assurance on whether there is no misstatement in overall financial statements caused by
fraud or error, and issue the audit report with audit opinions. Reasonable assurance is the high-level assurance, but it can’t
assure that a certain major misstatement can be always found when auditing according to the audit standard. The
misstatement may be caused by malpractices or
error. If the misstatements within the rational expectations may affect the economic decision of the financial statement user
according to the financial statement, it shall be deemed that the misstatement is significant.
During the process of conducting the audit work according to audit standards, we apply professional judgment and keep
professional skepticism. Meanwhile, we also perform the following tasks:
(1) Identify and Estimate the significant misstatement risks of the financial statement due to the malpractices and error,
design and implement the audit procedures to respond those risks, and obtain adequate and proper audit evidence serving as
the basis of publishing the audit opinions. Since malpractices may involve in collusion, falsification, intentional omission,
misrepresentation or overriding the internal control, the risk of failing to detect a significant misstatement due to malpractices
is higher than the risk of failing to detect a significant misstatement due to the error.
(2) Understand the internal control related to audit, so as to design appropriate audit procedures.
(3) Estimate the appropriateness of the accounting policies selected by the management layer, and the rationality of making
accounting estimate and relevant disclosures.
(4) Draw a conclusion on the appropriateness of the going concern assumption used by the management layer. Meanwhile,
according to the obtained audit evidence, it may cause to come to the conclusion that there are substantial doubtable events or
major uncertainty for the sustainable operation ability of the Company. In case that we come to the conclusion that there is a
significant uncertainty, the audit standards require us to remind the users of the statements to pay attention to relevant
disclosures in the financial statements in the audit report; In case of any insufficient disclosure, we shall give modified
opinions. Our conclusion is based on the available information up to the audit report day. However, the future events or
circumstances may cause the Company cannot continue to operate.
(5) Estimate the overall presentation, structure and content (disclosure included) of the financial statements, and Estimate
whether the financial statements fairly reflect relevant transactions and matters.
(6) Acquire adequate and appropriate audit evidences on the financial information of the entity or business activities of the
Company, and give audit opinions on the consolidated financial statements. We are responsible for guiding, supervising and
executing the audit of the Group, and take all responsibilities for the audit opinions.
We communicate with the governance layer about the audit scope, schedule, significant audit findings and other matters
within the plan, including the noteworthy internal control defects recognized by us during the audit.
We also provide statements to the governance layer on the compliance with the professional ethics requirement related to the
independence, and communicate with
the governance layer on all relationships and other matters that may reasonably be considered to affect our independence, as
well as relevant preventive measures.
From the matters that we have communicated with the governance layer, we confirm the most important matters for the audit
of the current financial statements, and thus constitute the key audit matters. We describe these matters in our audit report,
89
unless laws and regulations prohibit the public disclosure of these matters, or in rare cases, if it is reasonably expected that
the negative consequences of communicating a matter in the audit report will surpass the benefits in the public interests, we
confirm that the matter shall not be communicated in the audit report.
Asia-Pacific (Group) Certified Public Accountant of China
Certified Public Accountants
(special general partnership)
Beijing, China Certified Public Accountant of China
20April 2018
90
CSG HOLDING CO., LTD.
CONSOLIDATED AND COMPANY’S BALANCE SHEETS
AS AT 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
31 December 2017 31 December 2016 31 December 2017 31 December 2016
ASSETS Note Consolidated Consolidated Company Company
(Restated (Restated
Current assets
Cash at bank and on hand 4(1) 2,462,605,764 586,803,505 1,681,877,320 302,841,481
Notes receivable 4(2) 552,232,420 456,347,237 - -
Accounts receivable 4(3) 638,238,290 627,985,983 - -
Advances to suppliers 4(4) 143,848,023 95,733,132 146,132 16,880
Other receivables 4(5)/16(1) 205,939,019 200,809,149 2,400,334,816 4,030,701,029
Inventories 4(6) 685,895,317 477,780,925 - -
Assets classified as held for sale 4(7) 45,983,520 - - -
Other current assets 4(8) 200,847,989 199,905,577 - -
Total current assets 4,935,590,342 2,645,365,508 4,082,358,268 4,333,559,390
Non-current assets
Long-term receivables 16(3) - - 1,200,000,000 2,003,645,000
Long-term equity investments 16(2) - - 4,795,987,652 4,790,440,632
Fixed assets 4(9) 11,540,769,697 11,457,972,991 22,182,246 26,073,848
Construction in progress 4(10) 1,417,624,618 1,362,096,377 - -
Intangible assets 4(11) 1,047,222,407 1,032,458,977 1,742,109 1,393,454
Development expenditure 4(11) 61,365,537 66,927,714 - -
Goodwill 4(12) 397,392,156 397,392,156 - -
Long-term prepaid expenses 2,223,397 975,660 - -
Deferred tax assets 4(13) 80,872,862 96,451,854 - -
Other non-current assets 4(14) 51,941,352 87,174,393 2,132,041 -
Total non-current assets 14,599,412,026 14,501,450,122 6,022,044,048 6,821,552,934
TOTAL ASSETS 19,535,002,368 17,146,815,630 10,104,402,316 11,155,112,324
91
CSG HOLDING CO., LTD.
CONSOLIDATED AND COMPANY’S BALANCE SHEETS (CONT'D)
AS AT 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
31 December 2017 31 December 2016 31 December 2017 31 December 2016
LIABILITIES AND OWNERS' EQUITY Note Consolidated Consolidated Company Company
(Restated (Restated
Current liabilities
Short-term borrowings 4(16) 3,704,630,909 4,017,869,662 2,600,000,000 3,495,163,044
Notes payable 4(17) 213,401,622 20,000,000 - -
Accounts payable 4(18) 1,400,166,042 1,169,869,370 261,024 317,874
Advances from customers 4(19) 195,563,465 142,330,979 - -
Employee benefits payable 4(20) 272,170,660 193,372,239 40,856,313 18,380,010
Taxes payable 4(21) 111,996,764 115,592,616 1,762,580 1,804,568
Interest payable 4(22) 34,032,740 78,225,904 3,090,735 3,794,646
4(23)
Other payables /16(4) 619,324,354 188,321,450 909,432,991 240,593,894
Current portion of non-current liabilities 4(24) 904,261,397 1,029,340,000 180,000,000 1,000,000,000
Other current liabilities 300,000 300,000 - -
Total current liabilities 7,455,847,953 6,955,222,220 3,735,403,643 4,760,054,036
Non-current liabilities
Long-term borrowings 4(25) 1,554,120,000 1,438,660,000 1,200,000,000 1,380,000,000
Bonds payable 4(26) 1,161,794,247 - - -
Deferred tax liabilities 4(13) 20,915,954 29,749,137 - -
Deferred income 4(27) 562,701,103 593,993,254 186,526,280 183,035,040
Total non-current liabilities 3,299,531,304 2,062,402,391 1,386,526,280 1,563,035,040
Total liabilities 10,755,379,257 9,017,624,611 5,121,929,923 6,323,089,076
Shareholders’ equity
Share capital 4(28) 2,484,147,547 2,075,335,560 2,484,147,547 2,075,335,560
Capital surplus 4(29) 1,306,381,765 1,260,702,197 1,451,209,079 1,405,529,511
Less:Treasury shares 4(30) (417,349,879) - (417,349,879) -
Other comprehensive income 4(31) 1,948,943 4,653,971 - -
Special reserve 4(32) 3,224,938 5,843,473 - -
Surplus reserve 4(33) 920,592,332 888,508,230 935,137,692 903,053,590
Undistributed profits 4(34) 4,159,642,227 3,573,871,573 529,327,954 448,104,587
Total equity attributable to shareholders
of parent company 8,458,587,873 7,808,915,004 4,982,472,393 4,832,023,248
Minority interests 321,035,238 320,276,015 - -
Total shareholders' equity 8,779,623,111 8,129,191,019 4,982,472,393 4,832,023,248
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY 19,535,002,368 17,146,815,630 10,104,402,316 11,155,112,324
The accompanying notes form an integral part of these financial statements.
Legal representative: Principal in charge of accounting: Head of accounting
department:
92
CSG HOLDING CO., LTD.
CONSOLIDATED AND COMPANY’S INCOME STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
2017 2016 2017 2016
Item Note Consolidated Consolidated Company Company
Revenue 4(35) 10,879,400,746 8,974,083,407 58,687,566 22,581,872
Less: Cost of sales 4(35) (8,216,358,372) (6,562,214,373) - (60,337)
Taxes and surcharges 4(36) (124,523,926) (103,159,546) (4,942,397) (92,575)
Selling and distribution expenses 4(37) (336,131,723) (301,815,090) - -
General and administrative expenses 4(38) (919,329,772) (766,589,059) (117,294,601) (122,708,284)
Financial expenses - net 4(39) (315,961,080) (265,820,569) (42,124,252) (20,405,532)
Asset impairment loss 4(41) (69,399,755) (58,862,764) (80,219) 1,767,753
Add: Gain or loss from changes in fair value 4(42) - 228,500,000 - 228,500,000
4(43)
Investment income/(loss) /16(5) 427,636 (279,187,752) 436,068,825 186,072,766
Income on disposal assets 4(44) (1,768,993) (1,759,358) - 3,210
Other Income 4(45) 84,341,814 - 1,568,240 -
Operating profit 980,696,575 863,174,896 331,883,162 295,658,873
Add: Non-operating revenue 4(46) 20,763,042 98,078,639 40,000 1,574,277
Less: Non-operating expenses 4(47) (5,152,591) (5,144,916) (3,426,562) -
Total profit 996,307,026 956,108,619 328,496,600 297,233,150
Less: Income tax (expenses)/revenue 4(48) (167,670,991) (151,882,095) (7,655,575) 45,854
Net profit 828,636,035 804,226,524 320,841,025 297,279,004
Classified by continuous operation:
Net income from continuing operations (“-” for
net loss) 828,636,035 804,226,524 320,841,025 297,279,004
Net income from discontinued operations (“-”
for net loss) - - - -
Classified by equity ownership:
Attributable to shareholders of parentcompany 825,388,312 797,721,576 - -
Minority interests 3,247,723 6,504,948 - -
Other comprehensive income net after tax (2,705,028) 1,686,199 - -
Other comprehensive income net after tax
attributable to shareholders of parentcompany (2,705,028) 1,686,199 - -
Other comprehensive income items which will (2,705,028) 1,686,199 - -
be reclassified subsequently to profit or loss
Differences on translation of foreign currency
(2,705,028) 1,686,199 - -
financial statements
Other comprehensive income net after tax
- - - -
attributable to minority interests
Total comprehensive income 4(31) 825,931,007 805,912,723 320,841,025 297,279,004
Total comprehensive income attributable to
shareholders of parent company 822,683,284 799,407,775
Total comprehensive income attributable to
minority interests 3,247,723 6,504,948
Earnings per share 4(49)
Basic earnings per share (RMB Yuan) 4(49) 0.35 0.33
Diluted earnings per share (RMB Yuan) 4(49) 0.35 0.33
The accompanying notes form an integral part of these financial statements.
Legal representative: Principal in charge of accounting: Head of accounting department:
93
CSG HOLDING CO., LTD.
CONSOLIDATED AND COMPANY’S CASH FLOW STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
2017 2016 2017 2016
Item Note Consolidated Consolidated Company Company
1. Cash flows from operating activities
Cash received from sales of goods or rendering of services 12,159,560,836 10,375,273,438 84,336,551 -
Refund of taxes and surcharges 24,706,337 69,632,529 - -
Cash received relating to other operating activities 4(50)(a) 72,348,567 47,278,131 16,104,051 3,798,557
Sub-total of cash inflows 12,256,615,740 10,492,184,098 100,440,602 3,798,557
Cash paid for goods and services (7,206,584,779) (5,719,787,359) (65,853) -
Cash paid to and on behalf of employees (1,204,981,471) (1,198,976,110) (61,388,549) (125,316,231)
Payments of taxes and surcharges (795,627,245) (780,678,441) (17,355,536) (39,189,451)
Cash paid relating to other operating activities 4(50)(b) (585,976,089) (551,890,068) (26,421,920) (13,035,783)
Sub-total of cash outflows (9,793,169,584) (8,251,331,978) (105,231,858) (177,541,465)
Net cash flows from/(used in) operating activities 2,463,446,156 2,240,852,120 (4,791,256) (173,742,908)
2. Cash flows from investing activities
Cash received from returns on investments - - 436,068,825 395,236,932
Net cash received from disposal of fixed assets, intangible
4,370,785 8,426,349 - 3,210
assets and other long-term assets
Cash received relating to other investing activities 4(50)(c) 187,756,255 364,515,307 5,966,582 736,648,232
Sub-total of cash inflows 192,127,040 372,941,656 442,035,407 1,131,888,374
Cash paid to acquire fixed assets, intangible assets and other
long-term assets (1,212,172,338) (1,289,115,730) (3,996,610) (807,521)
Cash paid to acquire investments - (4,252,960) - (158,896,160)
Net cash received from acquired subsidiaries - (503,593,518) - (502,204,796)
Cash paid relating to other investing activities 4(50)(d) (200,085,036) (182,205,113) (284,975) -
Sub-total of cash outflows (1,412,257,374) (1,979,167,321) (4,281,585) (661,908,477)
Net cash flows (used in)/from investing activities (1,220,130,334) (1,606,225,665) 437,753,822 469,979,897
3. Cash flows from financing activities
Cash received from capital contributions 417,349,879 14,500,000 417,349,879 -
Including: Cash received from capital contributions by
minority shareholders of subsidiaries - 14,500,000 - -
Cash received from borrowings 4,096,568,050 9,747,674,851 2,750,693,638 9,117,091,808
Cash received relating to other financing activities 4(50)(e) 3,616,000,000 - 2,700,067,157 -
Sub-total of cash inflows 8,129,917,929 9,762,174,851 5,868,110,674 9,117,091,808
Cash repayments of borrowings (5,154,107,768) (9,481,131,859) (4,646,723,365) (8,580,928,764)
Cash payments for interest expenses and distribution of
dividends or profits (558,404,559) (907,404,419) (275,981,816) (871,890,165)
Including: Cash payments for dividends to minority
shareholders of subsidiaries (2,488,500) - - -
Cash payments relating to other financing activities 4(50)(f) (1,783,109,674) - - (53,686,866)
Sub-total of cash outflows (7,495,622,001) (10,388,536,278) (4,922,705,181) (9,506,505,795)
Net cash flows (used in)/from financing activities 634,295,928 (626,361,427) 945,405,493 (389,413,987)
94
4. Effect of foreign exchange rate changes on cash (2,425,575) 1,557,085 666,398 208,178
5. Net increase/(decrease) in cash and cash equivalents 4(51)(b) 1,875,186,175 9,822,113 1,379,034,457 (92,968,820)
Add: Cash and cash equivalents at beginning of year 584,566,990 574,744,877 301,637,933 394,606,753
6. Cash and cash equivalents at end of year 4(51)(c) 2,459,753,165 584,566,990 1,680,672,390 301,637,933
The accompanying notes form an integral part of these financial statements.
Legal representative: Principal in charge of accounting: Head of accounting
department:
95
CSG HOLDING CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Attributable to shareholders of parentcompany
Other Total
comprehensive Undistributed shareholders'
Item Share capital Capital surplus income Special reserve Surplus reserve profits Sub-total Minority interests equity
Note 4(28) 4(29) 4(31) 4(32) 4(33) 4(34)
Balance at 31 December 2015 2,075,335,560 1,261,391,272 2,967,772 15,437,498 859,122,330 3,431,556,565 7,645,810,997 3,080,480 7,648,891,477
Prior period accounting error correction - - - - (342,000) (3,078,000) (3,420,000) (3,420,000)
Balance at 1 January 2016(Restated) 2,075,335,560 1,261,391,272 2,967,772 15,437,498 858,780,330 3,428,478,565 7,642,390,997 3,080,480 7,645,471,477
Movements for the year ended 31
December 2016 (Restated)
Total comprehensive income
Net profit - - - - - 797,721,576 797,721,576 6,504,948 804,226,524
Other comprehensive income 4(31) - - 1,686,199 - - - 1,686,199 - 1,686,199
Total comprehensive income - - 1,686,199 - - 797,721,576 799,407,775 6,504,948 805,912,723
Capital invest or reduce from shareholders - 402,262 - - - - 402,262 313,771,067 314,173,329
Minority shareholders invest capital - - - - - - - 313,628,750 313,628,750
Share-based payments - 402,262 - - - - 402,262 142,317 544,579
Effect of changes in investees’ other equity
- 81,143 - - - - 81,143 - 81,143
applying the equity method
Profit distribution - - - - 29,727,900 (652,328,568) (622,600,668) - (622,600,668)
Appropriation to surplus reserve 4(33) - - - - 29,727,900 (29,727,900) - - -
Distribution to the shareholders 4(34) - - - - - (622,600,668) (622,600,668) - (622,600,668)
Special reserve - - - (9,594,025) - - (9,594,025) - (9,594,025)
Special reserve appropriated 4(32) - - - 6,930,650 - - 6,930,650 - 6,930,650
Special reserve used 4(32) - - - (16,524,675) - - (16,524,675) - (16,524,675)
- 96 -
Others - (1,172,480) - - - - (1,172,480) (3,080,480) (4,252,960)
Transactions with minority shareholders - (1,172,480) - - - - (1,172,480) (3,080,480) (4,252,960)
Balance at 31 December 2016 2,075,335,560 1,260,702,197 4,653,971 5,843,473 888,508,230 3,573,871,573 7,808,915,004 320,276,015 8,129,191,019
- 97 -
CSG HOLDING CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (CONT’D)
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Attributable to shareholders of parentcompany
Other Total
Less: Treasury comprehens Special Surplus Undistributed Minority shareholders'
Item Share capital Capital surplus share ive income reserve reserve profits Sub-total interests equity
Note 4(28) 4(29) 4(30) 4(31) 4(32) 4(33) 4(34)
Balance at 1 January
2017(Restated) 2,075,335,560 1,260,702,197 - 4,653,971 5,843,473 888,508,230 3,573,871,573 7,808,915,004 320,276,015 8,129,191,019
Movements for the year ended 31
December 2017
Total comprehensive income
Net profit - - - - - - 825,388,312 825,388,312 3,247,723 828,636,035
Other comprehensive income 4(31) - - - (2,705,028) - - - (2,705,028) - (2,705,028)
Total comprehensive income - - - (2,705,028) - - 825,388,312 822,683,284 3,247,723 825,931,007
Capital increase or decrease
from shareholder 97,511,654 356,979,901 (417,349,879) - - - - 37,141,676 - 37,141,676
Share-based payments 97,511,654 328,032,920 (417,349,879) - - - - 8,194,695 - 8,194,695
Shareholders’ Interest-free
borrowing - 28,946,981 - - - - - 28,946,981 - 28,946,981
Profit distribution - - - - - 32,084,102 (239,617,658) (207,533,556) (2,488,500) (210,022,056)
Appropriation to surplus
4(33) - - - - - 32,084,102 (32,084,102) - - -
reserve
Distribution to the shareholders 4(34) - - - - - - (207,533,556) (207,533,556) (2,488,500) (210,022,056)
Special reserve - - - - (2,618,535) - - (2,618,535) - (2,618,535)
Special reserve appropriated 4(32) - - - - 7,831,127 - - 7,831,127 - 7,831,127
Special reserve used 4(32) - - - - (10,449,662) - - (10,449,662) - (10,449,662)
Internal transfer of shareholders'
equity 311,300,333 (311,300,333) - - - - - - - -
Capital reserve to share capital 311,300,333 (311,300,333) - - - - - - - -
2,484,147,547 1,306,381,765 (417,349,879) 1,948,943 3,224,938 920,592,332 4,159,642,227 8,458,587,873 321,035,238 8,779,623,111
- 98 -
Balance at 31 December 2017
The accompanying notes form an integral part of these financial statements.
Legal representative: Principal in charge of accounting: Head of accounting department:
- 99 -
CSG HOLDING CO., LTD.
COMPANY'S STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Attributable to shareholders of parent company
Total
Less: Treasury Surplus Undistributed shareholders'
Item Share capital Capital surplus share reserve profits equity
Balance at 31 December 2015 2,075,335,560 1,404,803,407 - 873,667,690 806,232,151 5,160,038,808
Prior period accounting error correction - - - (342,000) (3,078,000) (3,420,000)
Balance at 1 January 2016（Restated) 2,075,335,560 1,404,803,407 - 873,325,690 803,154,151 5,156,618,808
Movements for the year ended 31 December 2016
Total comprehensive income
Net profit - - - - 297,279,004 297,279,004
Other comprehensive income - - - - - -
Total comprehensive income - - - - 297,279,004 297,279,004
Effect of changes in investees’ other
equity applying the equity method - 726,104 - - - 726,104
Profit distribution
- - - 29,727,900 (652,328,568) (622,600,668)
- Appropriation to surplus reserve - - - 29,727,900 (29,727,900) -
- Distribution to the shareholders - - - - (622,600,668) (622,600,668)
Balance at 31 December 2016 (Restated) 2,075,335,560 1,405,529,511 - 903,053,590 448,104,587 4,832,023,248
Balance at 1 January 2017(Restated) 2,075,335,560 1,405,529,511 - 903,053,590 448,104,587 4,832,023,248
Movements for the year ended 31 December
2017
Total comprehensive income
Net profit - - - - 320,841,025 320,841,025
Total comprehensive income - - - - 320,841,025 320,841,025
Capital increase or decrease from
shareholder 97,511,654 356,979,901 (417,349,879) - - 37,141,676
Share-based payments 97,511,654 328,032,920 (417,349,879) - - 8,194,695
Shareholders’ Interest-free borrowing - 28,946,981 - - - 28,946,981
Profit distribution - - - 32,084,102 (239,617,658) (207,533,556)
Appropriation to surplus reserve - - - 32,084,102 (32,084,102) -
Distribution to the shareholders - - - - (207,533,556) (207,533,556)
Capital reserve to share capital 311,300,333 (311,300,333) - - - -
Balance at 31 December 2017 2,484,147,547 1,451,209,079 (417,349,879) 935,137,692 529,327,954 4,982,472,393
The accompanying notes form an integral part of these financial statements.
Legal representative: Principal in charge of accounting: Head of accounting
department:
- 100 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
1 General information
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 headquarters is located in Shenzhen, Guangdong Province of the People's Republic of China. The
Company issued RMB-denominated ordinary shares (“A-share”) and foreign shares (“B-share”) publicly in October
1991 and January 1992 respectively, and was listed on Shenzhen Stock Exchange on February 1992. As at 31
December 2017, the registered capital was RMB2,484,147,547, 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 flat glass, specialised glass, engineering glass, energy saving glass, silicon related materials,
polycrystalline silicon and solar components and electronic-grade display device glass and the construction and
operation of photovoltaic plant etc.
Details on the majors subsidiaries included in the consolidated scope in current year were stated in Note 6(1).
The financial statements were authorised for issue by the Board of Directors on 20 April 2018.
2 Summary of significant accounting policies and accounting estimates
The Group determines its specific accounting policies and estimates according to manufacturing and operation
feature. It mainly reflected in provision for bad debts of receivables (Note 2(10)), inventory costing method (Note
2(11)), amortisation of Property,plant and equipmentand intangible assets (Note 2(13) and (16)), criteria for
determining capitalised development expenditure (Note 2(16)), and timing for revenue recognition (Note 2(24)).
Please see Note 2(30) for the key judgements adopted by the Group in applying important accounting policies.
(1) Basis of preparation
The financial statements are prepared in accordance with the Accounting Standards for Business Enterprises -
Basic Standard, and the specific accounting standards and other relevant regulations issued by the Ministry of
Finance on 15 February 2006 and in subsequent periods (hereafter collectively referred to as “the Accounting
Standard for Business Enterprises” or “CAS”), and Information Disclosure Rule No. 15 for Companies with Public
Traded Securities - Financial Reporting General Provision issued by China Security Regulatory Commission.
As at 31 December 2017, the Group current liabilities exceed current assets about RMB2.52 billion and committed
capital expenditure of about RMB 0.15 billion (Note 11(1)). The directors of the Company has assessed the
following facts and conditions: a) the Group has been able to generate positive operating cash flows in prior years
and expect to do so in the next 12 months, and in 2017, the net cash inflow from operation activities is
approximately RMB2.463 billion; b) the Group has maintained good relationship with banks, so the Group has
been able to successfully renew the bank facilities upon the expiry. As at 31 December 2017, the Group had
unutilised banking facilities of approximately RMB4.00 billion, among which long-term banking facilities were about
RMB0.57billion. In addition, the shareholder of the Group or other appointed related parties are willing to provide
the
Group with RMB2.00 billion interest-free loan. As at report date, the shareholder of Group has provided
RMB1.610 billion interest-free loan. The Group also has other sources of financing, such as issuing short-term
bonds, ultra-short-term financing bonds and medium-term notes. The directors are of view that the banking
facilities and shareholder’s support above can meet the funding requirements
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(1) Basis of preparation (Cont’d)
- 101 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
of the Group’s debt servicing and capital commitment. Accordingly, the directors of the Company had adopted the
going concern basis in the preparation of the financial statements of the Company and the Group.
(2)
tatement of compliance with the Accounting Standards for Business Enterprises
The financial statements of the Company for the year ended 31 December 2017 are in compliance with the
Accounting Standards for Business Enterprises, and truly and completely present the financial position of the
consolidated and the Company as at 31 December 2017 and their financial performance, cash flows and other
information for the year then ended.
(3)
ccounting year
The Company’s accounting year starts on 1 January and ends on 31 December.
(4)
ecording currency
The recording currency is Renminbi (RMB).The economic environment of subsidiaries (China Southern
Glass(Hong Kong) Limited, Hong Kong Southern Glass Trading co., Limited) determines their recording currency
is Hongkong dollar. This report ‘s recording currency is Renminbi (RMB).
(5)
usiness combinations
(a) Business combinations involving enterprises under common control
The consideration paid and net assets obtained by the absorbing party in a business combination are measured at
book value. The difference between book value of the net assets obtained from the combination and book value of
the consideration paid for the combination is treated as an adjustment to capital surplus (share premium). If the
capital surplus (share premium) is not sufficient to absorb the difference, the remaining balance is adjusted against
retained earnings. Costs directly attributable to the combination are included in profit or loss in the period in which
they are incurred. Transaction costs associated with the issue of equity or debt securities for the business
combination are included in the initially recognised amounts of the equity or debt securities.
(b) Business combinations involving enterprises not under common control
The cost of combination and identifiable net assets obtained by the acquirer in a business combination are
measured at fair value at the acquisition date. Where the cost of the combination exceeds the acquirer’s interest in
the fair value of the acquiree’s identifiable net assets, the difference is recognised as goodwill; where the cost of
combination is lower than the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the
difference is recognised in profit or loss for the current period. Costs directly attributable to the combination are
included in profit or loss in the period in which they are incurred. Transaction costs associated with the issue of
equity or debt securities for the business combination are included in the initially recognised amounts of the equity
or debt securities.
(6)
reparation 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 on which the Group obtains control and are de-consolidated from the
- 102 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
date that such control ceases. For a subsidiary that is acquired in a business combination involving enterprises
under common control, it is included in the consolidated financial statements from the date when it, together with
the Company, comes under common control of the
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(6) Preparation of consolidated financial statements (Cont’d)
ultimate controlling party. The portion of the net profits realised before the combination date is presented
separately in the consolidated income statement.
In preparing the consolidated financial statements, where 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. Unrealised profits and losses resulting from the sales of assets by the Company to its
subsidiaries are fully eliminated against net profit attributable to shareholders of the parent company. Unrealised
profits and losses resulting from the sales of assets by a subsidiary to the Company are eliminated and allocated
between net profit attributable to shareholders of the parent company and non-controlling interests in accordance
with the allocation proportion of the parent company in the subsidiary. Unrealised profits and losses resulting from
the sales of assets by one subsidiary to another are eliminated and allocated between net profit attributable to
shareholders of the parent company and non-controlling interests in accordance with the allocation proportion of
the parent in the subsidiary.
After the control over the subsidiary has been gained, whole or partial minority equities of the subsidiary owned by
minority shareholders are acquired from the subsidiary’s minority shareholders. In the consolidated financial
statements, the subsidiary's assets and liabilities are reflected with amount based on continuous calculation
starting from the acquisition date or consolidation date. Capital surplus is adjusted according to the difference
between newly increased long-term equity investment arising from acquisition of minority equity and the share of
net assets calculated based on current shareholding ratio that the parent company is entitled to. The share is
subject to continuous calculation starting from the acquisition date or consolidation date. If the capital surplus
(capital premium or share capital premium) is not sufficient to absorb the difference, the remaining balance is
adjusted against retained earnings.
If the accounting treatment of a transaction which considers the Group as an accounting entity is different from that
considers the Company or its subsidiaries as an accounting entity, it is adjusted from the perspective of the Group.
(7) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, deposits that can be readily drawn on demand, and short-term
and highly liquid investments that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value.
(8) Foreign currency transaction
(a) Foreign currency transaction
Foreign currency transactions are translated into RMB using the exchange rates prevailing at the dates of the
transactions.
2 Summary of significant accounting policies and accounting estimates (Cont’d)
- 103 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
(8) Foreign currency transaction (Cont’d)
At the balance sheet date, monetary items denominated in foreign currencies are translated into RMB using the
spot exchange rates on the balance sheet date. Exchange differences arising from these translations are
recognised in profit or loss for the current period, except for those attributable to foreign currency borrowings that
have been taken out specifically for the acquisition or construction of qualifying assets, which are capitalised as
part of the cost of those assets. Non-monetary items denominated in foreign currencies that are measured at
historical costs are translated at the balance sheet date using the spot exchange rates at the date of the
transactions. The effect of exchange rate changes on cash is presented separately in the cash flow statement.
(b) Translation of foreign currency financial statements
The asset and liability items in the balance sheets for overseas operations are translated at the spot exchange
rates on the balance sheet date. Among the shareholders’ 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 shareholders’ equity. The cash flows
of overseas operations are translated at the spot exchange rates on the dates of the cash flows. The effect of
exchange rate changes on cash is presented separately in the cash flow statement.
(9) Financial instrument
(a) Financial assets
(i) Classification 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 had no financial assets at fair value through profit or loss and held-to-maturity investments for 2017.
Receivables
Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market. Receivables comprise notes receivable, accounts receivable and other receivables. (Note 2(10))
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either designated in this category or
not classified in any of the other categories at initial recognition. Available-for-sale financial assets are included in
other current assets on the balance sheet if management intends to dispose of them within 12 months after the
balance sheet date.
(ii) Recognition and measurement
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.
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(9) Financial instrument (Cont’d)
Available-for-sale financial assets are subsequently measured at fair value. Investments in equity instruments are
- 104 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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.
(a) Financial assets
(iii) Impairment of financial assets
The Group assesses book values 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.
The objective evidence of impairment losses on financial assets refers to events that actually incurred after the
initial recognition of financial assets, have influence on the expected future cash flow from the financial assets and
the influence 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 Checkion 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% (inclusive) 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% (inclusive)
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 is 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
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(9) Financial instrument (Cont’d)
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
- 105 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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 book value and the sum of the consideration received
and the cumulative changes in fair value that had been recognised directly in owner's equity, is recognised in profit
or loss.
(b) Financial liabilities
Financial liabilities are classified into two categories at initial recognition: financial liabilities at fair value through
profit or loss and other financial liabilities. The financial liabilities of the Group mainly comprise other financial
liabilities, including payables, borrowings and bonds payable.
The fair value change of financial liabilities at fair value through profit or loss is charged to income statement.
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 (inclusive) is presented as current liabilities, while non-current financial
liabilities due with one year (inclusive) 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 book value 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.
- 106 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(10) Receivables
Receivables comprise notes receivable, accounts receivable and other receivables. Accounts receivable arising
from sales of goods or rendering of services are initially recognised at fair value of the contractual payments from
the buyers or service recipients.
(a) Receivables with amounts that are individually significant and subject to separate assessment for provision for bad
debts
Receivables with amounts that are individually significant are subject to separate assessment for impairment. If
there exists objective evidence that the Group will not be able to collect the amount under the original terms, a
provision for bad debts of that receivable is made at the difference between its carrying amount and the present
value of its estimated future cash flows.
The basis or amount for individually significant receivables is individually greater than RMB20 million.
(b) Receivables with amounts that are not individually significant but subject to separate assessment for provision for
bad debts
If there exists objective evidence that the Group will not be able to collect the amount under the original terms, a
provision for bad debts of that receivable is made at the difference between its carrying amount and the present
value of its estimated future cash flows.
(c) Receivables that are subject to provision for bad debts on the grouping basis
Receivables with amounts that have not been individually provided for impairment are classified into certain
groupings based on their credit risk characteristics. The provision for bad debts is determined based on the
historical loss experience for the groupings of receivables with similar credit risk characteristics, taking into
consideration of the current circumstances.
Basis for portfolio is as follows:
Portfolio 1 Receivables not impaired after separate assessment
Portfolio 2 Related party portfolio
The percentage of provision for the portfolio:
Percentage of provision for Percentage of provision for other
accounts receivable receivables
Portfolio 1 2% 2%
Portfolio 2 2% 2%
(d) The Group transfers receivables which have no recourse right to financial institution, the difference between book
values which is trade amount cut the write-off receivables and related tax expenses charged into the income
statement.
(11) Inventories
(a) Classification
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CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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.
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(11) Inventories (Cont’d)
(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 decline in the value of inventories
Provision for decline in the value of inventories is determined at the excess amount of book values of the
inventories over their net realisable value. Net realisable value is determined based on the estimated selling price
in the ordinary course of business, less the estimated costs to completion and estimated costs necessary to make
the sale and related taxes.
(e) The Group adopts the perpetual inventory system.
(12) Long-term equity investments
Long-term equity investments comprise the Company’s long-term equity investments in its subsidiaries, and the
Group’s long-term equity investments in its associates.
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.
(a) Initial recognition
For long-term equity investments formed in business combination: when obtained from business combinations
involving entities under common control, the long-term equity investment is stated at carrying amount of equity for
the combined parties at the time of merger; when the long-term equity investment obtained from business
combinations involving entities not under common control, the investment is measured at combination cost.
For long-term equity investments not formed in business combination: the one paid by cash is initially measured at
actual purchase price; the long-term investment obtained by issuing equity securities is stated at fair value of equity
securities as initial investment cost..
(b) Subsequent measurement and recognition of related profit or loss
For long-term equity investments accounted for using the cost method, they are measured at the initial investment
costs, and cash dividends or profit distribution declared by the investees are recognised as investment income in
profit or loss.
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CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
For long-term equity investments accounted for using the equity method, where the initial investment cost of a
long-term equity investment exceeds the Group’s share of the fair value of the investee’s
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(12) Long-term equity investments (Cont’d)
identifiable net assets at the acquisition date, the long-term equity investment is measured at the initial investment
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 acquisition date, the difference is included in profit or loss and the cost of the long-term equity
investment is adjusted upwards accordingly.
Under 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 book values 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 the shareholding of the Group in the investee remains unchanged. Book
value 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 intra-group transactions amongst the Group and its
investees are eliminated in proportion to the Group’s equity interest in the investees, and then based on which the
investment gains or losses are recognised. Any losses resulting from transactions between the Group and its
investees attributable to asset impairment losses are not eliminated.
(c) Basis for determining existence of control, jointly control or significant influence over 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
Book value of long-term equity investments in subsidiaries and associates is reduced to the recoverable amount
when the recoverable amount is less than book value (Note 2(18)).
(13) Fixed assets
(a) 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 probably flow to the Group
and the costs can be reliably measured. Fixed assets purchased or constructed by the Group are initially
measured at cost at the acquisition date.
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. Book
value 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.
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CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(b) Depreciation methods
Fixed assets are depreciated using the straight-line method to allocate the cost of the assets to their estimated
residual values over their estimated useful lives. For the fixed assets that have been provided for impairment loss,
the related depreciation charge is prospectively determined based upon the adjusted carrying amounts over their
remaining useful lives.
The estimated useful lives, the estimated net residual values expressed as a percentage of cost and the annual
depreciation rates of fixed assets are as follows:
Estimated useful lives Estimated net residual value Annual depreciation rate
Buildings 20 to 35 years 5% 2.71% to 4.75%
Machinery and equipment 8 to 20 years 5% 4.75% to 11.88%
Motor vehicles and others 5 to 8 years 0% 12.50% to 20.00%
The estimated useful life, the estimated net residual value of a fixed asset and the depreciation method applied to
the asset are reviewed, and adjusted as appropriate at each year-end.
(c) Book value of a fixed asset is reduced to the recoverable amount when the recoverable amount is below book
value (Note 2 (18)).
(d) Disposal
A fixed asset is derecognised on disposal or when no future economic benefits are expected from its use or
disposal. The amount of proceeds from disposals on sale, transfer, retirement or damage of a fixed asset net of its
carrying amount and related taxes and expenses is recognised in profit or loss for the current period.
(14) Construction in progress
Construction in progress is recorded at actual cost. Actual cost comprises construction cost, installation cost,
borrowing costs eligible for capitalised condition and necessary expenditures incurred for its 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.
Book value of construction in progress is reduced to the recoverable amount when the recoverable amount is
below book value (Note 2 (18)).
- 110 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(15) Borrowing costs
The borrowing costs that are directly attributable to the acquisition and construction of an 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 an 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 an asset qualifying for capitalisation, the
amount of borrowing costs eligible for capitalisation is determined by applying the weighted average effective
interest rate of general borrowings, to the weighted average of the excess amount of cumulative expenditures on
the asset over the amount of specific borrowings. The effective interest rate is the rate at which the estimated
future cash flows during the period of expected duration of the borrowings or applicable shorter period are
discounted to the initial amount of the borrowings.
