CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 Financial Report of Semi-annual Report 2018
(I)Auditors’ Report
Whether the Semi-annual Report has been audited or not
□ Yes√ No
(II) Financial Statements
All figures in the Notes to the Financial Statements are in RMB.
1. Consolidated Balance Sheet
Prepared by CSG Holding Co., Ltd.
Unit: RMB
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Current assets|||
|Cash at bank and on hand|3,372,045,169|2,462,605,764|
|Notes receivable|789,078,376|552,232,420|
|Accounts receivable|707,375,368|638,238,290|
|Advances to suppliers|122,002,548|143,848,023|
|Other receivables|209,270,387|205,939,019|
|Inventories|713,622,649|685,895,317|
|Assets classified as held for sale|45,983,520|45,983,520|
|Other current assets|178,803,755|200,847,989|
|Total current assets|6,138,181,772|4,935,590,342|
|Non-current assets|||
|Fixed assets|11,494,297,683|11,540,769,697|
|Construction in progress|1,190,859,428|1,417,624,618|
|Intangible assets|1,033,563,687|1,047,222,407|
|Development expenditure|71,977,914|61,365,537|
|Goodwill|397,392,156|397,392,156|
|Long-term prepaid expenses|12,251,997|2,223,397|
|Deferred tax assets|100,120,499|80,872,862|
|Other non-current assets|86,166,620|51,941,352|
|Total non-current assets|14,386,629,984|14,599,412,026|
|TOTAL ASSETS|20,524,811,756|19,535,002,368|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
||||
|-|-|-|
|Current liabilities|||
|Short-term borrowings|3,949,419,972|3,704,630,909|
|Notes payable|208,201,622|213,401,622|
|Accounts payable|1,331,128,942|1,400,166,042|
|Advances from customers|183,976,533|195,563,465|
|Employee benefits payable|182,613,590|272,170,660|
|Taxes payable|107,612,699|111,996,764|
|Interest payable|73,371,196|34,032,740|
|Dividend payable|4,875,583||
|Other payables|620,540,633|619,324,354|
|Current portion of non-current liabilities|941,647,396|904,261,397|
|Other current liabilities|300,000|300,000|
|Total current liabilities|7,603,688,166|7,455,847,953|
|Non-current liabilities|||
|Long-term borrowings|2,364,000,000|1,554,120,000|
|Long term payable|866,214,017|1,161,794,247|
|Deferred income|550,026,465|562,701,103|
|Deferred tax liabilities|24,419,058|20,915,954|
|Total non-current liabilities|3,804,659,540|3,299,531,304|
|Total liabilities|11,408,347,706|10,755,379,257|
|Shareholders’ equity|||
|Share capital|2,856,769,678|2,484,147,547|
|Capital surplus|1,029,395,134|1,306,381,765|
|Less: Treasury shares|412,640,249|417,349,879|
|Other comprehensive income|2,640,961|1,948,943|
|Special reserve|3,988,036|3,224,938|
|Surplus reserve|920,592,332|920,592,332|
|Undistributed profits|4,388,437,956|4,159,642,227|
|Total equity attributable to shareholders of|||
||8,789,183,848|8,458,587,873|
|parent company|||
|Minority shareholders' equity|327,280,202|321,035,238|
|Total shareholders' equity|9,116,464,050|8,779,623,111|
|TOTAL LIABILITIES AND SHAREHOLDERS’|||
||20,524,811,756|19,535,002,368|
|EQUITY|||

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 Legal Representative:Chen Lin Principal in charge of accounting:Wang Jian Principal of the financial department:Wang Wenxin 2. Balance Sheet of the Parent Company
Unit: RMB
||||
|-|-|-|
|Item|Ending balance|Beginning balance|
|Current assets|||
|Cash at bank and on hand|2,594,187,340|1,681,877,320|
|Advances to suppliers|2,839,117|146,132|
|Other receivables|2,811,139,401|2,400,334,816|
|Total current assets|5,408,165,858|4,082,358,268|
|Non-current assets|||
|Long-term receivables|1,200,000,000|1,200,000,000|
|Long-term equity investments|4,896,117,578|4,795,987,652|
|Fixed assets|20,923,085|22,182,246|
|Construction in progress|2,261,607||
|Intangible assets|1,079,827|1,742,109|
|Other non-current assets|533,718|2,132,041|
|Total non-current assets|6,120,915,815|6,022,044,048|
|TOTAL ASSETS|11,529,081,673|10,104,402,316|
|Current liabilities|||
|Short-term borrowings|2,850,000,000|2,600,000,000|
|Accounts payable|261,024|261,024|
|Employee benefits payable|23,615,615|40,856,313|
|Taxes payable|2,126,282|1,762,580|
|Interest payable|12,748,838|3,090,735|
|Dividends payable|4,875,583||
|Other payables|1,175,125,741|909,432,991|
|Non-current liabilities due within one year|180,000,000|180,000,000|
|Total current liabilities|4,248,753,083|3,735,403,643|
|Non-current liabilities|||
|Long-term borrowings|2,000,000,000|1,200,000,000|
|Deferred income|185,584,400|186,526,280|
|Total non-current liabilities|2,185,584,400|1,386,526,280|
|Total liabilities|6,434,337,483|5,121,929,923|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
||||
|-|-|-|
|Shareholders’ equity|||
|Share capital|2,856,769,678|2,484,147,547|
|Capital surplus|1,174,222,448|1,451,209,079|
|Less:Treasury shares|412,640,249|417,349,879|
|Other comprehensive income|||
|Surplus reserve|935,137,692|935,137,692|
|Undistributed profits|541,254,621|529,327,954|
|Total shareholders' equity|5,094,744,190|4,982,472,393|
|TOTAL LIABILITIES AND SHAREHOLDERS’|||
||11,529,081,673|10,104,402,316|
|EQUITY|||

3. Consolidated Income Statement
Unit: RMB
||||
|-|-|-|
|Item|Balance of this period|Balance of last period|
|I. Total revenue|5,471,169,598|4,944,337,861|
|Incl. Business income|5,471,169,598|4,944,337,861|
|II. Total business cost|5,073,729,591|4,502,642,030|
|Incl: Business cost|4,099,496,754|3,737,514,462|
|Tax and surcharge|71,930,546|61,745,775|
|Sales expense|172,217,254|156,344,731|
|Administrative expense|540,554,002|402,554,340|
|Financial expenses|185,877,426|143,374,027|
|Asset impairment loss|3,653,609|1,108,695|
|Plus: Income on disposal assets (“- “for loss)|-567,830|-71,756|
|Other Income|21,863,800|23,674,234|
|III. Operational profit (“- “for loss)|418,735,977|465,298,309|
|Plus: non-operational income|2,595,795|15,971,862|
|Less: non-operational expenditure|878,551|603,102|
|IV. Total profit (“- “for loss)|420,453,221|480,667,069|
|Less: Income tax expenses|61,371,104|80,453,021|
|V. Net profit (“- “for net loss)|359,082,117|400,214,048|
|(I) Net income from continuing operations (“-” for|||
||359,082,117|400,214,048|
|net loss)|||
|Attributable to shareholders of parent company|352,837,153|392,992,163|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
||||
|-|-|-|
|Minority shareholder gains and losses|6,244,964|7,221,885|
|VI. Other comprehensive income net after tax|692,018|-1,076,264|
|Other comprehensive income net after tax|||
||692,018|-1,076,264|
|attributable to shareholders of parent company|||
|Other comprehensive income items which will be|||
||692,018|-1,076,264|
|reclassified subsequently to profit or loss|||
|Differences on translation of foreign currency|||
||692,018|-1,076,264|
|financial statements|||
|VII. Total comprehensive income|359,774,135|399,137,784|
|Total comprehensive income attributable to|||
||353,529,171|391,915,899|
|shareholders of parent company|||
|Total comprehensive income attributable to|||
||6,244,964|7,221,885|
|minority shareholders|||
|VIII. Earnings per share:|||
|(I) Basic earnings per share|0.13|0.14|
|(II) Diluted earnings per share|0.12|0.14|

 Legal Representative:Chen Lin Principal in charge of accounting:Wang Jian Principal of the financial department:Wang Wenxin 4. Income Statement of the Parent Co.
Unit: RMB
||||
|-|-|-|
|Item|Balance of this period|Balance of last period|
|I. Revenue|30,709,068|27,295,266|
|Less: Business cost|||
|Tax and surcharge|246,465|5,136,944|
|Sales expense|||
|Administrative expense|97,263,171|70,540,224|
|Financial expenses|29,932,558|19,800,295|
|Asset impairment loss|-46,118|7,706|
|Plus: Investment income (“- “for loss)|231,537,606||
|Income on disposal assets (“- “for loss)|2,440||
|Other Income|991,880|18,000|
|II. Operating profit|135,844,918|-68,171,903|
|Add: Non-operating revenue|123,450|794,380|
|Less: Non-operating expenses|277||
|III. Total profit (“- “for loss)|135,968,091|-67,377,523|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
||||
|-|-|-|
|Less: Income tax (expenses)/revenue|||
|IV. Net profit (“- “for loss)|135,968,091|-67,377,523|
|Net profit for continuing operations(“- “for|||
||135,968,091|-67,377,523|
|loss)|||
|V. Total comprehensive income|135,968,091|-67,377,523|
|VI. Earnings per share|||
|(I) Basic earnings per share|||
|(II) Diluted earnings per share|||

5. Consolidated Cash Flow Statement
Unit: RMB
||||
|-|-|-|
|Item|Balance of this period|Balance of last period|
|I. Cash flows from operating activities|||
|Cash received from sales of goods or rendering of|||
||5,795,543,089|5,472,732,654|
|services|||
||14,619,913|7,273,335|
|Refund of taxes and surcharges|||
||63,866,925|68,210,702|
|Cash received relating to other operating activities|||
||5,874,029,927|5,548,216,691|
|Sub-total of cash inflows|||
||3,670,547,749|3,278,955,888|
|Cash paid for goods and services|||
||723,605,247|617,464,364|
|Cash paid to and on behalf of employees|||
||404,939,607|380,644,776|
|Payments of taxes and surcharges|||
||310,373,236|251,262,209|
|Cash paid relating to other operating activities|||
||5,109,465,839|4,528,327,237|
|Sub-total of cash outflows|||
|Net cash flows from/(used in) operating|||
||764,564,088|1,019,889,454|
|activities|||
|II. Cash flows from investing activities|||
|Net cash received from disposal of fixed assets,|||
||3,466,136|44,820|
|intangible assets and other long-term assets|||
||3,725,277|24,039,200|
|Cash received relating to other investing activities|||
||7,191,413|24,084,020|
|Sub-total of cash inflows|||
|Cash paid to acquire fixed assets, intangible assets|||
||268,526,891|731,954,148|
|and other long-term assets|||
||58,691,979|31,475,182|
|Cash paid relating to other investing activities|||
||327,218,870|763,429,330|
|Sub-total of cash outflows|||
|Net cash flows (used in)/from investing|||
||-320,027,457|-739,345,310|
|activities|||
|III. Cash flows from financing activities|||
||2,870,654,472|1,452,919,750|
|Cash received from borrowings|||

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
||||
|-|-|-|
||16,276,534|1,666,591,530|
|Cash received relating to other financing activities|||
||2,886,931,006|3,119,511,280|
|Sub-total of cash inflows|||
||1,777,250,000|2,924,757,768|
|Cash repayments of borrowings|||
|Cash payments for interest expenses and|||
||293,602,183|123,450,004|
|distribution of dividends or profits|||
|Cash payments relating to other financing|||
||362,001,673|3,451,507|
|activities|||
||2,432,853,856|3,051,659,279|
|Sub-total of cash outflows|||
|Net cash flows (used in)/from financing|||
||454,077,150|67,852,001|
|activities|||
|4. Effect of foreign exchange rate changes on cash|||
||-113,600|-912,613|
|and cash equivalents|||
|5. Net increase/(decrease) in cash and cash|||
||898,500,181|347,483,532|
|equivalents|||
|Add: Cash and cash equivalents at beginning|||
||2,459,753,165|584,566,990|
|of current period|||
|6. Cash and cash equivalents at end of current|||
||3,358,253,346|932,050,522|
|period|||

6. Cash Flow Statement of the Parent Co.
Unit: RMB
||||
|-|-|-|
|Item|Balance of this period|Balance of last period|
|I. Cash flows from operating activities|||
||22,667,417|4,843,988|
|Cash received relating to other operating activities|||
||22,667,417|4,843,988|
|Sub-total of cash inflows|||
||63,635,591|33,652,141|
|Cash paid to and on behalf of employees|||
||1,057,736|6,095,316|
|Payments of taxes and surcharges|||
||15,743,250|12,279,684|
|Cash paid relating to other operating activities|||
||80,436,577|52,027,141|
|Sub-total of cash outflows|||
|Net cash flows from/(used in) operating|||
||-57,769,160|-47,183,153|
|activities|||
|II. Cash flows from investing activities|||
|Net cash received from disposal of fixed assets,|||
||2,440||
|intangible assets and other long-term assets|||
|||5,000,000|
|Cash received relating to other investing activities|||
||2,440|5,000,000|
|Sub-total of cash inflows|||
|Cash paid to acquire fixed assets, intangible assets|||
||4,544,893|565,260|
|and other long-term assets|||
||36,750,000||
|Cash paid for investing activities|||
||41,294,893|565,260|
|Sub-total of cash outflows|||
||-41,292,453|4,434,740|
|Net cash flows (used in)/from investing|||