(16) Intangible assets
Intangible assets, mainly including land use rights, patents and proprietary technologies, exploitation rights and
others, 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 and proprietary technologies
Patents are amortised on a straight-line basis over the estimated use life.
(c) Exploitation rights
Exploitation rights are amortised on a straight-line basis over permitted exploitation periods 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.
- 111 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(16) Intangible assets (Cont’d)
(e) Research and development
The expenditure on an internal research and development project is classified into expenditure on the research
phase and expenditure on the development phase based on its nature and whether there is material uncertainty
that the research and development activities can form an intangible asset at end of the project.
Expenditure on the research phase related to planned survey, evaluation and selection for research on
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;
management has approved the budget for the development of manufacturing technique;
there are research and analysis of pre-market research explaining that products manufactured with such
technique are capable of marketing;
There is sufficient technical and capital to support the development of manufacturing technique and
subsequent mass production; and the expenditure on manufacturing technique development can be
reliably gathered.
Other development expenditures that do not meet the conditions above are recognised in profit or loss in the
period in which they are incurred. Development costs previously recognised as expenses are not recognised as an
asset in a subsequent period. Capitalised expenditure on the development phase is presented as development
costs in the balance sheet and transferred to intangible assets at the date that the asset is ready for its intended
use.
(f) Impairment of intangible assets
Book value of intangible assets is reduced to the recoverable amount when the recoverable amount is below book
value (Note 2 (18)).
(17) Long-term prepaid expenses
Long-term prepaid expenses include the expenditures that have been incurred but should be recognised as
expenses over more than one year in the current and subsequent periods. Long-term prepaid expenses are
amortised on the straight-line basis over the expected beneficial period and are presented at actual expenditure
net of accumulated amortisation.
(18) Impairment of long-term assets
Fixed assets, construction in progress, intangible assets with finite useful lives and long-term equity investments in
joint ventures and associates are tested for impairment if there is any indication that the assets may be impaired at
the balance sheet date; intangible assets not ready for their intended use are tested at least annually for
impairment, irrespective of whether there is any indication that they may be impaired. If the result of the impairment
test indicates that the recoverable amount of an asset is less than its carrying amount, a provision for impairment
and an impairment loss are recognised for the amount by which the asset’s carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and the
present value of the future cash flows expected to be derived from the asset. Provision for asset impairment is
determined and recognised on the individual asset basis. If it is not possible to estimate the recoverable amount of
an individual asset, the recoverable amount of a group of assets to which the asset belongs is determined. A group
of assets is the smallest group of assets that is able to generate independent cash inflows.
- 112 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(18) Impairment of long-term assets (Cont’d)
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, book 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 book value of goodwill that is allocated to
the asset group or group of asset groups, and then deducted from book values of other assets within the asset
groups or groups of asset groups in proportion to book values of assets other than goodwill.
Once the above asset impairment loss is recognised, it will not be reversed for the value recovered in the
subsequent periods.
(19) Employee benefits
Employee benefits include short-term employee benefits, post-employment benefits, termination benefits and other
long-term employee benefits provided in various forms of consideration in exchange for service rendered by
employees or compensations for the termination of employment relationship.
(a) Short-term employee benefits
Short-term employee benefits include wages or salaries, bonuses, allowances and subsidies, staff welfare, medical
care, work injury insurance, maternity insurance, housing funds, labour union funds, employee education funds
and paid short-term leave, etc. The employee benefit liabilities are recognised in the accounting period in which the
service is rendered by the employees, with a corresponding charge to the profit or loss for the current period or the
cost of relevant assets. Employee benefits which are non-monetary benefits shall be measured at fair value.
(b) Post-employment benefits
The Group classifies post-employment benefit plans as either defined contribution plans or defined benefit plans.
Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into
a separate fund and will have no obligation to pay further contributions; and defined benefit plans are
post-employment benefit plans other than defined contribution plans. During the reporting period, the Group's
post-employment benefits mainly include basic pensions and unemployment insurance, both of which belong to
the defined contribution plans.
Basic pensions
The Group’s employees participate in the basic pension plan set up and administered by local authorities of
Ministry of Human Resource and Social Security. Monthly payments of premiums on the basic pensions are
calculated according to prescribed bases and percentage by the relevant local authorities. When employees retire,
local labour and social security institutions have a duty to pay the basic pension insurance 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.
.
- 113 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(19) Employee benefits (Cont’d)
(c) Termination benefits
The Group provides compensation for terminating the employment relationship with employees before the end of
the employment contracts or as an offer to encourage employees to accept voluntary redundancy before the end of
the employment contracts. The Group recognises a liability arising from compensation for termination of the
employment relationship with employees, with a corresponding charge to profit or loss at the earlier of the following
dates: 1) when the Group cannot unilaterally withdraw the offer of termination benefits because of an employment
termination plan or a curtailment proposal; 2) when the Group recognises costs or expenses related to the
restructuring that involves the payment of termination benefits.
The termination benefits expected to be paid within one year since the balance sheet date are classified as current
liabilities.
(20) Dividend distribution
Cash dividend is recognised as a liability for the period in which the dividend is approved by the shareholders’
meeting.
(21) Deferred tax assets and deferred tax liabilities
Deferred tax assets and deferred tax liabilities are calculated and recognised based on the differences arising
between the tax bases of assets and liabilities and their carrying amounts (temporary differences). Deferred tax
asset is recognised for the deductible losses that can be carried forward to subsequent years for deduction of the
taxable profit in accordance with the tax laws. No deferred tax liability is recognised for a temporary difference
arising from the initial recognition of goodwill. No deferred tax asset or deferred tax liability is recognised for the
temporary differences resulting from the initial recognition of assets or liabilities due to a transaction other than a
business combination, which affects neither accounting profit nor taxable profit (or deductible loss). At the balance
sheet date, deferred tax assets and deferred tax liabilities are measured at the tax rates that are expected to apply
to the period when the asset is realised or the liability is settled.
Deferred tax assets are only recognised for deductible temporary differences, deductible losses and tax credits to
the extent that it is probable that taxable profit will be available in the future against which the deductible temporary
differences, deductible losses and tax credits can be utilised.
Deferred tax liabilities are recognised for temporary differences arising from investments in subsidiaries and
associates, except where the Group is able to control the timing of reversal of the temporary difference, and it is
probable that the temporary difference will not reverse in the foreseeable future. When it is probable that the
temporary differences arising from investments in subsidiaries and associates will be reversed in the foreseeable
future and that the taxable profit will be available in the future against which the temporary differences can be
utilised, the corresponding deferred tax assets are recognised.
Deferred tax assets and liabilities are offset when:
the deferred taxes are related to the same tax payer within the Group and the same taxation authority; and,
that tax payer within the Group has a legally enforceable right to offset current tax assets against current tax
liabilities.
- 114 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(22) Provisions
Business restructuring, provisions for product warranties, loss 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.
Book value of provision is reviewed at each balance sheet date and adjusted to reflect the current best estimate.
The provisions expected to be paid within one year since the balance sheet date are classified as current liabilities.
(23) Share-based payments
Share-based payments are divided into equity-settled and cash-settled payments. The term "equity-settled
share-based payment" refers to a transaction in which an enterprise grants shares or other equity instruments as a
consideration in return for services.
Equity-settled share-based payment The Group‘s stock optionstock option plan is the equity-settled share-based
payment in exchange of employees' services and is measured at the fair value of the equity instruments at grant
date. The equity instruments are exercisable after services in vesting period are completed or specified
performance conditions are met. In the vesting period, the services obtained in current period are included in
relevant cost and expenses at the fair value of the equity instruments at grant date based on the best estimate of
the number of exercisable equity instruments, and capital surplus is increased accordingly. If the subsequent
information indicates the number of exercisable equity instruments differs from the previous estimate, an
adjustment is made and, on the exercise date, the estimate is revised to equal the number of actual vested equity
instruments. The Group determines the fair value of stock optionstock options using option pricing model, which is
Black-Scholes option pricing model (B-S model).
In the period at which performance conditions and term of service are met, the relevant cost and expenses of
equity-settled payment should be recognized, and capital surplus is increased accordingly. Before the exercise
date, the accruing amounts of equity-settled payments on balance sheet date reflect the part of expired waiting
period and optimal estimation for the number of the Company final vested equity instruments.
If the non-market conditions and term of service are not met so that share-based payment fail to exercise, the costs
and expenses on this portion should not be recognized. If the share-based payment agreement sets out the market
conditions and term of non-vesting, as long as performance conditions and term of service are met, it is should be
regard as exercisable right, no matter the market conditions and non-vesting conditions are meet or not.
If the terms of equity-settled payment are modified, at least the service is confirmed in accordance with the
unmodified terms. In addition, the increase of the fair value of the authorized equity instruments, or the beneficial
changes to the employees on the modification date, the increase of service are confirmed.
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(23) Share-based payments (Cont’d)
If the equity-settled payment is cancelled, the cancellation date shall be deemed as an expedited exercise, and the
- 115 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
unconfirmed amount shall be confirmed immediately. If the employee or other party is able to choose to meet the
non-vesting conditions but not satisfied in the waiting period, equity-settled payment should be cancelled. But if a
new equity instrument is granted, and the new equity instrument is confirm to replace the old equity instrument
which is canceled in the authorization date of the new equity instrument, the new equity instrument should be
disposed by using the same conditions and terms of the old equity instrument for modifications
(24) Revenue recognition
The amount of revenue is determined in accordance with the fair value of the consideration received or receivable
for the sales 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 probably 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) Sales of goods
The Group mainly sells flat and engineering glass, products related to solar energy, and electronic glass and
displays. 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 recognises revenue. For export sales, the Group recognises 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 recognised 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 recognised on a time-proportion basis using the effective interest method.
(25) Government grants
Government grants are transfers of monetary or non-monetary assets from the government to the Group at nil
consideration, including tax refund and financial subsidies, etc.
A government grant is 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.
The government grants related to assets refer to government grant obtained by enterprises and used for purchase
and construction of long-term assets or formation of long-term asset in other ways. The government grants related
to income refer to grants other than those related to assets.
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(25) Government grants (Cont’d)
For government grants related to income, where the grant is a compensation for related expenses or losses to be
incurred by the Group in the subsequent periods, the grant is recognised as deferred income, and included in profit
- 116 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
or loss over the periods in which the related costs are recognised; where the grant is a compensation for related
expenses or losses already incurred by the Group, the grant is recognised immediately in profit or loss for the
current period.The company use the same method of presentation for similar government grants.
The ordinary activitiy government grants should be counted into operating profits; the government grants which not
belong ordinary activities should be counted inton non-operationg income.
(26) Leases
A lease that transfers substantially all the risks and rewards incidental to ownership of an asset is a finance lease.
An operating lease is a lease other than a finance lease.
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.
(27) Assets classified as held for sale
A non-current asset or a disposal group is classified as held for sale when all of the following conditions are
satisfied: (1) the non-current asset or the disposal group is available for immediate sale in its present condition
subject to terms that are traditionally and customary for sales; (2) the Group has made a resolution and obtained
appropriate approval for disposal of the non-current asset or the disposal group, and the transfer is to be
completed within one year.
Non-current assets (except for financial assets, investment properties at fair value 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 book value. The difference between fair value less costs to sell and carrying amount, should be
presented as impairment loss.
Such non-current assets and assets included in disposal groups as classified as held for sale are accounted for as
current assets; while liabilities included in disposal groups classified as held for sale are accounted for as current
liabilities, and 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.
The discontinued operation profits on income statement presentation have included the profits and loss of
operation and disposal.
(28) 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:
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(28) Safety production costs
- 117 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
(a) 4% for revenue below RMB10 million (inclusive) of the year;
(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 or loss 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.
(29) 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 revenue 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.
(30) Critical accounting estimates and judgements
The Group continually Estimates the critical accounting estimates and key assumptions 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 possibly causing a material
adjustment to book values of assets and liabilities within the next accounting year are outlined below:
(a) Income tax
The Group is subject to Income tax in numerous jurisdictions. There are some 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 tax in each of these jurisdictions. Where the final identified
outcome of these tax matters is different from the initially-recorded amount, such difference will impact the income
tax expenses and deferred income tax in the period in which such determination is finally 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. Realisation of deferred income tax are subject to sufficient taxable income that are possible to be
obtained by the Group in the future. Change of the future tax rate as well as the reversed time of temporary
difference might have effects on tax expense (income) and the balance of
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(30) Critical accounting estimates and judgements (Cont’d)
(b) Deferred income tax (Cont’d)
deferred tax assets or liabilities. Those estimates may also cause significant adjustment on deferred tax.
- 118 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
(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. 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
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, 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. Thus, the estimated result based on existing
experience may be different from the actual result of the next accounting period, which may cause major
adjustment to book value of fixed assets on balance sheet.
(e) Goodwill impairment
Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances
indicate a potential impairment. For the purpose of impairment testing, goodwill acquired in a business combination
is allocated to each of the cash-generating units (“CGUs”), or groups of CGUs, and future cash flow from each
CGU or CGUs is forcasted and discounted with appropriate discount rate.
(31) Significant changes in accounting policies
In 2017, the Ministry of Finance released the “Accounting Standard for Business Enterprises No. 42—Non-current
Assets or Disposal Groups Held for Sale and Discontinued Operations”, revised “Accounting Standard for Business
Enterprises No. 16—Government Grants” and the “Circular on Amendment to Formats of Financial Statements of
General Industry” and its interpretation (Cai Kuai [2017] 30). The financial statements are prepared in accordance
with the above standards and circular, and impacts are as follows:
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(31) Significant changes in accounting policies (Cont’d)
The nature and the reasons of the changes in The amounts
The line items affected
accounting policies affected
The Company and its subsidiaries recorded the VAT
return obtained and other government grants related
to ordinary activities in 2017 in other income. The N/A N/A
comparatives as at 31 December 2016 were not
restated
2016
The Company and its subsidiaries recorded the
gains or losses on disposals of fixed assets Income on disposal
occurred in 2017, in loss on disposals of assets. The
assets (1,759,358)
comparatives as at 31 December 2016 were 1,551,302
restated accordingly Non-operating income
(3,310,660)
Non-operating expense
- 119 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
The Company’s assets for sale in 2017 is presented
separately. The comparative financial statement at N/A N/A
31 December 2016 is not presented
(32) Prior period accounting error correction
a. Matter descreption
During the preparation of the current financial statements, the company discovered that: On December 10, 2012,
the People's Government of Yichang City and the Company signed the Cooperation Agreement on Fine Glass and
Ultrathin Electronic Glass Project (hereinafter referred to as the “original agreement”);Two supplemental
agreements were formed based on the original agreement: On March 20, 2013, the People's Government of
Yichang and the Company signed a supplementary agreement (I) 《Cooperation Agreement on Fine Glass and
Ultra-thin Electronic Glass Projects》、 December 30, 2013 Yichang High and new technology development zone
management committee and the company signed a supplementary agreement (II) 《Cooperative Agreement on
Fine Glass and Ultrathin Electronic Glass Projects》 The main contents of the supplementary agreement (II) are as
follows:
The management committee of Yichang High-tech Industrial Development Zone agreed to establish a RMB 171
million talent fund for the company’s mid- to senior-level management、 engineering and technical personnel and
senior professional mechanics who be introduced to Yichang, as a special fund subsidy for the introduction of
talents and the placement of talented people. The company is responsible for formulating the housing resettlement
subsidy program and supervising the use of this special fund.
According to the agreement, the company entrusted the wholly-owned subsidiary Yichang CSG Silicon Material
Co., Ltd. to collect the fund, and the management committee of Yichang High-tech Industrial Development Zone
fully allocated to Yichang CSG Silicon Material Co., Ltd.
The funds were subsidized by the government to the company, but Yichang CSG Silicon Material Co., Ltd.
received this amount and transferred it to Yichang Hongtai Real Estate Co., Ltd. in full amount without proper
approval from the company's board of directors and other relevant authorities. (Yichang Hongtai Real Estate Co.,
Ltd. is a company jointly indirect controlled by part of the former natural executives of the company. The
company has no equity relationship with the company. For details of the company, see Note 8(4)).
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(32) Prior period accounting error correction (Cont’d)
b. Accounting treatment
Yichang CSG Silicon Material Co., Ltd. received the above fund from February 21, 2014 to April 28, 2014, and
transferred it to Yichang Hongtai Real Estate Co., Ltd. in full and also handled the accounting treatment according
to the collecting and paying. The Company did not conduct any accounting treatment and report disclosure in
consolidated Statements.
According to the relevant provisions of the “Accounting Standards for Business Enterprises - Government
Subsidies”, the company believes that the special funds in the above agreement constitute a government subsidy,
and the government subsidy related to income should be confirmed in the financial statements of the
corresponding accounting period, recognition of expense at the same time carring forward the profits and loss of
the current.Therefore, the company in the current period Items were corrected for accounting errors.
c. Impact on the financial statements
The Group and the Company made retrospective adjustments to the above accounting errors. In the consolidated
balance sheet, other receivables were increased by RMB171,000,000 as of December 31, 2016 (January 1, 2016:
RMB171,000,000). December 2016 On the 31st, other receivables - bad debt provisions were increased by
3,420,000 yuan (January 1, 2016: RMB3,420,000), and deferred income was increased by 171 million yuan
(December 1, 2016: RMB171 million) on December 31, 2016. As of December 31, 2016, the surplus reserve was
reduced by RMB342,000 (January 1, 2016: RMB 342,000). As of December 31, 2016, the undistributed profit was
reduced by RMB 3,078,000 (January 1, 2016: RMB 3,078,000).
In the company's balance sheet, other receivables were increased by RMB171,000,000 (December 1, 2016:
- 120 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
RMB171,000,000) as of December 31, 2016, and other receivables – provision for bad debts increased by
RMB3,420,000 (December 31, 2016) ( January 1, 2016: RMB3,420,000), 20 yuan December 31, 2016 deferred
income increased by RMB171,000,000 (January 1, 2016: RMB171,000,000), December 31, 2016 surplus reserve
decreased by RMB342,000 (January 1, 2016: RMB342,000), Undistributed profits decreased by RMB3,078,000
(December 1, 2016: RMB 3,078,000) as of December 31, 2016.
3 Taxation
(1) The main categories and rates of taxes applicable to the Group are set out below:
Category Taxable basis Tax rate
Enterprise income tax Taxable income 0% to 25%
Value-added tax (“VAT”) (a) Taxable value-added amount (Tax payable is calculated using 6% to 17%
the taxable sales amount multiplied by the applicable tax
rate less deductible VAT input of the current period)
City maintenance and VAT paid 1% to 7%
construction tax
Educational surcharge VAT paid 3% to 5%
Resource tax Silica sold Sales 6.5%
Some subsidiaries of the Group have used the “exempt, credit, refund” method on goods exported and the refund
rate is 5%-17%.
3 Taxation (Cont’d)
(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.
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 2017 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 2017.
Dongguan CSG Solar Glass Co., Ltd. (“Dongguan CSG Solar”) passed review on a high and new tech enterprise in
2017 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 2017.
Yichang CSG Silicon Co., Ltd. (“Yichang CSG Silicon”) passed review on a high and new tech enterprise in 2017
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 2017.
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.
- 121 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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 2017, 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 2017.
Xianning CSG Glass Co Ltd. (“Xianning CSG”) was recognised as a high and new tech enterprise in 2017, 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 2017.
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.
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 2016.
- 122 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
3 Taxation (Cont'd)
(2) Tax incentives (Cont’d)
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 current year.
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 current year.
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”), Zhangzhou CSG Kibing PV Energy Co., Ltd. (“Zhangzhou
CSG”), Heyuan CSG Kibing PV Energy Co., Ltd. (“Heyuan CSG”), Shaoxing CSG Kibing PV Energy Co., Ltd.
(“Shaoxing CSG”) 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, Zhangzhou CSG, Heyuan CSG and Shaoxing CSG started
operation in 2017. The applicable enterprise income tax rate for them is 0% for the current year.
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.
- 123 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements
(1) Cash at bank and on hand
31 December 2017 31 December 2016
Cash on hand 36,182 17,239
Cash at bank 2,409,716,983 584,549,751
Other cash balances 52,852,599 2,236,515
2,462,605,764 586,803,505
Including: Total overseas deposits 24,049,075 12,956,226
Other cash balances include margin deposits for issuing letters of credit and applying loans, amounting to
RMB2,852,599 (31 December 2016: RMB2,236,515), which is restricted cash.
(2) Notes receivable
31 December 2017 31 December 2016
Trade acceptance notes 329,405,579 317,789,825
Bank acceptance notes 222,826,841 138,557,412
552,232,420 456,347,237
(a) As at 31 December 2017, notes receivable which have been endorsed or discounted by the Group but are not yet
due are as follows:
Derecognised Not derecognised
Trade acceptance notes - 179,023,725
Bank acceptance notes 3,154,733,678 -
3,154,733,678 179,023,725
(3) Accounts receivable
31 December 2017 31 December 2016
Accounts receivable 660,150,357 644,454,374
Less: Provision for bad debts (21,912,067) (16,468,391)
638,238,290 627,985,983
- 124 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(3) Accounts receivable (Cont’d)
(a) The ageing of accounts receivable is analysed as follows:
31 December 2017 31 December 2016
Within 1 year 639,294,320 628,822,515
1 to 2 years 8,343,672 15,585,397
2 to 3 years 12,512,365 -
Over 3 years - 46,462
660,150,357 644,454,374
As at 31 December 2017, accounts receivable of RMB93,961,486 (31 December 2016: RMB50,609,529) were
overdue. But based on analysis on financial positions and credit records of such customers, such receivables
were considered recoverable and unimpaired by the Company. Therefore no provision for impairment loss had
been made. The overdue ageing of the accounts receivable is analysed as follows:
31 December 2017 31 December 2016
Within 1 year 86,358,511 47,568,459
1 to 2 years 7,448,217 3,041,070
2 to 3 years 154,758
93,961,486 50,609,529
(b) Accounts receivable are analysed by categories as follows:
31 December 2017 31 December 2016
Carrying amount Provision for bad debts Carrying amount Provision for bad debts
% of total Provision for % of total Provision for
Amount balance bad debts % Amount balance bad debts %
Provision for bad debts by
groupings
Portfolio 1 636,614,136 96% (12,233,039) 2% 631,863,585 98% (12,187,534) 2%
With amounts that are not
individually significant but that
the related provision for bad
debts is provided on the
individual basis 23,536,221 4% (9,679,028) 41% 12,590,789 2% (4,280,857) 34%
660,150,357 100% (21,912,067) 3% 644,454,374 100% (16,468,391) 3%
- 125 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(3) Accounts receivable (Cont’d)
(c) Provision for bad debts provided on grouping basis using the percentage of provision method is analysed as
follows:
31 December 2017 31 December 2016
Carrying amount Provision for bad debts Carrying amount Provision for bad debts
Amount Amount % Amount Amount %
Portfolio 1 636,614,136 (12,233,039) 2% 631,863,585 (12,187,534) 2%
636,614,136 (12,233,039) 2% 631,863,585 (12,187,534) 2%
(d) As at 31 December 2017, the Company had no accounts receivable with amounts that were individually significant
and that the related provision for bad debts was provided on the individual basis (31 December 2016: Nil).
(e) As at 31 December 2017, accounts receivable of RMB23,536,221 (31 December 2016: RMB12,590,789) were not
individually significant but provided for bad debts separately. It mainly represented the goods receivable due from
a client of the subsidiary, Yichang CSG Display. Due to the client’s bankruptcy, Yichang CSG Display made full
provision against this receivable. It also represented the goods receivable due from a client of the subsidiary,
Dongguan CSG PV-tech. Due to business dispute, Dongguan CSG PV-tech made partial provision against the
receivable.
(f) Accounts receivables of RMB117,931 were written off this year, all of which were low amount of accounts receivable and
none of which arose from related-party transactions. The reasons for the written-off included disputes with
customers and inability to contact with creditors and etc.
(g) As at 31 December 2017, the Group’s top five entities with the largest accounts receivable balances are set out as
below:
Provision for bad Percentage in total accounts
Balance debts receivable balance
Total balances for the five largest
accounts receivable 104,847,077 (2,096,942) 16%
(4) Advances to suppliers
(a) The ageing of prepayment is analysed below:
31 December 2017 31 December 2016
% of total % of total
Amount balance Amount balance
Within 1 year 130,813,397 91% 80,819,387 84%
1 to 2 years 264,952 - 14,913,745 16%
2 to 3 years 12,769,674 9% - -
143,848,023 100% 95,733,132 100%
- 126 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
As at 31 December 2017, advances to suppliers over 1 year with a carrying amount of RMB13,034,626 (31
December 2016: RMB14,913,745) were mainly advances paid for materials, which were not fully settled since the
materials had not been received.
- 127 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(4) Advances to suppliers (Cont’d)
(b) As at 31 December 2017, the five largest prepayment are analysed as follows:
Percentage in total
advances to suppliers
Balance balance
Total balances for the five largest advances to suppliers 53,034,242 37%
(5) Other receivables
31 December 2017 31 December 2016
Receivables from related parties (Note 8(5)) 171,000,000 171,000,000
Refundable deposits 16,957,562 6,121,403
Payments made on behalf of other parties 19,306,658 25,019,422
Petty cash 875,714 959,785
Export tax rebates receivable - 755,372
Others 2,319,489 1,047,235
210,459,423 204,903,217
Less: Provision for bad debts (4,520,404) (4,094,068)
205,939,019 200,809,149
(a) The ageing of other receivables is analysed as follows:
31 December 2017 31 December 2016
Within 1 year 22,924,535 19,918,108
1 to 2 years 2,813,012 11,275,420
2 to 3 years 11,211,511 171,903,685
3 to 4 years 171,855,888 123,670
4 to 5 years 86,395 1,156,315
Over 5 years 1,568,082 526,019
210,459,423 204,903,217
As at 31 December 2017, other receivables of RMB2,510,365 (31 December 2016: RMB1,806,004) were overdue.
But based on analysis on financial positions and credit records of such customers, such receivables were
considered recoverable and unimpaired by the Company. Therefore no provision for impairment loss had been
made.
- 128 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(5) Other receivables (Cont'd)
(b) Other receivables are analysed by categories as follows:
31 December 2017 31 December 2016
Provision for bad Provision for bad
Carrying amount debts Carrying amount debts
% of total Provision for % of total Provision for
Amount balance bad debts % Amount balance bad debts %
Provision for bad debts by
groupings
Portfolio 1 39,136,518 19% (777,499) 2% 33,903,217 17% (674,068) 2%
Portfolio 2 171,000,000 81% (3,420,000) 2% 171,000,000 83% (3,420,000) 2%
Not individually significant
but provided for bad debts
separately 322,905 - (322,905) 100%
210,459,423 100% (4,520,404) 2% 204,903,217 100% (4,094,068) 2%
(c) The reason why not individually significant but provided for bad debts separately is the payment is not
recoverable over 5 years.
(d) The other receivables actually written off during the year amounted to RMB199,796, which was due to small
receivables and non-related transactions. The reasons for write-off include business disputes or failure
to contact the debtor and result in uncollectible payments.
(e)For other receivables provided for bad debts by portfolio, the percentage of provision for the portfolio is as
follows:
31 December 2017 31 December 2016
Carrying amount Provision for bad debts Carrying amount Provision for bad debts
Amount Amount % Amount Amount %
Portfolio 1 39,136,518 (777,499) 2% 33,903,217 (674,068) 2%
Portfolio 2 171,000,000 (3,420,000) 2% 171,000,000 (3,420,000) 2%
210,136,518 (4,197,499) 2% 204,903,217 (4,094,068) 2%
(f) As at 31 December 2017, the top 5 largest other receivables are analysed as bellow:
Percentage in total
other receivables Provision for
Nature of business Balance Ageing balance bad debts
Company A Independent third party 171,000,000 3 to 4 Years 81% 3,420,000
Governmental
departmentB Independent third party 11,067,754 2 to3 Years 5% 221,355
Company C Independent third party 5,000,000 Within 1 year 2% 100,000
Company D Independent third party 3,717,415 Within 1 year 2% 74,348
Company E Independent third party 3,350,000 Within 1 year 2% 67,000
194,135,169 92% 3,882,703
- 129 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(6) Inventories
(a) Inventories are summarised by categories as follows:
31 December 2017 31 December 2016
Provision for Provision for
decline in the decline in the
value of value of
Carrying amount inventories Carrying amount Carrying amount inventories Carrying amount
Raw materials 213,348,012 (1,447,590) 211,900,422 166,639,254 (2,025,446) 164,613,808
Work in progress 45,614,905 - 45,614,905 18,893,651 - 18,893,651
Finished goods 387,489,714 (68,974) 387,420,740 274,559,889 (6,347,741) 268,212,148
Turnover materials 40,959,250 - 40,959,250 26,061,318 - 26,061,318
687,411,881 (1,516,564) 685,895,317 486,154,112 (8,373,187) 477,780,925
(b) Provision for decline in the value of inventories are analysed as follows:
31 December 31 December
2016 Increase in current year Reversal in current year 2017
Finished goods 6,347,741 68,974 (6,347,741) 68,974
Raw materials 2,025,446 - (577,856) 1,447,590
8,373,187 68,974 (6,925,597) 1,516,564
(c) Provision for decline in the value of inventories is as follows:
Reasons of reversal of the
decline in the value of
Basis for provision for decline in the value of inventories inventories
The amount of carrying amount less net realisable value
Finished goods due to decline in price of products Sold
The amount of book value less net realisable value due to
Raw materials sluggish or damaged raw materials Used
(7) Assets classified as held for sale
carrying amounts Estimated Estimated
Item at the end of period Fair value disposal costs disposal time
Intangible assets 15,048,314 18,390,394 June of 2018
Construction in progress 30,935,206 37,805,606 June of 2018
45,983,520 56,196,000 -
The subsidiary of the Group, Dongguan CSG PV-tech signed a grant contract of land use right with third party
- 130 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Dongguan Chaoyin Textile Co., LTD. (Dongguan Chaoyin Company) on 17 June 2016. Dongguan CSG PV-tech
sells its land use right along with the buildings on the land to Dongguan Chaoyin Company. Therefore, the
construction-in-progress and intangible assets of Dongguan CSG PV-tech were transferred to assets held for sale.
As at 31 December 2017, the transfer of propery rights had not been finalised.
4 Notes to the consolidated financial statements (Cont’d)
(8) Other current assets
31 December 2017 31 December 2016
VAT to be offset 181,667,326 150,317,894
Assets classified as held for sale - 40,049,163
Enterprise income tax prepaid 1,132,508 1,325,723
VAT input to be recognised 18,048,155 8,212,797
200,847,989 199,905,577
(9) Fixed assets
Machinery and
Buildings equipment Motor vehicles Total
Cost
31 December 2016 3,911,336,527 11,699,296,248 201,923,067 15,812,555,842
Increase in current year
Acquisition 4,924,460 18,947,748 7,467,964 31,340,172
Transfers from construction
in progress (Note 4(10)) 94,982,205 1,338,373,278 5,515,375 1,438,870,858
Adjustment of completion
settlement 738,830 19,721,695 238,675 20,699,200
Decrease in current year
Disposal or retirement (8,917,927) (52,049,454) (6,203,870) (67,171,251)
Transfer to construction in
progress (3,695,395) (561,466,255) (648,454) (565,810,104)
31 December 2017 3,999,368,700 12,462,823,260 208,292,757 16,670,484,717
Accumulated depreciation
31 December 2016 629,946,237 3,287,606,208 172,265,020 4,089,817,465
Increase in current year
Provision 124,679,206 833,507,101 22,395,614 980,581,921
Decrease in current year
Disposal or retirement (1,211,382) (13,892,180) (5,723,521) (20,827,083)
Transfer to construction in
progress (1,895,250) (198,327,057) (387,830) (200,610,137)
31 December 2017 751,518,811 3,908,894,072 188,549,283 4,848,962,166
Provision for impairment loss
31 December 2016 - 264,765,386 - 264,765,386
Provision 10,580,861 25,679,443 36,260,304
- 131 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Disposal or retirement (20,272,836) (20,272,836)
31 December 2017 10,580,861 270,171,993 280,752,854
Carrying amount
31 December 2017 3,237,269,028 8,283,757,195 19,743,474 11,540,769,697
31 December 2016 3,281,390,290 8,146,924,654 29,658,047 11,457,972,991
In 2017, the depreciation amount provided for fixed assets was RMB980,581,921 (2016: RMB891,257,741), and
the amount of depreciation expenses charged to cost of sales, selling and distribution expenses, general and
administrative expenses and construction in progress was RMB890,575,701, RMB 970,739 , RMB 65,929,139
and RMB 23,106,342 (2016 ： RMB 819,298,731, RMB 979,874, RMB 59,067,087 and RMB 11,912,049)
respectively.
In 2017, the cost of fixed assets transferred from construction in progress amounted to RMB 1,438,870,858 (2016:
RMB1,281,171,543).
- 132 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
Fixed assets (Cont’d)
(a) Fixed assets with pending certificates of ownership
Carrying amount Reasons for not yet obtaining certificates of title
Have submitted the required documents and are in the process of
Buildings 893,119,983 application, or the related land use right certificate pending
(10) Construction in progress
31 December 2017 31 December 2016
Provision for
Carrying Carrying Carrying Provision for
impairment Carrying amount
amount amount amount impairment loss
loss
Xianning CSG Photoelectric
400,665,493 - 400,665,493 41,267,876 - 41,267,876
Glass project
Yichang display device
company flat panel display 298,794,622 (14,160,474) 284,634,148 274,342,571 (14,160,474) 260,182,097
project
Yichang Optoelectronic
242,055,237 - 242,055,237 - - -
Technology Reform Project
Hebei float 600T
113,762,853 - 113,762,853 - - -
tech-innovation project
Zhanjiang Photovoltaic
20MV Step-by-step
100,570,104 - 100,570,104 8,855,560 - 8,855,560
Photovoltaic Power Plant
Project
Dongguan Solar Glass
Phase I and II improvement 78,970,995 (40,248,018) 38,722,977 78,970,995 (33,075,116) 45,895,879
project
Wujiang energy glass
72,600,518 (19,876,460) 52,724,058 70,178,986 (19,876,460) 50,302,526
expansion project
Yichang 1GW silicon slice
43,617,802 - 43,617,802 95,011,027 - 95,011,027
project
LED Sapphire Substrate
30,886,629 (19,303,853) 11,582,776 29,472,040 - 29,472,040
Project
Wujiang Photovoltaic
7,414,854 - 7,414,854 1,583,553 - 1,583,553
Packaging Materials Project
Yichang 5000T
electronic-grade polysilicon 943,396 - 943,396 171,211,288 - 171,211,288
project
Heyuan Kibing PV tech
11MV distributed generation 2,267,345 - 2,267,345 85,126,446 - 85,126,446
project
Dongguan PV Tech 200MW
PV-tech Battery Expansion 1,179,935 - 1,179,935 8,224,072 - 8,224,072
project
Hebei float 900T
- - - 388,627,081 - 388,627,081
tech-innovation project
Chengdu float 550T line
- - - 102,304,740 - 102,304,740
tech-renovation
Qingyuan high-performance
ultrathin electronic glass - - - 1,034,372 - 1,034,372
project
- 133 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Sichuan energy-saving
- - - 13,005,928 - 13,005,928
project Phase III
Others 117,889,623 (405,983) 117,483,640 59,991,892 - 59,991,892
1,511,619,406 (93,994,788) 1,417,624,618 1,429,208,427 (67,112,050) 1,362,096,377
- 134 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
- 135 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(10) Construction in progress (Cont'd)
(a) Movement of significant project
Amount of Including:
Proportion
31 Transfer to fixed Other 31 borrowing Amount of Capitalisation
Increase in between Source
Project name Budget December assets in current decreases in December costs borrowing costs rate for in
current year engineering input of fund
2016 year current year 2017 capitalised in capitalised in current year
and budget (i)
2017 2017
Xianning CSG Internal
Photoelectric Glass 510,000,000 41,267,876 371,315,353 (11,692,808) (224,928) 400,665,493 81% 7,770,613 7,770,613 4.75% fund and
project bank loan
Internal
Yichang CSG flat panel 81% fund and
1,970,000,000 274,342,571 68,678,108 (44,226,057) - 298,794,622 4,144,159 3,146,516 4.20%
display project bank loan
Yichang Optoelectronic Internal
Technology Reform 258,296,536 - 242,055,237 - - 242,055,237 60% - - - fund and
Project bank loan
Hebei float 600T 1% Internal
129,180,000 - 121,809,135 (284,860) (7,761,422) 113,762,853 - - - fund
tech-innovation project
Zhanjiang Photovoltaic
Internal
20MV Step-by-step 96% fund and
133,000,000 8,855,560 91,714,544 - - 100,570,104 2,280,097 2,280,097 5.74%
Photovoltaic Power bank loan
Plant Project
Dongguan Solar Glass
80% Internal
Phase I and II 396,410,000 78,970,995 - - - 78,970,995 - - - fund
improvement project
Wujiang energy glass 99% Internal
845,630,000 70,178,986 3,279,395 (676,165) (181,698) 72,600,518 20,120,444 - - fund
expansion project
Yichang 1GW silicon Internal
1,073,209,600 95,011,027 361,731,413 (413,124,638) - 43,617,802 36% 8,629,993 8,083,768 4.79% fund and
slice project bank loan
Internal
LED Sapphire Substrate 88% fund and
35,000,000 29,472,040 2,696,640 (1,282,051) - 30,886,629 4,650,543 899,966 4.78%
Project bank loan
Wujiang Photovoltaic Internal
Packaging Materials 520,100,000 1,583,553 7,288,394 (1,457,093) - 7,414,854 87% - - - fund and
Project bank loan
Yichang 5000T 698,396,700 171,211,288 45,733,419 (216,001,311) - 943,396 26% 8,453,998 5,244,463 4.44% Internal
electronic-grade fund and
- 136 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
polysilicon project bank loan
Heyuan Kibing PV tech
93% Internal
11MV distributed 91,600,000 85,126,446 3,577,331 (77,641,121) (8,795,311) 2,267,345 325,704 325,704 5.00% fund
generation project
Dongguan PV Tech Internal
200MW PV-tech Battery 697,000,000 8,224,072 49,163,936 (56,208,073) - 1,179,935 100% 32,417,335 401,535 4.80% fund and
Expansion project bank loan
Internal
Hebei float 900T fund and
124,000,000 388,627,081 3,816,268 (392,210,090) (233,259) - 100% 4,211,893 1,057,593 4.94%
tech-innovation project bank loan
Internal
Chengdu float 550T line fund and
200,000,000 102,304,740 57,840,038 (160,144,778) - - 100% 306,663 306,663 4.60%
tech-renovation bank loan
Qingyuan
Internal
high-performance fund and
471,660,000 1,034,372 - - (1,034,372) - 100% - - -
ultrathin electronic glass bank loan
project
Sichuan energy-saving Internal
222,817,517 13,005,928 - (10,119,658) (2,886,270) - 100% - - - fund
project Phase III
Internal
Others 2,657,421,716 59,991,892 111,879,886 (53,802,155) (180,000) 117,889,623 339,257 339,257 4.15% fund and
bank loan
11,033,722,069 1,429,208,427 1,542,579,097 (1,438,870,858) (21,297,260) 1,511,619,406 93,650,699 29,856,175
(i) The proportion of project expenditure incurred to the budget is determined by the accumulative expenditures incurred divided by the total budget. Some of the projects
are transferred to property, plant, and equipment because the construction is completed.
(ii) The budget and actual expenditures incurred for these kinds of projects include cost of acquiring land use rights. The balance of construction in progress does not
include the costs of acquiring land-use right
- 137 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(10) Construction in progress (Cont'd)
(b) Provision for impairment of construction in progress
31 December Increase in Decrease in 31 December Reason for
Project name
2016 current year current year 2017 provision
Dongguan Solar Glass Phase I
33,075,116 7,172,902 - 40,248,018 -
and II improvement project
Wujiang float glass project 19,876,460 - - 19,876,460 -
Yichang CSG Display panel
14,160,474 - - 14,160,474 -
display project
LED Sapphire Substrate
- 19,303,853 - 19,303,853 -
Project
Others - 405,983 - 405,983 -
67,112,050 26,882,738 - 93,994,788 -
- 138 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(11) Intangible assets and development expenditure
Patents and
Land use Exploitation
proprietary Others Total
rights rights
technologies
Cost
31 December 2016 1,026,603,700 199,922,986 4,456,536 23,548,047 1,254,531,269
Acquisition in current year - 2,966,502 - 12,558,663 15,525,165
Transfers from development
- 43,122,431 - - 43,122,431
expenditure in current year
31 December 2017 1,026,603,700 246,011,919 4,456,536 36,106,710 1,313,178,865
Accumulated amortisation
31 December 2016 128,007,677 57,225,743 3,306,083 20,322,309 208,861,812
Provision in current year 21,049,588 17,759,493 400,641 4,674,444 43,884,166
31 December 2017 149,057,265 74,985,236 3,706,724 24,996,753 252,745,978
Provision for impairment loss
31 December 2016 - 13,201,347 - 9,133 13,210,480
31 December 2017 - 13,201,347 - 9,133 13,210,480
Carrying amount
31 December 2017 877,546,435 157,825,336 749,812 11,100,824 1,047,222,407
31 December 2016 898,596,023 129,495,896 1,150,453 3,216,605 1,032,458,977
In 2017, the amortisation of intangible assets amounted to RMB43,884,166 (2016: RMB36,907,548).
As at 31 December 2017, ownership certificates of land use rights (“Land ownership Certificates”) for certain land
use rights of the Group with carrying amounts of approximately RMB5,473,442 (cost: RMB6,586,712) had not yet
been obtained by the Group (31 December 2016: carrying amount: RMB5,718,191, cost: RMB 6,586,712). The
Company’s management are of the view that there is no legal restriction for the Group to apply for and obtain the
Land Ownership Certificates and has no adverse effect on the Group’s business operation.
- 139 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(11) Intangible assets and development expenditure (Cont'd)
Research expenditure is analysed below:
31 December Increase in 31 December
2016 current year Decrease in current year 2017
Recognised as Recognised as
expense intangible assets
Development
costs 66,927,714 37,560,254 (43,122,431) 61,365,537
In 2017, the total amount of research and development expenditures of the Group was RMB 368,237,629 (2016:
RMB 341,553,966), including RMB 330,677,375 (2016: RMB 285,129,442) recorded in income statement for
current period and the research and development expenditure with the amount of RMB 43,122,431 recognised as
intangible assets for the current period (2016: 23,213,785). As at 31 December 2017, the intangible assets arising
from internal research and development accounted for 12.37 % of total of intangible assets (31 December 2016:
9.51 %).
(12) Goodwill
Decrease
31 December Increase in in current 31 December
2016 current year year 2017
Tianjin CSG Architectural Glass Co., Ltd. 3,039,946 3,039,946
Xianning CSG Photoelectric 4,857,406 4,857,406
Shenzhen CSG Display 389,494,804 389,494,804
397,392,156 397,392,156
The goodwill allocated to the asset groups and groups of asset groups from Tianjin CSG Architectural was
summarised by operating segments as Architectural Glass segment. The goodwill allocated to the asset groups and
groups of asset groups from Shenzhen CSG Display and Xianning CSG Photoelectric are summarised by operating
segments as Electronic Glass and Display segment.
Combining with the prediction of the future business and independent third party appraisal institution,the Company's
management considered that the goodwill was not impaired as at 31 December 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.
- 140 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(13) Deferred tax assets and liabilities
(a) Deferred tax assets before offsetting
31 December 2017 31 December 2016
Deductible
Deferred tax Deductible temporary Deferred tax
temporary
assets differences assets
differences
Provision for asset
361,149,562 55,552,592 410,272,182 61,899,046
impairments
Tax losses 133,658,792 24,457,319 164,790,392 28,883,903
Government grants 128,189,967 20,424,022 129,722,993 20,654,199
Accrued expenses 50,193,405 7,529,011 81,018,069 12,352,386
Depreciation of fixed assets 33,762,174 8,000,331 28,241,461 6,320,146
Share payment 5,196,945 867,677 - -
712,150,845 116,830,952 814,045,097 130,109,680
Including:
Expected to be reversed within
33,751,219 33,957,444
one year (inclusive)
Expected to be reversed after
83,079,733 96,152,236
one year
116,830,952 130,109,680
(b) Deferred tax liabilities before offsetting
31 December 2017 31 December 2016
Taxable temporary Deferred tax Taxable temporary Deferred tax
differences liabilities differences liabilities
Depreciation of fixed
371,115,284 56,874,044 396,118,583 63,406,963
assets
Including:
Expected to be reversed within
4,247,230 3,342,336
one year (inclusive)
Expected to be reversed after
52,626,814 60,064,627
one year
56,874,044 63,406,963
- 141 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(13) Deferred tax assets and liabilities (Cont’d)
(c) Deductible losses that are not recognised as deferred tax assets of the Group are analysed as follows:
31 December 2017 31 December 2016
Deductible losses 425,759,321 342,455,782
The deductible tax losses not recognised as deferred tax assets mainly represented the tax losses of the Company
and some closed subsidiaries. Management was unable to expect that whether there were taxable profit would be
available in the future against which these deductible tax losses can be utilised, and accordingly, did not recognise
the deferred tax assets.
(d) The tax losses for which no deferred tax assets were recognised will expire in the following years:
31 December 2017 31 December 2016
2018 54,100,000 54,100,000
2019 82,300,000 82,300,000
2020 94,430,197 94,430,197
2021 111,625,585 111,625,585
2022 83,303,539 -
425,759,321 342,455,782
(e) The net balances of deferred tax assets and liabilities after offsetting are as follows:
31 December 2017 31 December 2016
Deductible/taxable Deductible/taxable
Net deferred tax temporary differences Net deferred tax temporary differences
assets or liabilities after offsetting assets or liabilities after offsetting
Deferred tax assets 80,872,862 472,134,707 96,451,854 565,834,538
Deferred tax liabilities 20,915,954 131,099,146 29,749,137 147,908,024
- 142 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(14) Other non-current assets
31 December 2017 31 December 2016
Prepayment for equipment and software upgrading expenses 45,431,352 69,945,550
VAT input to be offset - 10,718,843
Prepayment for lease of land use rights 6,510,000 6,510,000
51,941,352 87,174,393
(15) Provision for asset impairment
31 December Increase in Reversal in Written off in 31 December
2016 current year current year current year 2017
Provision for bad debts 20,562,459 9,498,129 (3,310,390) (317,727) 26,432,471
Including: Provision for bad debts of
accounts receivable 16,468,391 8,845,491 (3,283,884) (117,931) 21,912,067
Provision for bad debts of
other receivables 4,094,068 652,638 (26,506) (199,796) 4,520,404
Provision for decline in the value of
inventories 8,373,187 68,974 (6,925,597) 1,516,564
Provision for impairment of fixed
assets 264,765,386 36,260,304 (20,272,836) 280,752,854
Provision for impairment of
construction in progress 67,112,050 26,882,738 - 93,994,788
Provision for impairment of intangible
assets 13,210,480 - - - 13,210,480
374,023,562 72,710,145 (3,310,390) (27,516,160) 415,907,157
- 143 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(16) Short-term borrowings
31 December 2017 31 December 2016
Ultra-short-term financial bonds (i) - 2,000,000,000
Unsecured 2,691,732,609 1,650,251,293
Guaranteed (ii) 1,012,898,300 367,618,369
3,704,630,909 4,017,869,662
(i) Approved by file No. [2015] SCP163 of Inter-bank Market Trading Association, the Company is entitled to
issue ultra-short-term financial bonds with the limit of RMB4,000,000,000, which expires on 28 May 2017.
On 2 Augest 2016, the Company issued the Phase III ultra-short-term financial bonds of RMB600,000,000 for
2016, with the maturity data of May 1 2017 and annual rate of 3.67%. As at the reporting date, such
Ultra-short-term bonds had been repaid.
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 3.5%. As at the reporting
date, such ultra-short-term bonds had been repaid.
(ii) As at 31 December 2017, the Company provided its subsidiaries with guarantee for the short-term
borrowings of RMB1,012,898,300 (31 December 2016: RMB367,618,369), and the Company had no
counter guarantee from minority shareholders of subsidiaries (31 December 2016: Nil).
(iii) As at 31 December 2017, the interest of short-term borrowings varied from 2.70% to 5.66% (31 December
2016: 2.70% to 4.79%).
(17) Notes payable
31 December 2017 31 December 2016
Bank acceptance notes 213,401,622 20,000,000
All notes payable are due within one year.
- 144 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(18) Accounts payable
31 December 2017 31 December 2016
Materials payable 798,178,206 747,769,987
Equipment payable 329,926,045 233,779,329
Construction expenses payable 167,394,038 100,246,462
Freight payable 61,671,023 40,916,380
Utilities payable 35,973,405 44,602,055
Others 7,023,325 2,555,157
1,400,166,042 1,169,869,370
As at 31 December 2017, the amount of accounts payable over 1 year was approximately RMB160,638,075 (31
December 2016: RMB140,385,720), 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
31 December 2017 31 December 2016
Advances for goods from customers 195,563,465 142,330,979
The ageing of balances was substantively within 1 year.
(20) Employee benefits payable
31 December 2017 31 December 2016
Short-term employee benefits payable (a) 272,144,440 193,166,719
Defined contribution plans payable (b) 26,220 205,520
272,170,660 193,372,239
(a) Short-term employee benefits
31 December Increase in Decrease in 31 December
2016 current year current year 2017
Wages and salaries, bonus, allowances
159,601,219 1,083,193,468 (1,067,309,072) 175,485,615
and subsidies
Social security contributions 50,331 40,182,933 (40,219,512) 13,752
Including: Medical insurance 31,340 33,865,801 (33,884,783) 12,358
Work injury insurance 12,677 4,356,310 (4,368,003) 984
Maternity insurance 6,314 1,960,822 (1,966,726) 410
Housing funds 2,603,791 49,264,799 (49,110,219) 2,758,371
- 145 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Labour union funds and employee
15,571,378 14,607,578 (14,898,254) 15,280,702
education funds
Management bonus (i) 15,340,000 79,735,128 (16,469,128) 78,606,000
Share-based payments - 8,194,695 (8,194,695) -
193,166,719 1,275,178,601 (1,196,200,880) 272,144,440
4 Notes to the consolidated financial statements (Cont’d)
(20) Employee benefits payable (Cont’d)
Pursuant to the resolution at the 7th session in the 5th meeting of the board of directors of the Company on 31
March 2015, the board of directors adopted a management bonus scheme which was based on the quarterly return
on net assets and the net profit for the quarter. During the year, management bonuses amounting to
RMB79,735,128 (2016: RMB82,470,000) were accrued and charged to profit or loss.
Pursuant to the resolution at the 7th session in the temporary conference of the board of directors of the Company
on 11 December 2017, to implemented equity incentive plans of restricted stock for the Company directors and
senior management, core management team, backbones of technology and busines. The company first awarded
97,511,654 restricted shares to 454 incentive objects for the first time at RMB4.28 per share. The total fair value of
the equity instruments granted to the incentive object by the company for the first time is RMB289,519,900. The
total value of such fair value as the total cost of the company's equity incentive plan will be confirmed in stages
according to the ratio of unlocking/exercising in the implementation of the equity incentive plan, and it is included
in the cost in the term of "management fees" and "capital reserves - other capital reserves". The Company unlock
the conditions of restricted share in 2017, and the cost associated with equity incentive plan is confirmed at
RMB8,194,695 in this phase.
(b) Defined contribution plans
Increase in Decrease in
31 December 2016 current year current year 31 December 2017
Basic pensions 192,780 109,332,705 (109,500,097) 25,388
Unemployment insurance 12,740 3,866,282 (3,878,190) 832
205,520 113,198,987 (113,378,287) 26,220
- 146 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(21) Taxes payable
31 December 2017 31 December 2016
VAT payable 35,100,800 46,726,185
Enterprise income tax payable 48,496,225 41,919,187
Housing property tax payable 8,617,044 10,998,756
Individual income tax payable 5,177,080 3,755,374
City maintenance and construction tax payable 4,261,902 3,482,715
Educational surcharge payable 3,348,566 3,351,165
Others 6,995,147 5,359,234
111,996,764 115,592,616
(22) Interest payable
31 December 2017 31 December 2016
Interest of ultra-short-term financial bonds - 38,040,006
Interest payable for medium term notes 27,622,465 27,621,021
Interest for corporate bonds - 10,660,000
Interest of long-term borrowings with periodic payments of
interest and return of principal at maturity 938,950 514,750
Interest payable for short-term borrowings 5,471,325 1,390,127
34,032,740 78,225,904
(23) Other payables
31 December 2017 31 December 2016
Guarantee deposits received from construction contractors 49,624,256 69,156,801
Accrued cost of sales (i) 58,584,562 47,671,047
Temporary collection of payment for land transfer 56,196,000 28,098,000
Payable for contracted labour costs 17,568,695 17,467,346
Temporary receipts 7,964,070 14,022,924
Deposit for disabled 5,230,110 3,509,947
Restricted share repurchase obligation 417,349,879 -
Others 6,806,782 8,395,385
619,324,354 188,321,450
- 147 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
(i) It represented the payment made to external third parties arising from undertaking the rights of debtor and
creditor, comprising water and electricity, professional service fee and travelling expenses etc.
(ii) In the year ending 31 December 2017, the unlock conditions of first granted restricted stock was not met. The
Company will confirm the actual amount of restricted stock subscription RMB417,349,879 as the
corresponding expected liability, and confirm the corresponding amount of stock shares.
The ageing of other payables was substantively within 1 year.
- 148 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(24) Current portion of non-current liabilities
31 December 2017 31 December 2016
Current portion of long-term borrowings
- Guaranteed 14,880,000 29,340,000
- Unsecured 180,000,000 -
Current portion of corporate bonds - 1,000,000,000
Current portion of finance lease 709,381,397 -
904,261,397 1,029,340,000
(25) Long-term borrowings
31 December 2017 31 December 2016
Medium term notes (i) 1,200,000,000 1,200,000,000
Unsecured - 180,000,000
Guaranteed 354,120,000 58,660,000
1,554,120,000 1,438,660,000
(i) 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 RMB1,200,000,000, which expires on 28 May 2017.
On 14 July 2015, the Company issued the Phase I medium term notes of RMB1,200,000,000 for 2015, with
the maturity data of 14 July 2020 and annual rate of 4.94%.
As at 31 December 2017, the interest of long-term borrowings varied from 4.75% to 5.94% (31 December
2015: 4.51% to 4.94%).
(26) Long-term account payable
31 December 2017 31 December 2016
Finance lease 1,161,794,247 -
TheSale and leaseback lease of the group in this phase is a mortgage loan with a lease term of 36 months. On
December 31, 2017, the real interest rate of financing lease loans is 4.49%-7.8%.
- 149 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(27) Deferred income
31 December 2017 31 December 2016
Government grants 562,701,103 593,993,254
Government grants are analysed as follows:
Non-operating
31 December Increase in Other decrease income in current 31 December
Government grants 2016 current year in current year year 2017 Assets/Income related
Tianjin CSG Golden Sun
57,092,011 - -- (3,374,892) 53,717,119
Project (i) Assets related
Dongguan CSG Golden Sun
46,079,250 - -- (2,751,000) 43,328,250
Project (ii) Assets related
Hebei CSG Golden Sun Project
46,750,000 - -- (2,750,000) 44,000,000
(iii) Assets related
Xianning CSG Golden Sun
51,013,417 - -- (3,030,500) 47,982,917
Project (iv) Assets related
Infrastructure compensation
for Wujiang CSG Glass Co., 43,670,435 - -- (4,041,537) 39,628,898
Ltd (v) Assets related
Qingyuan Energy-saving project
23,259,167 - -- (2,470,000) 20,789,167
(vi) Assets related
Yichang Silicon products project
24,609,375 - -- (2,812,500) 21,796,875
(vii) Assets related
Yichang CSG silicon slice
13,890,609 - -- (1,227,733) 12,662,876
auxiliary project (viii) Assets related
Sichuan energy-saving glass
12,129,480 - -- (1,654,020) 10,475,460
project (ix) Assets related
Group coating film experimental
9,035,040 - -- (1,508,760) 7,526,280
project (x) Assets related
Yichang expert silicon project
3,906,547 - -- (306,664) 3,599,883
(xi) Assets related
Yichang semiconductor silicon
3,666,667 - -- (266,667) 3,400,000
project (xii) Assets related
Yichang CSG Display project
53,371,082 - -- (2,534,478) 50,836,604
(xiii) Assets related
Xianning Photoelectric project
- 7,800,000 - - 7,800,000
(xiv) Assets related
171,000,000 - - -
Group talent fund project (xv) 171,000,000 Assets related
Assets related/Income
34,520,174 8,150,000 (171,976) (18,341,424) 24,156,774
Others related
593,993,254 (171,976) (47,070,175) 562,701,103
15,950,000
(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.
- 150 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
(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.
- 151 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(27) Deferred income (Cont’d)
(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 16 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 16 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 to 15 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 funds granted by Yichang Municipal Government for Yichang CSG Display
Company's flat project construction support funds and construction of coil coating three-line
project. The grant will be amortised and credited to income statement by 15 years
(xiv) It represented the funds granted by Xianning Government of the Project supporting fund for
photoconductive glass production line,which is used to pay for Xianning CSG Glass Co. Ltd.
constructing the project of photoelectric photoelectric optical glass production line . After the
completion of the production line, the ownership belongs to Xianning photoelectric. The
allowance will be credited to income statement in 8 years, the useful life of the production line.
(xv) The allowance was granted by Administrative Commission of Yichang High-tech Industrial
Development Zone. For senior management personnel, engineering technical personnel and
- 152 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
senior professional technical team which is working at Yichang or plane to introduction, RMB171
million fund was set up, as a special fund for talent introduction and housing resettlement.
4 Notes to the consolidated financial statements (Cont’d)
(28) Share capital
Movement for the year ended 31 December 2017
31 December New issues Bonus 31 December
2016 during the year issue Capitalisation Others 2017
RMB-denominated ordinary shares 1,312,751,568 - - 196,912,735 - 1,509,664,303
Limited selling condition shares - 97,511,654 - - - 97,511,654
Domestically listed foreign shares 762,583,992 - - 114,387,598 - 876,971,590
2,075,335,560 97,511,654 - 311,300,333 - 2,484,147,547
Movement for the year ended 31
December 2016
31 December New issues Bonus 31 December
2015 during the year issue Capitalisation Others 2016
RMB-denominated ordinary shares 1,312,751,568 - - - - 1,312,751,568
Domestically listed foreign shares 762,583,992 - - - - 762,583,992
2,075,335,560 - - - - 2,075,335,560
The
par value of the RMB-denominated ordinary shares is RMB1, and that of domestically listed foreign shares is HKD1.
(29) Capital surplus
Increase in Decrease in
31 December 2016 current year current year 31 December 2017
Share premium (i) 1,345,264,670 319,838,225 (311,300,333) 1,353,802,562
Other capital surplus (84,562,473) 37,141,676 - (47,420,797)
Share of changes in equity other than
comprehensive income and profit
distribution of investees under the
equity method 757,420 - - 757,420
Share-based payment (ii) 2,811,683 8,194,695 - 11,006,378
Transfer of capital surplus recognised
under the previous accounting system (2,250,222) - - (2,250,222)
Disposal of fractional shares 1,316,208 - - 1,316,208
Purchase of minority interests (87,197,562) - - (87,197,562)
(iii) 28,946,981 28,946,981
-
1,260,702,197 356,979,901 (311,300,333) 1,306,381,765
Increase in Decrease in
31 December 2015 current year current year 31 December 2016
Share premium 1,345,264,670 - - 1,345,264,670
Other capital surplus (83,873,398) 483,405 (1,172,480) (84,562,473)
- 153 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Share of changes in equity other than
comprehensive income and profit
distribution of investees under the
equity method 676,277 81,143 - 757,420
Share-based payment 2,409,421 402,262 - 2,811,683
Transfer of capital surplus recognised (2,250,222)
under the previous accounting system - - (2,250,222)
Disposal of fractional shares 1,316,208 - - 1,316,208
Purchase of minority interests (86,025,082) - (1,172,480) (87,197,562)
1,261,391,272 483,405 (1,172,480) 1,260,702,197
- 154 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(29) Capital surplus(Cont’d)
(a) The reason for the decrease of capital reserve - other in current year was the acquisition of minority interests, with the
detail as follows:
(i)The Company passed the 2016 annual general meeting of shareholders held on May 22, 2017 and transferred
1.5 shares to every 10 shares for all shareholders. The total share capital before the distribution was 2,075,335,560
shares, and the total share capital after the dividend was increased to 2,386,635,893 shares. Capital reserve
decreased by RMB311,300,333;
In this year, the equity incentive plan received RMB 417,349,879 of capital contribution from the incentive object,
including RMB 97,511,654 of the share capital, which was included in the capital reserve of RMB 319,838,225.
(ii) This year, due to the equity incentive plan, the share payment fee of RMB8,194,695 was confirmed.
(iii) The shareholder Ju Shenghua provided interest-free loans of RMB1.61 billion to the company. The interest-free
loans were charged to other capital reserves of RMB28,946,981 based on the interest expense calculated on the
bank loan interest for the same period.
(30) Treasury shares
Increase in Decrease in
31 December 2016 current year current year 31 December 2017
Obligations of restricted share buybacks - 417,349,879 - 417,349,879
- 417,349,879 - 417,349,879
Explanation on changes in treasury stocks: The company confirms liabilities and treasury shares at the same time,
based on the number of restricted shares issued and the corresponding repurchase price.
- 155 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(31) Other comprehensive income
Other comprehensive income in Balance
Sheet Other comprehensive income in Income Statement for the year ended 31 December 2017
Less: Reclassification
Attributable of previous other Attributable to
to parent Actual amount comprehensive Attributable to minority
31 December company 31 December before tax for income to profit or Less: Income parent company shareholders
2016 after tax 2017 current year loss in current year tax expenses after tax after tax
Other comprehensive income items which
will be reclassified subsequently to profit or
loss
Financial rewards for energy-saving
technical retrofits 2,550,000 - 2,550,000 - - - - -
Difference on translation of foreign
currency financial statements 2,103,971 (2,705,028) (601,057) (2,705,028) - - (2,705,028) -
4,653,971 (2,705,028) 1,948,943 (2,705,028) - - (2,705,028) -
Other comprehensive income in Balance
Sheet Other comprehensive income in Income Statement for the year ended 31 December 2016
Less: Reclassification
Attributable of previous other Attributable to
to parent Actual amount comprehensive Attributable to minority
31 December company 31 December before tax for income to profit or Less: Income parent company shareholders
2015 after tax 2016 current year loss in current year tax expenses after tax after tax
Other comprehensive income items which
will be reclassified subsequently to profit or
loss
Financial rewards for energy-saving -
technical retrofits 2,550,000 - 2,550,000 - - - -
- 156 -
CSG HOLDING CO., LTD.
Notes to the financial statements
for the year ended 31 December 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Differences on translation of foreign -
currency financial statements 417,772 1,686,199 2,103,971 1,686,199 - 1,686,199 -
2,967,772 1,686,199 4,653,971 1,686,199 - - 1,686,199 -
- 157 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(32) Special reserve
31 December Increase in Decrease in 31 December
2016 current year current year 2017
Safety production costs 5,843,473 7,831,127 (1,0449,662) 3,224,938
The subsidiary Yichang CSG Silicon is a high risk chemical production enterprise. Therefore, the Company appropriated
such reserve in accordance with relevant regulations.
(33) Surplus reserve
31 December Increase in Decrease in 31 December
2016 current year current year 2017
Statutory surplus reserve 760,655,662 32,084,102 - 792,739,764
Discretionary surplus reserve 127,852,568 - - 127,852,568
888,508,230 32,084,102 - 920,592,332
31 December Increase in Decrease in 31 December
2015 current year current year 2016
Statutory surplus reserve 730,927,762 29,727,900 - 760,655,662
Discretionary surplus reserve 127,852,568 - - 127,852,568
858,780,330 29,727,900 - 888,508,230
In accordance with the Company Law of the People’s Republic of China and the Company’s Articles of Association, the
Company should appropriate 10% of net profit for the year to the statutory surplus reserve, and the Company can cease
appropriation when the statutory surplus reserve accumulated to more than 50% of the registered capital. The statutory
surplus reserve can be used to make up for the loss or increase the paid-in capital after approval from the appropriate
authorities. The Company accrued statutory surplus reserve at the amount of RMB32,084,102 10% of the net profit, in
2017 (2016: RMB29,727,900, accrued at 10% of the net profit).
The Company appropriates for the discretionary surplus reserve after the shareholders’ meeting approves the proposal
from the Board of Directors. The discretionary surplus reserve can be used to make up for the loss or increase the share
capital after approval from the appropriate authorities. The Company did not appropriate to discretionary surplus reserve
during the year.
- 158 -
CSG HOLDING CO., LTD.
Notes to the financial statements for the year ended 31 December 2016
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(34) Undistributed profits
2017 2016
Undistributed profits at beginning of year 3,573,871,573 3,428,478,565
Add: Net profits attributable to shareholders of parent
company 825,388,312 797,721,576
Less: Appropriation for statutory surplus reserve (32,084,102) (29,727,900)
Ordinary share dividends payable (a) (207,533,556) (622,600,668)
Undistributed profits at end of year 4,159,642,227 3,573,871,573
(a) Pursuant to the resolution of Board of Directors of the Company on 22 May 2017, the Company paid cash dividends of RMB1
(tax inclusive) for each 10 shares based on total shares of 2,075,335,560, with the total cash dividends distributed of
RMB207,533,556.
(35) Revenue and cost of sales
2017 2016
Revenue from main operations 10,786,756,657 8,886,948,218
Revenue from other operations 92,644,089 87,135,189
10,879,400,746 8,974,083,407
2017 2016
Cost of sales from main operations 8,183,862,835 6,510,577,440
Cost of sales from other operations 32,495,537 51,636,933
8,216,358,372 6,562,214,373
(a) Revenue and cost of sales from main operations
Revenue and cost of sales from main operations analysed by industry and product are set out below:
2017 2016
Revenue Cost Revenue Cost
Glass industry 6,975,512,082 5,179,173,783 6,244,550,400 4,542,947,575
Solar panel and parts 3,091,397,745 2,493,891,466 2,283,441,881 1,728,673,404
Electronic glass and displays 867,223,335 652,646,493 424,883,660 303,117,902
Elimination (147,376,505) (141,848,907) (65,927,723) (64,161,441)
10,786,756,657 8,183,862,835 8,886,948,218 6,510,577,440
- 159 -
CSG HOLDING CO., LTD.
Notes to the financial statements for the year ended 31 December 2016
(All amounts in RMB Yuan unless otherwise stated)
- 160 -
CSG HOLDING CO., LTD.
Notes to the financial statements for the year ended 31 December 2016
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(35) Revenue and cost of sales (Cont’d)
(b) Revenue and cost of sales from other operations
2017 2016
Revenue Cost Revenue Cost
Sales of raw materials 69,908,277 29,437,767 63,211,682 45,044,785
Others 22,735,812 3,057,770 23,923,507 6,592,148
92,644,089 32,495,537 87,135,189 51,636,933
(36) Taxes and surtax
2017 2016
City maintenance and construction tax 33,115,925 33,343,735
Educational surcharge 26,156,521 26,597,418
Housing property tax 29,539,408 19,980,233
Land use rights 21,941,304 14,851,345
Business tax 5,395,333 3,486,149
Others 8,375,435 4,900,666
124,523,926 103,159,546
(37) Selling expenses
2017 2016
Freight expenses 159,825,411 140,132,227
Employee benefits 110,068,886 100,367,564
Entertainment fees 12,690,770 12,607,179
Business travel expenses 10,931,013 10,738,590
Vehicle use fee 7,609,882 7,358,948
Rental expenses 5,937,331 5,376,741
General office expenses 3,662,269 7,239,581
Depreciation expenses 970,739 979,874
Others 24,435,422 17,014,386
336,131,723 301,815,090
- 161 -
CSG HOLDING CO., LTD.
Notes to the financial statements for the year ended 31 December 2016
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(38) Administrative expense
2017 2016
Research and development expenses 330,677,375 285,129,442
Employee benefits 295,657,274 250,150,056
Depreciation expenses 65,929,139 59,067,087
Amortisation of intangible assets 43,884,166 36,907,548
General office expenses 25,126,422 24,313,472
Taxes - 16,957,060
Labour union funds 14,696,230 11,325,909
Entertainment fees 12,027,303 10,834,055
Business travel expenses 11,074,568 10,495,397
Utility fees 10,108,470 10,065,166
Canteen costs 9,357,983 8,486,926
Vehicle use fee 6,639,769 6,141,700
Rental expenses 4,551,968 3,104,038
Consulting advisers 24,935,512 9,453,050
Others 64,663,593 24,158,153
919,329,772 766,589,059
(39) Financial expenses
2017 2016
Interest on borrowings 344,459,771 273,665,849
Less: Capitalised interest (29,856,175) (15,346,518)
Interest expenses 314,603,596 258,319,331
Less: Interest income (12,606,285) (3,193,680)
Exchange losses 4,780,451 249,220
Others 9,183,318 10,445,698
315,961,080 265,820,569
- 162 -
CSG HOLDING CO., LTD.
Notes to the financial statements for the year ended 31 December 2016
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(40) Expenses by nature
The cost of sales, selling and distribution expenses and general and administrative expenses in the income statement are
listed as follows by nature:
2017 2016
Changes in inventories of finished goods and work in progress (139,651,079) (111,401,312)
Consumed raw materials and low value consumables, etc. 4,941,314,821 3,245,155,140
Fuel fee 1,143,379,014 1,059,231,787
Employee benefits 1,222,510,952 1,196,241,368
Depreciation and amortisation expenses 1,002,432,274 917,152,746
Utility fees 778,033,060 830,921,457
Freight expenses 159,825,411 140,132,227
Taxes - 16,957,060
General office expenses 43,816,479 45,018,706
Canteen costs 39,682,701 38,395,686
Business travel expenses 26,904,472 27,482,191
Entertainment fees 26,167,761 24,785,451
Vehicle use fee 15,851,907 15,227,050
Rental expenses 10,489,299 8,480,779
Others 201,062,795 176,838,186
9,471,819,867 7,630,618,522
(41) Asset impairment losses
2017 2016
Impaiement of fixed assets 36,260,304 49,894,197
Bad debts 6,187,739 2,245,583
Decline in the value of inventories 68,974 6,722,984
Impairment loss in construction under
construction 26,882,738 -
69,399,755 58,862,764
(42) Gain or loss from change in fair value
2017 2016
Financial liabilities at fair value through profit or loss
- 163 -
CSG HOLDING CO., LTD.
Notes to the financial statements for the year ended 31 December 2016
(All amounts in RMB Yuan unless otherwise stated)
Change in fair value during holding period of derivative
financial instruments - (9,850,256)
Losses from disposal of derivative financial
instruments(Note 4(43)) - 238,350,256
- 228,500,000
- 164 -
CSG HOLDING CO., LTD.
Notes to the financial statements for the year ended 31 December 2016
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(43) Investment income
2017 2016
Losses from long-term equity investment under equity
method - 5,071,685
Losses from disposal of financial liabilities at fair value
through profit or loss 427,636 (238,350,256)
Losses from disposal of long-term equity investment - (45,909,181)
427,636 (279,187,752)
There is no significant restriction on the remittance of investment income to the Group.
(44) Asset disposal income
2017 2016
Gains on disposal of fixed assets (1,768,993) (1,759,358)
(1,768,993) (1,759,358)
(45) Other income
2017 2016
Government subsidy amortization 47,070,175 --
Industry support funds 16,123,793 --
Research grants 6,940,140 --
Energy conservation and utilization support funds 228,116 --
Government incentive funds 12,457,123 --
Technological transformation discount 306,000 --
Energy conservation and utilization support funds 100,000 --
Others 1,116,467 --
84,341,814 --
(46) Non-operating income
Amount of
non-recurring gains
and losses included
2017 2016 in 2017
- 165 -
CSG HOLDING CO., LTD.
Notes to the financial statements for the year ended 31 December 2016
(All amounts in RMB Yuan unless otherwise stated)
Government grants (a) 3,533,603 91,627,439 3,533,603
Default income 275,000 11,000 275,000
Compensation income 15,557,320 1,016,936 15,557,320
Amounts unable to pay 27,959 875,302 27,959
Others 1,369,160 4,547,962 1,369,160
20,763,042 98,078,639 20,763,042
4 Notes to the consolidated financial statements (Cont’d)
(a) Government grants are analysed below:
2017 2016 Category
Asset-income
Government grants amortisation - 28,054,929 related
Industry support fund - 26,108,198 Income related
Tax returns - 25,360,000 Income related
Energy-saving award 414,309 Income related
Government awards fund 2,748,263 2,332,700 Income related
Subsidies for research and development - 4,364,900 Income related
Interest subsidy for technological
600,000
renovation - Income related
Energy-saving fund - 3,520,000 Income related
Others 185,340 1,472,403 Income related
3,533,603 91,627,439
(47) Non-operating expenses
Amount of
non-recurring gains
and losses included
2017 2016 in 2017
Losses on disposal of inventory material - 4,096,235 -
Compensation 492,228 410,326 492,228
Donation 1,118,999 120,000 1,118,999
Others 3,541,364 518,355 3,541,364
5,152,591 5,144,916 5,152,591
- 166 -
CSG HOLDING CO., LTD.
Notes to the financial statements for the year ended 31 December 2016
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(48) Income tax expenses
2017 2016
Current income tax 160,923,182 140,207,714
Deferred income tax 6,747,809 11,674,381
167,670,991 151,882,095
The reconciliation from income tax calculated based on the applicable tax rates and total profit presented in the
consolidated income statement to the income tax expenses is listed below:
2017 2016
Total profit 996,307,026 956,108,619
Income tax expenses calculated at applicable tax rates by
149,078,702
company 145,901,167
Effect of changes in tax rates - 4,545,871
Costs, expenses and losses not deductible for tax purposes 7,893,473 2,227,140
Income not subject to tax (33,833) (855)
Deductible losses for which no deferred tax asset was
recognised in current period 20,825,885 25,603,526
Written-off of deductible losses for which deferred tax asset
was recognised previously - 1,469,360
Effect of tax incentives (13,637,793) (10,147,358)
Reconciliation of income tax for prior years in annual filing 3,544,557 (17,716,756)
Income tax expenses 167,670,991 151,882,095
- 167 -
CSG HOLDING CO., LTD.
Notes to the financial statements for the year ended 31 December 2016
(All amounts in RMB Yuan unless otherwise stated)
4 Notes to the consolidated financial statements (Cont’d)
(49) Earnings per share
The basic earnings per share is calculated by dividing the net profit attributable to ordinary shareholders of the company
by the weighted average number of ordinary shares outstanding.