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
||||
|-|-|-|
|activities|||
|III. Cash flows from financing activities|||
||2,190,000,000|990,693,638|
|Cash received from borrowings|||
||125,399,471|1,806,455,260|
|Cash received relating to other financing activities|||
||2,315,399,471|2,797,148,898|
|Sub-total of cash inflows|||
||1,140,000,000|2,496,723,365|
|Cash repayments of borrowings|||
|Cash payments for interest expenses and|||
||164,279,306|2,213,425|
|distribution of dividends or profits|||
||1,304,279,306|2,498,936,790|
|Sub-total of cash outflows|||
|Net cash flows (used in)/from financing|||
||1,011,120,165|298,212,108|
|activities|||
|4. Effect of foreign exchange rate changes on cash|||
||-1,253,410|855,016|
|and cash equivalents|||
|5. Net increase/(decrease) in cash and cash|||
||910,805,142|256,318,711|
|equivalents|||
|Add: Cash and cash equivalents at beginning|||
||1,680,672,390|301,637,933|
|of current period|||
|6. Cash and cash equivalents at end of current|||
||2,591,477,532|557,956,644|
|period|||

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 7. Statement of Change inOwners’ Equity (Consolidated)
Amount of this term
Unit: RMB
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Amount of the Current Term|||||||||
||Owners’ Equity Attributable to the Parent Company|||||||||
|||||||||Minority||
|Item||||Other|||||Total shareholders'|
|||Capital|Less: treasury||Special|Surplus|Undistributed|shareholders'||
||Share capital|||comprehensiv|||||equity|
|||surplus|share||reserves|reserve|profits|equity||
|||||e income||||||
|I. Balance at the end of the previous||||||||||
||2,484,147,547|1,306,381,765|417,349,879|1,948,943|3,224,938|920,592,332|4,159,642,227|321,035,238|8,779,623,111|
|year||||||||||
|Plus: change of accounting policy||||||||||
|Correction of errors in previous||||||||||
|periods||||||||||
|II. Balance at the beginning of current||||||||||
||2,484,147,547|1,306,381,765|417,349,879|1,948,943|3,224,938|920,592,332|4,159,642,227|321,035,238|8,779,623,111|
|year||||||||||
|III. Amount of change in current term||||||||||
||372,622,131|-276,986,631|-4,709,630|692,018|763,098||228,795,729|6,244,964|336,840,939|
|(“- “for decrease)||||||||||
|(I) Total amount of the comprehensive||||||||||
|||||692,018|||352,837,153|6,244,964|359,774,135|
|income||||||||||
|(II) Capital paid in and reduced by||||||||||
|||95,635,500|-4,709,630||||||100,345,130|
|owners||||||||||
|1. Common shares invested by the||||||||||
|||95,635,500|||||||95,635,500|
|shareholders||||||||||
|2. Others|||-4,709,630||||||4,709,630|
|(III) Profit distribution|||||||-124,041,424||-124,041,424|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
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|-|-|-|-|-|-|-|-|-|-|
|1. Appropriations to surplus reserves||||||||||
|2. Appropriations to owners (or||||||||||
||||||||-124,041,424||-124,041,424|
|shareholders)||||||||||
|(IV) Internal carry-forward of owners’||||||||||
||372,622,131|-372,622,131||||||||
|equity||||||||||
|New increase of capital (or share||||||||||
||372,622,131|-372,622,131||||||||
|capital) from capital public reserves||||||||||
|(V) Specific reserve|||||763,098||||763,098|
|1. Withdrawn for the period|||||4,150,167||||4,150,167|
|2. Used in the period|||||3,387,069||||3,387,069|
|IV. Balance at the end of this term|||||||||9,116,464,050|
||2,856,769,678|1,029,395,134|412,640,249|2,640,961|3,988,036|920,592,332|4,388,437,956|327,280,202||

 Amount of last year
Unit: RMB
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Amount of the same period of last year|||||||||
||Owners’ Equity Attributable to the Parent Company|||||||||
|||||||||Minority|Total|
|Item||||Other||||||
|||Capital|Less: treasury|||Surplus|Undistributed|shareholders'|shareholders'|
||Share capital|||comprehensi|Special reserves|||||
|||surplus|share|||reserve|profits|equity|equity|
|||||ve income||||||
|I. Balance at the end of the previous||||||||||
||2,075,335,560|1,260,702,197||4,653,971|5,843,473|888,508,230|3,573,871,573|320,276,015|8,129,191,019|
|year||||||||||
|Plus: change of accounting policy||||||||||
|Correction of errors in previous periods||||||||||

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
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|-|-|-|-|-|-|-|-|-|-|
|II. Balance at the beginning of current||||||||||
||2,075,335,560|1,260,702,197||4,653,971|5,843,473|888,508,230|3,573,871,573|320,276,015|8,129,191,019|
|year||||||||||
|III. Amount of change in current term||||||||||
||408,811,987|45,679,568|417,349,879|-2,705,028|-2,618,535|32,084,102|585,770,654|759,223|650,432,092|
|(“- “for decrease)||||||||||
|(I) Total amount of the comprehensive||||||||||
|||||-2,705,028|||825,388,312|3,247,723|825,931,007|
|income||||||||||
|(II) Capital paid in and reduced by||||||||||
||97,511,654|356,979,901|417,349,879||||||37,141,676|
|owners||||||||||
|1. Common shares invested by the||||||||||
|shareholders||||||||||
|2. Capital invested by the owners of||||||||||
|other equity instruments||||||||||
|3. Amounts of share-based payments||||||||||
||97,511,654|328,032,920|417,349,879||||||8,194,695|
|recognized in owners’ equity||||||||||
|4. Others||28,946,981|||||||28,946,981|
|(III) Profit distribution||||||32,084,102|-239,617,658|-2,488,500|-210,022,056|
|1. Appropriations to surplus reserves||||||32,084,102|-32,084,102|||
|2. Appropriations to general risk||||||||||
|provisions||||||||||
|3. Appropriations to owners (or||||||||||
||||||||-207,533,556|-2,488,500|-210,022,056|
|shareholders)||||||||||
|(IV) Internal carry-forward of owners’||||||||||
||311,300,333|-311,300,333||||||||
|equity||||||||||
|1.New increase of capital (or share||||||||||
||311,300,333|-311,300,333||||||||
|capital) from capital public reserves||||||||||

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|(V) Specific reserve|||||-2,618,535||||-2,618,535|
|1. Withdrawn for the period|||||7,831,127||||7,831,127|
|2. Used in the period|||||10,449,662||||10,449,662|
|(VI) Others||||||||||
||||||||||8,779,623,111|
|IV. Balance at the end of this term|2,484,147,547|1,306,381,765|417,349,879|1,948,943|3,224,938|920,592,332|4,159,642,227|321,035,238||

 8. Statement of Change inOwners’ Equity (Parent Co.)
Amount of this term
Unit: RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
||Amount of the Current Term||||||||
|||||Other||||Total|
|Item|||Less: treasury|||Surplus|Undistributed||
||Share capital|Capital surplus||comprehensive|Special reserves|||shareholders'|
||||share|||reserve|profits||
|||||income||||equity|
|I. Balance at the end of the previous year|2,484,147,547|1,451,209,079|417,349,879|||935,137,692|529,327,954|4,982,472,393|
|Plus: change of accounting policy|||||||||
|Correction of errors in previous periods|||||||||
|II. Balance at the beginning of current|||||||||
||2,484,147,547|1,451,209,079|417,349,879|||935,137,692|529,327,954|4,982,472,393|
|year|||||||||
|III. Amount of change in current term|||||||||
||372,622,131|-276,986,631|-4,709,630||||11,926,667|112,271,797|
|(“- “for decrease)|||||||||
|(I) Total amount of the comprehensive|||||||||
||||||||135,968,091|135,968,091|
|income|||||||||
|(II) Capital paid in and reduced by owners||95,635,500|-4,709,630|||||100,345,130|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
||||||||
|-|-|-|-|-|-|-|
|1. Amounts of share-based payments|||||||
|||95,635,500||||95,635,500|
|recognized in owners’ equity|||||||
|2. Others|||-4,709,630|||4,709,630|
|(III) Profit distribution|||||-124,041,424|-124,041,424|
|1. Appropriations to surplus reserves|||||||
|2. Appropriations to owners (or|||||||
||||||-124,041,424|-124,041,424|
|shareholders)|||||||
|(IV) Internal carry-forward of owners’|||||||
||372,622,131|-372,622,131|||||
|equity|||||||
|New increase of capital (or share capital)|||||||
||372,622,131|-372,622,131|||||
|from capital public reserves|||||||
|IV. Balance at the end of this term|2,856,769,678|1,174,222,448|412,640,249|935,137,692|541,254,621|5,094,744,190|

 Amount of last year
Unit: RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
||Amount of the same period of last year||||||||
|||||Other|||||
|Item|||||Special|Surplus|Undistributed|Total shareholders'|
||Share capital|Capital surplus|Less: treasury share|comprehensive|||||
||||||reserves|reserve|profits|equity|
|||||income|||||
|I. Balance at the end of the previous|||||||||
||2,075,335,560|1,405,529,511||||903,053,590|448,104,587|4,832,023,248|
|year|||||||||
|Plus: change of accounting policy|||||||||
|Correction of errors in previous|||||||||
|periods|||||||||