The numerator of diluted earnings per share is determined based on the net profit attributable to the common
shareholders of the company's common stock. The following factors are adjusted to determine: (1) interest on dilutive
potential ordinary shares that have been recognized as expenses in the current period; (2) dilutive potential ordinary The
income or expenses that will be generated when the shares are converted; (3) The above-mentioned adjustments related
to income tax effects.
The denominator of the diluted earnings per share equals the sum of: (1) the weighted average number of ordinary shares
of the parent company in the underlying earnings per share; (2) ordinary shares that are increased assuming the dilution
of potential ordinary shares into common shares The weighted average.
When calculating the weighted average of the number of ordinary shares increased from diluted common stocks to
ordinary shares, the diluted potential ordinary shares issued during the previous period are assumed to be converted at
the beginning of the current period; diluted potential ordinary shares of the current period are issued. , assuming a
conversion on the issue date.
The basic calculation of basic earnings per share and diluted earnings per share are as follows:
2017 2016
Profit
Consolidated net profit attributable to ordinary shareholders
825,388,312 797,721,576
of parent company
Shares
Weighted average number of outstanding ordinary 2,386,635,893 2,386,635,893
Dilution Effect - Weighted average number of ordinary shares
Stock options 4,062,986 -
The weighted average number of ordinary shares issued by
2,390,698,879 2,386,635,893
the company after adjustment
Basic earnings per share 0.35 0.33
among them：
- Continuing basic earnings per share 0.35 0.33
- Termination of basic earnings per share - -
Diluted earnings per share 0.35 0.33
among them：
- 168 -
CSG HOLDING CO., LTD.
Notes to the financial statements for the year ended 31 December 2016
(All amounts in RMB Yuan unless otherwise stated)
- Continuing basic earnings per share 0.35 0.33
- Termination of basic earnings per share - -
4 Notes to the consolidated financial statements (Cont’d)
(50) Notes to the cash flow statement
(a) Cash generated by other operating activities
2017 2016
Government grants 40,805,242 38,212,510
Interest income 12,606,285 3,193,680
Others 18,937,040 5,871,941
72,348,567 47,278,131
(b) Cash paid relating to other operating activities
2017 2016
Freight expenses 170,941,469 170,991,413
Canteen costs 39,682,701 38,395,686
General office expenses 34,267,447 32,516,317
Research and development expenses 31,684,954 25,191,468
Business travel expenses 27,935,416 26,421,204
Entertainment fees 25,206,039 24,573,593
Vehicle use fee 15,851,907 15,227,050
Maintenance fee 25,969,168 15,804,981
Rental expenses 10,489,299 8,480,779
Insurance 8,759,738 10,750,838
Bank fees 9,183,318 10,445,698
Others 186,004,633 173,091,041
585,976,089 551,890,068
(c) Cash generated by other investing activities
2017 2016
Income from trial production of construction in progress 124,108,255 155,174,454
Final payment of Shenzhen CSG Display’s subdiary equity
transfer - 150,000,000
- 169 -
CSG HOLDING CO., LTD.
Notes to the financial statements for the year ended 31 December 2016
(All amounts in RMB Yuan unless otherwise stated)
Government grants related to assets received 15,950,000 16,351,250
Land grant funds received 28,098,000 28,098,000
Insurance claims received 19,600,000 -
Government lands refund received - 14,891,603
187,756,255 364,515,307
4 Notes to the consolidated financial statements (Cont’d)
(d) Cash paid relating to other investing activities
2017 2016
Trial production expenditure in construction 156,543,177 166,905,113
The subsidies which Qingyuan energy returns to
government - 15,300,000
Deposit 43,541,859 -
200,085,036 182,205,113
(e) Cash generated by other financing activities
2017 2016
Interest-free borrowing 1,610,000,000 -
Income from financing leases 1,986,000,000 -
Receiving industrial production dispatch funds 20,000,000 -
3,616,000,000 -
(f) Cash payments relating to other financing activities
2017 2016
Repay financing leases 104,821,449 -
Pay for industrial production scheduling funds 31,000,000 -
Return interest-free loan 1,610,000,000 -
- 170 -
CSG HOLDING CO., LTD.
Notes to the financial statements for the year ended 31 December 2016
(All amounts in RMB Yuan unless otherwise stated)
Deposit 5,030,994 -
Payment of loan, security and fee for bills 32,257,231 -
1,783,109,674 -
4 Notes to the consolidated financial statements (Cont’d)
(51) Supplementary information to the cash flow statement
(a) Reconciliation from net profit to cash flows from operating activities
2017 2016
Net profit 828,636,035 804,226,524
Add: Provision for asset impairment 69,399,755 58,862,764
Depreciation of fixed assets 957,475,579 879,345,692
Amortisation of intangible assets 43,884,166 36,907,548
Net movements of safety production costs (2,618,535) (9,594,025)
Amortisation of long-term prepaid expenses 1,072,529 899,506
Net losses/(gains) on disposal of fixed assets and
8,194,695 -
intangible assets
Employee compensation based on shares 1,768,993 1,759,358
Financial expenses 314,603,596 258,319,331
Investment income/(loss) (427,636) 279,187,752
Decrease/(increase) in deferred tax assets 15,578,992 13,884,362
Increase/(decrease) in deferred tax liabilities (8,833,183) (2,209,981)
(Increase)/decrease in inventories - (228,500,000)
Decrease/(increase) in operating receivables (201,257,769) (71,720,745)
Increase in operating payables (206,859,922) (259,804,129)
- 171 -
CSG HOLDING CO., LTD.
Notes to the financial statements for the year ended 31 December 2016
(All amounts in RMB Yuan unless otherwise stated)
Increase in operating receivables 642,828,861 479,288,163
Net cash flows from operating activities 2,463,446,156 2,240,852,120
(b) Net increase/(decrease) in cash
2017 2016
Cash and cash equivalents at end of year 2,459,753,165 584,566,990
Less: Cash and cash equivalents at beginning of year (584,566,990) (574,744,877)
Net increase in cash and cash equivalents 1,875,186,175 9,822,113
(c) Cash and cash equivalents
31 December 2017 31 December 2016
Cash
- Cash on hand 36,182 17,239
- Bank deposits that can be readily drawn on demand 2,409,716,983 584,549,751
- Other cash balances that can be readily drawn on demand 50,000,000 -
Cash at end of year 2,459,753,165 584,566,990
4 Notes to the consolidated financial statements (Cont’d)
(52) Assets with restricted ownership or use rights
2017 2016 Reason
Monetary assets 2,852,599 2,236,515 Restricted deposit flow
Property,plant and equipment 2,369,789,041 - Limited finance lease
2,372,641,640 2,236,515
(53) Monetary items denominated in foreign currencies
31 December 2017
Balances
denominated in Exchange Balances
foreign currencies rates denominated in RMB
- 172 -
CSG HOLDING CO., LTD.
Notes to the financial statements for the year ended 31 December 2016
(All amounts in RMB Yuan unless otherwise stated)
Cash at bank and on hand -
HKD 7,314,730 0.8359 6,114,383
USD 11,343,508 6.5342 74,120,750
EUR 675 7.8023 5,267
JPY 309,620 0.0579 17,927
AUD 17,439 5.0928 88,813
80,347,140
Accounts receivable -
HKD 11,549,666 0.8359 9,654,366
USD 19,490,453 6.5342 127,354,518
EUR 946,785 7.8023 7,387,101
144,395,985
Short-term borrowings -
HKD 75,000,000 0.8359 62,692,500
Accounts payable -
HKD 307 0.8359 257
USD 15,922,406 6.5342 104,040,185
EUR 2,642,275 7.8023 20,615,822
JPY 281,927,203 0.0579 16,323,585
140,979,849
5 The changes of consolidation scope
The Group established a subsidiary company, China CGS (AUSTRILIA) PTY LTD, on 31 December 2017, and the Group
has not invested yet. The Company holds 100% of its shares.
- 173 -
CSG HOLDING CO., LTD.
Notes to the financial statements for the year ended 31 December 2016
(All amounts in RMB Yuan unless otherwise stated)
6 Interest in other entities
(1) Interest in subsidiaries
(a) Structure of the enterprise group
As at 31 December 2017, information of the Company’s major subsidiaries is set out below:
Shareholding
Major (%)
business Place of
location registration Scope of business Direct Indirect
Chengdu, Chengdu, Development, production and sales of special
Chengdu CSG PRC PRC glass 75% 25%
Chengdu, Chengdu, Development, production and sales of special
Sichuan CSG Energy Conservation PRC PRC glass and processing of glass 75% 25%
Tianjin, Tianjin, Development, production and sales of special
Tianjin Energy Conservation PRC PRC glass 75% 25%
Dongguan, Dongguan,
Dongguan CSG PRC PRC Intensive processing of glass 75% 25%
Dongguan, Dongguan,
Dongguan CSG Solar PRC PRC Production and sales of solar glass 75% 25%
Dongguan, Dongguan, Production and sales of hi-tech green battery
Dongguan CSG PV-tech PRC PRC and components - 100%
Yichang, Yichang, Production and sales of high-purity silicon
Yichang CSG Silicon PRC PRC materials 75% 25%
Wujiang, Wujiang,
Wujiang CSG PRC PRC Intensive processing of glass 75% 25%
Yongqing, Yongqing,
Hebei CSG PRC PRC Production and sales of special glass 75% 25%
Wujiang, Wujiang,
Wujiang CSG PRC PRC Production and sales of special glass 100% -
Hong Kong, Hong Kong,
China Southern Glass (Hong Kong) Limited PRC PRC Investment holding 100% -
Yongqing, Yongqing, Production and sales of ultra-thin electronic
Hebei Shichuang PRC PRC glass 100% -
Xianning, Xianning,
Xianning CSG PRC PRC Production and sales of special glass 75% 25%
Xianning, Xianning,
Xianning CSG Energy-Saving PRC PRC Intensive processing of glass 75% 25%
Qingyuan, Qingyuan, Production and sales of ultra-thin electronic
Qingyuan CSG Energy-Saving PRC PRC glass 100% -
Shenzhen, Shenzhen,
Shenzhen CSG Financial Leasing Co., Ltd. PRC PRC Finance leasing, etc. 75% 25%
Jiangyou, Jiangyou, Production and sales of silica and its
Jiangyou CSG Mining Development Co. Ltd. PRC PRC by-products 100% -
Shenzhen, Shenzhen, Investment management of photovoltaic
Shenzhen CSG PV Energy Co., Ltd. PRC PRC plant 100% -
Qingyuan, Qingyuan, Clean energy development, photovoltaic
Qingyuan CSG New Energy Co., Ltd. PRC PRC power generation - 100%
Wujiang, Wujiang, Clean energy development, photovoltaic
Suzhou CSG PV-tech Co., Ltd. PRC PRC power generation - 100%
Wujiang, Wujiang, Clean energy development, photovoltaic
Wujiang CSG New Energy Co., Ltd. PRC PRC power generation - 100%
Yichang, Yichang, Clean energy development, photovoltaic
Yichang CSG New Energy Co., Ltd PRC PRC power generation - 100%
Shenzhen, Shenzhen, Production and sales of display component
Shenzhen CSG Display: PRC PRC products 60.80% -
Xianning, Xianning,
Xianning CSG Photoelectric PRC PRC Photoelectric glass and high aluminium glass 37.50% 62.50%
- 174 -
CSG HOLDING CO., LTD.
Notes to the financial statements for the year ended 31 December 2016
(All amounts in RMB Yuan unless otherwise stated)
6 Interest in other entities (Cont'd)
(1) Interest in subsidiaries (Cont'd)
(b) Subsidiaries with significant minority interests
Profit or loss attributable to Dividends distributed to
Shareholding of minority shareholders for the minority shareholders for the Minority interests
minority year ended 31 December year ended 31 December as at 31 December
Subsidiaries shareholders 2017 2017 2017
Shenzhen CSG Display 39.20% (436,287) 2,488,500 302,902,364
The major financial information of the significant non-fully-owned subsidiaries of the Group is listed below:
31 December 2017
Non-current Non-current
Current assets assets Total assets Current liabilities liabilities Total liabilities
Shenzhen CSG
Display 230,735,047 1,384,202,485 1,614,937,532 588,962,555 237,351,982 826,314,537
2017
Total comprehensive Cash flows from operating
Revenue Net profit income activities
Shenzhen CSG
563,191,871 14,127,082 14,127,082 91,246,186
Display
- 175 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
7 Segment information
To meet operating strategies and requirements of business development, the Group adjusted its operating
structure in current year. The Group’s management allocated resources, Estimated segment performance,
updated reporting segment, and disclosed segment information according to revised operating segments in current
year. Segment information of prior year had been restated in accordance with updated reporting segments.
Before the revision, the Group's business activities are categorised by product or service as follows:
- Flat glass segment, engaged in production and sales of float glass and the silica for the production
thereof, etc.
- Engineering glass segment, engaged in manufacturing and sales of engineering glass, etc.
- Solar energy segment, engaged in manufacturing and sales of polycrystalline silicon and solar
battery and applications, etc.
After the revision, the Group's business activities are categorised by product and service as follows:
- Glass segment, engaged in production and sales of float glass and engineering glass and the
silica for the production thereof, etc.
- Solar energy segment, engaged in manufacturing and sales of polycrystalline silicon and solar
battery and applications, etc.
- Electronic glass and display segment is responsible for production and sales of display
components and special ultra-thin glass products, etc.
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 Estimates 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.
- 176 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
7 Segment information (Cont’d)
(a) Segment information as at and for the year ended 31 December 2017 is as follows:
Electronic glass
Flat glass and displays Solar energy Others Unallocated Elimination Total
Revenue from external customers 6,954,683,103 873,166,517 3,050,921,865 - 629,261 - 10,879,400,746
Inter-segment revenue 97,227,192 701,963 74,689,369 - 58,058,305 (230,676,829) -
Interest income 1,152,232 146,973 262,942 608 11,043,530 - 12,606,285
Interest expenses (153,982,540) (32,003,353) (79,797,858) - (54,488,918) 5,669,073 (314,603,596)
Asset impairment losses (20,109,566) (352,808) (48,857,162) - (80,219) - (69,399,755)
Depreciation and amortisation expenses (601,774,748) (132,769,853) (261,527,443) (107,198) (6,253,032) - (1,002,432,274)
Total profit/(loss) 827,335,674 80,463,836 218,437,923 (110,328) (124,292,481) (5,527,598) 996,307,026
Income tax (expenses)/income (118,701,953) (21,223,939) (23,950,456) (3,794,643) - (167,670,991)
Net profit/(loss) 708,633,721 59,239,897 194,487,467 (110,328) (128,087,124) (5,527,598) 828,636,035
Total assets 9,121,982,895 3,032,467,443 4,969,121,408 664,853 2,410,765,769 - 19,535,002,368
Total liabilities 3,453,100,959 856,548,520 1,640,361,900 2,502,814 4,802,865,064 - 10,755,379,257
Increase in non-current assets (i) 160,029,169 459,791,787 629,473,708 - 2,875,254 - 1,252,169,918
- 177 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
7 Segment information (Cont’d)
(b) Segment information as at and for the year ended 31 December 2016 is as follows:
Electronic glass
Flat glass and displays Solar energy Others Unallocated Elimination Total
Revenue from external customers 6,248,986,019 432,923,679 2,291,096,315 - 1,077,394 - 8,974,083,407
Inter-segment revenue 53,644,824 533,611 29,140,901 - 21,504,477 (104,823,813) -
Interest income 709,739 169,281 215,863 69 3,680,920 (1,582,192) 3,193,680
Interest expenses (141,501,800) (20,216,385) (80,249,948) - (22,179,393) 5,828,195 (258,319,331)
Investment income from associates - - - - 5,071,685 - 5,071,685
Asset impairment losses (1,347,361) (6,474,743) (52,808,413) - 1,767,753 - (58,862,764)
Depreciation and amortisation expenses (579,880,012) (89,743,215) (240,386,653) - (7,142,866) - (917,152,746)
Change in fair value of derivative financial
- - - - (9,850,256) - (9,850,256)
instruments
Total profit/(loss) 870,911,083 19,861,854 246,515,279 (64,601) (179,348,714) (1,766,282) 956,108,619
Income tax (expenses)/income (115,934,739) (9,777,225) (26,285,679) - 115,548 - (151,882,095)
Net profit/(loss) 754,976,344 10,084,629 220,229,600 (64,601) (179,233,166) (1,766,282) 804,226,524
Total assets 9,002,421,342 2,594,860,320 4,476,309,055 135,161 1,073,089,752 17,146,815,630
Total liabilities 1,789,702,282 566,783,261 519,338,730 2,502,814 6,139,297,524 - 9,017,624,611
Increase in non-current assets (i) 368,179,542 1,539,319,460 652,019,325 - 4,578,555 - 2,564,096,882
- 178 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
7 Segment information (Cont’d)
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 2017 2016
Mainland 9,506,249,433 7,971,929,246
Hong Kong, PRC 434,551,436 135,128,604
Europe 26,534,686 25,914,385
Asia (other than Mainland and Hong Kong) 848,958,711 614,806,258
Australia 37,937,222 37,437,349
North America 6,030,936 134,941,952
Other regions 19,138,322 53,925,613
10,879,400,746 8,974,083,407
Total non-current assets 31 December 2017 31 December 2016
Mainland 14,505,740,522 14,392,447,014
Hong Kong, PRC 12,798,642 12,551,254
14,518,539,164 14,404,998,268
No revenue from a single customer exceeded 10% or more of the Group’s revenue.
8 Related parties and related party transactions
(1) Information of the parent company
The Company regards no entity as the parent company.
(2) The subsidiaries
The general information and other related information of the subsidiaries are set out in Note 6(1).
(3) The associates
Shenzhen CSG Display company is a joint venture of the Company, and it became a subsidiary of our company on
June 3, 2016. Prior to June 3, 2016, the related transaction between Shenzhen CSG Display company and the
Group is noted, as indicated in note 8 (5).
On December 31, 2017, the Company has no joint venture.
- 179 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
8 Related parties and related party transactions (Cont’d)
(4) Other related parties information
Relationship with the Group
Shenzhen Jushenghua Co., Ltd. (“Jushenghua”) Persons acting in concert with the first majority
shareholder of the Group
Shenzhen Qianhai Ruinan Investment LLP Controlled by the former key management personnel of
the Croup
Yichang Hongtai Real Estate Co. Ltd Other related parties and their affiliates
(5) Related party transactions
(a) Purchase and sales of goods, provision and receiving of labour
Related party
Related parties transactions Pricing policies 2017 2016
Shenzhen CSG Display Purchase of materials Refer to market price - 608,722
Shenzhen CSG Display Sales of goods Refer to market price - 1,500,899
Xianning CSG Photoelectric Sales of special glass Refer to market price - 2,349,353
- 4,458,974
(b) Leases
The Group as the lessor:
Lease income Lease income
recognised in recognised in
Name of the lessee Category of the leased asset 2017 2016
Shenzhen CSG Display Equipment under finance leases - 2,359,961
- 2,359,961
(c) Gains on equity transfer
None
(d) Acquisition of equity
Related party
Related parties transactions Pricing principle 2017 2016
Shenzhen Qianhai Acquire 37.5% of Refer to fair value - 38,250,000
- 180 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Ruinan Investment Xianning CSG of the equity
LLP Photoelectric’s equity
- 181 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
8 Related parties and related party transactions (Cont’d)
(5) Related party transactions
(e) Advances paid on behalf of related parties
Related party
Related parties transactions Pricing policies 2017 2016
Shenzhen CSG Advances of electric Refer to market
Display charge price - 8,168,076
(f) Remuneration of key management
2017 2016
Remuneration 12,030,000 10,914,002
(6) Receivables from related parties
December 31, 2017 December 31, 2016
Bad debt Bad debt
Book balance preparation Book balance preparation
Other Yichang Hongtai Real
receivables Estate Company 171,000,000 (3,420,000) 171,000,000 (3,420,000)
(7) 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:
Related party Restrictive terms on
Related parties transactions borrowings 2017 2016
Shenzhen Jushenghua Facility of interest-free
Co., Ltd. loans provided for the
(“Jushenghua”) Company Nil 2,000,000,000 2,000,000,000
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 RMB2 billion 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. The shareholder provided RMB 1 billion 610 million interest free loan to the
group in the current year, which has been returned to all in December 31, 2017.
- 182 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
9 Share Payment
1. Overall situation of share payment
The total number of equity instruments granted by 97,511,654 shares
the company in the current period Restricted shares
Total amount of various equity instruments that the -
company exercises during the current period
The total number of various equity instruments that -
have failed in the current period
The scope of the company’s outstanding share -
options and the remaining duration of the contract at
the end of the period
The scope of the company's exercise of other equity -
instruments at the end of the period and the
remaining duration of the contract
Note: On December 11, 2017, reviewed and approved by the Group's eighth session of the Board of Directors, the
Group implemented the 2017 A Share Restricted Stock Incentive Plan. The incentive targets for the restricted
shares granted under this plan include company directors and senior management personnel. A total of 454 core
management teams, company technology members and main employees. The first grant date of this restricted
stock was December 11, 2017. The company granted 97,511,654 restricted shares for the first time to 454
incentive targets. The initial grant price was 4.28RMB per share. Reserved restricted stock ending balance
17,046,869 shares, the grant price has not been determined. The shares granted of the first time has been
registered and listed.
This incentive plan is valid for 48 months from the date of grant of the restricted stock to the date of unlocking of all
restricted stocks or the completion of repurchase and cancellation. During the unlocking/exercise period, if the
unlocking/exercise condition specified in the incentive plan is reached, the restricted stock granted is unlocked in
three phases after 12 months from the grant date.
The unlock period is shown in the following table:
Unlock Schedule Unlock Time Unlock Ratio
First unlock from the date of the first transaction 12 months after 40%
the award date to the date of the last transaction within
24 months from the grant date.
Second unlock from the date of the first trading day 24 months after 30%
the grant date to the date of the last trading day within
36 months from the grant date
Third unlock from the date of the first trading day 36 months after 30%
the grant date to the day of the last trading day within
48 months from the grant date
9 Share Payment (Cont’d)
- 183 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
2. Equity-settled share payment
Method for Determining the Fair Value of Equity Black-Scholes Model
Instruments on the Grant Date
Determination of the best estimate of the number Based on the latest information on the change in
of vesting equity instruments the number of exercisable rights and the
completion of performance indicators, the
number of equity instruments that are expected to
be exercised is revised.
Reasons for significant differences between Not applicable
current estimates and previous estimates
Cumulative amount of equity-settled share-based
payment in capital reserves 8,194,695
Total equity confirmed by equity-settled 8,194,695
share-based payment in this period
According to the relevant provisions of Accounting Standards for Business Enterprises No. 11 - Share Payment
and Enterprise Accounting Standard No. 22 - Recognition and Measurement of Financial Instruments, the Group
uses the Black-Scholes model (BS model) as a pricing model, deducting incentive objects. The fair value of the
restricted stock will be used after the lock-in costs that are required to obtain the rational expected return from the
sales restriction period are lifted in the future. The Group will, on each balance sheet date of the lock-in period,
revise the number of restricted stocks that are expected to be unlockable based on the newly obtained changes in
the number of unlockable persons and performance indicators, and follow the fair value of the restricted stock grant
date. The services obtained during the current period are included in the relevant costs or expenses and capital
reserves.
The Group actually granted restricted stocks of 97,511,654 shares in 2017, and the total fair value of the equity
instruments granted to the incentive target for the first day of grant was RMB 289,519,900, the total fair value as
the total cost of the company's equity incentive plan will be confirmed in stages according to the unlocking/exercise
ratio during the implementation of the equity incentive plan, and will be included in the “management fees” and
“capital” of each period accordingly.
In 2017, the Group achieved conditions for unlocking restricted stocks. In the current period, the relevant cost
sharing amount of the incentive plan was recognized as RMB 8,194,695.
10 Contingencies
Nil.
11 Commitments
(1) Capital commitments
Capital expenditures contracted for by the Group at the balance sheet date but are not yet necessary to be
recognized on the balance sheet are as follows:
31 December 2017 31 December 2016
Buildings, machinery and equipment 150,418,893 280,938,401
11 Commitments (Cont’d)
(2) Operating lease commitments
The future minimum lease payments due under the signed irrevocable operating leases contracts are summarized
- 184 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
as follows:
31 December 2017 31 December 2016
Within 1 year 3,675,748 1,142,713
1 to 2 years 1,914,948 831,008
2 to 3 years 1,472,224 273,320
Over 3 years 3,443,641 282,534
10,506,561 2,529,575
12 Events after the balance sheet date
Statement of profit distribution after balance sheet date
Amount
Proposed distribution of cash dividends 124,207,377
Pursuant to the resolution of the board of directors dated April 20, 2018, the board of directors proposed that the
company distribute cash dividends of RMB 124,207,377 to all shareholders, which has not yet been recognized as a
liability in the financial statements. In addition, the board of directors proposes to use the capital of 2,484,147,547 as
the base to transfer 1.5 shares for every 10 shares to all shareholders in a total of 372,622,132 shares, which has
not yet been reclassified as capital in the financial statements.
13 Financial instrument and risk
The Group's activities expose it to a variety of financial risks: market risk (primarily foreign exchange risk and interest
rate risk), credit risk and liquidity risk. The Group's overall risk management program focuses on the unpredictability
of financial markets and seeks to minimize 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. Some export business, however, is denominated in foreign currencies. In addition, the
Group is exposed to foreign exchange risk arising from the recognized assets and liabilities, and future
transactions denominated in foreign currencies, primarily with respect to US dollars and Hong Kong dollar. The
Group monitors the scale of foreign currency transactions, foreign currency assets and liabilities, and adjust
settlement currency of export business, to furthest reduce the currency risk.
As at 31 December 2017, book values in RMB equivalent of the Group’s assets and liabilities denominated in
foreign currencies are summarized below:
13 Financial instrument and risk (Cont’d)
(1) Market risk (Cont'd)
31 December 2017
USD HKD Others Total
- 185 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Financial assets denominated
in foreign currency -
Cash at bank and on hand 74,120,750 6,114,383 112,007 80,347,140
Receivables 127,354,518 9,654,366 7,387,101 144,395,985
201,475,268 15,768,749 7,499,108 224,743,125
Financial liabilities denominated
in foreign currency -
Short-term borrowings - 62,692,500 - 62,692,500
Payables 104,040,185 257 36,939,407 140,979,849
104,040,185 62,692,757 36,939,407 203,672,349
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 -
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 31 December 2017, if the currency had strengthened/weakened by 10% against the USD while all other
variables had been held constant, the Group’s net profit for the year would have been approximately
RMB8,281,982 lower/higher (31 December 2016: approximately RMB4,756,788 lower/higher) for various financial
assets and liabilities denominated in USD.
As at 31 December 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
RMB3,988,541 higher/lower (31 December 2016: approximately RMB5,230,592higher/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.
- 186 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
13 Financial instrument and risk (Cont’d)
(1) Market risk (Cont'd)
(b) interest rate risk
The Group's interest rate risk arises from long-term interest bearing debts including long-term borrowings and
bonds payable. Financial liabilities issued at floating rates expose the Group to cash flow interest rate risk.
Financial liabilities issued at fixed rates expose the Group to fair value interest rate risk. The Group determines the
relative proportions of its fixed rate and floating rate contracts depending on the prevailing market conditions. As at
31 December 2017, the Group’s long-term interest-bearing debts at and fixed rates and floating rates are illustrated
below:
31 December 2017 31 December 2016
Debt at fixed rates 1,425,000,000 1,380,000,000
Debt at floating rates 129,120,000 58,660,000
1,554,120,000 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, other receivables.
The Group expects that there is no significant credit risk associated with cash at bank since they are mainly
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, management believes the credit risk should be limited.
In addition, the Group has policies to limit the credit exposure on accounts receivable, other receivables and trade
acceptance notes receivable. The Group assesses the credit quality of and sets credit limits on its customers by
taking into account their financial position, the availability of guarantee from third parties, their credit history and
other factors such as current market conditions. The credit history of the customers is regularly monitored by the
Group. In respect of customers with a poor credit history, the Group will use written payment reminders, or shorten
or cancel credit periods, to ensure the overall credit risk of the Group is limited to a controllable extent.
- 187 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
13 Financial instrument and risk (Cont’d)
(3) Liquidity risk
Cash flow forecasting is performed by each subsidiary of the Group and aggregated by the Group’s finance
department in its headquarters. The Group’s finance department at its headquarters monitors rolling forecasts of
the Group's short-term and long-term liquidity requirements to ensure it has sufficient cash reserve, while
maintaining sufficient headroom on its undrawn committed borrowing facilities from major financial institutions so
that the Group does not breach borrowing limits or covenants on any of its borrowing facilities to meet the
short-term and long-term liquidity requirements.
As stated in Note 2(1) above, as at 31 December 2017, the Group had net current liabilities of approximately
RMB2.52 billion and committed capital expenditures of approximately RMB0.15 billion. 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;
(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 analyzed by their maturity date below at their
undiscounted contractual cash flows:
31 December 2017
Within 1 year 1 to 2 years 2 to 5years Over 5 years Total
Short-term borrowings 3,810,013,826 - - - 3,810,013,826
Notes payable 213,401,622 - - - 213,401,622
Accounts payable 1,400,166,042 - - - 1,400,166,042
Interest payable 34,032,740 - - - 34,032,740
Other payables 619,324,354 - - - 619,324,354
Other current liabilities 300,000 - - - 300,000
Current portion of
911,348,902 911,348,902
non-Current liabilities - - -
Long-term payables - 600,436,759 561,357,488 - 1,161,794,247
Long-term borrowings 80,169,450 117,889,436 1,580,649,809 - 1,778,708,695
7,068,756,936 718,326,195 2,142,007,297 - 9,929,090,428
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
- 188 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Other current liabilities 300,000 - - - 300,000
Current portion of non-current
liabilities 1,068,336,787 - - - 1,068,336,787
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
- 189 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
14 Fair value estimates
Based on the lowest level input that is significant to the fair value measurement in its entirety, the fair value
hierarchy has the following levels:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly or indirectly.
Level 3: Unobservable inputs for the asset or liability.
(a) Financial instruments measured at fair value
As of 31 December 2017, the group has no assets measured at fair value.
(b) Financial instruments not measured but disclosed 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, book value of the other financial assets and liabilities not measured at
fair value is a reasonable approximation of their fair value.
31 December 2017 31 December 2016
Carrying amount Fair value Carrying amount Fair value
Financial liabilities
Corporate bonds payable - - 1,000,000,000 1,009,177,000
Medium term notes 1,200,000,000 1,171,444,800 1,200,000,000 1,175,308,800
1,200,000,000 1,171,444,800 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.
15 Capital management
The Group’s capital management policies aim to safeguard the Group’s ability to continue as a going concern in
order to provide returns for shareholders and benefits for other stakeholders, and to maintain an optimal capital
structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to
shareholders, refund capital to shareholders, issue new shares or sell assets to reduce debts.
The Group is not subject to external mandatory capital requirements, and monitors capital on the basis of gearing
ratio.
As at 31 December 2017 and 31 December 2016, the Group's gearing ratio is as follows:
- 190 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
31 December 2017 31 December 2016
Total liabilities 10,755,379,257 9,017,624,611
Total assets 19,535,002,368 17,146,815,630
Gearing ratio 55% 53%
16 Notes to the Company’s financial statements
(1) Other receivables
31 December 2017 31 December 2016
Receivables from related parties 2,399,392,648 4,033,706,419
Others 4,451,192 423,416
2,403,843,840 4,034,129,835
Less: Provision for bad debts (3,509,024) (3,428,806)
2,400,334,816 4,030,701,029
(a) The ageing of other receivables is analysed as follows:
31 December 2017 31 December 2016
Within 1 year 2,232,668,334 3,863,129,835
Over 1year 171,175,506 171,000,000
2,403,843,840 4,034,129,835
As at 31 December 2017, the Company had no overdue but not impaired other receivables (31
December 2016: Nil).
(b) Other receivables are analysed by categories as follows:
31 December 2017 31 December 2016
Provision for bad
Carrying amount debts Carrying amount Provision for bad debts
% of total Provision for % of total Provision for
Amount balance bad debts % Amount balance bad debts %
Provision for bad debts by
groupings
- Group 1 4,451,192 - (89,024) 2% 423,416 - (8,806) 2%
- 191 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
- Group 2 2,399,392,648 100% (3,420,000) - 4,033,706,419 100% (3,420,000) -
2,403,843,840 100% (3,509,024) - 4,034,129,835 100% (3,428,806) -
(c) or other receivables provided for bad debts by portfolio, the percentage of provision for the portfolio is as
follows:
31 December 2017 31 December 2016
Carrying amount Provision for bad debts Carrying amount Provision for bad debts
Amount Amount % Amount Amount %
Portfolio 1 4,451,192 (89,024) 2% 423,416 (8,806) 2%
Portfolio 2 2,399,392,648 (3,420,000) - 4,033,706,419 (3,420,000) -
2,403,843,840 (3,509,024) - 4,034,129,835 (3,428,806) -
16 Notes to the Company’s financial statements (Cont’d)
(1) Other receivables (Cont'd)
As at 31 December 2017, the Group’s top five entities with the largest other receivables balances are
summarised as below:
Relationship % of
with the Group Amount Ageing total balance
Yichang CSG Silicon Subsidiary 1,265,446,303 Within 1 year 53%
Qingyuan CSG Energy-Saving Subsidiary 315,175,452 Within 1 year 13%
Yichang CSG Display Subsidiary 217,350,199 Within 1 year 9%
Other
Yichang Hongtai Real related parties and
Estate Co. Ltd their affiliates 171,000,000 Over 1 year 7%
Xianning CSG photoelectric
glass Subsidiary 120,520,736 Within 1 year 5%
2,089,492,690 87%
(2) Long-term equity investments
31 December 2017 31 December 2016
Subsidiaries (a) 4,810,987,652 4,805,440,632
Less: Impairment provision for investments in subsidiaries (a) (15,000,000) (15,000,000)
4,795,987,652 4,790,440,632
- 192 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
16 Notes to the Company’s financial statements (Cont’d)
(2) Long-term equity investments (Cont’d)
(a) Subsidiaries
Movement in current year
Provision for Provision for Cash dividends
31 December Additional Decrease in impairment 31 December impairment declared in
2016 investment investment loss 2017 loss current year
(i) (i)
Chengdu CSG 146,679,073 298,274 - - 146,977,347 - 29,098,516
Sichuan CSG Energy Conservation 115,290,583 256,131 - - 115,546,714 - 36,798,924
Tianjin Energy Conservation 242,902,974 288,454 - - 243,191,428 -
Dongguan CSG 193,618,971 297,078 - - 193,916,049 -
Dongguan CSG Solar 349,446,826 354,328 - - 349,801,154 - 109,684,420
Yichang CSG Silicon 632,958,044 506,124 - - 633,464,168 -
Wujiang CSG 251,313,658 202,531 - - 251,516,189 - 35,752,200
Hebei CSG 261,998,368 266,973 - - 262,265,341 -
China Southern Glass (Hong Kong)
Limited 85,742,211 60,391 - - 85,802,602 -
Wujiang CSG 562,179,564 348,190 - - 562,527,754 - 175,598,720
Hebei Shichuang 243,062,801 208,669 - - 243,271,470 -
Jiangyou CSG Mining Development
Co. Ltd. 100,725,041 112,558 - - 100,837,599 -
Xianning CSG 177,041,818 253,676 - - 177,295,494 - 47,124,545
Xianning CSG Energy-Saving 161,281,576 262,268 - - 161,543,844 -
Qingyuan CSG Energy-Saving 300,185,609 191,239 - - 300,376,848 -
- 193 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Shenzhen CSG Financial Leasing
Co., Ltd. 133,500,000 - - 133,500,000 -
Shenzhen CSG PV Energy Co., Ltd. 100,000,000 52,985 - - 100,052,985 -
Shenzhen CSG Display 542,027,830 664,058 - - 542,691,888 - 2,011,500
Xianning CSG Photoelectric 38,250,000 220,534 - - 38,470,534 -
Others (ii) 167,235,685 702,559 - - 167,938,244 (15,000,000)
4,805,440,632 5,547,020 - - 4,810,987,652 (15,000,000) 436,068,825
- 194 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
16 Notes to the Company’s financial statements (Cont’d)
(2) Long-term equity investments (Cont’d)
(a) Subsidiaries (Cont'd)
(i) As at 31 December 2017, included in the investments in subsidiaries were deemed investment costs of
RMB 114,582,341 (31 December 2016: RMB 109,035,321), the fair value of the equity instruments of the
Company granted to the employee of the subsidiaries for their serviced provided to the subsidiaries for
which the Company did not charge the subsidiaries.
(ii) The operations of the subsidiaries against which provision was made were basically ceased. The Company
made provision against the long-term investment in these subsidiaries based on their recoverable amounts
in previous years.
(3) Long-term receivables
31 December 2017 31 December 2016
Bonds payable and long-term borrowings allocated to
subsidiaries 1,200,000,000 1,905,645,000
Entrusted loans allocated to subsidiaries 98,000,000
1,200,000,000 2,003,645,000
Less: Provisions for impairment -
1,200,000,000 2,003,645,000
- 195 –
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
16 Notes to the Company’s financial statements (Cont’d)
(3) Long-term receivables (Cont’d)
Reversals of
Provision for provision for
31 December Movements in 31 December impairment impairment loss in
2016 current year 2017 loss current year
Chengdu CSG 190,000,000 (140,000,000) 50,000,000 - -
Sichuan CSG Energy Conservation 114,665,000 (94,665,000) 20,000,000 - -
Dongguan CSG PV-tech 160,105,000 (110,105,000) 50,000,000 - -
Yichang CSG Silicon 472,480,000 (122,480,000) 350,000,000 - -
Dongguan CSG 99,835,000 (24,835,000) 75,000,000 - -
Wujiang CSG 310,000,000 (100,000,000) 210,000,000 - -
Dongguan CSG Solar 193,780,000 (73,780,000) 120,000,000 - -
Wujiang CSG 69,890,000 (19,890,000) 50,000,000 - -
Qingyuan CSG Energy-Saving 148,000,000 (98,000,000) 50,000,000 - -
Xianning CSG Energy-Saving 80,000,000 - 80,000,000 - -
Xianning CSG 75,000,000 - 75,000,000 - -
Hebei CSG Class 69,890,000 (19,890,000) 50,000,000
Hebei CSG Window 20,000,000 - 20,000,000 - -
2,003,645,000 (803,645,000) 1,200,000,000 - -
(4) Other payables
31 December 2017 31 December 2016
Subsidiaries 477,067,694 233,414,167
Share repurchase 417,349,879 -
Others 15,015,418 7,179,727
909,432,991 240,593,894
(5) Investment income
2017 2016
Investment income from long-term equity investment under
cost method 436,068,825 395,236,932
Investment income from long-term equity investment under
equity method - 29,186,090
Losses from disposal of financial liabilities at fair value
through profit or loss - (238,350,256)
436,068,825 186,072,766
There is no significant restriction on the remittance of investment income to the Company.
- 196 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
I Statement of non-recurring gains and losses
2017 2016
Gains or losses on disposal of non-current assets 1,768,993 1,759,358
Government grants recognised in profit or loss for current
period (87,875,417) (91,627,439)
Gain or loss from change in fair value - (228,500,000)
Investment losses from disposal of financial liabilities at fair
value through profit or loss (427,636) 238,350,256
Losses from revaluation of stock rights under business
combinations involving enterprises not under common
control - 45,909,181
Non-operating income and expenses other than aforesaid
items (12,076,848) (1,306,284)
(98,610,908) (35,414,928)
Effect of income tax 16,209,135 14,327,585
Effect of minority interests (after tax) 2,386,569 316,740
Total non-recurring gains and losses (80,015,204) (20,770,603)
(1) Basis for preparation of statement of non-recurring gains and losses
Under the requirements in Explanatory Announcement No. 1 on Information Disclosure by Companies Offering
Securities to the Public – Non-recurring Profit or Loss [2008] from CSRC, non-recurring profit or loss refer to those
arises from transactions and events that are not directly relevant to ordinary activities, or that are relevant to
ordinary activities, but are extraordinary and not expected to recur frequently that would have an influence on users
of financial statements making economic decisions on the financial performance and profitability of an enterprise.
II Return on net assets and earnings per share
Earnings per share
Weighted average return Diluted earnings per
on net assets (%) Basic earnings per share share
2017 2016 2017 2016 2017 2016
Net profit attributable to ordinary
shareholders of the Company 10.15% 10.33% 0.35 0.33 0.35 0.33
Net profit attributable to ordinary
shareholders of the Company
after deducting non-recurring
gains and losses 9.16% 10.06% 0.31 0.33 0.31 0.33
- 197 –
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
CSG HOLDING CO., LTD.
CONSOLIDATED AND COMPANY’S BALANCE SHEETS
AS AT 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
31 December 2017 31 December 2016 31 December 2017 31 December 2016
ASSETS Note Consolidated Consolidated Company Company
(Restated (Restated
Current assets
Cash at bank and on hand 4(1) 2,462,605,764 586,803,505 1,681,877,320 302,841,481
Notes receivable 4(2) 552,232,420 456,347,237 - -
Accounts receivable 4(3) 638,238,290 627,985,983 - -
Advances to suppliers 4(4) 143,848,023 95,733,132 146,132 16,880
Other receivables 4(5)/16(1) 205,939,019 200,809,149 2,400,334,816 4,030,701,029
Inventories 4(6) 685,895,317 477,780,925 - -
Assets classified as held for sale 4(7) 45,983,520 - - -
Other current assets 4(8) 200,847,989 199,905,577 - -
Total current assets 4,935,590,342 2,645,365,508 4,082,358,268 4,333,559,390
Non-current assets
Long-term receivables 16(3) - - 1,200,000,000 2,003,645,000
Long-term equity investments 16(2) - - 4,795,987,652 4,790,440,632
Fixed assets 4(9) 11,540,769,697 11,457,972,991 22,182,246 26,073,848
Construction in progress 4(10) 1,417,624,618 1,362,096,377 - -
Intangible assets 4(11) 1,047,222,407 1,032,458,977 1,742,109 1,393,454
Development expenditure 4(11) 61,365,537 66,927,714 - -
Goodwill 4(12) 397,392,156 397,392,156 - -
Long-term prepaid expenses 2,223,397 975,660 - -
Deferred tax assets 4(13) 80,872,862 96,451,854 - -
Other non-current assets 4(14) 51,941,352 87,174,393 2,132,041 -
Total non-current assets 14,599,412,026 14,501,450,122 6,022,044,048 6,821,552,934
TOTAL ASSETS 19,535,002,368 17,146,815,630 10,104,402,316 11,155,112,324
198
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
CSG HOLDING CO., LTD.
CONSOLIDATED AND COMPANY’S BALANCE SHEETS (CONT'D)
AS AT 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
31 December 2017 31 December 2016 31 December 2017 31 December 2016
LIABILITIES AND OWNERS' EQUITY Note Consolidated Consolidated Company Company
(Restated (Restated
Current liabilities
Short-term borrowings 4(16) 3,704,630,909 4,017,869,662 2,600,000,000 3,495,163,044
Notes payable 4(17) 213,401,622 20,000,000 - -
Accounts payable 4(18) 1,400,166,042 1,169,869,370 261,024 317,874
Advances from customers 4(19) 195,563,465 142,330,979 - -
Employee benefits payable 4(20) 272,170,660 193,372,239 40,856,313 18,380,010
Taxes payable 4(21) 111,996,764 115,592,616 1,762,580 1,804,568
Interest payable 4(22) 34,032,740 78,225,904 3,090,735 3,794,646
4(23)
Other payables /16(4) 619,324,354 188,321,450 909,432,991 240,593,894
Current portion of non-current liabilities 4(24) 904,261,397 1,029,340,000 180,000,000 1,000,000,000
Other current liabilities 300,000 300,000 - -
Total current liabilities 7,455,847,953 6,955,222,220 3,735,403,643 4,760,054,036
Non-current liabilities
Long-term borrowings 4(25) 1,554,120,000 1,438,660,000 1,200,000,000 1,380,000,000
Bonds payable 4(26) 1,161,794,247 - - -
Deferred tax liabilities 4(13) 20,915,954 29,749,137 - -
Deferred income 4(27) 562,701,103 593,993,254 186,526,280 183,035,040
Total non-current liabilities 3,299,531,304 2,062,402,391 1,386,526,280 1,563,035,040
Total liabilities 10,755,379,257 9,017,624,611 5,121,929,923 6,323,089,076
Shareholders’ equity
Share capital 4(28) 2,484,147,547 2,075,335,560 2,484,147,547 2,075,335,560
Capital surplus 4(29) 1,306,381,765 1,260,702,197 1,451,209,079 1,405,529,511
Less:Treasury shares 4(30) (417,349,879) - (417,349,879) -
Other comprehensive income 4(31) 1,948,943 4,653,971 - -
Special reserve 4(32) 3,224,938 5,843,473 - -
Surplus reserve 4(33) 920,592,332 888,508,230 935,137,692 903,053,590
Undistributed profits 4(34) 4,159,642,227 3,573,871,573 529,327,954 448,104,587
Total equity attributable to shareholders
of parent company 8,458,587,873 7,808,915,004 4,982,472,393 4,832,023,248
Minority interests 321,035,238 320,276,015 - -
Total shareholders' equity 8,779,623,111 8,129,191,019 4,982,472,393 4,832,023,248
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY 19,535,002,368 17,146,815,630 10,104,402,316 11,155,112,324
199
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
The accompanying notes form an integral part of these financial statements.
Legal representative: Principal in charge of accounting: Head of accounting
department:
CSG HOLDING CO., LTD.
CONSOLIDATED AND COMPANY’S INCOME STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
2017 2016 2017 2016
Item Note Consolidated Consolidated Company Company
Revenue 4(35) 10,879,400,746 8,974,083,407 58,687,566 22,581,872
Less: Cost of sales 4(35) (8,216,358,372) (6,562,214,373) - (60,337)
Taxes and surcharges 4(36) (124,523,926) (103,159,546) (4,942,397) (92,575)
Selling and distribution expenses 4(37) (336,131,723) (301,815,090) - -
General and administrative expenses 4(38) (919,329,772) (766,589,059) (117,294,601) (122,708,284)
Financial expenses - net 4(39) (315,961,080) (265,820,569) (42,124,252) (20,405,532)
Asset impairment loss 4(41) (69,399,755) (58,862,764) (80,219) 1,767,753
Add: Gain or loss from changes in fair value 4(42) - 228,500,000 - 228,500,000
4(43)
Investment income/(loss) /16(5) 427,636 (279,187,752) 436,068,825 186,072,766
Income on disposal assets 4(44) (1,768,993) (1,759,358) - 3,210
Other Income 4(45) 84,341,814 - 1,568,240 -
Operating profit 980,696,575 863,174,896 331,883,162 295,658,873
Add: Non-operating revenue 4(46) 20,763,042 98,078,639 40,000 1,574,277
Less: Non-operating expenses 4(47) (5,152,591) (5,144,916) (3,426,562) -
Total profit 996,307,026 956,108,619 328,496,600 297,233,150
Less: Income tax (expenses)/revenue 4(48) (167,670,991) (151,882,095) (7,655,575) 45,854
Net profit 828,636,035 804,226,524 320,841,025 297,279,004
Classified by continuous operation:
Net income from continuing operations (“-” for
net loss) 828,636,035 804,226,524 320,841,025 297,279,004
Net income from discontinued operations (“-”
for net loss) - - - -
Classified by equity ownership:
Attributable to shareholders of parentcompany 825,388,312 797,721,576 - -
Minority interests 3,247,723 6,504,948 - -
Other comprehensive income net after tax (2,705,028) 1,686,199 - -
Other comprehensive income net after tax
attributable to shareholders of parentcompany (2,705,028) 1,686,199 - -
Other comprehensive income items which will (2,705,028) 1,686,199 - -
be reclassified subsequently to profit or loss
Differences on translation of foreign currency
(2,705,028) 1,686,199 - -
financial statements
Other comprehensive income net after tax
- - - -
attributable to minority interests
Total comprehensive income 4(31) 825,931,007 805,912,723 320,841,025 297,279,004
Total comprehensive income attributable to
shareholders of parent company 822,683,284 799,407,775
Total comprehensive income attributable to
minority interests 3,247,723 6,504,948
200
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Earnings per share 4(49)
Basic earnings per share (RMB Yuan) 4(49) 0.35 0.33
Diluted earnings per share (RMB Yuan) 4(49) 0.35 0.33
The accompanying notes form an integral part of these financial statements.
Legal representative: Principal in charge of accounting: Head of accounting department:
CSG HOLDING CO., LTD.
CONSOLIDATED AND COMPANY’S CASH FLOW STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
2017 2016 2017 2016
Item Note Consolidated Consolidated Company Company
1. Cash flows from operating activities
Cash received from sales of goods or rendering of services 12,159,560,836 10,375,273,438 84,336,551 -
Refund of taxes and surcharges 24,706,337 69,632,529 - -
Cash received relating to other operating activities 4(50)(a) 72,348,567 47,278,131 16,104,051 3,798,557
Sub-total of cash inflows 12,256,615,740 10,492,184,098 100,440,602 3,798,557
Cash paid for goods and services (7,206,584,779) (5,719,787,359) (65,853) -
Cash paid to and on behalf of employees (1,204,981,471) (1,198,976,110) (61,388,549) (125,316,231)
Payments of taxes and surcharges (795,627,245) (780,678,441) (17,355,536) (39,189,451)
Cash paid relating to other operating activities 4(50)(b) (585,976,089) (551,890,068) (26,421,920) (13,035,783)
Sub-total of cash outflows (9,793,169,584) (8,251,331,978) (105,231,858) (177,541,465)
Net cash flows from/(used in) operating activities 2,463,446,156 2,240,852,120 (4,791,256) (173,742,908)
2. Cash flows from investing activities
Cash received from returns on investments - - 436,068,825 395,236,932
Net cash received from disposal of fixed assets, intangible
4,370,785 8,426,349 - 3,210
assets and other long-term assets
Cash received relating to other investing activities 4(50)(c) 187,756,255 364,515,307 5,966,582 736,648,232
Sub-total of cash inflows 192,127,040 372,941,656 442,035,407 1,131,888,374
Cash paid to acquire fixed assets, intangible assets and other
long-term assets (1,212,172,338) (1,289,115,730) (3,996,610) (807,521)
Cash paid to acquire investments - (4,252,960) - (158,896,160)
Net cash received from acquired subsidiaries - (503,593,518) - (502,204,796)
Cash paid relating to other investing activities 4(50)(d) (200,085,036) (182,205,113) (284,975) -
Sub-total of cash outflows (1,412,257,374) (1,979,167,321) (4,281,585) (661,908,477)
Net cash flows (used in)/from investing activities (1,220,130,334) (1,606,225,665) 437,753,822 469,979,897
3. Cash flows from financing activities
Cash received from capital contributions 417,349,879 14,500,000 417,349,879 -
Including: Cash received from capital contributions by
minority shareholders of subsidiaries - 14,500,000 - -
Cash received from borrowings 4,096,568,050 9,747,674,851 2,750,693,638 9,117,091,808
201
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Cash received relating to other financing activities 4(50)(e) 3,616,000,000 - 2,700,067,157 -
Sub-total of cash inflows 8,129,917,929 9,762,174,851 5,868,110,674 9,117,091,808
Cash repayments of borrowings (5,154,107,768) (9,481,131,859) (4,646,723,365) (8,580,928,764)
Cash payments for interest expenses and distribution of
dividends or profits (558,404,559) (907,404,419) (275,981,816) (871,890,165)
Including: Cash payments for dividends to minority
shareholders of subsidiaries (2,488,500) - - -
Cash payments relating to other financing activities 4(50)(f) (1,783,109,674) - - (53,686,866)
Sub-total of cash outflows (7,495,622,001) (10,388,536,278) (4,922,705,181) (9,506,505,795)
Net cash flows (used in)/from financing activities 634,295,928 (626,361,427) 945,405,493 (389,413,987)
4. Effect of foreign exchange rate changes on cash (2,425,575) 1,557,085 666,398 208,178
5. Net increase/(decrease) in cash and cash equivalents 4(51)(b) 1,875,186,175 9,822,113 1,379,034,457 (92,968,820)
Add: Cash and cash equivalents at beginning of year 584,566,990 574,744,877 301,637,933 394,606,753
6. Cash and cash equivalents at end of year 4(51)(c) 2,459,753,165 584,566,990 1,680,672,390 301,637,933
The accompanying notes form an integral part of these financial statements.
Legal representative: Principal in charge of accounting: Head of accounting
department:
202
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
CSG HOLDING CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Attributable to shareholders of parentcompany
Other Total
comprehensive Undistributed shareholders'
Item Share capital Capital surplus income Special reserve Surplus reserve profits Sub-total Minority interests equity
Note 4(28) 4(29) 4(31) 4(32) 4(33) 4(34)
Balance at 31 December 2015 2,075,335,560 1,261,391,272 2,967,772 15,437,498 859,122,330 3,431,556,565 7,645,810,997 3,080,480 7,648,891,477
Prior period accounting error correction - - - - (342,000) (3,078,000) (3,420,000) (3,420,000)
Balance at 1 January 2016(Restated) 2,075,335,560 1,261,391,272 2,967,772 15,437,498 858,780,330 3,428,478,565 7,642,390,997 3,080,480 7,645,471,477
Movements for the year ended 31
December 2016 (Restated)
Total comprehensive income
Net profit - - - - - 797,721,576 797,721,576 6,504,948 804,226,524
Other comprehensive income 4(31) - - 1,686,199 - - - 1,686,199 - 1,686,199
Total comprehensive income - - 1,686,199 - - 797,721,576 799,407,775 6,504,948 805,912,723
Capital invest or reduce from shareholders - 402,262 - - - - 402,262 313,771,067 314,173,329
Minority shareholders invest capital - - - - - - - 313,628,750 313,628,750
Share-based payments - 402,262 - - - - 402,262 142,317 544,579
Effect of changes in investees’ other equity
- 81,143 - - - - 81,143 - 81,143
applying the equity method
Profit distribution - - - - 29,727,900 (652,328,568) (622,600,668) - (622,600,668)
Appropriation to surplus reserve 4(33) - - - - 29,727,900 (29,727,900) - - -
Distribution to the shareholders 4(34) - - - - - (622,600,668) (622,600,668) - (622,600,668)
- 203 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Special reserve - - - (9,594,025) - - (9,594,025) - (9,594,025)
Special reserve appropriated 4(32) - - - 6,930,650 - - 6,930,650 - 6,930,650
Special reserve used 4(32) - - - (16,524,675) - - (16,524,675) - (16,524,675)
Others - (1,172,480) - - - - (1,172,480) (3,080,480) (4,252,960)
Transactions with minority shareholders - (1,172,480) - - - - (1,172,480) (3,080,480) (4,252,960)
Balance at 31 December 2016 2,075,335,560 1,260,702,197 4,653,971 5,843,473 888,508,230 3,573,871,573 7,808,915,004 320,276,015 8,129,191,019
- 204 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
CSG HOLDING CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (CONT’D)
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Attributable to shareholders of parentcompany
Other Total
Less: Treasury comprehens Special Surplus Undistributed Minority shareholders'
Item Share capital Capital surplus share ive income reserve reserve profits Sub-total interests equity
Note 4(28) 4(29) 4(30) 4(31) 4(32) 4(33) 4(34)
Balance at 1 January
2017(Restated) 2,075,335,560 1,260,702,197 - 4,653,971 5,843,473 888,508,230 3,573,871,573 7,808,915,004 320,276,015 8,129,191,019
Movements for the year ended 31
December 2017
Total comprehensive income
Net profit - - - - - - 825,388,312 825,388,312 3,247,723 828,636,035
Other comprehensive income 4(31) - - - (2,705,028) - - - (2,705,028) - (2,705,028)
Total comprehensive income - - - (2,705,028) - - 825,388,312 822,683,284 3,247,723 825,931,007
Capital increase or decrease
from shareholder 97,511,654 356,979,901 (417,349,879) - - - - 37,141,676 - 37,141,676
Share-based payments 97,511,654 328,032,920 (417,349,879) - - - - 8,194,695 - 8,194,695
Shareholders’ Interest-free
borrowing - 28,946,981 - - - - - 28,946,981 - 28,946,981
Profit distribution - - - - - 32,084,102 (239,617,658) (207,533,556) (2,488,500) (210,022,056)
Appropriation to surplus
4(33) - - - - - 32,084,102 (32,084,102) - - -
reserve
Distribution to the shareholders 4(34) - - - - - - (207,533,556) (207,533,556) (2,488,500) (210,022,056)
Special reserve - - - - (2,618,535) - - (2,618,535) - (2,618,535)
Special reserve appropriated 4(32) - - - - 7,831,127 - - 7,831,127 - 7,831,127
Special reserve used 4(32) - - - - (10,449,662) - - (10,449,662) - (10,449,662)
Internal transfer of shareholders'
equity 311,300,333 (311,300,333) - - - - - - - -
Capital reserve to share capital 311,300,333 (311,300,333) - - - - - - - -
- 205 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Balance at 31 December 2017 2,484,147,547 1,306,381,765 (417,349,879) 1,948,943 3,224,938 920,592,332 4,159,642,227 8,458,587,873 321,035,238 8,779,623,111
The accompanying notes form an integral part of these financial statements.
Legal representative: Principal in charge of accounting: Head of accounting department:
- 206 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
CSG HOLDING CO., LTD.
COMPANY'S STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Attributable to shareholders of parent company
Total
Less: Treasury Surplus Undistributed shareholders'
Item Share capital Capital surplus share reserve profits equity
Balance at 31 December 2015 2,075,335,560 1,404,803,407 - 873,667,690 806,232,151 5,160,038,808
Prior period accounting error correction - - - (342,000) (3,078,000) (3,420,000)
Balance at 1 January 2016（Restated) 2,075,335,560 1,404,803,407 - 873,325,690 803,154,151 5,156,618,808
Movements for the year ended 31 December 2016
Total comprehensive income
Net profit - - - - 297,279,004 297,279,004
Other comprehensive income - - - - - -
Total comprehensive income - - - - 297,279,004 297,279,004
Effect of changes in investees’ other
equity applying the equity method - 726,104 - - - 726,104
Profit distribution
- - - 29,727,900 (652,328,568) (622,600,668)
- Appropriation to surplus reserve - - - 29,727,900 (29,727,900) -
- Distribution to the shareholders - - - - (622,600,668) (622,600,668)
Balance at 31 December 2016 (Restated) 2,075,335,560 1,405,529,511 - 903,053,590 448,104,587 4,832,023,248
Balance at 1 January 2017(Restated) 2,075,335,560 1,405,529,511 - 903,053,590 448,104,587 4,832,023,248
Movements for the year ended 31 December
2017
Total comprehensive income
Net profit - - - - 320,841,025 320,841,025
Total comprehensive income - - - - 320,841,025 320,841,025
Capital increase or decrease from
shareholder 97,511,654 356,979,901 (417,349,879) - - 37,141,676
Share-based payments 97,511,654 328,032,920 (417,349,879) - - 8,194,695
Shareholders’ Interest-free borrowing - 28,946,981 - - - 28,946,981
Profit distribution - - - 32,084,102 (239,617,658) (207,533,556)
Appropriation to surplus reserve - - - 32,084,102 (32,084,102) -
Distribution to the shareholders - - - - (207,533,556) (207,533,556)
Capital reserve to share capital 311,300,333 (311,300,333) - - - -
Balance at 31 December 2017 2,484,147,547 1,451,209,079 (417,349,879) 935,137,692 529,327,954 4,982,472,393
The accompanying notes form an integral part of these financial statements.
Legal representative: Principal in charge of accounting: Head of accounting
department:
- 207 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
- 208 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
1 General information
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 headquarters is located in Shenzhen, Guangdong Province of the People's Republic of China. The
Company issued RMB-denominated ordinary shares (“A-share”) and foreign shares (“B-share”) publicly in October
1991 and January 1992 respectively, and was listed on Shenzhen Stock Exchange on February 1992. As at 31
December 2017, the registered capital was RMB2,484,147,547, 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 flat glass, specialised glass, engineering glass, energy saving glass, silicon related materials,
polycrystalline silicon and solar components and electronic-grade display device glass and the construction and
operation of photovoltaic plant etc.
Details on the majors subsidiaries included in the consolidated scope in current year were stated in Note 6(1).
The financial statements were authorised for issue by the Board of Directors on 20 April 2018.
2 Summary of significant accounting policies and accounting estimates
The Group determines its specific accounting policies and estimates according to manufacturing and operation
feature. It mainly reflected in provision for bad debts of receivables (Note 2(10)), inventory costing method (Note
2(11)), amortisation of Property,plant and equipmentand intangible assets (Note 2(13) and (16)), criteria for
determining capitalised development expenditure (Note 2(16)), and timing for revenue recognition (Note 2(24)).
Please see Note 2(30) for the key judgements adopted by the Group in applying important accounting policies.
(7) Basis of preparation
The financial statements are prepared in accordance with the Accounting Standards for Business Enterprises -
Basic Standard, and the specific accounting standards and other relevant regulations issued by the Ministry of
Finance on 15 February 2006 and in subsequent periods (hereafter collectively referred to as “the Accounting
Standard for Business Enterprises” or “CAS”), and Information Disclosure Rule No. 15 for Companies with Public
Traded Securities - Financial Reporting General Provision issued by China Security Regulatory Commission.
As at 31 December 2017, the Group current liabilities exceed current assets about RMB2.52 billion and committed
capital expenditure of about RMB 0.15 billion (Note 11(1)). The directors of the Company has assessed the
following facts and conditions: a) the Group has been able to generate positive operating cash flows in prior years
and expect to do so in the next 12 months, and in 2017, the net cash inflow from operation activities is
approximately RMB2.463 billion; b) the Group has maintained good relationship with banks, so the Group has
been able to successfully renew the bank facilities upon the expiry. As at 31 December 2017, the Group had
unutilised banking facilities of approximately RMB4.00 billion, among which long-term banking facilities were about
RMB0.57billion. In addition, the shareholder of the Group or other appointed related parties are willing to provide
the
Group with RMB2.00 billion interest-free loan. As at report date, the shareholder of Group has provided
RMB1.610 billion interest-free loan. The Group also has other sources of financing, such as issuing short-term
bonds, ultra-short-term financing bonds and medium-term notes. The directors are of view that the banking
facilities and shareholder’s support above can meet the funding requirements
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(2) Basis of preparation (Cont’d)
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CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
of the Group’s debt servicing and capital commitment. Accordingly, the directors of the Company had adopted the
going concern basis in the preparation of the financial statements of the Company and the Group.
(8)
tatement of compliance with the Accounting Standards for Business Enterprises
The financial statements of the Company for the year ended 31 December 2017 are in compliance with the
Accounting Standards for Business Enterprises, and truly and completely present the financial position of the
consolidated and the Company as at 31 December 2017 and their financial performance, cash flows and other
information for the year then ended.
(9)
ccounting year
The Company’s accounting year starts on 1 January and ends on 31 December.
(10)
ecording currency
The recording currency is Renminbi (RMB).The economic environment of subsidiaries (China Southern
Glass(Hong Kong) Limited, Hong Kong Southern Glass Trading co., Limited) determines their recording currency
is Hongkong dollar. This report ‘s recording currency is Renminbi (RMB).
(11)
usiness combinations
(a) Business combinations involving enterprises under common control
The consideration paid and net assets obtained by the absorbing party in a business combination are measured at
book value. The difference between book value of the net assets obtained from the combination and book value of
the consideration paid for the combination is treated as an adjustment to capital surplus (share premium). If the
capital surplus (share premium) is not sufficient to absorb the difference, the remaining balance is adjusted against
retained earnings. Costs directly attributable to the combination are included in profit or loss in the period in which
they are incurred. Transaction costs associated with the issue of equity or debt securities for the business
combination are included in the initially recognised amounts of the equity or debt securities.
(b) Business combinations involving enterprises not under common control
The cost of combination and identifiable net assets obtained by the acquirer in a business combination are
measured at fair value at the acquisition date. Where the cost of the combination exceeds the acquirer’s interest in
the fair value of the acquiree’s identifiable net assets, the difference is recognised as goodwill; where the cost of
combination is lower than the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the
difference is recognised in profit or loss for the current period. Costs directly attributable to the combination are
included in profit or loss in the period in which they are incurred. Transaction costs associated with the issue of
equity or debt securities for the business combination are included in the initially recognised amounts of the equity
or debt securities.
(12)
reparation 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 on which the Group obtains control and are de-consolidated from the
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CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
date that such control ceases. For a subsidiary that is acquired in a business combination involving enterprises
under common control, it is included in the consolidated financial statements from the date when it, together with
the Company, comes under common control of the
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(6) Preparation of consolidated financial statements (Cont’d)
ultimate controlling party. The portion of the net profits realised before the combination date is presented
separately in the consolidated income statement.
In preparing the consolidated financial statements, where 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. Unrealised profits and losses resulting from the sales of assets by the Company to its
subsidiaries are fully eliminated against net profit attributable to shareholders of the parent company. Unrealised
profits and losses resulting from the sales of assets by a subsidiary to the Company are eliminated and allocated
between net profit attributable to shareholders of the parent company and non-controlling interests in accordance
with the allocation proportion of the parent company in the subsidiary. Unrealised profits and losses resulting from
the sales of assets by one subsidiary to another are eliminated and allocated between net profit attributable to
shareholders of the parent company and non-controlling interests in accordance with the allocation proportion of
the parent in the subsidiary.
After the control over the subsidiary has been gained, whole or partial minority equities of the subsidiary owned by
minority shareholders are acquired from the subsidiary’s minority shareholders. In the consolidated financial
statements, the subsidiary's assets and liabilities are reflected with amount based on continuous calculation
starting from the acquisition date or consolidation date. Capital surplus is adjusted according to the difference
between newly increased long-term equity investment arising from acquisition of minority equity and the share of
net assets calculated based on current shareholding ratio that the parent company is entitled to. The share is
subject to continuous calculation starting from the acquisition date or consolidation date. If the capital surplus
(capital premium or share capital premium) is not sufficient to absorb the difference, the remaining balance is
adjusted against retained earnings.
If the accounting treatment of a transaction which considers the Group as an accounting entity is different from that
considers the Company or its subsidiaries as an accounting entity, it is adjusted from the perspective of the Group.
(7) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, deposits that can be readily drawn on demand, and short-term
and highly liquid investments that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value.
(8) Foreign currency transaction
(a) Foreign currency transaction
Foreign currency transactions are translated into RMB using the exchange rates prevailing at the dates of the
transactions.
2 Summary of significant accounting policies and accounting estimates (Cont’d)
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CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
(8) Foreign currency transaction (Cont’d)
At the balance sheet date, monetary items denominated in foreign currencies are translated into RMB using the
spot exchange rates on the balance sheet date. Exchange differences arising from these translations are
recognised in profit or loss for the current period, except for those attributable to foreign currency borrowings that
have been taken out specifically for the acquisition or construction of qualifying assets, which are capitalised as
part of the cost of those assets. Non-monetary items denominated in foreign currencies that are measured at
historical costs are translated at the balance sheet date using the spot exchange rates at the date of the
transactions. The effect of exchange rate changes on cash is presented separately in the cash flow statement.
(b) Translation of foreign currency financial statements
The asset and liability items in the balance sheets for overseas operations are translated at the spot exchange
rates on the balance sheet date. Among the shareholders’ 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 shareholders’ equity. The cash flows
of overseas operations are translated at the spot exchange rates on the dates of the cash flows. The effect of
exchange rate changes on cash is presented separately in the cash flow statement.
(9) Financial instrument
(a) Financial assets
(i) Classification 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 had no financial assets at fair value through profit or loss and held-to-maturity investments for 2017.
Receivables
Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market. Receivables comprise notes receivable, accounts receivable and other receivables. (Note 2(10))
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either designated in this category or
not classified in any of the other categories at initial recognition. Available-for-sale financial assets are included in
other current assets on the balance sheet if management intends to dispose of them within 12 months after the
balance sheet date.
(ii) Recognition and measurement
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.
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(9) Financial instrument (Cont’d)
Available-for-sale financial assets are subsequently measured at fair value. Investments in equity instruments are
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CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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.
(a) Financial assets
(iii) Impairment of financial assets
The Group assesses book values 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.
The objective evidence of impairment losses on financial assets refers to events that actually incurred after the
initial recognition of financial assets, have influence on the expected future cash flow from the financial assets and
the influence 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 Checkion 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% (inclusive) 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% (inclusive)
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 is 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
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(9) Financial instrument (Cont’d)
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
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CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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 book value and the sum of the consideration received
and the cumulative changes in fair value that had been recognised directly in owner's equity, is recognised in profit
or loss.
(b) Financial liabilities
Financial liabilities are classified into two categories at initial recognition: financial liabilities at fair value through
profit or loss and other financial liabilities. The financial liabilities of the Group mainly comprise other financial
liabilities, including payables, borrowings and bonds payable.
The fair value change of financial liabilities at fair value through profit or loss is charged to income statement.
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 (inclusive) is presented as current liabilities, while non-current financial
liabilities due with one year (inclusive) 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 book value 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.
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CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(12) Receivables
Receivables comprise notes receivable, accounts receivable and other receivables. Accounts receivable arising
from sales of goods or rendering of services are initially recognised at fair value of the contractual payments from
the buyers or service recipients.
(a) Receivables with amounts that are individually significant and subject to separate assessment for provision for bad
debts
Receivables with amounts that are individually significant are subject to separate assessment for impairment. If
there exists objective evidence that the Group will not be able to collect the amount under the original terms, a
provision for bad debts of that receivable is made at the difference between its carrying amount and the present
value of its estimated future cash flows.
The basis or amount for individually significant receivables is individually greater than RMB20 million.
(b) Receivables with amounts that are not individually significant but subject to separate assessment for provision for
bad debts
If there exists objective evidence that the Group will not be able to collect the amount under the original terms, a
provision for bad debts of that receivable is made at the difference between its carrying amount and the present
value of its estimated future cash flows.
(c) Receivables that are subject to provision for bad debts on the grouping basis
Receivables with amounts that have not been individually provided for impairment are classified into certain
groupings based on their credit risk characteristics. The provision for bad debts is determined based on the
historical loss experience for the groupings of receivables with similar credit risk characteristics, taking into
consideration of the current circumstances.
Basis for portfolio is as follows:
Portfolio 1 Receivables not impaired after separate assessment
Portfolio 2 Related party portfolio
The percentage of provision for the portfolio:
Percentage of provision for Percentage of provision for other
accounts receivable receivables
Portfolio 1 2% 2%
Portfolio 2 2% 2%
(d) The Group transfers receivables which have no recourse right to financial institution, the difference between book
values which is trade amount cut the write-off receivables and related tax expenses charged into the income
statement.
(13) Inventories
(f) Classification
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CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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.
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(11) Inventories (Cont’d)
(g) 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.
(h) Amortisation methods of low value consumables and packaging materials
Turnover materials include low value consumables and packaging materials, which are expensed when issued.
(i) The determination of net realisable value and the method of provision for decline in the value of inventories
Provision for decline in the value of inventories is determined at the excess amount of book values 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.
(j) The Group adopts the perpetual inventory system.
(17) 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.
(e) 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..
(f) Subsequent measurement and recognition of related profit or loss
For long-term equity investments accounted for using the cost method, they are measured at the initial investment
costs, and cash dividends or profit distribution declared by the investees are recognised as investment income in
profit or loss.
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CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
For long-term equity investments accounted for using the equity method, where the initial investment cost of a
long-term equity investment exceeds the Group’s share of the fair value of the investee’s
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(12) Long-term equity investments (Cont’d)
identifiable net assets at the acquisition date, the long-term equity investment is measured at the initial investment
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 acquisition date, the difference is included in profit or loss and the cost of the long-term equity
investment is adjusted upwards accordingly.
Under 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 book values 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 the shareholding of the Group in the investee remains unchanged. Book
value 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 intra-group transactions amongst the Group and its
investees are eliminated in proportion to the Group’s equity interest in the investees, and then based on which the
investment gains or losses are recognised. Any losses resulting from transactions between the Group and its
investees attributable to asset impairment losses are not eliminated.
(g) Basis for determining existence of control, jointly control or significant influence over 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.
(h) Impairment of long-term equity investments
Book value of long-term equity investments in subsidiaries and associates is reduced to the recoverable amount
when the recoverable amount is less than book value (Note 2(18)).
(18) Fixed assets
(e) 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 probably flow to the Group
and the costs can be reliably measured. Fixed assets purchased or constructed by the Group are initially
measured at cost at the acquisition date.
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. Book
value of the replaced part is derecognised. All the other subsequent expenditures are recognised in profit or loss in
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CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
the period in which they are incurred.
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(f) Depreciation methods
Fixed assets are depreciated using the straight-line method to allocate the cost of the assets to their estimated
residual values over their estimated useful lives. For the fixed assets that have been provided for impairment loss,
the related depreciation charge is prospectively determined based upon the adjusted carrying amounts over their
remaining useful lives.
The estimated useful lives, the estimated net residual values expressed as a percentage of cost and the annual
depreciation rates of fixed assets are as follows:
Estimated useful lives Estimated net residual value Annual depreciation rate
Buildings 20 to 35 years 5% 2.71% to 4.75%
Machinery and equipment 8 to 20 years 5% 4.75% to 11.88%
Motor vehicles and others 5 to 8 years 0% 12.50% to 20.00%
The estimated useful life, the estimated net residual value of a fixed asset and the depreciation method applied to
the asset are reviewed, and adjusted as appropriate at each year-end.
(g) Book value of a fixed asset is reduced to the recoverable amount when the recoverable amount is below book
value (Note 2 (18)).
(h) Disposal
A fixed asset is derecognised on disposal or when no future economic benefits are expected from its use or
disposal. The amount of proceeds from disposals on sale, transfer, retirement or damage of a fixed asset net of its
carrying amount and related taxes and expenses is recognised in profit or loss for the current period.
(19) Construction in progress
Construction in progress is recorded at actual cost. Actual cost comprises construction cost, installation cost,
borrowing costs eligible for capitalised condition and necessary expenditures incurred for its 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.
Book value of construction in progress is reduced to the recoverable amount when the recoverable amount is
below book value (Note 2 (18)).
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CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(20) Borrowing costs
The borrowing costs that are directly attributable to the acquisition and construction of an 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 an 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 an asset qualifying for capitalisation, the
amount of borrowing costs eligible for capitalisation is determined by applying the weighted average effective
interest rate of general borrowings, to the weighted average of the excess amount of cumulative expenditures on
the asset over the amount of specific borrowings. The effective interest rate is the rate at which the estimated
future cash flows during the period of expected duration of the borrowings or applicable shorter period are
discounted to the initial amount of the borrowings.
(21) Intangible assets
Intangible assets, mainly including land use rights, patents and proprietary technologies, exploitation rights and
others, 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 and proprietary technologies
Patents are amortised on a straight-line basis over the estimated use life.
(c) Exploitation rights
Exploitation rights are amortised on a straight-line basis over permitted exploitation periods 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.
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CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(19) Intangible assets (Cont’d)
(e) Research and development
The expenditure on an internal research and development project is classified into expenditure on the research
phase and expenditure on the development phase based on its nature and whether there is material uncertainty
that the research and development activities can form an intangible asset at end of the project.