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
||||||||
|-|-|-|-|-|-|-|
|II. Balance at the beginning of current|||||||
||2,075,335,560|1,405,529,511||903,053,590|448,104,587|4,832,023,248|
|year|||||||
|III. Amount of change in current term|||||||
||408,811,987|45,679,568|417,349,879|32,084,102|81,223,367|150,449,145|
|(“- “for decrease)|||||||
|(I) Total amount of the comprehensive|||||||
||||||320,841,025|320,841,025|
|income|||||||
|(II) Capital paid in and reduced by|||||||
||97,511,654|356,979,901|417,349,879|||37,141,676|
|owners|||||||
|1. Amounts of share-based payments|||||||
||97,511,654|328,032,920|417,349,879|||8,194,695|
|recognized in owners’ equity|||||||
|2. Others||28,946,981||||28,946,981|
|(III) Profit distribution||||32,084,102|-239,617,658|-207,533,556|
|1. Appropriations to surplus reserves||||32,084,102|-32,084,102||
|2. Appropriations to owners (or|||||||
||||||-207,533,556|-207,533,556|
|shareholders)|||||||
|(IV) Internal carry-forward of owners’|||||||
||311,300,333|-311,300,333|||||
|equity|||||||
|1.New increase of capital (or share|||||||
||311,300,333|-311,300,333|||||
|capital) from capital public reserves|||||||
|IV. Balance at the end of this term|2,484,147,547|1,451,209,079|417,349,879|935,137,692|529,327,954|4,982,472,393|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 III. Basic Information of the Company
CSG Holding Co Ltd (the “Company”) was incorporated in September 1984, known as China South Glass Company, as a joint venture enterprise by Hong Kong China Merchants Shipping Co., LTD(香港招商局轮船股份有限公司), Shenzhen Building Materials Industry Corporation(深圳建筑材料工业集团公司), China North Industries Corporation(中国北方工业深圳公司) and Guangdong International Trust and Investment Corporation(广东国际信托投资公司). The Company was registered in Shenzhen, Guangdong Province of the People's Republic of China and its 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 June 30, 2018, the registered capital was RMB 2,856,769,678, with nominal value of RMB 1 per share.
The Company and its subsidiaries (collectively referred to as the “Group”) are mainly engaged in the manufacture and sales of flat glass, architectural glass and other building energy - saving materials, polycrystalline silicon and solar module and the construction and operation of photovoltaic plant as well as the manufacture and sales of electronic glass and display device etc. The main subsidiaries included in the scope of consolidation this year are detailed in the notes.
The financial statements were authorised for issue by the Board of Directors on August 27, 2018.
IV. Basis of the preparation of financial statements
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.
2. Going concern
As at June 30, 2018, the Group current liabilities exceed current assets about RMB 1,466 million and committed capital expenditure of about RMB 218 million. 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, From January to June 2018, the net cash inflow from operation activities is approximately RMB 765 million; 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 June 30, 2018, the Group had unutilised banking facilities of approximately RMB 5.4 billion, among which long-term banking facilities were about RMB 251 million. In addition, the shareholder of the Group or other appointed related parties are willing to provide the Group with RMB 2 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 andshareholder’s support above can meet the funding requirements
CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 V. 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, inventory costing method, amortisation of property, plant and equipmentand intangible assets, criteria for determining capitalised development expenditure, and timing for revenue recognition.
Please see Note for the key judgements adopted by the Group in applying important accounting policies.
1. Statement of compliance with the Accounting Standards for Business Enterprises
The financial statements of the Company for the first half year of 2018 truly and completely present the financial position as of June 30, 2018 and the operating results, cash flows and other information for the first half year of 2018 of the Group and the Company in compliance with the Accounting Standards for Business Enterprises.
2. Accounting period
TheCompany’s accounting year starts on 1 January and ends on 31 December.
3. Operating cycle
TheCompany’s operating cycle starts on 1 January and ends on 31 December.
4. Recording currency
The recording currency is Renminbi (RMB). The economic environment of subsidiaries, Hong Kong Southern Glass Trading Limited and China Southern Glass (Hong Kong) Limited, determines their recording currency is Hong Kong dollar. The recording currency in this report is Renminbi (RMB).
5. Business combinations
(a)Business combinations involving entities 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 entities 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 theacquirer’s interest in the fair value of theacquiree’s identifiable net assets, the difference is recognised as goodwill; where the cost of combination is lower than theacquirer’s interest in the fair value of theacquiree’s identifiable net assets, the difference is recognised in profit or loss for the current period. Costs directly
CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 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. Preparation of consolidated financial statements
The consolidated financial statements comprise the financial statements of the Company and all of its subsidiaries.
Subsidiaries are consolidated from the date on which the Group obtains control and are de-consolidated from the 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 ultimate controlling party. The portion of the net profits realised before the combination date 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 ofsubsidiaries’ equity and the portion of asubsidiaries’ 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 thesubsidiary’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.
CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 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. Translating of foreign currency operations and foreign currency report form
(a) Foreign currency transaction
Foreign currency transactions are translated into RMB using the exchange rates prevailing at the dates of the transactions.
At the balance sheet date, monetary items denominated in foreign currencies are translated into RMB using the spot exchange rates on the balance sheet date. Exchange differences arising from these translations are recognised in profit or loss for the current period, except for those attributable to foreign currency borrowings that have been taken out specifically for the acquisition or construction of qualifying assets, which are capitalised as part of the cost of those assets. Non-monetary items denominated in foreign currencies that are measured at historical costs are translated at the balance sheet date using the spot exchange rates at the date of the transactions. The effect of exchange rate changes on cash is presented separately in the cash flow statement.
(b) Translation of foreign currency financial statements
The asset and liability items in the balance sheets for overseas operations are translated at the spot exchange rates on the balance sheet date. Among theshareholders’ 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 theshareholders’ 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 theGroup’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 the period.
Receivables
Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Receivables comprise notes receivable, accounts receivable and other receivables.
Available-for-sale financial assets
CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 Available-for-sale financial assets are non-derivative financial assets that are either designated in this category or not classified in any of the other categories at initial recognition. Available-for-sale financial assets are included in other current assets on the balance sheet if management intends to dispose of them within 12 months after the balance sheet date.
(ii) Recognition and measurement
Financial assets are recognised at fair value on the balance sheet when the Group becomes a party to the contractual provisions of the financial instrument. The related transaction costs that are attributable to the acquisition of receivables and available-for-sale financial assets are included in their initial recognition amounts.
Available-for-sale financial assets are subsequently measured at fair value. Investments in equity instruments are measured at cost when they do not have a quoted market price in an active market and whose fair value cannot be reliably measured. Receivables are measured at amortised cost using the effective interest method.
Gains or losses arising from change in fair value of available-for-sale financial assets are recognised directly in equity, except for impairment losses and foreign exchange gains and losses arising from translation of monetary financial assets. When such financial assets are derecognised, the cumulative gains or losses previously recognised directly into equity are recycled into profit or loss for the current period. Interests on available-for-sale investments in debt instruments calculated using the effective interest method during the period in which such investments are held and cash dividends declared by the investee on available-for-sale investments in equity instruments are recognised as investment income, which is recognised in profit or loss for the period.
(iii) Impairment of financial assets
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 than50% (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 than20% (inclusive) but has not reached50%, 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 theasset’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
CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 amount of reversal is recognised in profit or loss.
If an impairment loss on available-for-sale financial assets measured at fair value is incurred, the cumulative losses arising from the decline in fair value that had been recognised directly in shareholders' equity are transferred out from equity and into impairment loss. For an investment in debt instrument classified as available-for-sale on which impairment losses have been recognised, if, in a subsequent period, its fair value increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the previously recognised impairment loss is reversed into profit or loss for the current period. For an investment in an equity instrument classified as available-for-sale on which impairment losses have been recognised, the increase in its fair value in a subsequent period is recognised directly in equity.
(iv) Derecognition of financial assets
Financial assets are derecognised when: i) the contractual rights to receive the cash flows from the financial assets have expired; or ii) all substantial risks and rewards of ownership of the financial assets have been transferred; or iii) the control over the financial asset has been waived even if the Group does not transfer or retain nearly all of the risks and rewards relating to the ownership of a financial asset. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received and the cumulative changes in fair value that had been recognised directly in owner's equity, is recognised in profit or loss.
(b) Financial liabilities
Financial liabilities are classified into two categories at initial recognition: financial liabilities at fair value through profit or loss and other financial liabilities. Other financial liabilities in the Group mainly include payables, borrowings and bonds payable.
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 (including one year) is presented as current liabilities, while non-current financial liabilities due with one year (including one year) is reclassified as non-current liabilities due within one year. Others are presented as non-current liabilities.
A financial liability (or a part of a financial liability) is derecognised when all or part of the obligation is extinguished. The difference between the carrying amount of a financial liability (or a part of financial liability) extinguished and the consideration paid is recognised in the income statement.
(c) Determination of fair value of financial instruments
The fair value of a financial instrument that is traded in an active market is determined at the quoted price in the active market. The fair value of a financial instrument that is not traded in an active market is determined by using a valuation technique. During valuation, the
CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 Group adopts a valuation technique suitable for current situation, which is supported by sufficient available data and other information, chooses the inputs consistent with the feature of assets or liabilities considered in the transaction thereof with market participants, and uses related observable inputs in preference to the greatest extent. Unobservable inputs are used when it is unable to obtain or is infeasible for related observable inputs.
10. Recognition standard impairment and receivables
(1) Bad debt provision on receivable accounts with major amount individually
|||
|-|-|
|Basis of recognition or standard amount of Receivables that are||
||The amount individually greater than 20 million.|
|individually significant||
||Receivables that are individually significant are subject to|
||separate impairment assessment. A provision for impairment|
|Basis of bad debt provision on receivable accounts with major||
||of the receivable is recognized if there is objective evidence|
|amount individually||
||that the Group will not be able to collect the full amounts|
||according to the original terms.|

(2) Receivables that are provided for provision based on their credit risk characteristics
|||
|-|-|
|Name of the portfolio|Basis of bad debt provision|
|Portfolio 1|according to percentage of balance method|
|Portfolio 2|according to percentage of balance method|

Accounts on aging analysis basis in the portfolio:
□Applicable√Non-applicable
Accounts on percentage basis in the portfolio:
√Applicable□Non-applicable
||||
|-|-|-|
||Percentage of provision for|Percentage of provision for other|
|Name of the portfolio|||
||accounts receivable(%)|receivables(%)|
|Portfolio 1|2%|2%|
|Portfolio 2|2%|2%|

 Accounts on other basis in the portfolio:
□Applicable√Non-applicable
(3) The method of provision for impairment of receivables that are individually significant
|||
|-|-|
|Reason for providing bad debt|A provision for impairment of the receivable is recognized if there is objective evidence that|
|individually:|the Group will not be able to collect the full amounts according to the original terms.|
||The provision for impairment of the receivable is established at the difference between the|
|Basis of bad debt provision:||
||carrying amount of the receivable and the present value of estimated future cash flows.|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 11. Inventories
(a) Classification
Inventories refer to manufacturing sector, including raw materials, work in progress, finished goods and turnover materials, and are measured at the lower of cost and net realisable value.
(b)Inventory costing method
Cost is determined using the weighted average method. The cost of finished goods and work in progress comprise raw materials, direct labour and systematically allocated production overhead based on the normal production capacity.
(c)Amortisation methods of low value consumables and packaging materials
Turnover materials include low value consumables and packaging materials, which are expensed when issued.
(d)The determination of net realisable value and the method of provision for impairment of inventories
Provision for decline in the value of inventories is determined at the excess amount of the carrying amounts of the inventories over their net realisable value. Net realisable value is determined based on the estimated selling price in the ordinary course of business, less the estimated costs to completion and estimated costs necessary to make the sale and related taxes.
(e)The Group adopts the perpetual inventory system.
12. 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 only to terms that are usual and customary for sales of such non-current asset or disposal group; (2) the group has signed with other parties legally binding sale agreement and approval has been obtained, is expected to the sale will be completed within one year.
Non-current assets (except for financial assets and deferred tax assets) that meet the recognition criteria for held for sale are recognised at the amount equal to the lower of the fair value less costs to sell and the carrying amount. The difference between fair value less costs to sell and the carrying amount should be presented as impairment loss.
Such non-current assets and assets included in disposal groups as classified as held for sale are accounted for as current assets; while liabilities included in disposal groups classified as held for sale are accounted for as current liabilities, which are presented separately in the balance sheet.
A discontinued operation is a component of the Group that either has been disposed of or is classified as held for sale, and is separately identifiable operationally and for financial reporting purposes, and satisfies one of the following conditions: (1) represents a separate major line of business or geographical area of operations; (2) is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations; and (3) is a subsidiary acquired exclusively with a view to resale.
Earnings from discontinued operations stated in the income statement include operating profit and loss and disposal gains and losses.
CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 13. Long-term equity investments
Long-term equity investments comprise theCompany’s long-term equity investments in its subsidiaries, and theGroup’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 theCompany’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 method of profit or loss
Long-term equity investments accounted for using the cost method are measured at initial investment cost. Cash dividend or profit distribution declared by the investees is recognised as investment income in profit or loss.
For long-term equity investments accounted for using the equity method, where the initial investment cost exceeds theGroup’s share of the fair value of theinvestee’s identifiable net assets at the time of acquisition, the investment is initially measured at cost. Where the initial investment cost is less than theGroup’s share of the fair value of theinvestee’s identifiable net assets at the time of acquisition, the difference is included in profit or loss for the current period and the cost of the long-term equity investment is adjusted upwards accordingly.
For long-term equity investments accounted for using the equity method, the Group recognises the investment income according to its share of net profit or loss of the investee. The Group discontinues recognising its share of the net losses of an investee after the carrying amounts of the long-term equity investment together with any long-term interests that in substance form part of theinvestor’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 inowners’ equity of the investee other than those arising from its net profit or loss, its proportionate share is directly recorded into capital surplus, provided that the proportion of shareholding of the Group in the investee remains unchanged. The carrying amount of the investment is reduced by theGroup’s share of the profit
CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 distribution or cash dividends declared by an investee. The unrealised profits or losses arising from the transactions between the Group and its investees are eliminated in proportion to theGroup’s equity interest in the investees, based on which the investment gain or losses are recognised. Any losses resulting from transactions between the Group and its investees attributable to asset impairment losses are not eliminated.
(c) Definition of control, joint control and significant influence over the investees
The term "control" refers to the power in the investees, to obtain variable returns by participating in the related business activities of the investees, and the ability to affect the returns by exercising its power over the investees.
The term "significant influence" refers to the power to participate in the formulation of financial and operating policies of an enterprise, but not the power to control, or jointly control, the formulation of such policies with other parties.
(d) Impairment of long-term equity investments
The carrying amount of long-term equity investments in subsidiaries and associates is reduced to the recoverable amount when the recoverable amount is less than the carrying amount.
14. Fixed assets
(1) Recognition and initial measurement
Fixed assets comprise buildings, machinery and equipment, motor vehicles and others.
Fixed assets are recognised when it is probable that the related economic benefits will flow to the Group and the costs can be reliably measured. Fixed assets purchased or constructed by the Group are initially measured at cost at the time of acquisition.
Subsequent expenditures incurred for a fixed asset are included in the cost of the fixed asset when it is probable that the associated economic benefits will flow to the Group and the related cost can be reliably measured. The carrying amount of the replaced part is derecognised. All the other subsequent expenditures are recognised in profit or loss in the period in which they are incurred. (2) Depreciation 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 net residual||
|Categories|Depreciation methods|Period of depreciation||Annual depreciation rate|
||||value||

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
||||||
|-|-|-|-|-|
|Buildings|straight-line method|20 to 35 years|5%|2.71% ~ 4.75%|
|Machinery and equipment|straight-line method|8 to 20 years|5%|4.75%~11.88%|
|Motor vehicles and others|straight-line method|5 to 8 years|0%|12.50%~20.00%|

15. 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 bookvalue。
16. 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.
17. Intangible assets
(1) Valuation method, service life and impairment test
Intangible assets, mainly including land use rights, patents and proprietary technologies, exploitation rights and others, are measured
at cost.
CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 (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.
(e) Impairment of intangible assets
Book value of intangible assets is reduced to the recoverable amount when the recoverable amount is below book value.
(2) Internal research and development expenditure accounting policy
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.
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
CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 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 theasset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of anasset’s fair value less costs to sell and the present value of the future cash flows expected to be derived from the asset. Provision for asset impairment is determined and recognised on the individual asset basis. If it is not possible to estimate the recoverable amount of an individual asset, the recoverable amount of a group of assets to which the asset belongs is determined. A group of assets is the smallest group of assets that is able to generate independent cash inflows.
Goodwill that is separately presented in the financial statements is tested at least annually for impairment, irrespective of whether there is any indication that it may be impaired. In conducting the test, 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. Long-term prepaid expenses
Long-term prepaid expenses include the expenditures that have been incurred but should be recognised as expenses over more than one year in the current and subsequent periods. Long-term prepaid expenses are amortised on the straight-line basis over the expected beneficial period and are presented at actual expenditure net of accumulated amortisation.
20. Employee benefits
(1) Short-term employee benefits accounting method
Short-term employee benefits include 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.
(2) Post-employment benefits accounting method
The Group classifies post-employment benefit plans as either defined contribution plans or defined benefit plans. Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into a separate fund and will have no obligation to pay further contributions; and defined benefit plans are post-employment benefit plans other than defined contribution plans. During the reporting period, the Group's post-employment benefits mainly include basic pensions and unemployment insurance, both of which belong to the defined contribution plans.
(3) Basic pensions
TheGroup’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
CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 period or the cost of relevant assets.
(4) Termination benefits accounting method
The Group provides compensation for terminating the employment relationship with employees before the end of the employment contracts or as an offer to encourage employees to accept voluntary redundancy before the end of the employment contracts. The Group recognises a liability arising from compensation for termination of the employment relationship with employees, with a corresponding charge to profit or loss at the earlier of the following dates: 1) when the Group cannot unilaterally withdraw the offer of termination benefits because of an employment termination plan or a curtailment proposal; 2) when the Group recognises costs or expenses related to the restructuring that involves the payment of termination benefits.
The termination benefits expected to be paid within one year since the balance sheet date are classified as current liabilities. 21. Provisions
Business restructuring, provisions for product warranties, 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.
22. 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 TheGroup‘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
CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 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.
If the equity-settled payment is cancelled, the cancellation date shall be deemed as an expedited exercise, and the 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.
23. Revenue
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 theGroup’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 theGroup’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.
CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 24. Government grants
(1)Judgment basis and accounting method of government grants related to an asset
The government grants related to assets refers to government grant obtained by enterprises and used for purchase and construction of long-term assets or formation of long-term in other ways.
The government subsidies related to assets will be used to write off the book value of assets concerned, or be recognized as the deferred gains and be booked into the gains and losses in a reasonable and systematic manner over the useful life of the assets concerned.
(2) Judgment basis and accounting method of government grants related to income
The government grants related to income refer to grants other than those related to assets.
The income-related government subsidy which is used to compensate for costs or losses associated with the subsequent periods will be recognized as deferred gains and is recorded as current gains or losses or offsets related costs during the period in which the relevant cost costs or losses are recognized; The income-related government subsidy which is used to compensate for related costs or losses incurred will be directly included in current profits or losses or related costs. The group adopts the same presentation method for similar government grants.
(3) Judgment basis and accounting method of government grants related to ordinary activities.
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.
25. Deferred tax assets and deferred tax liabilities
Deferred tax assets and deferred tax liabilities are calculated and recognised based on the differences arising between the tax bases of assets and liabilities and their carrying amounts (temporary differences). Deferred tax asset is recognised for the deductible losses that can be carried forward to subsequent years for deduction of the taxable profit in accordance with the tax laws. No deferred tax liability is recognised for a temporary difference arising from the initial recognition of goodwill. No deferred tax asset or deferred tax liability is recognised for the temporary differences resulting from the initial recognition of assets or liabilities due to a transaction other than a business combination, which affects neither accounting profit nor taxable profit (or deductible loss). At the balance sheet date, deferred tax assets and deferred tax liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled.
Deferred tax assets are only recognised for deductible temporary differences, deductible losses and tax credits to the extent that it is probable that taxable profit will be available in the future against which the deductible temporary differences, deductible losses and tax credits can be utilised.
Deferred tax liabilities are recognised for temporary differences arising from investments in subsidiaries and associates, except where the Group is able to control the timing of reversal of the temporary difference, and it is probable that the temporary difference will not reverse in the foreseeable future. When it is probable that the temporary differences arising from investments in subsidiaries and associates will be reversed in the foreseeable future and that the taxable profit will be available in the future against which the temporary differences can be utilised, the corresponding deferred tax assets are recognised.
CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 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. 26. Leases
(1) Accounting method of operating lease
Lease payments under an operating lease are recognised on a straight-line basis over the period of the lease, and are either capitalised as part of the cost of related assets, or charged as an expense for the current period.
Lease income under an operating lease is recognised as revenue on a straight-line basis over the period of the lease.
(2) Accounting method of financing lease
A lease that transfers substantially all the risks and rewards incidental to ownership of an asset is a finance lease. An operating lease is a lease other than a finance lease.
27. Safety production costs
According to relevant regulations of the Ministry of Finance and National Administration of Work Safety, a subsidiary of the Group which is engaged in producing and selling polysilicon appropriates safety production costs on following basis:
(a) 4% for revenue below RMB10 million (inclusive) of the year;
(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.
28. Segment information
The Group identifies operating segments based on the internal organisation structure, management requirements and internal reporting system, and discloses segment information of reportable segments which is determined on the basis of operating segments. 29. Significant changes in accounting policies
(1) Changes in significant accounting policies
□Applicable√Not applicable
CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 (2)Changes in significant accounting estimates
□Applicable√ Not applicable
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 deferred tax assets or liabilities. Those estimates may also cause significant adjustment on deferred tax.
(c) Impairment of long-term assets (excluding goodwill)
Long-term assets at the balance sheet date should be subject to impairment testing if there are any indications of impairment. 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 theasset’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
CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 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.
VI. Taxation
1. The main categories and rates of taxes applicable to the Group are set out below:
||||
|-|-|-|
|Tax item|Tax basis|Tax rate|
||Taxable value-added amount (Tax payable is calculated||
|Value-added tax (“VAT”)|using the taxable sales amount multiplied by the applicable|6%-17%|
||tax rate less deductible VAT input of the current period)||
|City maintenance and construction tax|VAT paid|1%-7%|
|Enterprise income tax|Taxable income|0%-25%|
|Educational surcharge|VAT paid|3%-5%|
|Resource tax|Sales volume of silica|6.5%|

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 to15% tax rate for three years since 2015. Currently in the review of high and new tech enterprise, this report period temporary by15% income tax rate. 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 to15% 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 to15% 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 to15% 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 to15% tax rate for three years since
2017.
CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 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 to15% tax rate for three years since 2016.
Hebei Panel Glass Co., Ltd. (“Hebei Panel”) 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 to15% 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 to15% 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 to15% 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 to15% tax rate for three years since 2015. Currently in the review of high and new tech enterprise, this report period temporary by15% income tax rate.
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 to15% tax rate for three years since 2015. Currently in the review of high and new tech enterprise, this report period temporary by15% income tax rate.
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 to15% tax rate for three years since 2016.
Qingyuan CSG New Energy-Saving Materials Co., Ltd. (“Qingyuan CSG Energy-Saving”) was recognised as a high and new tech enterprise in 2016, and obtained the Certificate of High and New Tech Enterprise, and the period of validity was three years. It applies to15% 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 of15% 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 of15% 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
CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 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.
In addition, pursuant to the document Fogang Guo Shui Shui Tong[2015] No. 2489, the VAT for photovoltaic power generation of Qingyuan CSG New Energy is subject to the refund upon collection policy.
3. Others
Some subsidiaries of the Group have used the “exempt, credit, refund” method on goods exported and the refund rate is5%-17%. VII. Notes to the consolidated financial statements
1. Cash at bank and on hand
Unit: RMB
||||
|-|-|-|
|Item|Balance at the end of the period|Balance at the beginning of the period|
|Cash on hand|14,984|36,182|
|Cash at bank|3,358,238,362|2,409,716,983|
|Other cash balances|13,791,823|52,852,599|
|Total|3,372,045,169|2,462,605,764|

 Other cash balances include margin deposits for the application of opening letter of credit and loan from the bank, amounting to RMB 13,791,823 (Dec. 31,2017: RMB 2,852,599), which is restricted cash.
2. Notes receivable
(1) Notes receivable listed by classification
Unit: RMB
||||
|-|-|-|
|Item|Balance at the end of the period|Balance at the beginning of the period|
|Bank acceptance notes|443,248,211|222,826,841|
|Trade acceptance notes|345,830,165|329,405,579|
|Total|789,078,376|552,232,420|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 (2) Notes receivable which have been endorsed or discounted at the end of the term by the Group but are not yet due are as follows:
Unit: RMB
||||
|-|-|-|
||Amount of recognition termination|Amount of not terminated recognition at theperiod-end|
|Item|||
||at the period-end||
|Bank acceptance notes|2,358,041,319||
|Trade acceptance notes||150,400,507|
|Total|2,358,041,319|150,400,507|

 3. Accounts receivable
(1) Accounts receivable disclosed by category
Unit: RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||End of term|||||Beginning of term|||||
||Carrying amount||Provision for bad debts|||Carrying amount||Provision for bad debts|||
|Category|||||||||||
|||Proporti||Propor|Book value||Propor||Propor|Book value|
||Amount||Amount|||Amount||Amount|||
|||on||tion|||tion||tion||
|With amounts|||||||||||
|that are|||||||||||
|individually|||||||||||
|significant but|||||||||||
|that the related|||||||||||
|provision for|||||||||||
|bad debts is|||||||||||
|provided on the|||||||||||
|individual basis|||||||||||
|Accounts|||||||||||
|receivable|||||||||||
|withdrawn bad|||||||||||
|debt provision|710,368,384|97%|14,207,893|2%|696,160,491|636,614,136|96%|12,233,039|2%|624,381,097|
|according to|||||||||||
|credit risks|||||||||||
|characteristics|||||||||||
|With amounts|||||||||||
|that are not|||||||||||
|individually|||||||||||
||19,750,276|3%|8,535,399|43%|11,214,877|23,536,221|4%|9,679,028|41%|13,857,193|
|significant but|||||||||||
|that the related|||||||||||
|provision for|||||||||||

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|bad debts is|||||||||||
|provided on the|||||||||||
|individual basis|||||||||||
|Total|730,118,660|100%|22,743,292|3%|707,375,368|660,150,357|100%|21,912,067|3%|638,238,290|

 Accounts receivable with large amount individually and bad debt provisions were provided
□ Applicable√ Non-applicable
Accounts receivable on which bad debt provisions are provided on age analyze basis in the portfolio
□ Applicable√ Non-applicable
Accounts receivable on which bad debt provisions are provided on percentage analyze basis in a portfolio
√Applicable□ Non-applicable
Unit: RMB
|||||
|-|-|-|-|
||Closing balalnce|||
|Name of portfolio||||
||Accounts receivable|Bad debt provision|Proportion %|
|Portfolio 1|710,368,384|14,207,893|2%|
|Total|710,368,384|14,207,893|2%|

 (2) Accounts receivable withdraw, reversed or collected during the reporting period
The withdrawal amount of the bad debt provision during the report period was of RMB 7,311,182. The amount of the reversed or collected part during the report period was of RMB 3,725,813.
(3) The actual write-off accounts receivable
Unit: RMB
|||
|-|-|
|Item|Write-off amount|
|Accounts receivable|2,754,144|

 The receivables actually written off during the year amounted to RMB 2,754,144, 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. (4) Top 5 of the closing balance of the accounts receivable colleted according to the arrears party
As at June 30, 2018, the top 5 of the closing balance of the accounts receivable colleted according to the arrears party were collected and analyzed as follows:
|||||
|-|-|-|-|
||Balance|Provision for bad debts|Percentage in total accounts receivable balance|
|Total balances for the five largestaccounts receivable|100,227,996|2,004,560|14%|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 4. Advances to suppliers
(1) Listed by aging analysis
Unit: RMB
||||||
|-|-|-|-|-|
||Closing balance||Opening balance||
|Age|||||
||Amount|Proportion|Amount|Proportion|
|within 1 year|109,057,887|89%|130,813,397|91%|
|1 to 2 years|102,035||264,952||
|2 to 3 years|72,952||12,769,674|9%|
|over 3 years|12,769,674|11%|||
|Total|122,002,548|--|143,848,023|--|

 As at June 30, 2018, advances to suppliers ageing over one-year amount to RMB 12,944,661 (December 31 2017: RMB 13,034,626). They were mainly mainly for prepaid gas and material purchases, and the payment had not been selected because the materials had not been received.
(2) Top 5 of the closing balance of the advances to suppliers colleted according to the target
As at June 30, 2018, the top five largest advances to supplies are set out as below:
||||
|-|-|-|
||Balance|Percentage in total advances balance|
|Total advances for the five largest advances|56,202,340|46%|

 5. Other account receivable
(1) Other accounts receivable disclosed by category:
Unit: RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||End of term|||||Beginning of term|||||
||||Provision for bad|||||Provision for bad|||
||Carrying amount|||||Carrying amount|||||
|Category|||debts|||||debts|||
||||||Book value|||||Book value|
|||Propor||Propor|||Propor||Propor||
||Amount||Amount|||Amount||Amount|||
|||tion||tion|||tion||tion||
|With amounts that|||||||||||
|are individually|||||||||||
|significant but that|||||||||||
|the related provision|||||||||||
|for bad debts is|||||||||||
|provided on the|||||||||||
|individual basis|||||||||||

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Accounts receivable|||||||||||
|withdrawn bad debt|||||||||||
|provision according|213,536,126|100%|4,265,739|2%|209,270,387|210,136,518|100%|4,197,499|2%|205,939,019|
|to credit risks|||||||||||
|characteristics|||||||||||
|With amounts that|||||||||||
|are not individually|||||||||||
|significant but that|||||||||||
|the related provision|322,905||322,905|100%||322,905||322,905|100%||
|for bad debts is|||||||||||
|provided on the|||||||||||
|individual basis|||||||||||
|Total|213,859,031|100%|4,588,644|2%|209,270,387|210,459,423|100%|4,520,404|2%|205,939,019|

 Other accounts receivable with large amount and were provided bad debt provisions individually at end of period.
□ Applicable√ Non-applicable
Other accounts receivable in the portfolio on which bad debt provisions were provided on age analyze basis
□ Applicable√ Non-applicable
Other accounts receivable in the portfolio on which bad debt provisions were provided on percentage basis
√ Applicable□ Non-applicable
Unit: RMB
|||||
|-|-|-|-|
||Closing balance|||
|Name of portfolio||||
||Other receivable accounts|Provision for bad debts|proportion|
|Portfolio 1|42,536,126|845,739|2%|
|Portfolio 2|171,000,000|3,420,000|2%|
|Total|213,536,126|4,265,739|2%|