Expenditure on the research phase related to planned survey, evaluation and selection for research on
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;
management has approved the budget for the development of manufacturing technique;
there are research and analysis of pre-market research explaining that products manufactured with such
technique are capable of marketing;
There is sufficient technical and capital to support the development of manufacturing technique and
subsequent mass production; and the expenditure on manufacturing technique development can be
reliably gathered.
Other development expenditures that do not meet the conditions above are recognised in profit or loss in the
period in which they are incurred. Development costs previously recognised as expenses are not recognised as an
asset in a subsequent period. Capitalised expenditure on the development phase is presented as development
costs in the balance sheet and transferred to intangible assets at the date that the asset is ready for its intended
use.
(f) Impairment of intangible assets
Book value of intangible assets is reduced to the recoverable amount when the recoverable amount is below book
value (Note 2 (18)).
(20) 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.
(21) 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
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CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
of assets is the smallest group of assets that is able to generate independent cash inflows.
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CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(20) Impairment of long-term assets (Cont’d)
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, book 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 book value of goodwill that is allocated to
the asset group or group of asset groups, and then deducted from book values of other assets within the asset
groups or groups of asset groups in proportion to book values 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.
(21) Employee benefits
Employee benefits include short-term employee benefits, post-employment benefits, termination benefits and other
long-term employee benefits provided in various forms of consideration in exchange for service rendered by
employees or compensations for the termination of employment relationship.
(d) Short-term employee benefits
Short-term employee benefits include wages or salaries, bonuses, allowances and subsidies, staff welfare, medical
care, work injury insurance, maternity insurance, housing funds, labour union funds, employee education funds
and paid short-term leave, etc. The employee benefit liabilities are recognised in the accounting period in which the
service is rendered by the employees, with a corresponding charge to the profit or loss for the current period or the
cost of relevant assets. Employee benefits which are non-monetary benefits shall be measured at fair value.
(e) Post-employment benefits
The Group classifies post-employment benefit plans as either defined contribution plans or defined benefit plans.
Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into
a separate fund and will have no obligation to pay further contributions; and defined benefit plans are
post-employment benefit plans other than defined contribution plans. During the reporting period, the Group's
post-employment benefits mainly include basic pensions and unemployment insurance, both of which belong to
the defined contribution plans.
Basic pensions
The Group’s employees participate in the basic pension plan set up and administered by local authorities of
Ministry of Human Resource and Social Security. Monthly payments of premiums on the basic pensions are
calculated according to prescribed bases and percentage by the relevant local authorities. When employees retire,
local labour and social security institutions have a duty to pay the basic pension insurance 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.
.
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CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(33) Employee benefits (Cont’d)
(f) Termination benefits
The Group provides compensation for terminating the employment relationship with employees before the end of
the employment contracts or as an offer to encourage employees to accept voluntary redundancy before the end of
the employment contracts. The Group recognises a liability arising from compensation for termination of the
employment relationship with employees, with a corresponding charge to profit or loss at the earlier of the following
dates: 1) when the Group cannot unilaterally withdraw the offer of termination benefits because of an employment
termination plan or a curtailment proposal; 2) when the Group recognises costs or expenses related to the
restructuring that involves the payment of termination benefits.
The termination benefits expected to be paid within one year since the balance sheet date are classified as current
liabilities.
(34) Dividend distribution
Cash dividend is recognised as a liability for the period in which the dividend is approved by the shareholders’
meeting.
(35) 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:
the deferred taxes are related to the same tax payer within the Group and the same taxation authority; and,
that tax payer within the Group has a legally enforceable right to offset current tax assets against current tax
liabilities.
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CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(36) Provisions
Business restructuring, provisions for product warranties, loss 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.
Book value of provision is reviewed at each balance sheet date and adjusted to reflect the current best estimate.
The provisions expected to be paid within one year since the balance sheet date are classified as current liabilities.
(37) Share-based payments
Share-based payments are divided into equity-settled and cash-settled payments. The term "equity-settled
share-based payment" refers to a transaction in which an enterprise grants shares or other equity instruments as a
consideration in return for services.
Equity-settled share-based payment The Group‘s stock optionstock option plan is the equity-settled share-based
payment in exchange of employees' services and is measured at the fair value of the equity instruments at grant
date. The equity instruments are exercisable after services in vesting period are completed or specified
performance conditions are met. In the vesting period, the services obtained in current period are included in
relevant cost and expenses at the fair value of the equity instruments at grant date based on the best estimate of
the number of exercisable equity instruments, and capital surplus is increased accordingly. If the subsequent
information indicates the number of exercisable equity instruments differs from the previous estimate, an
adjustment is made and, on the exercise date, the estimate is revised to equal the number of actual vested equity
instruments. The Group determines the fair value of stock optionstock options using option pricing model, which is
Black-Scholes option pricing model (B-S model).
In the period at which performance conditions and term of service are met, the relevant cost and expenses of
equity-settled payment should be recognized, and capital surplus is increased accordingly. Before the exercise
date, the accruing amounts of equity-settled payments on balance sheet date reflect the part of expired waiting
period and optimal estimation for the number of the Company final vested equity instruments.
If the non-market conditions and term of service are not met so that share-based payment fail to exercise, the costs
and expenses on this portion should not be recognized. If the share-based payment agreement sets out the market
conditions and term of non-vesting, as long as performance conditions and term of service are met, it is should be
regard as exercisable right, no matter the market conditions and non-vesting conditions are meet or not.
If the terms of equity-settled payment are modified, at least the service is confirmed in accordance with the
unmodified terms. In addition, the increase of the fair value of the authorized equity instruments, or the beneficial
changes to the employees on the modification date, the increase of service are confirmed.
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(23) Share-based payments (Cont’d)
If the equity-settled payment is cancelled, the cancellation date shall be deemed as an expedited exercise, and the
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CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
unconfirmed amount shall be confirmed immediately. If the employee or other party is able to choose to meet the
non-vesting conditions but not satisfied in the waiting period, equity-settled payment should be cancelled. But if a
new equity instrument is granted, and the new equity instrument is confirm to replace the old equity instrument
which is canceled in the authorization date of the new equity instrument, the new equity instrument should be
disposed by using the same conditions and terms of the old equity instrument for modifications
(38) Revenue recognition
The amount of revenue is determined in accordance with the fair value of the consideration received or receivable
for the sales 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 probably 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) Sales of goods
The Group mainly sells flat and engineering glass, products related to solar energy, and electronic glass and
displays. 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 recognises revenue. For export sales, the Group recognises 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 recognised 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 recognised on a time-proportion basis using the effective interest method.
(39) Government grants
Government grants are transfers of monetary or non-monetary assets from the government to the Group at nil
consideration, including tax refund and financial subsidies, etc.
A government grant is 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.
The government grants related to assets refer to government grant obtained by enterprises and used for purchase
and construction of long-term assets or formation of long-term asset in other ways. The government grants related
to income refer to grants other than those related to assets.
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(25) Government grants (Cont’d)
For government grants related to income, where the grant is a compensation for related expenses or losses to be
incurred by the Group in the subsequent periods, the grant is recognised as deferred income, and included in profit
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CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
or loss over the periods in which the related costs are recognised; where the grant is a compensation for related
expenses or losses already incurred by the Group, the grant is recognised immediately in profit or loss for the
current period.The company use the same method of presentation for similar government grants.
The ordinary activitiy government grants should be counted into operating profits; the government grants which not
belong ordinary activities should be counted inton non-operationg income.
(40) Leases
A lease that transfers substantially all the risks and rewards incidental to ownership of an asset is a finance lease.
An operating lease is a lease other than a finance lease.
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.
(41) Assets classified as held for sale
A non-current asset or a disposal group is classified as held for sale when all of the following conditions are
satisfied: (1) the non-current asset or the disposal group is available for immediate sale in its present condition
subject to terms that are traditionally and customary for sales; (2) the Group has made a resolution and obtained
appropriate approval for disposal of the non-current asset or the disposal group, and the transfer is to be
completed within one year.
Non-current assets (except for financial assets, investment properties at fair value 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 book value. The difference between fair value less costs to sell and carrying amount, should be
presented as impairment loss.
Such non-current assets and assets included in disposal groups as classified as held for sale are accounted for as
current assets; while liabilities included in disposal groups classified as held for sale are accounted for as current
liabilities, and 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.
The discontinued operation profits on income statement presentation have included the profits and loss of
operation and disposal.
(42) 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:
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(28) Safety production costs
- 226 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
(a) 4% for revenue below RMB10 million (inclusive) of the year;
(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 or loss 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.
(43) 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 revenue 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.
(44) Critical accounting estimates and judgements
The Group continually Estimates the critical accounting estimates and key assumptions 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 possibly causing a material
adjustment to book values of assets and liabilities within the next accounting year are outlined below:
(a) Income tax
The Group is subject to Income tax in numerous jurisdictions. There are some 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 tax in each of these jurisdictions. Where the final identified
outcome of these tax matters is different from the initially-recorded amount, such difference will impact the income
tax expenses and deferred income tax in the period in which such determination is finally 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. Realisation of deferred income tax are subject to sufficient taxable income that are possible to be
obtained by the Group in the future. Change of the future tax rate as well as the reversed time of temporary
difference might have effects on tax expense (income) and the balance of
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(30) Critical accounting estimates and judgements (Cont’d)
(b) Deferred income tax (Cont’d)
deferred tax assets or liabilities. Those estimates may also cause significant adjustment on deferred tax.
- 227 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
(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. 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
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, 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. Thus, the estimated result based on existing
experience may be different from the actual result of the next accounting period, which may cause major
adjustment to book value of fixed assets on balance sheet.
(e) Goodwill impairment
Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances
indicate a potential impairment. For the purpose of impairment testing, goodwill acquired in a business combination
is allocated to each of the cash-generating units (“CGUs”), or groups of CGUs, and future cash flow from each
CGU or CGUs is forcasted and discounted with appropriate discount rate.
(45) Significant changes in accounting policies
In 2017, the Ministry of Finance released the “Accounting Standard for Business Enterprises No. 42—Non-current
Assets or Disposal Groups Held for Sale and Discontinued Operations”, revised “Accounting Standard for Business
Enterprises No. 16—Government Grants” and the “Circular on Amendment to Formats of Financial Statements of
General Industry” and its interpretation (Cai Kuai [2017] 30). The financial statements are prepared in accordance
with the above standards and circular, and impacts are as follows:
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(31) Significant changes in accounting policies (Cont’d)
The nature and the reasons of the changes in The amounts
The line items affected
accounting policies affected
The Company and its subsidiaries recorded the VAT
return obtained and other government grants related N/A N/A
to ordinary activities in 2017 in other income. The
comparatives as at 31 December 2016 were not
- 228 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
restated
2016
The Company and its subsidiaries recorded the
gains or losses on disposals of fixed assets Income on disposal
occurred in 2017, in loss on disposals of assets. The assets (1,759,358)
comparatives as at 31 December 2016 were 1,551,302
restated accordingly Non-operating income
(3,310,660)
Non-operating expense
The Company’s assets for sale in 2017 is presented
separately. The comparative financial statement at N/A N/A
31 December 2016 is not presented
(46) Prior period accounting error correction
b. Matter descreption
During the preparation of the current financial statements, the company discovered that: On December 10, 2012,
the People's Government of Yichang City and the Company signed the Cooperation Agreement on Fine Glass and
Ultrathin Electronic Glass Project (hereinafter referred to as the “original agreement”);Two supplemental
agreements were formed based on the original agreement: On March 20, 2013, the People's Government of
Yichang and the Company signed a supplementary agreement (I) 《Cooperation Agreement on Fine Glass and
Ultra-thin Electronic Glass Projects》、 December 30, 2013 Yichang High and new technology development
zone management committee and the company signed a supplementary agreement (II) 《 Cooperative
Agreement on Fine Glass and Ultrathin Electronic Glass Projects》. The main contents of the supplementary
agreement (II) are as follows:
The management committee of Yichang High-tech Industrial Development Zone agreed to establish a RMB 171
million talent fund for the company’s mid- to senior-level management、 engineering and technical personnel and
senior professional mechanics who be introduced to Yichang, as a special fund subsidy for the introduction of
talents and the placement of talented people. The company is responsible for formulating the housing resettlement
subsidy program and supervising the use of this special fund.
According to the agreement, the company entrusted the wholly-owned subsidiary Yichang CSG Silicon Material
Co., Ltd. to collect the fund, and the management committee of Yichang High-tech Industrial Development Zone
fully allocated to Yichang CSG Silicon Material Co., Ltd.
The funds were subsidized by the government to the company, but Yichang CSG Silicon Material Co., Ltd.
received this amount and transferred it to Yichang Hongtai Real Estate Co., Ltd. in full amount without proper
approval from the company's board of directors and other relevant authorities. (Yichang Hongtai Real Estate Co.,
Ltd. is a company jointly indirect controlled by part of the former natural executives of the company. The
company has no equity relationship with the company. For details of the company, see Note 8(4)).
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(32) Prior period accounting error correction (Cont’d)
b. Accounting treatment
Yichang CSG Silicon Material Co., Ltd. received the above fund from February 21, 2014 to April 28, 2014, and
transferred it to Yichang Hongtai Real Estate Co., Ltd. in full and also handled the accounting treatment according
to the collecting and paying. The Company did not conduct any accounting treatment and report disclosure in
consolidated Statements.
According to the relevant provisions of the “Accounting Standards for Business Enterprises - Government
Subsidies”, the company believes that the special funds in the above agreement constitute a government subsidy,
and the government subsidy related to income should be confirmed in the financial statements of the
corresponding accounting period, recognition of expense at the same time carring forward the profits and loss of
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CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
the current.Therefore, the company in the current period Items were corrected for accounting errors.
c. Impact on the financial statements
The Group and the Company made retrospective adjustments to the above accounting errors. In the consolidated
balance sheet, other receivables were increased by RMB171,000,000 as of December 31, 2016 (January 1, 2016:
RMB171,000,000). December 2016 On the 31st, other receivables - bad debt provisions were increased by
3,420,000 yuan (January 1, 2016: RMB3,420,000), and deferred income was increased by 171 million yuan
(December 1, 2016: RMB171 million) on December 31, 2016. As of December 31, 2016, the surplus reserve was
reduced by RMB342,000 (January 1, 2016: RMB 342,000). As of December 31, 2016, the undistributed profit was
reduced by RMB 3,078,000 (January 1, 2016: RMB 3,078,000).
In the company's balance sheet, other receivables were increased by RMB171,000,000 (December 1, 2016:
RMB171,000,000) as of December 31, 2016, and other receivables – provision for bad debts increased by
RMB3,420,000 (December 31, 2016) ( January 1, 2016: RMB3,420,000), 20 yuan December 31, 2016 deferred
income increased by RMB171,000,000 (January 1, 2016: RMB171,000,000), December 31, 2016 surplus reserve
decreased by RMB342,000 (January 1, 2016: RMB342,000), Undistributed profits decreased by RMB3,078,000
(December 1, 2016: RMB 3,078,000) as of December 31, 2016.
4 Taxation
(1) The main categories and rates of taxes applicable to the Group are set out below:
Category Taxable basis Tax rate
Enterprise income tax Taxable income 0% to 25%
Value-added tax (“VAT”) (a) Taxable value-added amount (Tax payable is calculated using 6% to 17%
the taxable sales amount multiplied by the applicable tax
rate less deductible VAT input of the current period)
City maintenance and VAT paid 1% to 7%
construction tax
Educational surcharge VAT paid 3% to 5%
Resource tax Silica sold Sales 6.5%
Some subsidiaries of the Group have used the “exempt, credit, refund” method on goods exported and the refund
rate is 5%-17%.
3 Taxation (Cont’d)
(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.
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.
- 230 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Wujiang CSG North-east Architectural Glass Co., Ltd. (“Wujiang CSG”) passed review on a high and new tech
enterprise in 2017 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 2017.
Dongguan CSG Solar Glass Co., Ltd. (“Dongguan CSG Solar”) passed review on a high and new tech enterprise in
2017 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 2017.
Yichang CSG Silicon Co., Ltd. (“Yichang CSG Silicon”) passed review on a high and new tech enterprise in 2017
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 2017.
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 2017, 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 2017.
Xianning CSG Glass Co Ltd. (“Xianning CSG”) was recognised as a high and new tech enterprise in 2017, 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 2017.
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.
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 2016.
- 231 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
3 Taxation (Cont'd)
(2) Tax incentives (Cont’d)
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 current year.
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 current year.
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”), Zhangzhou CSG Kibing PV Energy Co., Ltd. (“Zhangzhou
CSG”), Heyuan CSG Kibing PV Energy Co., Ltd. (“Heyuan CSG”), Shaoxing CSG Kibing PV Energy Co., Ltd.
(“Shaoxing CSG”) 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, Zhangzhou CSG, Heyuan CSG and Shaoxing CSG started
operation in 2017. The applicable enterprise income tax rate for them is 0% for the current year.
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.
- 232 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements
(4) Cash at bank and on hand
31 December 2017 31 December 2016
Cash on hand 36,182 17,239
Cash at bank 2,409,716,983 584,549,751
Other cash balances 52,852,599 2,236,515
2,462,605,764 586,803,505
Including: Total overseas deposits 24,049,075 12,956,226
Other cash balances include margin deposits for issuing letters of credit and applying loans, amounting to
RMB2,852,599 (31 December 2016: RMB2,236,515), which is restricted cash.
(5) Notes receivable
31 December 2017 31 December 2016
Trade acceptance notes 329,405,579 317,789,825
Bank acceptance notes 222,826,841 138,557,412
552,232,420 456,347,237
(a) As at 31 December 2017, notes receivable which have been endorsed or discounted by the Group but are not yet
due are as follows:
Derecognised Not derecognised
Trade acceptance notes - 179,023,725
Bank acceptance notes 3,154,733,678 -
3,154,733,678 179,023,725
(6) Accounts receivable
31 December 2017 31 December 2016
Accounts receivable 660,150,357 644,454,374
Less: Provision for bad debts (21,912,067) (16,468,391)
638,238,290 627,985,983
- 233 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(3) Accounts receivable (Cont’d)
(d) The ageing of accounts receivable is analysed as follows:
31 December 2017 31 December 2016
Within 1 year 639,294,320 628,822,515
1 to 2 years 8,343,672 15,585,397
2 to 3 years 12,512,365 -
Over 3 years - 46,462
660,150,357 644,454,374
As at 31 December 2017, accounts receivable of RMB93,961,486 (31 December 2016: RMB50,609,529) were
overdue. But based on analysis on financial positions and credit records of such customers, such receivables
were considered recoverable and unimpaired by the Company. Therefore no provision for impairment loss had
been made. The overdue ageing of the accounts receivable is analysed as follows:
31 December 2017 31 December 2016
Within 1 year 86,358,511 47,568,459
1 to 2 years 7,448,217 3,041,070
2 to 3 years 154,758
93,961,486 50,609,529
(e) Accounts receivable are analysed by categories as follows:
31 December 2017 31 December 2016
Carrying amount Provision for bad debts Carrying amount Provision for bad debts
% of total Provision for % of total Provision for
Amount balance bad debts % Amount balance bad debts %
Provision for bad debts by
groupings
Portfolio 1 636,614,136 96% (12,233,039) 2% 631,863,585 98% (12,187,534) 2%
With amounts that are not
individually significant but that
the related provision for bad
debts is provided on the
individual basis 23,536,221 4% (9,679,028) 41% 12,590,789 2% (4,280,857) 34%
660,150,357 100% (21,912,067) 3% 644,454,374 100% (16,468,391) 3%
- 234 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(3) Accounts receivable (Cont’d)
(f) Provision for bad debts provided on grouping basis using the percentage of provision method is analysed as
follows:
31 December 2017 31 December 2016
Carrying amount Provision for bad debts Carrying amount Provision for bad debts
Amount Amount % Amount Amount %
Portfolio 1 636,614,136 (12,233,039) 2% 631,863,585 (12,187,534) 2%
636,614,136 (12,233,039) 2% 631,863,585 (12,187,534) 2%
(h) As at 31 December 2017, the Company had no accounts receivable with amounts that were individually significant
and that the related provision for bad debts was provided on the individual basis (31 December 2016: Nil).
(i) As at 31 December 2017, accounts receivable of RMB23,536,221 (31 December 2016: RMB12,590,789) were not
individually significant but provided for bad debts separately. It mainly represented the goods receivable due from
a client of the subsidiary, Yichang CSG Display. Due to the client’s bankruptcy, Yichang CSG Display made full
provision against this receivable. It also represented the goods receivable due from a client of the subsidiary,
Dongguan CSG PV-tech. Due to business dispute, Dongguan CSG PV-tech made partial provision against the
receivable.
(j) Accounts receivables of RMB117,931 were written off this year, all of which were low amount of accounts receivable and
none of which arose from related-party transactions. The reasons for the written-off included disputes with
customers and inability to contact with creditors and etc.
(k) As at 31 December 2017, the Group’s top five entities with the largest accounts receivable balances are set out as
below:
Provision for bad Percentage in total accounts
Balance debts receivable balance
Total balances for the five largest
accounts receivable 104,847,077 (2,096,942) 16%
(7) Advances to suppliers
(c) The ageing of prepayment is analysed below:
31 December 2017 31 December 2016
% of total % of total
Amount balance Amount balance
Within 1 year 130,813,397 91% 80,819,387 84%
1 to 2 years 264,952 - 14,913,745 16%
2 to 3 years 12,769,674 9% - -
143,848,023 100% 95,733,132 100%
- 235 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
As at 31 December 2017, advances to suppliers over 1 year with a carrying amount of RMB13,034,626 (31
December 2016: RMB14,913,745) were mainly advances paid for materials, which were not fully settled since the
materials had not been received.
- 236 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(4) Advances to suppliers (Cont’d)
(d) As at 31 December 2017, the five largest prepayment are analysed as follows:
Percentage in total
advances to suppliers
Balance balance
Total balances for the five largest advances to suppliers 53,034,242 37%
(8) Other receivables
31 December 2017 31 December 2016
Receivables from related parties (Note 8(5)) 171,000,000 171,000,000
Refundable deposits 16,957,562 6,121,403
Payments made on behalf of other parties 19,306,658 25,019,422
Petty cash 875,714 959,785
Export tax rebates receivable - 755,372
Others 2,319,489 1,047,235
210,459,423 204,903,217
Less: Provision for bad debts (4,520,404) (4,094,068)
205,939,019 200,809,149
(g) The ageing of other receivables is analysed as follows:
31 December 2017 31 December 2016
Within 1 year 22,924,535 19,918,108
1 to 2 years 2,813,012 11,275,420
2 to 3 years 11,211,511 171,903,685
3 to 4 years 171,855,888 123,670
4 to 5 years 86,395 1,156,315
Over 5 years 1,568,082 526,019
210,459,423 204,903,217
As at 31 December 2017, other receivables of RMB2,510,365 (31 December 2016: RMB1,806,004) were overdue.
But based on analysis on financial positions and credit records of such customers, such receivables were
considered recoverable and unimpaired by the Company. Therefore no provision for impairment loss had been
made.
- 237 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(5) Other receivables (Cont'd)
(h) Other receivables are analysed by categories as follows:
31 December 2017 31 December 2016
Provision for bad Provision for bad
Carrying amount debts Carrying amount debts
% of total Provision for % of total Provision for
Amount balance bad debts % Amount balance bad debts %
Provision for bad debts by
groupings
Portfolio 1 39,136,518 19% (777,499) 2% 33,903,217 17% (674,068) 2%
Portfolio 2 171,000,000 81% (3,420,000) 2% 171,000,000 83% (3,420,000) 2%
Not individually significant
but provided for bad debts
separately 322,905 - (322,905) 100%
210,459,423 100% (4,520,404) 2% 204,903,217 100% (4,094,068) 2%
(i) The reason why not individually significant but provided for bad debts separately is the payment is not
recoverable over 5 years.
(j) The other receivables actually written off during the year amounted to RMB199,796, which was due to small
receivables and non-related transactions. The reasons for write-off include business disputes or failure
to contact the debtor and result in uncollectible payments.
(k) For other receivables provided for bad debts by portfolio, the percentage of provision for the portfolio is as
follows:
31 December 2017 31 December 2016
Carrying amount Provision for bad debts Carrying amount Provision for bad debts
Amount Amount % Amount Amount %
Portfolio 1 39,136,518 (777,499) 2% 33,903,217 (674,068) 2%
Portfolio 2 171,000,000 (3,420,000) 2% 171,000,000 (3,420,000) 2%
210,136,518 (4,197,499) 2% 204,903,217 (4,094,068) 2%
(l) As at 31 December 2017, the top 5 largest other receivables are analysed as bellow:
Percentage in total
other receivables Provision for
Nature of business Balance Ageing balance bad debts
Company A Independent third party 171,000,000 3 to 4 Years 81% 3,420,000
Governmental
departmentB Independent third party 11,067,754 2 to3 Years 5% 221,355
Company C Independent third party 5,000,000 Within 1 year 2% 100,000
Company D Independent third party 3,717,415 Within 1 year 2% 74,348
- 238 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Company E Independent third party 3,350,000 Within 1 year 2% 67,000
194,135,169 92% 3,882,703
- 239 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(9) Inventories
(a) Inventories are summarised by categories as follows:
31 December 2017 31 December 2016
Provision for Provision for
decline in the decline in the
value of value of
Carrying amount inventories Carrying amount Carrying amount inventories Carrying amount
Raw materials 213,348,012 (1,447,590) 211,900,422 166,639,254 (2,025,446) 164,613,808
Work in progress 45,614,905 - 45,614,905 18,893,651 - 18,893,651
Finished goods 387,489,714 (68,974) 387,420,740 274,559,889 (6,347,741) 268,212,148
Turnover materials 40,959,250 - 40,959,250 26,061,318 - 26,061,318
687,411,881 (1,516,564) 685,895,317 486,154,112 (8,373,187) 477,780,925
(b) Provision for decline in the value of inventories are analysed as follows:
31 December 31 December
2016 Increase in current year Reversal in current year 2017
Finished goods 6,347,741 68,974 (6,347,741) 68,974
Raw materials 2,025,446 - (577,856) 1,447,590
8,373,187 68,974 (6,925,597) 1,516,564
(c) Provision for decline in the value of inventories is as follows:
Reasons of reversal of the
decline in the value of
Basis for provision for decline in the value of inventories inventories
The amount of carrying amount less net realisable value
Finished goods due to decline in price of products Sold
The amount of book value less net realisable value due to
Raw materials sluggish or damaged raw materials Used
(7) Assets classified as held for sale
carrying amounts Estimated Estimated
Item at the end of period Fair value disposal costs disposal time
Intangible assets 15,048,314 18,390,394 June of 2018
Construction in progress 30,935,206 37,805,606 June of 2018
45,983,520 56,196,000 -
The subsidiary of the Group, Dongguan CSG PV-tech signed a grant contract of land use right with third party
- 240 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Dongguan Chaoyin Textile Co., LTD. (Dongguan Chaoyin Company) on 17 June 2016. Dongguan CSG PV-tech
sells its land use right along with the buildings on the land to Dongguan Chaoyin Company. Therefore, the
construction-in-progress and intangible assets of Dongguan CSG PV-tech were transferred to assets held for sale.
As at 31 December 2017, the transfer of propery rights had not been finalised.
4 Notes to the consolidated financial statements (Cont’d)
(8) Other current assets
31 December 2017 31 December 2016
VAT to be offset 181,667,326 150,317,894
Assets classified as held for sale - 40,049,163
Enterprise income tax prepaid 1,132,508 1,325,723
VAT input to be recognised 18,048,155 8,212,797
200,847,989 199,905,577
(10) Fixed assets
Machinery and
Buildings equipment Motor vehicles Total
Cost
31 December 2016 3,911,336,527 11,699,296,248 201,923,067 15,812,555,842
Increase in current year
Acquisition 4,924,460 18,947,748 7,467,964 31,340,172
Transfers from construction
in progress (Note 4(10)) 94,982,205 1,338,373,278 5,515,375 1,438,870,858
Adjustment of completion
settlement 738,830 19,721,695 238,675 20,699,200
Decrease in current year
Disposal or retirement (8,917,927) (52,049,454) (6,203,870) (67,171,251)
Transfer to construction in
progress (3,695,395) (561,466,255) (648,454) (565,810,104)
31 December 2017 3,999,368,700 12,462,823,260 208,292,757 16,670,484,717
Accumulated depreciation
31 December 2016 629,946,237 3,287,606,208 172,265,020 4,089,817,465
Increase in current year
Provision 124,679,206 833,507,101 22,395,614 980,581,921
Decrease in current year
Disposal or retirement (1,211,382) (13,892,180) (5,723,521) (20,827,083)
Transfer to construction in
progress (1,895,250) (198,327,057) (387,830) (200,610,137)
31 December 2017 751,518,811 3,908,894,072 188,549,283 4,848,962,166
Provision for impairment loss
- 241 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
31 December 2016 - 264,765,386 - 264,765,386
Provision 10,580,861 25,679,443 36,260,304
Disposal or retirement (20,272,836) (20,272,836)
31 December 2017 10,580,861 270,171,993 280,752,854
Carrying amount
31 December 2017 3,237,269,028 8,283,757,195 19,743,474 11,540,769,697
31 December 2016 3,281,390,290 8,146,924,654 29,658,047 11,457,972,991
In 2017, the depreciation amount provided for fixed assets was RMB980,581,921 (2016: RMB891,257,741), and
the amount of depreciation expenses charged to cost of sales, selling and distribution expenses, general and
administrative expenses and construction in progress was RMB890,575,701, RMB 970,739 , RMB 65,929,139
and RMB 23,106,342 (2016 ： RMB 819,298,731, RMB 979,874, RMB 59,067,087 and RMB 11,912,049)
respectively.
In 2017, the cost of fixed assets transferred from construction in progress amounted to RMB 1,438,870,858 (2016:
RMB1,281,171,543).
4 Notes to the consolidated financial statements (Cont’d)
Fixed assets (Cont’d)
(b) Fixed assets with pending certificates of ownership
Carrying amount Reasons for not yet obtaining certificates of title
Have submitted the required documents and are in the process of
Buildings 893,119,983 application, or the related land use right certificate pending
(12) Construction in progress
31 December 2017 31 December 2016
Provision for
Carrying Carrying Carrying Provision for
impairment Carrying amount
amount amount amount impairment loss
loss
Xianning CSG Photoelectric
400,665,493 - 400,665,493 41,267,876 - 41,267,876
Glass project
Yichang display device
company flat panel display 298,794,622 (14,160,474) 284,634,148 274,342,571 (14,160,474) 260,182,097
project
Yichang Optoelectronic
242,055,237 - 242,055,237 - - -
Technology Reform Project
Hebei float 600T
113,762,853 - 113,762,853 - - -
tech-innovation project
Zhanjiang Photovoltaic
20MV Step-by-step
100,570,104 - 100,570,104 8,855,560 - 8,855,560
Photovoltaic Power Plant
Project
Dongguan Solar Glass
Phase I and II improvement 78,970,995 (40,248,018) 38,722,977 78,970,995 (33,075,116) 45,895,879
project
- 242 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Wujiang energy glass
72,600,518 (19,876,460) 52,724,058 70,178,986 (19,876,460) 50,302,526
expansion project
Yichang 1GW silicon slice
43,617,802 - 43,617,802 95,011,027 - 95,011,027
project
LED Sapphire Substrate
30,886,629 (19,303,853) 11,582,776 29,472,040 - 29,472,040
Project
Wujiang Photovoltaic
7,414,854 - 7,414,854 1,583,553 - 1,583,553
Packaging Materials Project
Yichang 5000T
electronic-grade polysilicon 943,396 - 943,396 171,211,288 - 171,211,288
project
Heyuan Kibing PV tech
11MV distributed generation 2,267,345 - 2,267,345 85,126,446 - 85,126,446
project
Dongguan PV Tech 200MW
PV-tech Battery Expansion 1,179,935 - 1,179,935 8,224,072 - 8,224,072
project
Hebei float 900T
- - - 388,627,081 - 388,627,081
tech-innovation project
Chengdu float 550T line
- - - 102,304,740 - 102,304,740
tech-renovation
Qingyuan high-performance
ultrathin electronic glass - - - 1,034,372 - 1,034,372
project
Sichuan energy-saving
- - - 13,005,928 - 13,005,928
project Phase III
Others 117,889,623 (405,983) 117,483,640 59,991,892 - 59,991,892
1,511,619,406 (93,994,788) 1,417,624,618 1,429,208,427 (67,112,050) 1,362,096,377
- 243 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
- 244 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(10) Construction in progress (Cont'd)
(c) Movement of significant project
Amount of Including:
Proportion
31 Transfer to fixed Other 31 borrowing Amount of Capitalisation
Increase in between Source
Project name Budget December assets in current decreases in December costs borrowing costs rate for in
current year engineering input of fund
2016 year current year 2017 capitalised in capitalised in current year
and budget (i)
2017 2017
Xianning CSG Internal
Photoelectric Glass 510,000,000 41,267,876 371,315,353 (11,692,808) (224,928) 400,665,493 81% 7,770,613 7,770,613 4.75% fund and
project bank loan
Internal
Yichang CSG flat panel 81% fund and
1,970,000,000 274,342,571 68,678,108 (44,226,057) - 298,794,622 4,144,159 3,146,516 4.20%
display project bank loan
Yichang Optoelectronic Internal
Technology Reform 258,296,536 - 242,055,237 - - 242,055,237 60% - - - fund and
Project bank loan
Hebei float 600T 1% Internal
129,180,000 - 121,809,135 (284,860) (7,761,422) 113,762,853 - - - fund
tech-innovation project
Zhanjiang Photovoltaic
Internal
20MV Step-by-step 96% fund and
133,000,000 8,855,560 91,714,544 - - 100,570,104 2,280,097 2,280,097 5.74%
Photovoltaic Power bank loan
Plant Project
Dongguan Solar Glass
80% Internal
Phase I and II 396,410,000 78,970,995 - - - 78,970,995 - - - fund
improvement project
Wujiang energy glass 99% Internal
845,630,000 70,178,986 3,279,395 (676,165) (181,698) 72,600,518 20,120,444 - - fund
expansion project
Yichang 1GW silicon Internal
1,073,209,600 95,011,027 361,731,413 (413,124,638) - 43,617,802 36% 8,629,993 8,083,768 4.79% fund and
slice project bank loan
Internal
LED Sapphire Substrate 88% fund and
35,000,000 29,472,040 2,696,640 (1,282,051) - 30,886,629 4,650,543 899,966 4.78%
Project bank loan
Wujiang Photovoltaic Internal
Packaging Materials 520,100,000 1,583,553 7,288,394 (1,457,093) - 7,414,854 87% - - - fund and
Project bank loan
Yichang 5000T 698,396,700 171,211,288 45,733,419 (216,001,311) - 943,396 26% 8,453,998 5,244,463 4.44% Internal
electronic-grade fund and
- 245 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
polysilicon project bank loan
Heyuan Kibing PV tech
93% Internal
11MV distributed 91,600,000 85,126,446 3,577,331 (77,641,121) (8,795,311) 2,267,345 325,704 325,704 5.00% fund
generation project
Dongguan PV Tech Internal
200MW PV-tech Battery 697,000,000 8,224,072 49,163,936 (56,208,073) - 1,179,935 100% 32,417,335 401,535 4.80% fund and
Expansion project bank loan
Internal
Hebei float 900T fund and
124,000,000 388,627,081 3,816,268 (392,210,090) (233,259) - 100% 4,211,893 1,057,593 4.94%
tech-innovation project bank loan
Internal
Chengdu float 550T line fund and
200,000,000 102,304,740 57,840,038 (160,144,778) - - 100% 306,663 306,663 4.60%
tech-renovation bank loan
Qingyuan
Internal
high-performance fund and
471,660,000 1,034,372 - - (1,034,372) - 100% - - -
ultrathin electronic glass bank loan
project
Sichuan energy-saving Internal
222,817,517 13,005,928 - (10,119,658) (2,886,270) - 100% - - - fund
project Phase III
Internal
Others 2,657,421,716 59,991,892 111,879,886 (53,802,155) (180,000) 117,889,623 339,257 339,257 4.15% fund and
bank loan
11,033,722,069 1,429,208,427 1,542,579,097 (1,438,870,858) (21,297,260) 1,511,619,406 93,650,699 29,856,175
(j) The proportion of project expenditure incurred to the budget is determined by the accumulative expenditures incurred divided by the total budget. Some of the projects
are transferred to property, plant, and equipment because the construction is completed.
(ii) The budget and actual expenditures incurred for these kinds of projects include cost of acquiring land use rights. The balance of construction in progress does not
include the costs of acquiring land-use right
- 246 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(10) Construction in progress (Cont'd)
(d) Provision for impairment of construction in progress
31 December Increase in Decrease in 31 December Reason for
Project name
2016 current year current year 2017 provision
Dongguan Solar Glass Phase I
33,075,116 7,172,902 - 40,248,018 -
and II improvement project
Wujiang float glass project 19,876,460 - - 19,876,460 -
Yichang CSG Display panel
14,160,474 - - 14,160,474 -
display project
LED Sapphire Substrate
- 19,303,853 - 19,303,853 -
Project
Others - 405,983 - 405,983 -
67,112,050 26,882,738 - 93,994,788 -
- 247 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(13) Intangible assets and development expenditure
Patents and
Land use Exploitation
proprietary Others Total
rights rights
technologies
Cost
31 December 2016 1,026,603,700 199,922,986 4,456,536 23,548,047 1,254,531,269
Acquisition in current year - 2,966,502 - 12,558,663 15,525,165
Transfers from development
- 43,122,431 - - 43,122,431
expenditure in current year
31 December 2017 1,026,603,700 246,011,919 4,456,536 36,106,710 1,313,178,865
Accumulated amortisation
31 December 2016 128,007,677 57,225,743 3,306,083 20,322,309 208,861,812
Provision in current year 21,049,588 17,759,493 400,641 4,674,444 43,884,166
31 December 2017 149,057,265 74,985,236 3,706,724 24,996,753 252,745,978
Provision for impairment loss
31 December 2016 - 13,201,347 - 9,133 13,210,480
31 December 2017 - 13,201,347 - 9,133 13,210,480
Carrying amount
31 December 2017 877,546,435 157,825,336 749,812 11,100,824 1,047,222,407
31 December 2016 898,596,023 129,495,896 1,150,453 3,216,605 1,032,458,977
In 2017, the amortisation of intangible assets amounted to RMB43,884,166 (2016: RMB36,907,548).
As at 31 December 2017, ownership certificates of land use rights (“Land ownership Certificates”) for certain land
use rights of the Group with carrying amounts of approximately RMB5,473,442 (cost: RMB6,586,712) had not yet
been obtained by the Group (31 December 2016: carrying amount: RMB5,718,191, cost: RMB 6,586,712). The
Company’s management are of the view that there is no legal restriction for the Group to apply for and obtain the
Land Ownership Certificates and has no adverse effect on the Group’s business operation.
- 248 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(17) Intangible assets and development expenditure (Cont'd)
Research expenditure is analysed below:
31 December Increase in 31 December
2016 current year Decrease in current year 2017
Recognised as Recognised as
expense intangible assets
Development
costs 66,927,714 37,560,254 (43,122,431) 61,365,537
In 2017, the total amount of research and development expenditures of the Group was RMB 368,237,629 (2016:
RMB 341,553,966), including RMB 330,677,375 (2016: RMB 285,129,442) recorded in income statement for
current period and the research and development expenditure with the amount of RMB 43,122,431 recognised as
intangible assets for the current period (2016: 23,213,785). As at 31 December 2017, the intangible assets arising
from internal research and development accounted for 12.37 % of total of intangible assets (31 December 2016:
9.51 %).
(18) Goodwill
Decrease
31 December Increase in in current 31 December
2016 current year year 2017
Tianjin CSG Architectural Glass Co., Ltd. 3,039,946 3,039,946
Xianning CSG Photoelectric 4,857,406 4,857,406
Shenzhen CSG Display 389,494,804 389,494,804
397,392,156 397,392,156
The goodwill allocated to the asset groups and groups of asset groups from Tianjin CSG Architectural was
summarised by operating segments as Architectural Glass segment. The goodwill allocated to the asset groups and
groups of asset groups from Shenzhen CSG Display and 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 31 December 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.
- 249 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(19) Deferred tax assets and liabilities
(a) Deferred tax assets before offsetting
31 December 2017 31 December 2016
Deductible
Deferred tax Deductible temporary Deferred tax
temporary
assets differences assets
differences
Provision for asset
361,149,562 55,552,592 410,272,182 61,899,046
impairments
Tax losses 133,658,792 24,457,319 164,790,392 28,883,903
Government grants 128,189,967 20,424,022 129,722,993 20,654,199
Accrued expenses 50,193,405 7,529,011 81,018,069 12,352,386
Depreciation of fixed assets 33,762,174 8,000,331 28,241,461 6,320,146
Share payment 5,196,945 867,677 - -
712,150,845 116,830,952 814,045,097 130,109,680
Including:
Expected to be reversed within
33,751,219 33,957,444
one year (inclusive)
Expected to be reversed after
83,079,733 96,152,236
one year
116,830,952 130,109,680
(b) Deferred tax liabilities before offsetting
31 December 2017 31 December 2016
Taxable temporary Deferred tax Taxable temporary Deferred tax
differences liabilities differences liabilities
Depreciation of fixed
371,115,284 56,874,044 396,118,583 63,406,963
assets
Including:
Expected to be reversed within
4,247,230 3,342,336
one year (inclusive)
Expected to be reversed after
52,626,814 60,064,627
one year
56,874,044 63,406,963
- 250 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(13) Deferred tax assets and liabilities (Cont’d)
(c) Deductible losses that are not recognised as deferred tax assets of the Group are analysed as follows:
31 December 2017 31 December 2016
Deductible losses 425,759,321 342,455,782
The deductible tax losses not recognised as deferred tax assets mainly represented the tax losses of the Company
and some closed subsidiaries. Management was unable to expect that whether there were taxable profit would be
available in the future against which these deductible tax losses can be utilised, and accordingly, did not recognise
the deferred tax assets.
(d) The tax losses for which no deferred tax assets were recognised will expire in the following years:
31 December 2017 31 December 2016
2018 54,100,000 54,100,000
2019 82,300,000 82,300,000
2020 94,430,197 94,430,197
2021 111,625,585 111,625,585
2022 83,303,539 -
425,759,321 342,455,782
(f) The net balances of deferred tax assets and liabilities after offsetting are as follows:
31 December 2017 31 December 2016
Deductible/taxable Deductible/taxable
Net deferred tax temporary differences Net deferred tax temporary differences
assets or liabilities after offsetting assets or liabilities after offsetting
Deferred tax assets 80,872,862 472,134,707 96,451,854 565,834,538
Deferred tax liabilities 20,915,954 131,099,146 29,749,137 147,908,024
- 251 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(20) Other non-current assets
31 December 2017 31 December 2016
Prepayment for equipment and software upgrading expenses 45,431,352 69,945,550
VAT input to be offset - 10,718,843
Prepayment for lease of land use rights 6,510,000 6,510,000
51,941,352 87,174,393
(21) Provision for asset impairment
31 December Increase in Reversal in Written off in 31 December
2016 current year current year current year 2017
Provision for bad debts 20,562,459 9,498,129 (3,310,390) (317,727) 26,432,471
Including: Provision for bad debts of
accounts receivable 16,468,391 8,845,491 (3,283,884) (117,931) 21,912,067
Provision for bad debts of
other receivables 4,094,068 652,638 (26,506) (199,796) 4,520,404
Provision for decline in the value of
inventories 8,373,187 68,974 (6,925,597) 1,516,564
Provision for impairment of fixed
assets 264,765,386 36,260,304 (20,272,836) 280,752,854
Provision for impairment of
construction in progress 67,112,050 26,882,738 - 93,994,788
Provision for impairment of intangible
assets 13,210,480 - - - 13,210,480
374,023,562 72,710,145 (3,310,390) (27,516,160) 415,907,157
- 252 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(22) Short-term borrowings
31 December 2017 31 December 2016
Ultra-short-term financial bonds (i) - 2,000,000,000
Unsecured 2,691,732,609 1,650,251,293
Guaranteed (ii) 1,012,898,300 367,618,369
3,704,630,909 4,017,869,662
(i) Approved by file No. [2015] SCP163 of Inter-bank Market Trading Association, the Company is entitled to
issue ultra-short-term financial bonds with the limit of RMB4,000,000,000, which expires on 28 May 2017.
On 2 Augest 2016, the Company issued the Phase III ultra-short-term financial bonds of RMB600,000,000 for
2016, with the maturity data of May 1 2017 and annual rate of 3.67%. As at the reporting date, such
Ultra-short-term bonds had been repaid.
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 3.5%. As at the reporting
date, such ultra-short-term bonds had been repaid.
(ii) As at 31 December 2017, the Company provided its subsidiaries with guarantee for the short-term
borrowings of RMB1,012,898,300 (31 December 2016: RMB367,618,369), and the Company had no
counter guarantee from minority shareholders of subsidiaries (31 December 2016: Nil).
(iii) As at 31 December 2017, the interest of short-term borrowings varied from 2.70% to 5.66% (31 December
2016: 2.70% to 4.79%).
(28) Notes payable
31 December 2017 31 December 2016
Bank acceptance notes 213,401,622 20,000,000
All notes payable are due within one year.
- 253 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(29) Accounts payable
31 December 2017 31 December 2016
Materials payable 798,178,206 747,769,987
Equipment payable 329,926,045 233,779,329
Construction expenses payable 167,394,038 100,246,462
Freight payable 61,671,023 40,916,380
Utilities payable 35,973,405 44,602,055
Others 7,023,325 2,555,157
1,400,166,042 1,169,869,370
As at 31 December 2017, the amount of accounts payable over 1 year was approximately RMB160,638,075 (31
December 2016: RMB140,385,720), 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.
(30) Advances from customers
31 December 2017 31 December 2016
Advances for goods from customers 195,563,465 142,330,979
The ageing of balances was substantively within 1 year.
(31) Employee benefits payable
31 December 2017 31 December 2016
Short-term employee benefits payable (a) 272,144,440 193,166,719
Defined contribution plans payable (b) 26,220 205,520
272,170,660 193,372,239
(a) Short-term employee benefits
31 December Increase in Decrease in 31 December
2016 current year current year 2017
Wages and salaries, bonus, allowances
159,601,219 1,083,193,468 (1,067,309,072) 175,485,615
and subsidies
Social security contributions 50,331 40,182,933 (40,219,512) 13,752
Including: Medical insurance 31,340 33,865,801 (33,884,783) 12,358
Work injury insurance 12,677 4,356,310 (4,368,003) 984
Maternity insurance 6,314 1,960,822 (1,966,726) 410
Housing funds 2,603,791 49,264,799 (49,110,219) 2,758,371
- 254 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Labour union funds and employee
15,571,378 14,607,578 (14,898,254) 15,280,702
education funds
Management bonus (i) 15,340,000 79,735,128 (16,469,128) 78,606,000
Share-based payments - 8,194,695 (8,194,695) -
193,166,719 1,275,178,601 (1,196,200,880) 272,144,440
4 Notes to the consolidated financial statements (Cont’d)
(21) Employee benefits payable (Cont’d)
Pursuant to the resolution at the 7th session in the 5th meeting of the board of directors of the Company on 31
March 2015, the board of directors adopted a management bonus scheme which was based on the quarterly return
on net assets and the net profit for the quarter. During the year, management bonuses amounting to
RMB79,735,128 (2016: RMB82,470,000) were accrued and charged to profit or loss.
Pursuant to the resolution at the 7th session in the temporary conference of the board of directors of the Company
on 11 December 2017, to implemented equity incentive plans of restricted stock for the Company directors and
senior management, core management team, backbones of technology and busines. The company first awarded
97,511,654 restricted shares to 454 incentive objects for the first time at RMB4.28 per share. The total fair value of
the equity instruments granted to the incentive object by the company for the first time is RMB289,519,900. The
total value of such fair value as the total cost of the company's equity incentive plan will be confirmed in stages
according to the ratio of unlocking/exercising in the implementation of the equity incentive plan, and it is included
in the cost in the term of "management fees" and "capital reserves - other capital reserves". The Company unlock
the conditions of restricted share in 2017, and the cost associated with equity incentive plan is confirmed at
RMB8,194,695 in this phase.
(b) Defined contribution plans
Increase in Decrease in
31 December 2016 current year current year 31 December 2017
Basic pensions 192,780 109,332,705 (109,500,097) 25,388
Unemployment insurance 12,740 3,866,282 (3,878,190) 832
205,520 113,198,987 (113,378,287) 26,220
- 255 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(32) Taxes payable
31 December 2017 31 December 2016
VAT payable 35,100,800 46,726,185
Enterprise income tax payable 48,496,225 41,919,187
Housing property tax payable 8,617,044 10,998,756
Individual income tax payable 5,177,080 3,755,374
City maintenance and construction tax payable 4,261,902 3,482,715
Educational surcharge payable 3,348,566 3,351,165
Others 6,995,147 5,359,234
111,996,764 115,592,616
(33) Interest payable
31 December 2017 31 December 2016
Interest of ultra-short-term financial bonds - 38,040,006
Interest payable for medium term notes 27,622,465 27,621,021
Interest for corporate bonds - 10,660,000
Interest of long-term borrowings with periodic payments of
interest and return of principal at maturity 938,950 514,750
Interest payable for short-term borrowings 5,471,325 1,390,127
34,032,740 78,225,904
(34) Other payables
31 December 2017 31 December 2016
Guarantee deposits received from construction contractors 49,624,256 69,156,801
Accrued cost of sales (i) 58,584,562 47,671,047
Temporary collection of payment for land transfer 56,196,000 28,098,000
Payable for contracted labour costs 17,568,695 17,467,346
Temporary receipts 7,964,070 14,022,924
Deposit for disabled 5,230,110 3,509,947
Restricted share repurchase obligation 417,349,879 -
Others 6,806,782 8,395,385
619,324,354 188,321,450
- 256 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
(iii) It represented the payment made to external third parties arising from undertaking the rights of debtor and
creditor, comprising water and electricity, professional service fee and travelling expenses etc.
(iv) In the year ending 31 December 2017, the unlock conditions of first granted restricted stock was not met. The
Company will confirm the actual amount of restricted stock subscription RMB417,349,879 as the
corresponding expected liability, and confirm the corresponding amount of stock shares.
The ageing of other payables was substantively within 1 year.
- 257 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(35) Current portion of non-current liabilities
31 December 2017 31 December 2016
Current portion of long-term borrowings
- Guaranteed 14,880,000 29,340,000
- Unsecured 180,000,000 -
Current portion of corporate bonds - 1,000,000,000
Current portion of finance lease 709,381,397 -
904,261,397 1,029,340,000
(36) Long-term borrowings
31 December 2017 31 December 2016
Medium term notes (i) 1,200,000,000 1,200,000,000
Unsecured - 180,000,000
Guaranteed 354,120,000 58,660,000
1,554,120,000 1,438,660,000
(i) 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 RMB1,200,000,000, which expires on 28 May 2017.
On 14 July 2015, the Company issued the Phase I medium term notes of RMB1,200,000,000 for 2015, with
the maturity data of 14 July 2020 and annual rate of 4.94%.
As at 31 December 2017, the interest of long-term borrowings varied from 4.75% to 5.94% (31 December
2015: 4.51% to 4.94%).
(37) Long-term account payable
31 December 2017 31 December 2016
Finance lease 1,161,794,247 -
TheSale and leaseback lease of the group in this phase is a mortgage loan with a lease term of 36 months. On
December 31, 2017, the real interest rate of financing lease loans is 4.49%-7.8%.
- 258 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(38) Deferred income
31 December 2017 31 December 2016
Government grants 562,701,103 593,993,254
Government grants are analysed as follows:
Non-operating
31 December Increase in Other decrease income in current 31 December
Government grants 2016 current year in current year year 2017 Assets/Income related
Tianjin CSG Golden Sun
57,092,011 - -- (3,374,892) 53,717,119
Project (i) Assets related
Dongguan CSG Golden Sun
46,079,250 - -- (2,751,000) 43,328,250
Project (ii) Assets related
Hebei CSG Golden Sun Project
46,750,000 - -- (2,750,000) 44,000,000
(iii) Assets related
Xianning CSG Golden Sun
51,013,417 - -- (3,030,500) 47,982,917
Project (iv) Assets related
Infrastructure compensation
for Wujiang CSG Glass Co., 43,670,435 - -- (4,041,537) 39,628,898
Ltd (v) Assets related
Qingyuan Energy-saving project
23,259,167 - -- (2,470,000) 20,789,167
(vi) Assets related
Yichang Silicon products project
24,609,375 - -- (2,812,500) 21,796,875
(vii) Assets related
Yichang CSG silicon slice
13,890,609 - -- (1,227,733) 12,662,876
auxiliary project (viii) Assets related
Sichuan energy-saving glass
12,129,480 - -- (1,654,020) 10,475,460
project (ix) Assets related
Group coating film experimental
9,035,040 - -- (1,508,760) 7,526,280
project (x) Assets related
Yichang expert silicon project
3,906,547 - -- (306,664) 3,599,883
(xi) Assets related
Yichang semiconductor silicon
3,666,667 - -- (266,667) 3,400,000
project (xii) Assets related
Yichang CSG Display project
53,371,082 - -- (2,534,478) 50,836,604
(xiii) Assets related
Xianning Photoelectric project
- 7,800,000 - - 7,800,000
(xiv) Assets related
171,000,000 - - -
Group talent fund project (xv) 171,000,000 Assets related
Assets related/Income
34,520,174 8,150,000 (171,976) (18,341,424) 24,156,774
Others related
593,993,254 (171,976) (47,070,175) 562,701,103
15,950,000
(v) 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.
(vi) 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.
(vii) 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
- 259 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
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.
(viii) 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.
- 260 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(27) Deferred income (Cont’d)
(xvi) 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.
(xvii) 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.
(xviii) 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 16 years according to the
useful life of the converting station.
(xix) 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 16 years after related assets
were put into use.
(xx) 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.
(xxi) 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.
(xxii) 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 to 15 years
(xxiii) 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
(xxiv) It represented the funds granted by Yichang Municipal Government for Yichang CSG Display
Company's flat project construction support funds and construction of coil coating three-line
project. The grant will be amortised and credited to income statement by 15 years
(xxv) It represented the funds granted by Xianning Government of the Project supporting fund for
photoconductive glass production line,which is used to pay for Xianning CSG Glass Co. Ltd.
constructing the project of photoelectric photoelectric optical glass production line . After the
completion of the production line, the ownership belongs to Xianning photoelectric. The
allowance will be credited to income statement in 8 years, the useful life of the production line.
(xxvi) The allowance was granted by Administrative Commission of Yichang High-tech Industrial
Development Zone. For senior management personnel, engineering technical personnel and
- 261 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
senior professional technical team which is working at Yichang or plane to introduction, RMB171
million fund was set up, as a special fund for talent introduction and housing resettlement.
4 Notes to the consolidated financial statements (Cont’d)
(28) Share capital
Movement for the year ended 31 December 2017
31 December New issues Bonus 31 December
2016 during the year issue Capitalisation Others 2017
RMB-denominated ordinary shares 1,312,751,568 - - 196,912,735 - 1,509,664,303
Limited selling condition shares - 97,511,654 - - - 97,511,654
Domestically listed foreign shares 762,583,992 - - 114,387,598 - 876,971,590
2,075,335,560 97,511,654 - 311,300,333 - 2,484,147,547
Movement for the year ended 31
December 2016
31 December New issues Bonus 31 December
2015 during the year issue Capitalisation Others 2016
RMB-denominated ordinary shares 1,312,751,568 - - - - 1,312,751,568
Domestically listed foreign shares 762,583,992 - - - - 762,583,992
2,075,335,560 - - - - 2,075,335,560
The
par value of the RMB-denominated ordinary shares is RMB1, and that of domestically listed foreign shares is HKD1.
(30) Capital surplus
Increase in Decrease in
31 December 2016 current year current year 31 December 2017
Share premium (i) 1,345,264,670 319,838,225 (311,300,333) 1,353,802,562
Other capital surplus (84,562,473) 37,141,676 - (47,420,797)
Share of changes in equity other than
comprehensive income and profit
distribution of investees under the
equity method 757,420 - - 757,420
Share-based payment (ii) 2,811,683 8,194,695 - 11,006,378
Transfer of capital surplus recognised
under the previous accounting system (2,250,222) - - (2,250,222)
Disposal of fractional shares 1,316,208 - - 1,316,208
Purchase of minority interests (87,197,562) - - (87,197,562)
(iii) 28,946,981 28,946,981
-
1,260,702,197 356,979,901 (311,300,333) 1,306,381,765
Increase in Decrease in
31 December 2015 current year current year 31 December 2016
Share premium 1,345,264,670 - - 1,345,264,670
Other capital surplus (83,873,398) 483,405 (1,172,480) (84,562,473)
- 262 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Share of changes in equity other than
comprehensive income and profit
distribution of investees under the
equity method 676,277 81,143 - 757,420
Share-based payment 2,409,421 402,262 - 2,811,683
Transfer of capital surplus recognised (2,250,222)
under the previous accounting system - - (2,250,222)
Disposal of fractional shares 1,316,208 - - 1,316,208
Purchase of minority interests (86,025,082) - (1,172,480) (87,197,562)
1,261,391,272 483,405 (1,172,480) 1,260,702,197
- 263 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(31) Capital surplus(Cont’d)
(a) The reason for the decrease of capital reserve - other in current year was the acquisition of minority interests, with the
detail as follows:
(i)The Company passed the 2016 annual general meeting of shareholders held on May 22, 2017 and transferred
1.5 shares to every 10 shares for all shareholders. The total share capital before the distribution was 2,075,335,560
shares, and the total share capital after the dividend was increased to 2,386,635,893 shares. Capital reserve
decreased by RMB311,300,333;
In this year, the equity incentive plan received RMB 417,349,879 of capital contribution from the incentive object,
including RMB 97,511,654 of the share capital, which was included in the capital reserve of RMB 319,838,225.
(ii) This year, due to the equity incentive plan, the share payment fee of RMB8,194,695 was confirmed.
(iii) The shareholder Ju Shenghua provided interest-free loans of RMB1.61 billion to the company. The interest-free
loans were charged to other capital reserves of RMB28,946,981 based on the interest expense calculated on the
bank loan interest for the same period.
(32) Treasury shares
Increase in Decrease in
31 December 2016 current year current year 31 December 2017
Obligations of restricted share buybacks - 417,349,879 - 417,349,879
- 417,349,879 - 417,349,879
Explanation on changes in treasury stocks: The company confirms liabilities and treasury shares at the same time,
based on the number of restricted shares issued and the corresponding repurchase price.
- 264 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(31) Other comprehensive income
Other comprehensive income in Balance
Sheet Other comprehensive income in Income Statement for the year ended 31 December 2017
Less: Reclassification
Attributable of previous other Attributable to
to parent Actual amount comprehensive Attributable to minority
31 December company 31 December before tax for income to profit or Less: Income parent company shareholders
2016 after tax 2017 current year loss in current year tax expenses after tax after tax
Other comprehensive income items which
will be reclassified subsequently to profit or
loss
Financial rewards for energy-saving
technical retrofits 2,550,000 - 2,550,000 - - - - -
Difference on translation of foreign
currency financial statements 2,103,971 (2,705,028) (601,057) (2,705,028) - - (2,705,028) -
4,653,971 (2,705,028) 1,948,943 (2,705,028) - - (2,705,028) -
Other comprehensive income in Balance
Sheet Other comprehensive income in Income Statement for the year ended 31 December 2016
Less: Reclassification
Attributable of previous other Attributable to
to parent Actual amount comprehensive Attributable to minority
31 December company 31 December before tax for income to profit or Less: Income parent company shareholders
2015 after tax 2016 current year loss in current year tax expenses after tax after tax
Other comprehensive income items which
will be reclassified subsequently to profit or
loss
Financial rewards for energy-saving -
technical retrofits 2,550,000 - 2,550,000 - - - -
- 265 -
CSG HOLDING CO., LTD.
Notes to the financial statements
for the year ended 31 December 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Differences on translation of foreign -
currency financial statements 417,772 1,686,199 2,103,971 1,686,199 - 1,686,199 -
2,967,772 1,686,199 4,653,971 1,686,199 - - 1,686,199 -
- 266 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(51) Special reserve
31 December Increase in Decrease in 31 December
2016 current year current year 2017
Safety production costs 5,843,473 7,831,127 (1,0449,662) 3,224,938
The subsidiary Yichang CSG Silicon is a high risk chemical production enterprise. Therefore, the Company
appropriated such reserve in accordance with relevant regulations.
(52) Surplus reserve
31 December Increase in Decrease in 31 December
2016 current year current year 2017
Statutory surplus reserve 760,655,662 32,084,102 - 792,739,764
Discretionary surplus reserve 127,852,568 - - 127,852,568
888,508,230 32,084,102 - 920,592,332
31 December Increase in Decrease in 31 December
2015 current year current year 2016
Statutory surplus reserve 730,927,762 29,727,900 - 760,655,662
Discretionary surplus reserve 127,852,568 - - 127,852,568
858,780,330 29,727,900 - 888,508,230
In accordance with the Company Law of the People’s Republic of China and the Company’s Articles of Association,
the Company should appropriate 10% of net profit for the year to the statutory surplus reserve, and the Company
can cease appropriation when the statutory surplus reserve accumulated to more than 50% of the registered
capital. The statutory surplus reserve can be used to make up for the loss or increase the paid-in capital after
approval from the appropriate authorities. The Company accrued statutory surplus reserve at the amount of
RMB32,084,102 10% of the net profit, in 2017 (2016: RMB29,727,900, accrued at 10% of the net profit).
The Company appropriates for the discretionary surplus reserve after the shareholders’ meeting approves the
proposal from the Board of Directors. The discretionary surplus reserve can be used to make up for the loss or
increase the share capital after approval from the appropriate authorities. The Company did not appropriate to
discretionary surplus reserve during the year.
- 267 -
CSG HOLDING CO., LTD.
Notes to the financial statements
for the year ended 31 December 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(53) Undistributed profits
2017 2016
Undistributed profits at beginning of year 3,573,871,573 3,428,478,565
Add: Net profits attributable to shareholders of parent
company 825,388,312 797,721,576
Less: Appropriation for statutory surplus reserve (32,084,102) (29,727,900)
Ordinary share dividends payable (a) (207,533,556) (622,600,668)
Undistributed profits at end of year 4,159,642,227 3,573,871,573
(b) Pursuant to the resolution of Board of Directors of the Company on 22 May 2017, the Company paid cash dividends of
RMB1 (tax inclusive) for each 10 shares based on total shares of 2,075,335,560, with the total cash dividends
distributed of RMB207,533,556.
(54) Revenue and cost of sales
2017 2016
Revenue from main operations 10,786,756,657 8,886,948,218
Revenue from other operations 92,644,089 87,135,189
10,879,400,746 8,974,083,407
2017 2016
Cost of sales from main operations 8,183,862,835 6,510,577,440
Cost of sales from other operations 32,495,537 51,636,933
8,216,358,372 6,562,214,373
(c) Revenue and cost of sales from main operations
Revenue and cost of sales from main operations analysed by industry and product are set out below:
2017 2016
Revenue Cost Revenue Cost
Glass industry 6,975,512,082 5,179,173,783 6,244,550,400 4,542,947,575
Solar panel and parts 3,091,397,745 2,493,891,466 2,283,441,881 1,728,673,404
Electronic glass and displays 867,223,335 652,646,493 424,883,660 303,117,902
Elimination (147,376,505) (141,848,907) (65,927,723) (64,161,441)
10,786,756,657 8,183,862,835 8,886,948,218 6,510,577,440
- 268 -
CSG HOLDING CO., LTD.
Notes to the financial statements
for the year ended 31 December 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
- 269 -
CSG HOLDING CO., LTD.
Notes to the financial statements
for the year ended 31 December 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(35) Revenue and cost of sales (Cont’d)
(d) Revenue and cost of sales from other operations
2017 2016
Revenue Cost Revenue Cost
Sales of raw materials 69,908,277 29,437,767 63,211,682 45,044,785
Others 22,735,812 3,057,770 23,923,507 6,592,148
92,644,089 32,495,537 87,135,189 51,636,933
(55) Taxes and surtax
2017 2016
City maintenance and construction tax 33,115,925 33,343,735
Educational surcharge 26,156,521 26,597,418
Housing property tax 29,539,408 19,980,233
Land use rights 21,941,304 14,851,345
Business tax 5,395,333 3,486,149
Others 8,375,435 4,900,666
124,523,926 103,159,546
(56) Selling expenses
2017 2016
Freight expenses 159,825,411 140,132,227
Employee benefits 110,068,886 100,367,564
Entertainment fees 12,690,770 12,607,179
Business travel expenses 10,931,013 10,738,590
Vehicle use fee 7,609,882 7,358,948
Rental expenses 5,937,331 5,376,741
General office expenses 3,662,269 7,239,581
Depreciation expenses 970,739 979,874
Others 24,435,422 17,014,386
336,131,723 301,815,090
- 270 -
CSG HOLDING CO., LTD.
Notes to the financial statements
for the year ended 31 December 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(57) Administrative expense
2017 2016
Research and development expenses 330,677,375 285,129,442
Employee benefits 295,657,274 250,150,056
Depreciation expenses 65,929,139 59,067,087
Amortisation of intangible assets 43,884,166 36,907,548
General office expenses 25,126,422 24,313,472
Taxes - 16,957,060
Labour union funds 14,696,230 11,325,909
Entertainment fees 12,027,303 10,834,055
Business travel expenses 11,074,568 10,495,397
Utility fees 10,108,470 10,065,166
Canteen costs 9,357,983 8,486,926
Vehicle use fee 6,639,769 6,141,700
Rental expenses 4,551,968 3,104,038
Consulting advisers 24,935,512 9,453,050
Others 64,663,593 24,158,153
919,329,772 766,589,059
(58) Financial expenses
2017 2016
Interest on borrowings 344,459,771 273,665,849
Less: Capitalised interest (29,856,175) (15,346,518)
Interest expenses 314,603,596 258,319,331
Less: Interest income (12,606,285) (3,193,680)
Exchange losses 4,780,451 249,220
Others 9,183,318 10,445,698
315,961,080 265,820,569
- 271 -
CSG HOLDING CO., LTD.
Notes to the financial statements
for the year ended 31 December 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(59) Expenses by nature
The cost of sales, selling and distribution expenses and general and administrative expenses in the income
statement are listed as follows by nature:
2017 2016
Changes in inventories of finished goods and work in progress (139,651,079) (111,401,312)
Consumed raw materials and low value consumables, etc. 4,941,314,821 3,245,155,140
Fuel fee 1,143,379,014 1,059,231,787
Employee benefits 1,222,510,952 1,196,241,368
Depreciation and amortisation expenses 1,002,432,274 917,152,746
Utility fees 778,033,060 830,921,457
Freight expenses 159,825,411 140,132,227
Taxes - 16,957,060
General office expenses 43,816,479 45,018,706
Canteen costs 39,682,701 38,395,686
Business travel expenses 26,904,472 27,482,191
Entertainment fees 26,167,761 24,785,451
Vehicle use fee 15,851,907 15,227,050
Rental expenses 10,489,299 8,480,779
Others 201,062,795 176,838,186
9,471,819,867 7,630,618,522
(60) Asset impairment losses
2017 2016
Impaiement of fixed assets 36,260,304 49,894,197
Bad debts 6,187,739 2,245,583
Decline in the value of inventories 68,974 6,722,984
Impairment loss in construction under
construction 26,882,738 -
69,399,755 58,862,764
(61) Gain or loss from change in fair value
2017 2016
Financial liabilities at fair value through profit or loss
- 272 -
CSG HOLDING CO., LTD.
Notes to the financial statements
for the year ended 31 December 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Change in fair value during holding period of derivative
financial instruments - (9,850,256)
Losses from disposal of derivative financial
instruments(Note 4(43)) - 238,350,256
- 228,500,000
- 273 -
CSG HOLDING CO., LTD.
Notes to the financial statements
for the year ended 31 December 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(62) Investment income
2017 2016
Losses from long-term equity investment under equity
method - 5,071,685
Losses from disposal of financial liabilities at fair value
through profit or loss 427,636 (238,350,256)
Losses from disposal of long-term equity investment - (45,909,181)
427,636 (279,187,752)
There is no significant restriction on the remittance of investment income to the Group.
(63) Asset disposal income
2017 2016
Gains on disposal of fixed assets (1,768,993) (1,759,358)
(1,768,993) (1,759,358)
(64) Other income
2017 2016
Government subsidy amortization 47,070,175 --
Industry support funds 16,123,793 --
Research grants 6,940,140 --
Energy conservation and utilization support funds 228,116 --
Government incentive funds 12,457,123 --
Technological transformation discount 306,000 --
Energy conservation and utilization support funds 100,000 --
Others 1,116,467 --
84,341,814 --
(65) Non-operating income
Amount of
non-recurring gains
and losses included
2017 2016 in 2017
Government grants (a) 3,533,603 91,627,439 3,533,603
- 274 -
CSG HOLDING CO., LTD.
Notes to the financial statements
for the year ended 31 December 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Default income 275,000 11,000 275,000
Compensation income 15,557,320 1,016,936 15,557,320
Amounts unable to pay 27,959 875,302 27,959
Others 1,369,160 4,547,962 1,369,160
20,763,042 98,078,639 20,763,042
4 Notes to the consolidated financial statements (Cont’d)
(b) Government grants are analysed below:
2017 2016 Category
Asset-income
Government grants amortisation - 28,054,929 related
Industry support fund - 26,108,198 Income related
Tax returns - 25,360,000 Income related
Energy-saving award 414,309 Income related
Government awards fund 2,748,263 2,332,700 Income related
Subsidies for research and development - 4,364,900 Income related
Interest subsidy for technological
600,000
renovation - Income related
Energy-saving fund - 3,520,000 Income related
Others 185,340 1,472,403 Income related
3,533,603 91,627,439
(66) Non-operating expenses
Amount of
non-recurring gains
and losses included
2017 2016 in 2017
Losses on disposal of inventory material - 4,096,235 -
Compensation 492,228 410,326 492,228
Donation 1,118,999 120,000 1,118,999
Others 3,541,364 518,355 3,541,364
5,152,591 5,144,916 5,152,591
- 275 -
CSG HOLDING CO., LTD.
Notes to the financial statements
for the year ended 31 December 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(67) Income tax expenses
2017 2016
Current income tax 160,923,182 140,207,714
Deferred income tax 6,747,809 11,674,381
167,670,991 151,882,095
The reconciliation from income tax calculated based on the applicable tax rates and total profit presented in the
consolidated income statement to the income tax expenses is listed below:
2017 2016
Total profit 996,307,026 956,108,619
Income tax expenses calculated at applicable tax rates by
149,078,702
company 145,901,167
Effect of changes in tax rates - 4,545,871
Costs, expenses and losses not deductible for tax purposes 7,893,473 2,227,140
Income not subject to tax (33,833) (855)
Deductible losses for which no deferred tax asset was
recognised in current period 20,825,885 25,603,526
Written-off of deductible losses for which deferred tax asset
was recognised previously - 1,469,360
Effect of tax incentives (13,637,793) (10,147,358)
Reconciliation of income tax for prior years in annual filing 3,544,557 (17,716,756)
Income tax expenses 167,670,991 151,882,095
- 276 -
CSG HOLDING CO., LTD.
Notes to the financial statements
for the year ended 31 December 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
4 Notes to the consolidated financial statements (Cont’d)
(68) Earnings per share
The basic earnings per share is calculated by dividing the net profit attributable to ordinary shareholders of the
company by the weighted average number of ordinary shares outstanding.
The numerator of diluted earnings per share is determined based on the net profit attributable to the common
shareholders of the company's common stock. The following factors are adjusted to determine: (1) interest on
dilutive potential ordinary shares that have been recognized as expenses in the current period; (2) dilutive potential
ordinary The income or expenses that will be generated when the shares are converted; (3) The above-mentioned
adjustments related to income tax effects.
The denominator of the diluted earnings per share equals the sum of: (1) the weighted average number of ordinary
shares of the parent company in the underlying earnings per share; (2) ordinary shares that are increased
assuming the dilution of potential ordinary shares into common shares The weighted average.
When calculating the weighted average of the number of ordinary shares increased from diluted common stocks to
ordinary shares, the diluted potential ordinary shares issued during the previous period are assumed to be
converted at the beginning of the current period; diluted potential ordinary shares of the current period are issued. ,
assuming a conversion on the issue date.
The basic calculation of basic earnings per share and diluted earnings per share are as follows:
2017 2016
Profit
Consolidated net profit attributable to ordinary shareholders
825,388,312 797,721,576
of parent company
Shares
Weighted average number of outstanding ordinary 2,386,635,893 2,386,635,893
Dilution Effect - Weighted average number of ordinary shares
Stock options 4,062,986 -
The weighted average number of ordinary shares issued by
2,390,698,879 2,386,635,893
the company after adjustment
Basic earnings per share 0.35 0.33
among them：
- Continuing basic earnings per share 0.35 0.33
- Termination of basic earnings per share - -
Diluted earnings per share 0.35 0.33
among them：
- Continuing basic earnings per share 0.35 0.33
- 277 -
CSG HOLDING CO., LTD.
Notes to the financial statements
for the year ended 31 December 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
- Termination of basic earnings per share - -
4 Notes to the consolidated financial statements (Cont’d)
(69) Notes to the cash flow statement
(g) Cash generated by other operating activities
2017 2016
Government grants 40,805,242 38,212,510
Interest income 12,606,285 3,193,680
Others 18,937,040 5,871,941
72,348,567 47,278,131
(h) Cash paid relating to other operating activities
2017 2016
Freight expenses 170,941,469 170,991,413
Canteen costs 39,682,701 38,395,686
General office expenses 34,267,447 32,516,317
Research and development expenses 31,684,954 25,191,468
Business travel expenses 27,935,416 26,421,204
Entertainment fees 25,206,039 24,573,593
Vehicle use fee 15,851,907 15,227,050
Maintenance fee 25,969,168 15,804,981
Rental expenses 10,489,299 8,480,779
Insurance 8,759,738 10,750,838
Bank fees 9,183,318 10,445,698
Others 186,004,633 173,091,041
585,976,089 551,890,068
(i) Cash generated by other investing activities
2017 2016
Income from trial production of construction in progress 124,108,255 155,174,454
Final payment of Shenzhen CSG Display’s subdiary equity
transfer - 150,000,000
Government grants related to assets received 15,950,000 16,351,250
- 278 -
CSG HOLDING CO., LTD.