 Other accounts receivable in the portfolio on which bad debt provisions were provided on other basis
□ Applicable√ Non-applicable
(2) Accounts receivable withdraw, reversed or collected during the reporting period
The withdrawal amount of the bad debt provision during the report period was of RMB150,117. The amount of the reversed or collected part during the report period was of RMB 81,877.
(3) Other accounts receivable classified by the nature of accounts
Unit: RMB
||||
|-|-|-|
|Nature|Closing balance|Opening balance|
|Receivables from related parties|171,000,000|171,000,000|
|Refundable deposits|20,162,058|16,957,562|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
||||
|-|-|-|
|Payments made on behalf of other parties|13,889,009|19,306,658|
|Petty cash|1,519,176|875,714|
|Others|7,288,788|2,319,489|
|Total|213,859,031|210,459,423|

 (4) Top 5 of the closing balance of the other accounts receivable collated according to the arrears party Unit: RMB
|||||||
|-|-|-|-|-|-|
|||||Proportion of the||
|Name of the||||||
|||||total year end|Closing balance of|
|companies|Nature of business|Closing balance|Ages|||
|||||balance of the|bad debt provision|
|Industrial||||||
|||||accounts receivable||
|Company A|Related parties|171,000,000|4 to 5 years|80%|3,420,000|
|Governmental|Independent third party||3 to 4 years|||
|||11,067,754||5%|221,355|
|department B||||||
|Company C|Independent third party|5,000,000|1 to 2 years|2%|100,000|
|Company D|Independent third party|3,350,000|Within 1 year|2%|67,000|
|Governmental|Independent third party||Within 1 year|||
|||2,728,214||1%|54,564|
|department E||||||
|Total|--|193,145,968|--|90%|3,862,919|

 6. Inventories
(1) Categories of inventory
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||Provision for|||Provision for decline||
||Carrying amount||Book value|Carrying amount||Book value|
|||decline in the value|||in the value||
|Raw materials|209,815,202|1,444,252|208,370,950|213,348,012|1,447,590|211,900,422|
|Products in process|20,713,776||20,713,776|45,614,905||45,614,905|
|Products in stock|443,933,341|68,974|443,864,367|387,489,714|68,974|387,420,740|
|Material in|||||||
||40,673,556||40,673,556|40,959,250||40,959,250|
|circulation|||||||
|Total|715,135,875|1,513,226|713,622,649|687,411,881|1,516,564|685,895,317|

(2) Provision for decline in the value of inventories
Unit: RMB
CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
||||||||
|-|-|-|-|-|-|-|
|||Increased in this term||Decreased in this term|||
|Category|Opening balance|||||Closing balance|
|||Withdrawal|Other|Reverse or write-off|Other||
|Raw materials|1,447,590|||3,338||1,444,252|
|Products in stock|68,974|||||68,974|
|Total|1,516,564|||3,338||1,513,226|

 Provision for decline in the value of inventories is as follows:
Basis for provision for decline in the value of inventories Reasons of reversal of the decline in the value of inventories Products in stock
The amount of carrying amount less than that of net realisable value
due to decline in price of products Sold Raw materials
The amount of book value more that of net realisable value due to
sluggish or damaged raw materials Used 7. Assets classified as held for sale
Unit: RMB
||||||
|-|-|-|-|-|
||carrying amounts|||Estimated|
|Item||Fair value|Estimated disposal costs||
||at the end of period|||disposal time|
|Intangible assets|15,048,314|18,390,394|||
|Construction in progress|30,935,206|37,805,606|||
|Total|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 Dongguan Chaoying Textile Co., LTD. (Dongguan Chaoying Company) on 17 June 2016. Dongguan CSG PV-tech sells its land use right along with the buildings on the land to Dongguan Chaoying Company. Therefore, the construction-in-progress and intangible assets of Dongguan CSG PV-tech were transferred to assets held for sale. By the end of this reporting period, the above transfer procedures have not been completed.
8. Other current assets
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|VAT to be offset|154,548,103|181,667,326|
|Enterprise income tax prepaid|2,198,301|1,132,508|
|VAT input to be recognised|22,057,351|18,048,155|
|Total:|178,803,755|200,847,989|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 9. Fixed assets
(1) Particulars of fixed assets
Unit: RMB
||||||
|-|-|-|-|-|
|||Machinery and|||
|Item|Buildings||Motor vehicles|Total|
|||equipment|||
|I. Original book value:|||||
|1. Opening balance|3,999,368,700|12,462,823,260|208,292,757|16,670,484,717|
|2. Increased amount of the period|||||
|(1) Acquisition|71,132|7,573,067|3,439,675|11,083,874|
|(2) Transfers from construction in progress|10,251,332|430,457,709|2,839,472|443,548,513|
|(3) Others|6,596,592|18,819,685|2,274,639|27,690,916|
|3. Decreased amount of the period|||||
|(1) Disposal or retirement||19,245,299|2,743,499|21,988,798|
|(2) Transfer to construction in progress||145,340,491||145,340,491|
|4. Closing balance|4,016,287,756|12,755,087,931|214,103,044|16,985,478,731|
|II. Accumulative depreciation|||||
|1. Opening balance|751,518,811|3,908,894,072|188,549,283|4,848,962,166|
|2. Increased amount of the period|||||
|(1) Provision|63,278,467|422,717,038|11,716,224|497,711,729|
|3. Decreased amount of the period|||||
|(1) Disposal or retirement||4,968,193|2,715,456|7,683,649|
|(2) Transferred to construction in progress||117,366,019||117,366,019|
|4. Closing balance|814,797,278|4,209,276,898|197,550,051|5,221,624,227|
|III. Depreciation reserves|||||
|1. Opening balance|10,580,861|270,171,993||280,752,854|
|2. Increased amount of the period|||||
|(1) Provision|||||
|3. Decreased amount of the period|||||
|(1) Disposal or retirement||11,196,033||11,196,033|
|4. Closing balance|10,580,861|258,975,960||269,556,821|
|IV. Book value|||||
|1. Closing book value|3,190,909,617|8,286,835,073|16,552,993|11,494,297,683|
|2. Opening book value|3,237,269,028|8,283,757,195|19,743,474|11,540,769,697|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 (2) Fixed assets with pending certificates of ownership
Unit: RMB
||||
|-|-|-|
|Items|Book value|Reason for not yet obtaining certificates of title|
|||Have submitted the required documents and are in the process of|
|Buildings|825,479,080||
|||application, or the related land use right certificate pending|

10. Construction in process
(1)Particulars of construction in process
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||Provision for|||Provision for||
||Carrying amount||Carrying amount|Carrying amount||Carrying amount|
|||impairment loss|||impairment loss||
|Xianning CSG Photoelectric Glass|||||||
||460,524,423||460,524,423|400,665,493||400,665,493|
|project|||||||
|Yichang display device company flat|||||||
||321,772,258|14,160,474|307,611,784|298,794,622|14,160,474|284,634,148|
|panel display project|||||||
|Yichang Optoelectronic Technology|||||||
||1,117,944||1,117,944|242,055,237||242,055,237|
|Reform Project|||||||
|Hebei float 600T tech-innovation|||||||
||116,421,995||116,421,995|113,762,853||113,762,853|
|project|||||||
|Zhanjiang Photovoltaic 20MV|||||||
|Step-by-step Photovoltaic Power Plant|4,239,529||4,239,529|100,570,104||100,570,104|
|Project|||||||
|Dongguan Solar Glass Phase I and II|||||||
||78,970,995|40,248,018|38,722,977|78,970,995|40,248,018|38,722,977|
|improvement project|||||||
|Wujiang energy glass expansion|||||||
||70,936,821|19,876,460|51,060,361|72,600,518|19,876,460|52,724,058|
|project|||||||
|Yichang 1GW silicon slice project|48,653,281||48,653,281|43,617,802||43,617,802|
|LED Sapphire Substrate Project|31,762,102|19,303,853|12,458,249|30,886,629|19,303,853|11,582,776|
|Wujiang Photovoltaic Packaging|||||||
||4,805,466||4,805,466|7,414,854||7,414,854|
|Materials Project|||||||
|Dongguan PV Tech 200MW PV-tech|||||||
||1,541,388||1,541,388|1,179,935||1,179,935|
|Battery Expansion project|||||||
|Dongguan Solar Glass new|||||||
||32,491,564||32,491,564|1,888,363||1,888,363|
|photovoltaic glass project|||||||
|others|111,616,450|405,983|111,210,467|119,212,001|405,983|118,806,018|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
||||||||
|-|-|-|-|-|-|-|
||||1,190,859,428|||1,417,624,618|
|Total|1,284,854,216|93,994,788||1,511,619,406|93,994,788||

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 (2) Movement of significant project
Unit: RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||Proportion||||||
||||||||||Accumulate|Including:|Capitalizin||
|||||Transfer to fixed|Other||between||||||
|||Opening|Increased|||Closing|||of|interest|g rate of||
|Projects|Budget|||assets in this|decreases in||engineering|Progress||||Fund recourse|
|||balance|this term|||balance|||interest|capitalized this|interest||
|||||term|this term||input and||||||
||||||||||capitalized|term|this term||
||||||||budget||||||
|Xianning CSG|||||||||||||
|Photoelectric Glass|510,000,000|400,665,493|59,858,930|||460,524,423|91%|100%|14,047,509|6,276,896|4.75%|Internal fund and|
|project||||||||||||bank loan|
|Yichang display|||||||||||||
|||||||||||||Internal fund and|
|device company flat|1,970,000,000|298,794,622|23,438,436|460,800||321,772,258|82%|85%|6,607,890|2,463,731|4.47%||
|||||||||||||bank loan|
|panel display project|||||||||||||
|Yichang|||||||||||||
|Optoelectronic|||||||||||||
||258,296,536|242,055,237|9,970,569|250,054,605|853,257|1,117,944|100%|100%|||||
|Technology Reform|||||||||||||
|Project||||||||||||Internal fund|
|Hebei float 600T|||||||||||||
|tech-innovation|145,750,000|113,762,853|2,659,142|||116,421,995|14%|15%|163,839|163,839|4.94%|Internal fund and|
|project||||||||||||bank loan|
|Zhanjiang|||||||||||||
|Photovoltaic 20MV|||||||||||||
|Step-by-step|133,000,000|100,570,104||92,218,630|4,111,945|4,239,529|100%|100%|2,280,097||||
|Photovoltaic Power||||||||||||Internal fund and|
|Plant Project||||||||||||bank loan|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Dongguan Solar|||||||||||||
|Glass Phase I and II|396,410,000|78,970,995||||78,970,995|80%|81%|||||
|improvement project||||||||||||Internal fund|
|Wujiang energy glass||||||||||||Internal fund and|
||845,630,000|72,600,518|1,396,512|2,899,013|161,196|70,936,821|100%|100%|20,120,444||||
|expansion project||||||||||||bank loan|
|Yichang 1GW silicon||||||||||||Internal fund and|
||1,073,209,600|43,617,802|5,081,198|45,719||48,653,281|39%|60%|10,105,307|1,475,314|5.15%||
|slice project||||||||||||bank loan|
|LED Sapphire||||||||||||Internal fund and|
||35,000,000|30,886,629|875,473|||31,762,102|88%|88%|4,650,543||||
|Substrate Project||||||||||||bank loan|
|Wujiang Photovoltaic|||||||||||||
|||||||||||||Internal fund and|
|Packaging Materials|520,100,000|7,414,854|22,910,266|24,771,759|747,895|4,805,466|95%|100%|||||
|||||||||||||bank loan|
|Project|||||||||||||
|Dongguan PV Tech|||||||||||||
|200MW PV-tech||||||||||||Internal fund and|
||697,000,000|1,179,935|1,094,726|733,273||1,541,388|100%|100%|32,417,335||||
|Battery Expansion||||||||||||bank loan|
|project|||||||||||||
|Dongguan Solar|||||||||||||
|Glass new|||||||||||||
||60,000,000|1,888,363|30,603,201|||32,491,564|57%|80%||||Internal fund|
|photovoltaic glass|||||||||||||
|project|||||||||||||
|||||||||||||Internal fund and|
|others|1,283,748,333|119,212,001|64,904,542|72,364,714|135,379|111,616,450|||8,789,090|9,388|||
|||||||||||||bank loan|
|Total|7,928,144,469|1,511,619,406|222,792,995|443,548,513|6,009,672|1,284,854,216|--|--|99,182,054|10,389,168||--|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 11. Intangible assets
(1) Particulars of intangible assets
Unit: RMB
|||||||
|-|-|-|-|-|-|
||||Exploitation|||
|Item|Land use rights|Patents||Others|Total|
||||rights|||
|I. Original book value:||||||
|1. Opening balance|1,026,603,700|246,011,919|4,456,536|36,106,710|1,313,178,865|
|2. Increased amount of this period||||||
|(1) Acquisition||25,361||278,387|303,748|
|(2) Internal R&D||9,191,305|||9,191,305|
|3. Decreased amount of the period||||||
|(1)Disposal||||||
|4. Closing balance|1,026,603,700|255,228,585|4,456,536|36,385,097|1,322,673,918|
|II. Accumulated amortisation||||||
|1. Opening balance|149,057,265|74,985,236|3,706,724|24,996,753|252,745,978|
|2. Increased amount of this period||||||
|(1) Provision|10,193,270|9,333,131|200,321|3,427,051|23,153,773|
|3. Decreased amount of the period||||||
|(1) Disposal||||||
|4. Closing balance|159,250,535|84,318,367|3,907,045|28,423,804|275,899,751|
|III. Impairment provision||||||
|1. Opening balance||13,201,347||9,133|13,210,480|
|2. Increased amount of this period||||||
|(1) Provision||||||
|3. Decreased amount of this period||||||
|(1) Disposal||||||
|4. Closing balance||13,201,347||9,133|13,210,480|
|IV. Book value||||||
|1. Closing book value|867,353,165|157,708,871|549,491|7,952,160|1,033,563,687|
|2. Opening book value|877,546,435|157,825,336|749,812|11,100,824|1,047,222,407|

 At the end of the period, the intangible assets arising from internal research and development accounted for12.98% of total of
intangible assets.
CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 (2) Land use rights not licensed yet
Unit: RMB
||||
|-|-|-|
|Item|Book value|Reason for not yet obtaining certificates of title|
|Land|5,351,068|in the process|

As at June 30, 2018, ownership certificates of land use right (“Land ownership Certificates”) for certain land use rights of the Group with carrying amounts of approximately RMB 5,351,068 (cost: RMB 6,586,712) had not yet been obtained by the Group (as at December 31, 2017, carrying amount: RMB 5,473,442, cost: RMB 6,586,712). TheCompany’s management is of the view that there is no legal restriction for the Group to apply for and obtain the Land Ownership Certificates and has no adverse effect on theGroup’s business operation.
12. Development expenditure
Unit: RMB
||||||
|-|-|-|-|-|
|||The increased amount in the period|The decrease amount in the period||
|Item|Opening balance|||Closing balance|
|||Internal development expenditure|Recognised as intangible assets||
|Developmentexpenditure|61,365,537||||
|||19,803,682|9,191,305|71,977,914|
|Total|61,365,537|19,803,682|9,191,305|71,977,914|

 During Jan.-Jun. 2018, the total amount of research and development expenditures of the Group was RMB 185,844,867 (Jan.-Jun. 2017: RMB 166,809,377), including RMB 166,041,185 (Jan.-Jun. 2017: RMB 151,590,181) recorded in income statement for current period and the research and development expenditure with the amount of RMB 9,191,305 recognised as intangible assets for the current period (Jan.-Jun. 2017: 6,097,439). As at June 30, 2018, the intangible assets arising from internal research and development accounted for 12.98% of total of intangible assets (31 December 2017: 12.37%).
13. Goodwill
(1) Book value of goodwill
Unit: RMB
||||||
|-|-|-|-|-|
|Name of the companies or goodwill item|Opening balance|Increased this term|Decreased this term|Closing balance|
|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|
|Total|397,392,156|||397,392,156|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 14. Long-term prepaid expenses
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increased this term|Amortized this term|Closing balance|
|Expenses to be amortized|2,223,397|10,823,584|794,984|12,251,997|
|Total|2,223,397|10,823,584|794,984|12,251,997|

 15. Deferred income tax asset/deferred income tax liabilities
(1) Deferred income tax assets had not been off-set
Unit: RMB
||||||
|-|-|-|-|-|
||Closing balance||Opening balance||
|Item|Deductible temporary|Deferred income tax|Deductible temporary|Deferred income tax|
||difference|assets|difference|assets(cid:10)|
|Provision for asset|||||
||358,728,456|53,970,832|361,149,562|55,552,592|
|impairments|||||
|Deductible loss|186,903,882|33,564,573|133,658,792|24,457,319|
|Government grants|174,742,139|27,365,959|128,189,967|20,424,022|
|Accrued expenses|49,145,573|7,371,836|50,193,405|7,529,011|
|Depreciation of fixed assets|20,764,321|4,607,204|33,762,174|8,000,331|
|Share payment|62,178,136|10,200,424|5,196,945|867,677|
|Total|852,462,507|137,080,828|712,150,845|116,830,952|

 (2) Deferred tax liabilities before offsetting
Unit: RMB
||||||
|-|-|-|-|-|
||Closing balance||Opening balance||
|Item|Deductible temporary|Deferred income tax|Deductible temporary|Deferred income tax|
||difference|liabilities|difference|liabilities|
|Depreciation of fixed assets|399,860,322|61,379,387|371,115,284|56,874,044|
|Total|399,860,322|61,379,387|371,115,284|56,874,044|

 (3) The net balances of deferred tax assets or liabilities
Unit: RMB
||||||
|-|-|-|-|-|
||ff-set amount of|Closing balance of|Off-set amount of|Opening balance of|
|OItemd|||||
||eferred income tax|deferred income tax|deferred income tax|deferred income tax|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
||||||
|-|-|-|-|-|
|t|assets and liabilities at|assetsor liabilities after|assets and liabilities at|assetsor liabilities after|
||he period-end|off-set|the period-beginning|off-set|
|Deferred tax assets|36,960,329|100,120,499|35,958,090|80,872,862|
|Deferred tax liabilities|36,960,329|24,419,058|35,958,090|20,915,954|

 (4) Details of unrecognised deferred income tax assets
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Deductible losses|521,381,041|425,759,321|
|Total|521,381,041|425,759,321|

 (5) Deductible losses of unrecognized deferred income tax assets will due the following years
Unit: RMB
|||||
|-|-|-|-|
|Year|Closing balance|Opening balance|Note|
|2018年|54,100,000|54,100,000||
|2019年|82,300,000|82,300,000||
|2020年|94,430,197|94,430,197||
|2021年|111,625,585|111,625,585||
|2022年|83,303,539|83,303,539||
|2023年|95,621,720|||
|Total|521,381,041|425,759,321|--|

16. Other non-current assets
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Prepayment of engineering equipment|79,656,620|45,431,352|
|Prepayment for lease of land use rights|6,510,000|6,510,000|
|Total|86,166,620|51,941,352|

 17. Short-term loans
(1) Categories of short-term loans
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
||||
|-|-|-|
|Guaranteed loan|1,099,419,972|1,012,898,300|
|Unsecured loan|2,850,000,000|2,691,732,609|
|Total|3,949,419,972|3,704,630,909|

 As at June 30, 2018, the interest of short-term borrowings varied from2.95% to6.18% (31 December 2017:2.70% to5.66%). 18. Notes payable
Unit: RMB
||||
|-|-|-|
|Category|Closing balance|Opening balance|
||208,201,622|213,401,622|
|Bank acceptance notes|||
|Total|208,201,622|213,401,622|

 19. Accounts payable
(1) Particulars of accounts payable
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Materials payable|786,952,582|798,178,206|
|Equipment payable|293,681,363|329,926,045|
|Construction expenses payable|134,857,144|167,394,038|
|Freight payable|71,579,206|61,671,023|
|Utilities payable|31,002,278|35,973,405|
|Others|13,056,369|7,023,325|
|Total|1,331,128,942|1,400,166,042|

 (2) Significant accounts payable due for over one year
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Unpaid reason|
|Account payable for construction and||As the construction work had not passed the final|
||148,507,365||
|equipments.||acceptance test yet, the balance was not yet settled.|
|Total|148,507,365|--|

20. Advances from customers
(1) List of advance from customers
Unit: RMB
CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Advances from customers|183,976,533|195,563,465|
|Total|183,976,533|195,563,465|

 21. Employee benefits payable
(1) List of Employee benefits payable
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increased this term|Decreased this term|Closing balance|
|I. Short-term employee|||||
||272,144,440|736,129,597|825,838,639|182,435,398|
|benefits payable|||||
|II. Welfare after|||||
|departure- defined|26,220|55,521,053|55,369,081|178,192|
|contribution plans|||||
|Total|272,170,660|791,650,650|881,207,720|182,613,590|

 (2) List of short-term employee benefits
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increased this term|Decreased this term|Closing balance|
|1. Wages and salaries, bonuses,|||||
||175,485,615|557,542,383|607,426,805|125,601,193|
|allowances and subsidies|||||
|2. Social security contributions|13,752|22,071,046|21,990,590|94,208|
|Including: Medical insurance|12,358|18,579,525|18,510,496|81,387|
|Work injury insurance|984|2,270,598|2,261,771|9,811|
|Maternity insurance|410|1,220,923|1,218,323|3,010|
|3. Housing funds|2,758,371|23,814,977|24,343,892|2,229,456|
|4.Labour union funds and|||||
||15,280,702|8,234,381|6,081,286|17,433,797|
|employee education funds|||||
|5.Management bonus (i)|78,606,000|28,831,310|70,360,566|37,076,744|
|6. Share payment (ii)||95,635,500|95,635,500||
|Total|272,144,440|736,129,597|825,838,639|182,435,398|

 (3) List of defined contribution plans
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increased this term|Decreased this term|Closing balance|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
||||||
|-|-|-|-|-|
|1. Basic pensions|25,388|53,602,090|53,455,510|171,968|
|2. Unemployment insurance|832|1,918,963|1,913,571|6,224|
|Total|26,220|55,521,053|55,369,081|178,192|

 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 first half of 2018, management bonuses amounting to RMB 31,000,000 (Jan.-Jun. 2017: RMB 35,700,000) 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 RMB 4.28 per share. The total fair value of the equity instruments granted to the incentive object by the company for the first time is RMB 289,519,900. 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".
In the first half of 2018, and the cost associated with equity incentive plan is confirmed at RMB 95,635,500 in this phase.
22. Tax payable
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Value-added-tax payable|37,724,917|48,496,225|
|Corporate income tax payable|41,970,446|35,100,800|
|Individual income tax payable|5,768,179|5,177,080|
|City maintenance and construction tax|2,888,985|4,261,902|
|Property tax payable|8,058,999|8,617,044|
|Education surcharge payable|2,430,091|3,348,566|
|environmental protection tax|2,926,779||
|Others|5,844,303|6,995,147|
|Total|107,612,699|111,996,764|

 23. Interest payable
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Interest of long-term borrowings with periodic payments of|||
||976,143|938,950|
|interest and return of principal at maturity|||
|Interest payable for short-term borrowings|6,110,565|5,471,325|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
||||
|-|-|-|
|Interest payable for medium term notes|66,284,488|27,622,465|
|Total|73,371,196|34,032,740|

 24. Dividends payable
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Restricted shares dividend|4,875,583||
|Total|4,875,583||

25. Other account payable
(1) List of other account payable by nature
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Guarantee deposits received from construction|||
||60,768,771|49,624,256|
|contractors|||
|Accrued cost of sales (i)|25,927,613|58,584,562|
|Temporary collection of payment for land|||
||55,496,000|56,196,000|
|transfer|||
|Payable for contracted labour costs|17,614,260|17,568,695|
|Temporary receipts|15,621,231|7,964,070|
|Deposit for disabled|5,280,590|5,230,110|
|Restricted share repurchases obligation (ii)|412,474,296|417,349,879|
|Industrial production scheduling funds|15,000,000||
|Others|12,357,872|6,806,782|
|Total|620,540,633|619,324,354|

 (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 this item, the repurchase obligation of restricted shares is recognized by the company as liabilities and meanwhile the treasury stock will be recognized in terms of corresponding amount.
26. Current portion of non-current liabilities
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Current portion of long-term borrowings|234,000,000|194,880,000|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
||||
|-|-|-|
|Current portion of finance lease|707,647,396|709,381,397|
|Total|941,647,396|904,261,397|

 27. Other current liabilities
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Others|300,000|300,000|
|Total|300,000|300,000|

 28. Long-term borrowings
(1) Categories of long-term loans
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Guaranteed|364,000,000|354,120,000|
|Medium term notes|2,000,000,000|1,200,000,000|
|Total|2,364,000,000|1,554,120,000|

 Approved by file No.[2015] MTN225 of Inter-bank Market Trading Association, the Company is entitled to issue medium term notes with the limit of RMB 1,200,000,000, which expires on 28 May 2017.
On 14 July 2015, the Company issued the Phase I medium term notes of RMB 1,200,000,000 for 2015, with the maturity data of 14 July 2020 and annual rate of4.94%.
Approved by file No.[2018] MTN157 of Inter-bank Market Trading Association, the Company is entitled to issue medium term notes with the limit of RMB 800,000,000, which expires on 20 March 2020.
On 4 May 2018, the Company issued the Phase I medium term notes of RMB 800,000,000 for 2018, with the maturity data of 4 May 2021 and annual rate of7%.
As at 30 June 2018, the interest of long-term borrowings varied from4.75%-7% (31 December 2017:4.75%-5.94%).
29. Long-term account payable
(1) List of Long-term account payable by nature
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Finacial lease|866,214,017|1,161,794,247|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 The sale and leaseback lease of the group in this phase is a mortgage loan with a lease term of 36 months. On June 30, 2018, the real interest rate of financing lease loans is4.49%-7.8%.
30. Deferred income
Unit: RMB
|||||||
|-|-|-|-|-|-|
|||Increase in currentperiod|decrease in current|||
|Item|Opening balance|||Closing balance|Reason|
||||period|||
|Government grants|562,701,103|2,680,000|15,354,638|550,026,465||
|Total|562,701,103|2,680,000|15,354,638|550,026,465|--|