Notes to the financial statements
for the year ended 31 December 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Land grant funds received 28,098,000 28,098,000
Insurance claims received 19,600,000 -
Government lands refund received - 14,891,603
187,756,255 364,515,307
4 Notes to the consolidated financial statements (Cont’d)
(j) Cash paid relating to other investing activities
2017 2016
Trial production expenditure in construction 156,543,177 166,905,113
The subsidies which Qingyuan energy returns to
government - 15,300,000
Deposit 43,541,859 -
200,085,036 182,205,113
(k) Cash generated by other financing activities
2017 2016
Interest-free borrowing 1,610,000,000 -
Income from financing leases 1,986,000,000 -
Receiving industrial production dispatch funds 20,000,000 -
3,616,000,000 -
(l) Cash payments relating to other financing activities
2017 2016
Repay financing leases 104,821,449 -
Pay for industrial production scheduling funds 31,000,000 -
Return interest-free loan 1,610,000,000 -
Deposit 5,030,994 -
- 279 -
CSG HOLDING CO., LTD.
Notes to the financial statements
for the year ended 31 December 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Payment of loan, security and fee for bills 32,257,231 -
1,783,109,674 -
4 Notes to the consolidated financial statements (Cont’d)
(51) Supplementary information to the cash flow statement
(d) Reconciliation from net profit to cash flows from operating activities
2017 2016
Net profit 828,636,035 804,226,524
Add: Provision for asset impairment 69,399,755 58,862,764
Depreciation of fixed assets 957,475,579 879,345,692
Amortisation of intangible assets 43,884,166 36,907,548
Net movements of safety production costs (2,618,535) (9,594,025)
Amortisation of long-term prepaid expenses 1,072,529 899,506
Net losses/(gains) on disposal of fixed assets and
8,194,695 -
intangible assets
Employee compensation based on shares 1,768,993 1,759,358
Financial expenses 314,603,596 258,319,331
Investment income/(loss) (427,636) 279,187,752
Decrease/(increase) in deferred tax assets 15,578,992 13,884,362
Increase/(decrease) in deferred tax liabilities (8,833,183) (2,209,981)
(Increase)/decrease in inventories - (228,500,000)
Decrease/(increase) in operating receivables (201,257,769) (71,720,745)
Increase in operating payables (206,859,922) (259,804,129)
Increase in operating receivables 642,828,861 479,288,163
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CSG HOLDING CO., LTD.
Notes to the financial statements
for the year ended 31 December 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Net cash flows from operating activities 2,463,446,156 2,240,852,120
(e) Net increase/(decrease) in cash
2017 2016
Cash and cash equivalents at end of year 2,459,753,165 584,566,990
Less: Cash and cash equivalents at beginning of year (584,566,990) (574,744,877)
Net increase in cash and cash equivalents 1,875,186,175 9,822,113
(f) Cash and cash equivalents
31 December 2017 31 December 2016
Cash
- Cash on hand 36,182 17,239
- Bank deposits that can be readily drawn on demand 2,409,716,983 584,549,751
- Other cash balances that can be readily drawn on demand 50,000,000 -
Cash at end of year 2,459,753,165 584,566,990
4 Notes to the consolidated financial statements (Cont’d)
(52) Assets with restricted ownership or use rights
2017 2016 Reason
Monetary assets 2,852,599 2,236,515 Restricted deposit flow
Property,plant and equipment 2,369,789,041 - Limited finance lease
2,372,641,640 2,236,515
(53) Monetary items denominated in foreign currencies
31 December 2017
Balances
denominated in Exchange Balances
foreign currencies rates denominated in RMB
Cash at bank and on hand -
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CSG HOLDING CO., LTD.
Notes to the financial statements
for the year ended 31 December 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
HKD 7,314,730 0.8359 6,114,383
USD 11,343,508 6.5342 74,120,750
EUR 675 7.8023 5,267
JPY 309,620 0.0579 17,927
AUD 17,439 5.0928 88,813
80,347,140
Accounts receivable -
HKD 11,549,666 0.8359 9,654,366
USD 19,490,453 6.5342 127,354,518
EUR 946,785 7.8023 7,387,101
144,395,985
Short-term borrowings -
HKD 75,000,000 0.8359 62,692,500
Accounts payable -
HKD 307 0.8359 257
USD 15,922,406 6.5342 104,040,185
EUR 2,642,275 7.8023 20,615,822
JPY 281,927,203 0.0579 16,323,585
140,979,849
5 The changes of consolidation scope
The Group established a subsidiary company, China CGS (AUSTRILIA) PTY LTD, on 31 December 2017, and the
Group has not invested yet. The Company holds 100% of its shares.
6 Interest in other entities
(1) Interest in subsidiaries
(a) Structure of the enterprise group
As at 31 December 2017, information of the Company’s major subsidiaries is set out below:
- 282 -
CSG HOLDING CO., LTD.
Notes to the financial statements
for the year ended 31 December 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Shareholding
Major (%)
business Place of
location registration Scope of business Direct Indirect
Chengdu, Chengdu, Development, production and sales of special
Chengdu CSG PRC PRC glass 75% 25%
Chengdu, Chengdu, Development, production and sales of special
Sichuan CSG Energy Conservation PRC PRC glass and processing of glass 75% 25%
Tianjin, Tianjin, Development, production and sales of special
Tianjin Energy Conservation PRC PRC glass 75% 25%
Dongguan, Dongguan,
Dongguan CSG PRC PRC Intensive processing of glass 75% 25%
Dongguan, Dongguan,
Dongguan CSG Solar PRC PRC Production and sales of solar glass 75% 25%
Dongguan, Dongguan, Production and sales of hi-tech green battery
Dongguan CSG PV-tech PRC PRC and components - 100%
Yichang, Yichang, Production and sales of high-purity silicon
Yichang CSG Silicon PRC PRC materials 75% 25%
Wujiang, Wujiang,
Wujiang CSG PRC PRC Intensive processing of glass 75% 25%
Yongqing, Yongqing,
Hebei CSG PRC PRC Production and sales of special glass 75% 25%
Wujiang, Wujiang,
Wujiang CSG PRC PRC Production and sales of special glass 100% -
Hong Kong, Hong Kong,
China Southern Glass (Hong Kong) Limited PRC PRC Investment holding 100% -
Yongqing, Yongqing, Production and sales of ultra-thin electronic
Hebei Shichuang PRC PRC glass 100% -
Xianning, Xianning,
Xianning CSG PRC PRC Production and sales of special glass 75% 25%
Xianning, Xianning,
Xianning CSG Energy-Saving PRC PRC Intensive processing of glass 75% 25%
Qingyuan, Qingyuan, Production and sales of ultra-thin electronic
Qingyuan CSG Energy-Saving PRC PRC glass 100% -
Shenzhen, Shenzhen,
Shenzhen CSG Financial Leasing Co., Ltd. PRC PRC Finance leasing, etc. 75% 25%
Jiangyou, Jiangyou, Production and sales of silica and its
Jiangyou CSG Mining Development Co. Ltd. PRC PRC by-products 100% -
Shenzhen, Shenzhen, Investment management of photovoltaic
Shenzhen CSG PV Energy Co., Ltd. PRC PRC plant 100% -
Qingyuan, Qingyuan, Clean energy development, photovoltaic
Qingyuan CSG New Energy Co., Ltd. PRC PRC power generation - 100%
Wujiang, Wujiang, Clean energy development, photovoltaic
Suzhou CSG PV-tech Co., Ltd. PRC PRC power generation - 100%
Wujiang, Wujiang, Clean energy development, photovoltaic
Wujiang CSG New Energy Co., Ltd. PRC PRC power generation - 100%
Yichang, Yichang, Clean energy development, photovoltaic
Yichang CSG New Energy Co., Ltd PRC PRC power generation - 100%
Shenzhen, Shenzhen, Production and sales of display component
Shenzhen CSG Display: PRC PRC products 60.80% -
Xianning, Xianning,
Xianning CSG Photoelectric PRC PRC Photoelectric glass and high aluminium glass 37.50% 62.50%
- 283 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
6 Interest in other entities (Cont'd)
(1) Interest in subsidiaries (Cont'd)
(b) Subsidiaries with significant minority interests
Profit or loss attributable to Dividends distributed to
Shareholding of minority shareholders for the minority shareholders for the Minority interests
minority year ended 31 December year ended 31 December as at 31 December
Subsidiaries shareholders 2017 2017 2017
Shenzhen CSG Display 39.20% (436,287) 2,488,500 302,902,364
The major financial information of the significant non-fully-owned subsidiaries of the Group is listed below:
31 December 2017
Non-current Non-current
Current assets assets Total assets Current liabilities liabilities Total liabilities
Shenzhen CSG
Display 230,735,047 1,384,202,485 1,614,937,532 588,962,555 237,351,982 826,314,537
2017
Total comprehensive Cash flows from operating
Revenue Net profit income activities
Shenzhen CSG
563,191,871 14,127,082 14,127,082 91,246,186
Display
- 284 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
7 Segment information
To meet operating strategies and requirements of business development, the Group adjusted its operating
structure in current year. The Group’s management allocated resources, Estimated segment performance,
updated reporting segment, and disclosed segment information according to revised operating segments in current
year. Segment information of prior year had been restated in accordance with updated reporting segments.
Before the revision, the Group's business activities are categorised by product or service as follows:
- Flat glass segment, engaged in production and sales of float glass and the silica for the production
thereof, etc.
- Engineering glass segment, engaged in manufacturing and sales of engineering glass, etc.
- Solar energy segment, engaged in manufacturing and sales of polycrystalline silicon and solar
battery and applications, etc.
After the revision, the Group's business activities are categorised by product and service as follows:
- Glass segment, engaged in production and sales of float glass and engineering glass and the
silica for the production thereof, etc.
- Solar energy segment, engaged in manufacturing and sales of polycrystalline silicon and solar
battery and applications, etc.
- Electronic glass and display segment is responsible for production and sales of display
components and special ultra-thin glass products, etc.
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 Estimates 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.
- 285 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
7 Segment information (Cont’d)
(c) Segment information as at and for the year ended 31 December 2017 is as follows:
Electronic glass
Flat glass and displays Solar energy Others Unallocated Elimination Total
Revenue from external customers 6,954,683,103 873,166,517 3,050,921,865 - 629,261 - 10,879,400,746
Inter-segment revenue 97,227,192 701,963 74,689,369 - 58,058,305 (230,676,829) -
Interest income 1,152,232 146,973 262,942 608 11,043,530 - 12,606,285
Interest expenses (153,982,540) (32,003,353) (79,797,858) - (54,488,918) 5,669,073 (314,603,596)
Asset impairment losses (20,109,566) (352,808) (48,857,162) - (80,219) - (69,399,755)
Depreciation and amortisation expenses (601,774,748) (132,769,853) (261,527,443) (107,198) (6,253,032) - (1,002,432,274)
Total profit/(loss) 827,335,674 80,463,836 218,437,923 (110,328) (124,292,481) (5,527,598) 996,307,026
Income tax (expenses)/income (118,701,953) (21,223,939) (23,950,456) (3,794,643) - (167,670,991)
Net profit/(loss) 708,633,721 59,239,897 194,487,467 (110,328) (128,087,124) (5,527,598) 828,636,035
Total assets 9,121,982,895 3,032,467,443 4,969,121,408 664,853 2,410,765,769 - 19,535,002,368
Total liabilities 3,453,100,959 856,548,520 1,640,361,900 2,502,814 4,802,865,064 - 10,755,379,257
Increase in non-current assets (i) 160,029,169 459,791,787 629,473,708 - 2,875,254 - 1,252,169,918
- 286 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
7 Segment information (Cont’d)
(d) Segment information as at and for the year ended 31 December 2016 is as follows:
Electronic glass
Flat glass and displays Solar energy Others Unallocated Elimination Total
Revenue from external customers 6,248,986,019 432,923,679 2,291,096,315 - 1,077,394 - 8,974,083,407
Inter-segment revenue 53,644,824 533,611 29,140,901 - 21,504,477 (104,823,813) -
Interest income 709,739 169,281 215,863 69 3,680,920 (1,582,192) 3,193,680
Interest expenses (141,501,800) (20,216,385) (80,249,948) - (22,179,393) 5,828,195 (258,319,331)
Investment income from associates - - - - 5,071,685 - 5,071,685
Asset impairment losses (1,347,361) (6,474,743) (52,808,413) - 1,767,753 - (58,862,764)
Depreciation and amortisation expenses (579,880,012) (89,743,215) (240,386,653) - (7,142,866) - (917,152,746)
Change in fair value of derivative financial
- - - - (9,850,256) - (9,850,256)
instruments
Total profit/(loss) 870,911,083 19,861,854 246,515,279 (64,601) (179,348,714) (1,766,282) 956,108,619
Income tax (expenses)/income (115,934,739) (9,777,225) (26,285,679) - 115,548 - (151,882,095)
Net profit/(loss) 754,976,344 10,084,629 220,229,600 (64,601) (179,233,166) (1,766,282) 804,226,524
Total assets 9,002,421,342 2,594,860,320 4,476,309,055 135,161 1,073,089,752 17,146,815,630
Total liabilities 1,789,702,282 566,783,261 519,338,730 2,502,814 6,139,297,524 - 9,017,624,611
Increase in non-current assets (i) 368,179,542 1,539,319,460 652,019,325 - 4,578,555 - 2,564,096,882
- 287 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
7 Segment information (Cont’d)
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 2017 2016
Mainland 9,506,249,433 7,971,929,246
Hong Kong, PRC 434,551,436 135,128,604
Europe 26,534,686 25,914,385
Asia (other than Mainland and Hong Kong) 848,958,711 614,806,258
Australia 37,937,222 37,437,349
North America 6,030,936 134,941,952
Other regions 19,138,322 53,925,613
10,879,400,746 8,974,083,407
Total non-current assets 31 December 2017 31 December 2016
Mainland 14,505,740,522 14,392,447,014
Hong Kong, PRC 12,798,642 12,551,254
14,518,539,164 14,404,998,268
No revenue from a single customer exceeded 10% or more of the Group’s revenue.
8 Related parties and related party transactions
(8) Information of the parent company
The Company regards no entity as the parent company.
(9) The subsidiaries
The general information and other related information of the subsidiaries are set out in Note 6(1).
(10) The associates
Shenzhen CSG Display company is a joint venture of the Company, and it became a subsidiary of our company on
June 3, 2016. Prior to June 3, 2016, the related transaction between Shenzhen CSG Display company and the
Group is noted, as indicated in note 8 (5).
On December 31, 2017, the Company has no joint venture.
- 288 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
8 Related parties and related party transactions (Cont’d)
(11) Other related parties information
Relationship with the Group
Shenzhen Jushenghua Co., Ltd. (“Jushenghua”) Persons acting in concert with the first majority
shareholder of the Group
Shenzhen Qianhai Ruinan Investment LLP Controlled by the former key management personnel of
the Croup
Yichang Hongtai Real Estate Co. Ltd Other related parties and their affiliates
(12) Related party transactions
(g) Purchase and sales of goods, provision and receiving of labour
Related party
Related parties transactions Pricing policies 2017 2016
Shenzhen CSG Display Purchase of materials Refer to market price - 608,722
Shenzhen CSG Display Sales of goods Refer to market price - 1,500,899
Xianning CSG Photoelectric Sales of special glass Refer to market price - 2,349,353
- 4,458,974
(h) Leases
The Group as the lessor:
Lease income Lease income
recognised in recognised in
Name of the lessee Category of the leased asset 2017 2016
Shenzhen CSG Display Equipment under finance leases - 2,359,961
- 2,359,961
(i) Gains on equity transfer
None
(j) Acquisition of equity
Related party
Related parties transactions Pricing principle 2017 2016
Shenzhen Qianhai Acquire 37.5% of
Ruinan Investment Xianning CSG Refer to fair value
LLP Photoelectric’s equity of the equity - 38,250,000
- 289 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
8 Related parties and related party transactions (Cont’d)
(5) Related party transactions
(k) Advances paid on behalf of related parties
Related party
Related parties transactions Pricing policies 2017 2016
Shenzhen CSG Advances of electric Refer to market
Display charge price - 8,168,076
(l) Remuneration of key management
2017 2016
Remuneration 12,030,000 10,914,002
(13) Receivables from related parties
December 31, 2017 December 31, 2016
Bad debt Bad debt
Book balance preparation Book balance preparation
Other Yichang Hongtai Real
receivables Estate Company 171,000,000 (3,420,000) 171,000,000 (3,420,000)
(14) 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:
Related party Restrictive terms on
Related parties transactions borrowings 2017 2016
Shenzhen Jushenghua Facility of interest-free
Co., Ltd. loans provided for the
(“Jushenghua”) Company Nil 2,000,000,000 2,000,000,000
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 RMB2 billion 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. The shareholder provided RMB 1 billion 610 million interest free loan to the
group in the current year, which has been returned to all in December 31, 2017.
- 290 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
9 Share Payment
1. Overall situation of share payment
The total number of equity instruments granted by 97,511,654 shares
the company in the current period Restricted shares
Total amount of various equity instruments that the -
company exercises during the current period
The total number of various equity instruments that -
have failed in the current period
The scope of the company’s outstanding share -
options and the remaining duration of the contract at
the end of the period
The scope of the company's exercise of other equity -
instruments at the end of the period and the
remaining duration of the contract
Note: On December 11, 2017, reviewed and approved by the Group's eighth session of the Board of Directors, the
Group implemented the 2017 A Share Restricted Stock Incentive Plan. The incentive targets for the restricted
shares granted under this plan include company directors and senior management personnel. A total of 454 core
management teams, company technology members and main employees. The first grant date of this restricted
stock was December 11, 2017. The company granted 97,511,654 restricted shares for the first time to 454
incentive targets. The initial grant price was 4.28RMB per share. Reserved restricted stock ending balance
17,046,869 shares, the grant price has not been determined. The shares granted of the first time has been
registered and listed.
This incentive plan is valid for 48 months from the date of grant of the restricted stock to the date of unlocking of all
restricted stocks or the completion of repurchase and cancellation. During the unlocking/exercise period, if the
unlocking/exercise condition specified in the incentive plan is reached, the restricted stock granted is unlocked in
three phases after 12 months from the grant date.
The unlock period is shown in the following table:
Unlock Schedule Unlock Time Unlock Ratio
First unlock from the date of the first transaction 12 months after 40%
the award date to the date of the last transaction within
24 months from the grant date.
Second unlock from the date of the first trading day 24 months after 30%
the grant date to the date of the last trading day within
36 months from the grant date
Third unlock from the date of the first trading day 36 months after 30%
the grant date to the day of the last trading day within
48 months from the grant date
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CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
9 Share Payment (Cont’d)
2. Equity-settled share payment
Method for Determining the Fair Value of Equity Black-Scholes Model
Instruments on the Grant Date
Determination of the best estimate of the number Based on the latest information on the change in
of vesting equity instruments the number of exercisable rights and the
completion of performance indicators, the
number of equity instruments that are expected to
be exercised is revised.
Reasons for significant differences between Not applicable
current estimates and previous estimates
Cumulative amount of equity-settled share-based
payment in capital reserves 8,194,695
Total equity confirmed by equity-settled 8,194,695
share-based payment in this period
According to the relevant provisions of Accounting Standards for Business Enterprises No. 11 - Share Payment
and Enterprise Accounting Standard No. 22 - Recognition and Measurement of Financial Instruments, the Group
uses the Black-Scholes model (BS model) as a pricing model, deducting incentive objects. The fair value of the
restricted stock will be used after the lock-in costs that are required to obtain the rational expected return from the
sales restriction period are lifted in the future. The Group will, on each balance sheet date of the lock-in period,
revise the number of restricted stocks that are expected to be unlockable based on the newly obtained changes in
the number of unlockable persons and performance indicators, and follow the fair value of the restricted stock grant
date. The services obtained during the current period are included in the relevant costs or expenses and capital
reserves.
The Group actually granted restricted stocks of 97,511,654 shares in 2017, and the total fair value of the equity
instruments granted to the incentive target for the first day of grant was RMB 289,519,900, the total fair value as
the total cost of the company's equity incentive plan will be confirmed in stages according to the unlocking/exercise
ratio during the implementation of the equity incentive plan, and will be included in the “management fees” and
“capital” of each period accordingly.
In 2017, the Group achieved conditions for unlocking restricted stocks. In the current period, the relevant cost
sharing amount of the incentive plan was recognized as RMB 8,194,695.
17 Contingencies
Nil.
18 Commitments
(1) Capital commitments
Capital expenditures contracted for by the Group at the balance sheet date but are not yet necessary to be
recognized on the balance sheet are as follows:
31 December 2017 31 December 2016
Buildings, machinery and equipment 150,418,893 280,938,401
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CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
11 Commitments (Cont’d)
(2) Operating lease commitments
The future minimum lease payments due under the signed irrevocable operating leases contracts are summarized
as follows:
31 December 2017 31 December 2016
Within 1 year 3,675,748 1,142,713
1 to 2 years 1,914,948 831,008
2 to 3 years 1,472,224 273,320
Over 3 years 3,443,641 282,534
10,506,561 2,529,575
19 Events after the balance sheet date
Statement of profit distribution after balance sheet date
Amount
Proposed distribution of cash dividends 124,207,377
Pursuant to the resolution of the board of directors dated April 20, 2018, the board of directors proposed that the
company distribute cash dividends of RMB 124,207,377 to all shareholders, which has not yet been recognized as a
liability in the financial statements. In addition, the board of directors proposes to use the capital of 2,484,147,547 as
the base to transfer 1.5 shares for every 10 shares to all shareholders in a total of 372,622,132 shares, which has
not yet been reclassified as capital in the financial statements.
20 Financial instrument and risk
The Group's activities expose it to a variety of financial risks: market risk (primarily foreign exchange risk and interest
rate risk), credit risk and liquidity risk. The Group's overall risk management program focuses on the unpredictability
of financial markets and seeks to minimize 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. Some export business, however, is denominated in foreign currencies. In addition, the
Group is exposed to foreign exchange risk arising from the recognized assets and liabilities, and future
transactions denominated in foreign currencies, primarily with respect to US dollars and Hong Kong dollar. The
Group monitors the scale of foreign currency transactions, foreign currency assets and liabilities, and adjust
settlement currency of export business, to furthest reduce the currency risk.
As at 31 December 2017, book values in RMB equivalent of the Group’s assets and liabilities denominated in
foreign currencies are summarized below:
- 293 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
13 Financial instrument and risk (Cont’d)
(1) Market risk (Cont'd)
31 December 2017
USD HKD Others Total
Financial assets denominated
in foreign currency -
Cash at bank and on hand 74,120,750 6,114,383 112,007 80,347,140
Receivables 127,354,518 9,654,366 7,387,101 144,395,985
201,475,268 15,768,749 7,499,108 224,743,125
Financial liabilities denominated
in foreign currency -
Short-term borrowings - 62,692,500 - 62,692,500
Payables 104,040,185 257 36,939,407 140,979,849
104,040,185 62,692,757 36,939,407 203,672,349
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 -
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 31 December 2017, if the currency had strengthened/weakened by 10% against the USD while all other
variables had been held constant, the Group’s net profit for the year would have been approximately
RMB8,281,982 lower/higher (31 December 2016: approximately RMB4,756,788 lower/higher) for various financial
assets and liabilities denominated in USD.
As at 31 December 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
RMB3,988,541 higher/lower (31 December 2016: approximately RMB5,230,592higher/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.
- 294 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
13 Financial instrument and risk (Cont’d)
(1) Market risk (Cont'd)
(b) interest rate risk
The Group's interest rate risk arises from long-term interest bearing debts including long-term borrowings and
bonds payable. Financial liabilities issued at floating rates expose the Group to cash flow interest rate risk.
Financial liabilities issued at fixed rates expose the Group to fair value interest rate risk. The Group determines the
relative proportions of its fixed rate and floating rate contracts depending on the prevailing market conditions. As at
31 December 2017, the Group’s long-term interest-bearing debts at and fixed rates and floating rates are illustrated
below:
31 December 2017 31 December 2016
Debt at fixed rates 1,425,000,000 1,380,000,000
Debt at floating rates 129,120,000 58,660,000
1,554,120,000 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, other receivables.
The Group expects that there is no significant credit risk associated with cash at bank since they are mainly
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, management believes the credit risk should be limited.
In addition, the Group has policies to limit the credit exposure on accounts receivable, other receivables and trade
acceptance notes receivable. The Group assesses the credit quality of and sets credit limits on its customers by
taking into account their financial position, the availability of guarantee from third parties, their credit history and
other factors such as current market conditions. The credit history of the customers is regularly monitored by the
Group. In respect of customers with a poor credit history, the Group will use written payment reminders, or shorten
or cancel credit periods, to ensure the overall credit risk of the Group is limited to a controllable extent.
- 295 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
13 Financial instrument and risk (Cont’d)
(3) Liquidity risk
Cash flow forecasting is performed by each subsidiary of the Group and aggregated by the Group’s finance
department in its headquarters. The Group’s finance department at its headquarters monitors rolling forecasts of
the Group's short-term and long-term liquidity requirements to ensure it has sufficient cash reserve, while
maintaining sufficient headroom on its undrawn committed borrowing facilities from major financial institutions so
that the Group does not breach borrowing limits or covenants on any of its borrowing facilities to meet the
short-term and long-term liquidity requirements.
As stated in Note 2(1) above, as at 31 December 2017, the Group had net current liabilities of approximately
RMB2.52 billion and committed capital expenditures of approximately RMB0.15 billion. 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;
(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 analyzed by their maturity date below at their
undiscounted contractual cash flows:
31 December 2017
Within 1 year 1 to 2 years 2 to 5years Over 5 years Total
Short-term borrowings 3,810,013,826 - - - 3,810,013,826
Notes payable 213,401,622 - - - 213,401,622
Accounts payable 1,400,166,042 - - - 1,400,166,042
Interest payable 34,032,740 - - - 34,032,740
Other payables 619,324,354 - - - 619,324,354
Other current liabilities 300,000 - - - 300,000
Current portion of
911,348,902 911,348,902
non-Current liabilities - - -
Long-term payables - 600,436,759 561,357,488 - 1,161,794,247
Long-term borrowings 80,169,450 117,889,436 1,580,649,809 - 1,778,708,695
7,068,756,936 718,326,195 2,142,007,297 - 9,929,090,428
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
- 296 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Other current liabilities 300,000 - - - 300,000
Current portion of non-current
liabilities 1,068,336,787 - - - 1,068,336,787
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
- 297 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
21 Fair value estimates
Based on the lowest level input that is significant to the fair value measurement in its entirety, the fair value
hierarchy has the following levels:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly or indirectly.
Level 3: Unobservable inputs for the asset or liability.
(c) Financial instruments measured at fair value
As of 31 December 2017, the group has no assets measured at fair value.
(d) Financial instruments not measured but disclosed 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, book value of the other financial assets and liabilities not measured at
fair value is a reasonable approximation of their fair value.
31 December 2017 31 December 2016
Carrying amount Fair value Carrying amount Fair value
Financial liabilities
Corporate bonds payable - - 1,000,000,000 1,009,177,000
Medium term notes 1,200,000,000 1,171,444,800 1,200,000,000 1,175,308,800
1,200,000,000 1,171,444,800 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.
22 Capital management
The Group’s capital management policies aim to safeguard the Group’s ability to continue as a going concern in
order to provide returns for shareholders and benefits for other stakeholders, and to maintain an optimal capital
structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to
shareholders, refund capital to shareholders, issue new shares or sell assets to reduce debts.
The Group is not subject to external mandatory capital requirements, and monitors capital on the basis of gearing
ratio.
As at 31 December 2017 and 31 December 2016, the Group's gearing ratio is as follows:
- 298 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
31 December 2017 31 December 2016
Total liabilities 10,755,379,257 9,017,624,611
Total assets 19,535,002,368 17,146,815,630
Gearing ratio 55% 53%
23 Notes to the Company’s financial statements
(2) Other receivables
31 December 2017 31 December 2016
Receivables from related parties 2,399,392,648 4,033,706,419
Others 4,451,192 423,416
2,403,843,840 4,034,129,835
Less: Provision for bad debts (3,509,024) (3,428,806)
2,400,334,816 4,030,701,029
(e) The ageing of other receivables is analysed as follows:
31 December 2017 31 December 2016
Within 1 year 2,232,668,334 3,863,129,835
Over 1year 171,175,506 171,000,000
2,403,843,840 4,034,129,835
As at 31 December 2017, the Company had no overdue but not impaired other receivables (31
December 2016: Nil).
(f) Other receivables are analysed by categories as follows:
31 December 2017 31 December 2016
Provision for bad
Carrying amount debts Carrying amount Provision for bad debts
% of total Provision for % of total Provision for
Amount balance bad debts % Amount balance bad debts %
Provision for bad debts by
groupings
- Group 1 4,451,192 - (89,024) 2% 423,416 - (8,806) 2%
- 299 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
- Group 2 2,399,392,648 100% (3,420,000) - 4,033,706,419 100% (3,420,000) -
2,403,843,840 100% (3,509,024) - 4,034,129,835 100% (3,428,806) -
(g) or other receivables provided for bad debts by portfolio, the percentage of provision for the portfolio is as
follows:
31 December 2017 31 December 2016
Carrying amount Provision for bad debts Carrying amount Provision for bad debts
Amount Amount % Amount Amount %
Portfolio 1 4,451,192 (89,024) 2% 423,416 (8,806) 2%
Portfolio 2 2,399,392,648 (3,420,000) - 4,033,706,419 (3,420,000) -
2,403,843,840 (3,509,024) - 4,034,129,835 (3,428,806) -
16 Notes to the Company’s financial statements (Cont’d)
(1) Other receivables (Cont'd)
As at 31 December 2017, the Group’s top five entities with the largest other receivables balances are
summarised as below:
Relationship % of
with the Group Amount Ageing total balance
Yichang CSG Silicon Subsidiary 1,265,446,303 Within 1 year 53%
Qingyuan CSG Energy-Saving Subsidiary 315,175,452 Within 1 year 13%
Yichang CSG Display Subsidiary 217,350,199 Within 1 year 9%
Other
Yichang Hongtai Real related parties and
Estate Co. Ltd their affiliates 171,000,000 Over 1 year 7%
Xianning CSG photoelectric
glass Subsidiary 120,520,736 Within 1 year 5%
2,089,492,690 87%
(2) Long-term equity investments
31 December 2017 31 December 2016
Subsidiaries (a) 4,810,987,652 4,805,440,632
Less: Impairment provision for investments in subsidiaries (a) (15,000,000) (15,000,000)
4,795,987,652 4,790,440,632
- 300 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
16 Notes to the Company’s financial statements (Cont’d)
(2) Long-term equity investments (Cont’d)
(b) Subsidiaries
Movement in current year
Provision for Provision for Cash dividends
31 December Additional Decrease in impairment 31 December impairment declared in
2016 investment investment loss 2017 loss current year
(i) (i)
Chengdu CSG 146,679,073 298,274 - - 146,977,347 - 29,098,516
Sichuan CSG Energy Conservation 115,290,583 256,131 - - 115,546,714 - 36,798,924
Tianjin Energy Conservation 242,902,974 288,454 - - 243,191,428 -
Dongguan CSG 193,618,971 297,078 - - 193,916,049 -
Dongguan CSG Solar 349,446,826 354,328 - - 349,801,154 - 109,684,420
Yichang CSG Silicon 632,958,044 506,124 - - 633,464,168 -
Wujiang CSG 251,313,658 202,531 - - 251,516,189 - 35,752,200
Hebei CSG 261,998,368 266,973 - - 262,265,341 -
China Southern Glass (Hong Kong)
Limited 85,742,211 60,391 - - 85,802,602 -
Wujiang CSG 562,179,564 348,190 - - 562,527,754 - 175,598,720
Hebei Shichuang 243,062,801 208,669 - - 243,271,470 -
Jiangyou CSG Mining Development
Co. Ltd. 100,725,041 112,558 - - 100,837,599 -
Xianning CSG 177,041,818 253,676 - - 177,295,494 - 47,124,545
Xianning CSG Energy-Saving 161,281,576 262,268 - - 161,543,844 -
Qingyuan CSG Energy-Saving 300,185,609 191,239 - - 300,376,848 -
- 301 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
Shenzhen CSG Financial Leasing
Co., Ltd. 133,500,000 - - 133,500,000 -
Shenzhen CSG PV Energy Co., Ltd. 100,000,000 52,985 - - 100,052,985 -
Shenzhen CSG Display 542,027,830 664,058 - - 542,691,888 - 2,011,500
Xianning CSG Photoelectric 38,250,000 220,534 - - 38,470,534 -
Others (ii) 167,235,685 702,559 - - 167,938,244 (15,000,000)
4,805,440,632 5,547,020 - - 4,810,987,652 (15,000,000) 436,068,825
- 302 -
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
16 Notes to the Company’s financial statements (Cont’d)
(2) Long-term equity investments (Cont’d)
(a) Subsidiaries (Cont'd)
(i) As at 31 December 2017, included in the investments in subsidiaries were deemed investment costs of
RMB 114,582,341 (31 December 2016: RMB 109,035,321), the fair value of the equity instruments of the
Company granted to the employee of the subsidiaries for their serviced provided to the subsidiaries for
which the Company did not charge the subsidiaries.
(ii) The operations of the subsidiaries against which provision was made were basically ceased. The Company
made provision against the long-term investment in these subsidiaries based on their recoverable amounts
in previous years.
(3) Long-term receivables
31 December 2017 31 December 2016
Bonds payable and long-term borrowings allocated to
subsidiaries 1,200,000,000 1,905,645,000
Entrusted loans allocated to subsidiaries 98,000,000
1,200,000,000 2,003,645,000
Less: Provisions for impairment -
1,200,000,000 2,003,645,000
- 303 –
CSG HOLDING CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
(All amounts in RMB Yuan unless otherwise stated)
[English translation for reference only]
16 Notes to the Company’s financial statements (Cont’d)
(3) Long-term receivables (Cont’d)
Reversals of
Provision for provision for
31 December Movements in 31 December impairment impairment loss in
2016 current year 2017 loss current year
Chengdu CSG 190,000,000 (140,000,000) 50,000,000 - -
Sichuan CSG Energy Conservation 114,665,000 (94,665,000) 20,000,000 - -
Dongguan CSG PV-tech 160,105,000 (110,105,000) 50,000,000 - -
Yichang CSG Silicon 472,480,000 (122,480,000) 350,000,000 - -
Dongguan CSG 99,835,000 (24,835,000) 75,000,000 - -
Wujiang CSG 310,000,000 (100,000,000) 210,000,000 - -
Dongguan CSG Solar 193,780,000 (73,780,000) 120,000,000 - -
Wujiang CSG 69,890,000 (19,890,000) 50,000,000 - -
Qingyuan CSG Energy-Saving 148,000,000 (98,000,000) 50,000,000 - -
Xianning CSG Energy-Saving 80,000,000 - 80,000,000 - -
Xianning CSG 75,000,000 - 75,000,000 - -
Hebei CSG Class 69,890,000 (19,890,000) 50,000,000
Hebei CSG Window 20,000,000 - 20,000,000 - -
2,003,645,000 (803,645,000) 1,200,000,000 - -
(6) Other payables
31 December 2017 31 December 2016
Subsidiaries 477,067,694 233,414,167
Share repurchase 417,349,879 -
Others 15,015,418 7,179,727
909,432,991 240,593,894
(7) Investment income
2017 2016
Investment income from long-term equity investment under
cost method 436,068,825 395,236,932
Investment income from long-term equity investment under
equity method - 29,186,090
Losses from disposal of financial liabilities at fair value
through profit or loss - (238,350,256)
436,068,825 186,072,766
There is no significant restriction on the remittance of investment income to the Company.
- 304 -
I Statement of non-recurring gains and losses
2017 2016
Gains or losses on disposal of non-current assets 1,768,993 1,759,358
Government grants recognised in profit or loss for current
period (87,875,417) (91,627,439)
Gain or loss from change in fair value - (228,500,000)
Investment losses from disposal of financial liabilities at fair
value through profit or loss (427,636) 238,350,256
Losses from revaluation of stock rights under business
combinations involving enterprises not under common
control - 45,909,181
Non-operating income and expenses other than aforesaid
items (12,076,848) (1,306,284)
(98,610,908) (35,414,928)
Effect of income tax 16,209,135 14,327,585
Effect of minority interests (after tax) 2,386,569 316,740
Total non-recurring gains and losses (80,015,204) (20,770,603)
(1) Basis for preparation of statement of non-recurring gains and losses
Under the requirements in Explanatory Announcement No. 1 on Information Disclosure by Companies Offering Securities
to the Public – Non-recurring Profit or Loss [2008] from CSRC, non-recurring profit or loss refer to those arises from
transactions and events that are not directly relevant to ordinary activities, or that are relevant to ordinary activities, but are
extraordinary and not expected to recur frequently that would have an influence on users of financial statements making
economic decisions on the financial performance and profitability of an enterprise.
II Return on net assets and earnings per share
Earnings per share
Weighted average return Diluted earnings per
on net assets (%) Basic earnings per share share
2017 2016 2017 2016 2017 2016
Net profit attributable to ordinary
shareholders of the Company 10.15% 10.33% 0.35 0.33 0.35 0.33
- 305 -
Net profit attributable to ordinary
shareholders of the Company
after deducting non-recurring
gains and losses 9.16% 10.06% 0.31 0.33 0.31 0.33
- 306 -
Section XI. Documents Available for Reference
I. Text of the Annual Report carrying the legal representative’s signature;
II. Text of the financial report carrying the signatures and seals of the legal representative, responsible person in
charge of accounting and person in charge of financial institution;
III. Original of the Auditors’ Report carrying the seal of Asia Pacific (Group) CPAs (special general partnership)
and the signatures and seals of the certified public accountants;
IV. All texts of the Company’s documents and original public notices disclosed in the website and papers
appointed by CSRC in the report period.
Board of Directors of
CSG Holding Co., Ltd.
23 April 2018
- 307 -