Government grants are analysed below:
Unit: RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
||||||Amount of||||
||||||cost and||||
|||Increase in|Included in||expense||||
||Opening|||||Other|Closing|Related to assets|
|Item in debt||current|non-busines|Account to|written||||
||balance|||||changes|balance|or income|
|||period|s income|other inco|down in||||
|||||me in this|current||||
|||||period|period||||
|Tianjin CSG Golden|||||||||
||53,717,119|||1,687,446|||52,029,673||
|Sun Project (i)||||||||Assets related|
|Dongguan CSG|||||||||
|Golden Sun|43,328,250|||1,375,500|||41,952,750||
|Project (ii)||||||||Assets related|
|Hebei CSG Golden|||||||||
||44,000,000|||1,375,000|||42,625,000||
|Sun Project (iii)||||||||Assets related|
|Xianning CSG|||||||||
|Golden Sun|47,982,917|||1,515,250|||46,467,667||
|Project (iv)||||||||Assets related|
|Infrastructure|||||||||
|compensation for|||||||||
||39,628,898|||2,020,769|||37,608,129||
|Wujiang CSG|||||||||
|Glass Co., Ltd (v)||||||||Assets related|
|Qingyuan|||||||||
|Energy-saving project|20,789,167|||1,235,000|||19,554,167||
|(vi)||||||||Assets related|
|Yichang Silicon|||||||||
|products project|21,796,875|||1,406,250|||20,390,625||
|(vii)||||||||Assets related|
|Yichang CSG silicon|12,662,876|||613,867|||12,049,009|Assets related|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
||||||||
|-|-|-|-|-|-|-|
|slice auxiliary|||||||
|project (viii)|||||||
|Sichuan|||||||
|energy-saving|10,475,460||827,010||9,648,450||
|glass project (ix)||||||Assets related|
|Group coating film|||||||
|experimental|7,526,280||941,880||6,584,400||
|project (x)||||||Assets related|
|Yichang expert|||||||
||3,599,883||153,331||3,446,552||
|silicon project (xi)||||||Assets related|
|Yichang|||||||
|semiconductor|3,400,000||133,333||3,266,667||
|silicon project (xii)||||||Assets related|
|Yichang CSG Display|||||||
||50,836,604||1,267,239||49,569,365||
|project (xiii)||||||Assets related|
|Xianning|||||||
|Photoelectric|7,800,000||||7,800,000||
|project (xiv)||||||Assets related|
|Group talent fund|||||||
||171,000,000||||171,000,000||
|project (xv)||||||Income related|
||24,156,774||||26,034,011|Assets related/Income|
|||2,680,000|716,775|85,988|||
|Others||||||related|
|Total|562,701,103|2,680,000|15,268,650|85,988|550,026,465|——|

 (i)The allowance was granted by Tianjin Municipal Government. The allowance was used for establishing PV power station by Tianjin CSG Architectural Glass Co., Ltd. The facilities belonged to Tianjin CSG upon completion. The allowance will be credited to income statement in 20 years, the useful life of the PV power station.
(ii)The allowance was granted by Dongguan Municipal Government. The allowance was used for establishing PV power station by Dongguan CSG Architectural Glass Co., Ltd. The facilities belonged to Dongguan CSG upon completion. The allowance will be credited to income statement in 20 years, the useful life of the PV power station.
(iii)The allowance was granted by Langfang Municipal Government. The allowance was used for establishing PV power station by Hebei CSG Glass Co., Ltd. ("Hebei CSG"). When the facilities were set up, they belonged to Hebei CSG. The allowance will be credited to income statement in 20 years, the useful life of the PV power station.
(iv)The allowance was granted by Xianning Municipal Government. The allowance was used for establishing PV power station by Xianning CSG Glass Co Ltd. The facilities belonged to Xianning CSG upon completion. The allowance will be credited to income statement in 20 years, the useful life of the PV power station.
(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.
CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 (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 and 15 years
(xii) 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
(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 of light guide plate production line, which is used to pay for Xianning CSG Glass Co. Ltd. constructing the project of photoelectric optical glass of light guide plate 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 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.
CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 31. Share Capital
Unit: RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||Changed in the report period (+,-)||||||
||Opening||||||Closing|
|||||Transferredfrom reserves||||
||balance|New issues|Bonus issue||Others|Sub-total|balance|
|Total of capital|2,484,147,547||||||2,856,769,678|
|||||372,622,131||372,622,131||
|shares||||||||

32. Capital surplus
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increased this term|Decreased this term|Closing balance|
||1,353,802,562||372,622,131|981,180,431|
|Capital premium (Share premium)|||||
||-47,420,797|95,635,500||48,214,703|
|Other capital surplus|||||
||1,306,381,765|95,635,500|372,622,131|1,029,395,134|
|Total|||||

 (i)The Company passed the 2017 annual general meeting of shareholders held on May 14, 2018 and transferred 1.5 shares to every 10 shares for all shareholders. The total share capital before the distribution was 2,484,147,547 shares, and the total share capital after the dividend was increased to 2,856,769,678 shares. Capital reserve decreased by RMB 372,622,131;
(ii) This year, due to the equity incentive plan, the share payment fee of RMB 95,635,500 was confirmed.
33. Treasury shares
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increased this term|Decreased this term|Closing balance|
||417,349,879||4,709,630|412,640,249|
|Obligations of restricted share buybacks|||||
||417,349,879||4,709,630|412,640,249|
|Total|||||

 The Company calculated the amount determined based on the number of restricted stocks issued and the corresponding repurchase price, and confirmed the liabilities and treasury stocks. The decrease in treasury stocks was mainly due to the transfer of the restricted stock stocks during the report period.
34. Other comprehensive income
Unit: RMB
|||||||||
|-|-|-|-|-|-|-|-|
||Openingbalance|||||||
|||Occuring in current period||||||
||||||||Closing|
|Item||Amount|Less: Amount|Less:|After-tax|After-tax||
||||||||balance|
|||incurred|transferred into|income|attribute to|attribute to||
|||before|profit and loss in the|tax|the parent|minority||

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
|||||||||
|-|-|-|-|-|-|-|-|
|||income|current period that|expense|company|shareholder||
|||tax|recognized into|||||
||||other|||||
||||comprehensive|||||
||||income in prior|||||
||||period|||||
|I. Other comprehensive income not||||||||
|reclassified into profit and loss in||||||||
|futur||||||||
|II. Other comprehensive income|||||692,018|||
|reclassified into profit and loss in|1,948,943|692,018|||||2,640,961|
|future||||||||
|Differences on translation of foreign|||||692,018|||
||-601,057|692,018|||||90,961|
|currency financial statements||||||||
|Finance incentives for energy and||||||||
||2,550,000||||||2,550,000|
|technical transformation||||||||
|Total of other comprehensive income|1,948,943|692,018|||692,018||2,640,961|

 35. Special reserves
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increased this term|Decreased this term|Closing balance|
|Safety production cost|3,224,938|4,150,167|3,387,069|3,988,036|
|Total|3,224,938|4,150,167|3,387,069|3,988,036|

 36. Surplus reserves
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Beginning of term|Increased this term|Decreased this term|End of term|
||792,739,764|||792,739,764|
|Statutory surplus reserve|||||
||127,852,568|||127,852,568|
|Discretionary surplus reserve|||||
|Total|920,592,332|||920,592,332|

 37. Undistributed profits
Unit: RMB
||||
|-|-|-|
|Items|The current period|The same period of last year|
|Retained earnings at the end of the previous termbefore adjustment|||
||4,159,642,227|3,576,949,573|
|Retained earnings at the beginning of this term|4,159,642,227|3,573,871,573|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
||||
|-|-|-|
|after adjustment|||
|Add: net profits belonging to equity holders of the|||
||352,837,153|392,992,163|
|Company|||
|Less: Appropriations to statutory surplus reserve|||
||124,041,424|207,533,556|
|common stock dividends payable|||
||4,388,437,956|3,759,330,180|
|Retained earnings in the end|||

 38. Revenue and cost of sales
Unit: RMB
||||||
|-|-|-|-|-|
||Occurred in current term||Occurred in previous term||
|Item|||||
||Revenue|Cost|Revenue|Cost|
||5,427,330,622|4,086,213,828|4,914,535,874|3,730,914,851|
|Revenue from main operations|||||
||43,838,976|13,282,926|29,801,987|6,599,611|
|Revenue from other operations|||||
|Total|5,471,169,598|4,099,496,754|4,944,337,861|3,737,514,462|

 39. Tax and surcharge
Unit: RMB
||||
|-|-|-|
|Item|Occurred in current term|Occurred in previous term|
|City maintenance and construction tax|20,205,850|15,364,494|
|Educational surcharge|16,053,678|11,927,211|
|Housing property tax|15,231,539|14,797,102|
|Land use rights|10,028,066|11,043,223|
|Business tax|2,733,716|2,411,686|
|Environmental protection tax|5,879,730||
|Others|1,797,967|6,202,059|
|Total|71,930,546|61,745,775|

 40. Selling Expenses
Unit: RMB
||||
|-|-|-|
|Item|Occurred in current term|Occurred in previous term|
|Freight expenses|83,319,840|76,391,481|
|Employee benefits|56,534,666|49,496,703|
|Entertainment expenses|6,061,293|5,674,868|
|Business travle expenses|4,909,377|5,113,500|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
||||
|-|-|-|
|Vehicle use fee|3,839,779|3,531,901|
|Rental expenses|3,085,489|3,029,551|
|Compensation|765,215|532,240|
|General office expenses|1,492,596|1,536,282|
|Depreciation expenses|494,202|482,108|
|Others|11,714,797|10,556,097|
|Total|172,217,254|156,344,731|

 41. Administrative Expenses
Unit: RMB
||||
|-|-|-|
|Item|Occurred in current term|Occurred in previous term|
|Research and development expenses|166,041,185|151,590,181|
|Employee benefits|237,887,025|135,166,127|
|Depreciation expenses|31,624,004|31,885,617|
|Amortisation of intangible assets|23,153,773|19,756,528|
|General office expenses|10,595,047|12,640,569|
|Labour union funds|7,756,982|7,083,212|
|Entertainment fees|7,056,600|4,800,751|
|Business travel expenses|5,348,267|4,486,643|
|Utility fees|4,734,267|4,529,626|
|Canteen costs|4,046,654|4,404,253|
|Vehicle use fee|3,268,588|2,966,987|
|Rental expenses|2,273,435|2,457,132|
|Consulting advisers|14,334,351|6,015,614|
|Others|22,433,824|14,771,100|
|Total|540,554,002|402,554,340|

 42. Finance Expenses
Unit: RMB
||||
|-|-|-|
|Item|Occurred in current term|Occurred in previous term|
|Interest expenses|203,531,507|143,194,586|
|Less: Interest income|23,033,418|4,186,712|
||-1,568,225|2,109,890|
|Exchange losses|||
||6,947,562|2,256,263|
|Others|||

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
||||
|-|-|-|
|Total|185,877,426|143,374,027|

 43. Asset impairment losses
Unit: RMB
||||
|-|-|-|
|Item|Occurred in current term|Occurred in previous term|
|Bad debt loss|3,653,609|1,108,695|
|Total|3,653,609|1,108,695|

 44. Asset disposal income
Unit: RMB
||||
|-|-|-|
|Source of income from assets disposal|Occurred in current term|Occurred in previous term|
|Gains on disposal of non-current assets|-567,830|-71,756|

 45. Other income
Unit: RMB
||||
|-|-|-|
|Source of other gains|Occurred in current term|Occurred in previous term|
|Government subsidy amortization|15,268,650||
|Industry support funds|236,000|12,600,000|
|Research grants|1,423,460|6,479,492|
|Energy conservation and utilizationsupport funds|||
||7,000|128,116|
|Government incentive funds|4,239,400|4,323,546|
|Others|689,290|143,080|
|Total|21,863,800|23,674,234|

 46. Non-operating income
Unit: RMB
|||||
|-|-|-|-|
||Occurred in current|Occurred in previous|Amount of non-recurring gain and loss|
|Item||||
||term|term|included in the report period|
|Government grants|150,000|14,826,965|150,000|
|Default income|75,000||75,000|
|Compensation income|837,396|146,436|837,396|
|Amounts unable to pay|282,061|520|282,061|
|Others|1,251,338|997,941|1,251,338|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
|||||
|-|-|-|-|
|Total|2,595,795|15,971,862|2,595,795|

 Government subsidy included in current profit and loss
Unit: RMB
|||||
|-|-|-|-|
|Item|Occurred in current term|Occurred in previous term|Related to assets or income|
|Government grants amortisation||14,826,965|Assets related/Income related|
|Government awards fund|150,000||Income related|
|Total|150,000|14,826,965|--|

 47. Non-operating expenses
Unit: RMB
|||||
|-|-|-|-|
||Occurred in current|Occurred in previous|Amount of non-recurring|
|Item||||
||term|term|gain and loss included in the report period|
|Donation||199,999||
|Others|878,551|403,103|878,551|
|Total|878,551|603,102|878,551|

 48. Income tax expenses
(1) List of income tax expenses
Unit: RMB
||||
|-|-|-|
|Item|Occurred in current term|Occurred in previous term|
|Current income tax|77,115,637|74,283,293|
|Deferred income tax|-15,744,533|6,169,728|
|Total|61,371,104|80,453,021|

 (2) Adjustment process of accounting profit and income tax expense
Unit: RMB
|||
|-|-|
|Item|Occurred in current term|
|Total profit|420,453,221|
|Current income tax expense accounted by tax and relevant regulations|58,805,863|
|Costs, expenses and losses not deductible for tax purposes|493,030|
|The impact of the application of the deductible losses of of the deferred||
||-2,047,668|
|income tax not recognized in the previous periods||
|Influence of deductible temporary difference or deductible losses of|23,905,430|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
|||
|-|-|
|unrecognized deferred income tax assets||
|Balance the previous year income tax adjustment|-14,815,121|
|Impact of tax incentives|-4,036,456|
|Non-taxable income|-933,974|
|Income tax expenses|61,371,104|

 49. Other comprehensive income
The details can be found in notes to the financial statements.
50. Items of the cash flow statement
(1) Cash generated by other operating activities
Unit: RMB
||||
|-|-|-|
|Item|Occurred in current term|Occurred in previous term|
|Government grant|6,745,150|23,674,234|
|Interest income|23,033,418|4,186,712|
|Others|34,088,357|40,349,756|
|Total|63,866,925|68,210,702|

 (2) Cash paid relating to other operating activities
Unit: RMB
||||
|-|-|-|
|Item|Occurred in current term|Occurred in previous term|
|Freight expenses|88,366,623|68,348,981|
|Canteen costs|18,797,322|21,140,169|
|General office expenses|15,300,093|16,993,639|
|Research and development expenses|32,721,683|26,795,302|
|Business travel expenses|12,947,259|12,971,903|
|Entertainment fees|13,644,421|11,650,156|
|Vehicle use fee|7,827,828|7,589,416|
|Maintenance fee|15,974,559|9,445,635|
|Rental expenses|5,358,924|4,103,767|
|Insurance|9,642,870|6,679,946|
|Bank fees|6,947,562|2,256,263|
|Consulting fees|8,397,822|6,015,614|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
||||
|-|-|-|
|Others|74,446,270|57,271,418|
|Total|310,373,236|251,262,209|

 (3) Cash generated by other investing activities
Unit: RMB
||||
|-|-|-|
|Item|Occurred in current term|Occurred in previous term|
|Government grants related to assets received|2,680,000|12,800,000|
|Collection trusted||11,239,200|
|Income from trial production of construction in progress|1,045,277||
|Total|3,725,277|24,039,200|

 (4) Cash paid relating to other investing activities
Unit: RMB
||||
|-|-|-|
|Item|Occurred in current term|Occurred in previous term|
|Payment for deposit and margin|4,673,145|31,475,182|
|Trial production expenditure in construction|54,018,834||
|Total|58,691,979|31,475,182|

 (5) Cash generated by other financing activities
Unit: RMB
||||
|-|-|-|
|Item|Occurred in current term|Occurred in previous term|
|Received interest free loan||1,381,000,000|
|Received mortgage loan||278,400,000|
|Collection of income tax of dividends of|||
||1,276,534||
|A-share & B-share|||
|Collection||2,490,239|
|Collect industrial production scheduling|||
||15,000,000|4,701,291|
|fund|||
|Total|16,276,534|1,666,591,530|

 (6) Cash paid relating to other financing activities
Unit: RMB
||||
|-|-|-|
|Item|Occurred in current term|Occurred in previous term|
|Payment of income tax of dividends of||1,701,507|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
||||
|-|-|-|
|A-share & B-share|||
|Cash paid for Commission fee|1,920,000|1,750,000|
|Repay financing leases|347,964,797||
|Payment for deposit and margin|12,116,876||
|Total|362,001,673|3,451,507|

 51. Supplement information to the cash flow statement
(1) Supplement information to the cash flow statement
Unit: RMB
||||
|-|-|-|
|Supplementary Info.|Amount of this term|Amount of last term|
|1. Reconciliation from net profit to cash flows from operating|||
||--|--|
|activities|||
|Net profit|359,082,117|400,214,048|
|Add: Provisions for assets impairment|3,653,609|1,108,695|
|Depreciation of fixed assets, gas and petrol depreciation,|||
||497,530,356|480,563,388|
|production goods depreciation|||
|Amortisation of intangible assets|23,153,773|19,756,528|
|Amortisation of long-term prepaid expenses|||
|Losses on disposal of fixed assets intangible assets and|||
||567,830|71,756|
|other long-term assets (“- “for gains)|||
|Losses on scrapping of fixed assets (“- “for gains)|||
|Loss from changes in fair value (“- “for gains)|||
|Finance expenses (“- “for gains)|203,531,507|143,194,586|
|Investment loss (“- “for gains)|||
|Decrease in deferred tax assets (“- “for increase)|-19,247,637|11,754,644|
|Increase of deferred income tax liability (“- “for decrease)|3,503,104|-5,584,916|
|Decrease of inventory (“- “for increase)|-27,723,994|-152,812,851|
|Decrease of operational receivable items (“- “for increase)|-288,368,392|-132,167,898|
|Increase of operational payable items (“- “for decrease)|-86,753,685|253,791,474|
|Others|95,635,500||
|Net cash flow generated by business operation|764,564,088|1,019,889,454|
|2. Net change of cash and cash equivalents|--|--|
|Balance of cash at period end|3,358,253,346|932,050,522|
|Less: Initial balance of cash|2,459,753,165|584,566,990|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
||||
|-|-|-|
|Net increasing of cash and cash equivalents|898,500,181|347,483,532|

 (2) Formation of cash and cash equivalents
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|I. Cash|3,358,253,346|2,459,753,165|
|Incl: Cash on hand|14,984|36,182|
|Bank deposits that can be readily drawn on demand|3,358,238,362|2,409,716,983|
|Other cash balances that can be readily drawn on demand||50,000,000|
|II. Cash equivalents|||
|III. Balance of cash and cash equivalents at th end of the period|3,358,253,346|2,459,753,165|

 52. Assets with restricted ownership or use rights
Unit: RMB
||||
|-|-|-|
|Item|Ending book value|Reason for restriction|
|Monetary assets|13,791,823|Restricted deposit flow|
|Fixed assets|2,369,789,041|Limited finance lease|
|Total|2,383,580,864|--|

53. Foreign currency monetary items
(1) Foreign currency monetary items
Unit: RMB
|||||
|-|-|-|-|
||Closing balance of foreign||Closing|
|Item||Exchange rate||
||currency||balance convert to RMB|
|Cash at bank and on hand|--|--|52,567,315|
|Incl: USD|7,509,132|6.6166|49,684,923|
|EUR|676|7.6515|5,172|
|HKD|3,309,892|0.8431|2,790,570|
|AUD|17,443|4.8633|84,831|
|JPY|30,367|0.0599|1,819|
|Accounts receivable|--|--|159,975,673|
|Incl: USD|22,876,273|6.6166|151,363,148|
|EUR|989,154|7.6515|7,568,512|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
|||||
|-|-|-|-|
|HKD|1,238,303|0.8431|1,044,013|
|Short-term borrowings|||63,232,500|
|Incl: HKD|75,000,000|0.8431|63,232,500|
|Accounts payable|||59,173,980|
|Incl: HKD|307|0.8431|259|
|USD|6,386,858|6.6166|42,259,285|
|EUR|1,964,778|7.6515|15,033,499|
|JPY|31,401,285|0.0599|1,880,937|

 VIII. The changes of consolidation scope
1. Other
On March 9, 2017, The Group established a subsidiary company, Chengdu CSG PV Energy Co., Ltd. As of June 30, 2018, the Group has not invested yet. The Company holds100% of its shares.
On March 2, 2017, The Group established a subsidiary company, Xianning CSG PV Energy Co., Ltd. As of June 30, 2018, the Group has not invested yet. The Company holds100% of its shares.
On February 22, 2017, The Group established a subsidiary company, Yichang CSG PV Energy Co., Ltd. As of June 30, 2018, the Group has not invested yet. The Company holds100% of its shares.
IX. Interest in other entities
1. Interest in subsidiary
(1) Composition of the Group
||||||||
|-|-|-|-|-|-|-|
||Major business|Place of||Shareholding (%)|||
|Name of subsidiary|||Scope of business|||Way of acquicition|
||location|registration||Direct|Indirect||
|||Chengdu,|Development, production and sales of special||||
|||||||Establishment|
|Chengdu CSG|Chengdu, PRC|PRC|glass|75%|25%||
|||Chengdu,|Development, production and sales of special||||
|||||||Split-off|
|Sichuan CSG Energy Conservation|Chengdu, PRC|PRC|glass and processing of glass|75%|25%||
||||Development, production and sales of special||||
|||||||Establishment|
|Tianjin Energy Conservation|Tianjin, PRC|Tianjin, PRC|glass|75%|25%||
|||Dongguan,|||||
|||||||Establishment|
|Dongguan CSG|Dongguan, PRC|PRC|Intensive processing of glass|75%|25%||
|Dongguan CSG Solar|Dongguan, PRC|Dongguan,|Production and sales of solar glass|75%|25%|Establishment|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
||||||||
|-|-|-|-|-|-|-|
|||PRC|||||
|||Dongguan,|Production and sales of hi-tech green battery||||
|||||||Establishment|
|Dongguan CSG PV-tech|Dongguan, PRC|PRC|and components||100%||
|||Yichang,|Production and sales of high-purity silicon||||
|||||||Establishment|
|Yichang CSG Silicon|Yichang, PRC|PRC|materials|75%|25%||
|||Wujiang,|||||
|||||||Establishment|
|Wujiang CSG|Wujiang, PRC|PRC|Intensive processing of glass|75%|25%||
|||Yongqing,|||||
|||||||Establishment|
|Hebei CSG|Yongqing, PRC|PRC|Production and sales of special glass|75%|25%||
|||Wujiang,|||||
|||||||Establishment|
|Wujiang CSG|Wujiang, PRC|PRC|Production and sales of special glass|100%|||
|China Southern Glass (Hong Kong|)|Hong Kong,|||||
|||||||Establishment|
|Limited|Hong Kong, PRC|PRC|Investment holding|100%|||
|||Yongqing,|Production and sales of ultra-thin electronic||||
|||||||Establishment|
|Hebei Shichuang|Yongqing, PRC|PRC|glass|100%|||
|||Xianning,|||||
|||||||Establishment|
|Xianning CSG|Xianning, PRC|PRC|Production and sales of special glass|75%|25%||
|||Xianning,|||||
|||||||Split-off|
|Xianning CSG Energy-Saving|Xianning, PRC|PRC|Intensive processing of glass|75%|25%||
|||Qingyuan,|Production and sales of ultra-thin electronic||||
|||||||Establishment|
|Qingyuan CSG Energy-Saving|Qingyuan, PRC|PRC|glass|100%|||
|Shenzhen CSG Financial Leasing Co|.,|Shenzhen,|||||
|||||||Establishment|
|Ltd.|Shenzhen, PRC|PRC|Finance leasing, etc.|75%|25%||
|Jiangyou CSG Mining Development C|o.|Jiangyou,|Production and sales of silica and its||||
|||||||Establishment|
|Ltd.|Jiangyou, PRC|PRC|by-products|100%|||
|||Shenzhen,|||||
|||||||Establishment|
|Shenzhen CSG PV Energy Co., Ltd.|Shenzhen, PRC|PRC|Investment management of photovoltaic plant|100%|||
|||Shenzhen,|Production and sales of display component||||
|||||||Acquisition|
|Shenzhen Nanbo Display|Shenzhen, PRC|PRC|products|60.80%|||
|||Xianning,|||||
|||||||Acquisition|
|Xianning CSG Photoelectric|Xianning, PRC|PRC|Photoelectric glass and high aluminium glass|37.50%|62.50%||

(2)The significant non-fully-owned subsidiaries of the Group
Unit: RMB
||||||
|-|-|-|-|-|
|||Total profit or loss|Dividends distributed||
||Shareholding|||Minority interest|
|||attributable to minority|to minority interests||
|Subsidiaries|of minority|||as at 30 June|
|||shareholders for the year|for the year ended 30||
||shareholders|||2018|
|||ended 30 June 2018|June 2018||

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
|||||
|-|-|-|-|
|Shenzhen Nanbo Display Technology Co.,||||
||39.20%|4,388,860|307,291,224|
|Ltd.||||

(3) The major financial information of the significant non-fully-owned subsidiaries of the Group
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||Closing balance||||||
|Name of|||||||
||Current|Non-current|||||
|Subsidiary|||Total assets|Current liabilities|Non-current liabilities|Total liabilities|
||assets|assets|||||
|Shenzhen|260,907,161|1,405,303,159|1,666,210,320|621,330,169|238,708,875|860,039,044|
|Nanbo|Opening balance||||||
|Display|||||||
||Current|Non-current|||||
|Technology|||Total assets|Current liabilities|Non-current liabilities|Total liabilities|
||assets|assets|||||
|Co., Ltd.|||||||
||230,735,047|1,384,202,485|1,614,937,532|588,962,555|237,351,982|826,314,537|

 Unit: RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
||Occurred in current term||||Occurred in previous term||||
|Name of|||Total|Cash flows from|||Total|Cash flows|
|Subsidiary|Revenue|Net profit|comprehensi|operating|Revenue|Net profit|comprehensiv|from operating|
||||ve income|activities|||e income|activities|
|ShenzhenNanbo|||||||||
|Display|240,861,525|11,154,553|11,154,553|30,440,528|228,993,498|14,924,574|14,924,574|27,884,582|
|TechnologyCo., Ltd.|||||||||

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 X. Risk related to financial instrument
The Group's activities expose it to a variety of financial risks: market risk (primarily currency risk and interest rate risk), credit risk and liquidity risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance.
(1) Market risk
(a) Foreign exchange risk
TheGroup’s major operational activities are carried out in Mainland China and a majority of the transactions are denominated in RMB. However, some of the export business is settled in foreign currency. Besides, the Group is exposed to foreign exchange risk arising from the recognised assets and liabilities, and future transactions denominated in foreign currencies, primarily with respect to US dollars and HKD. The Group monitors the scale of foreign currency transactions, foreign currency assets and liabilities, and adjust settlement currency of export business, to furthest reduce the currency risk.
As at 30 June 2018 the carrying amounts in RMB equivalent of theGroup’s assets and liabilities denominated in foreign currencies are summarized below:
||||||
|-|-|-|-|-|
||30 June 2018||||
||USD|HKD|Others|Total|
|Financial assets denominated in foreign currency-|||||
|Cash at bank and on hand|49,684,923|2,790,570|91,822|52,567,315|
|Receivables|151,363,148|1,044,013|7,568,512|159,975,673|
|Total|201,048,071|3,834,583|7,660,334|212,542,988|
|Financial liabilities denominated in foreigncurrency|||||
|Short-term borrowings||63,232,500||63,232,500|
|Payables|42,259,285|259|16,914,436|59,173,980|
|Total|42,259,285|63,232,759|16,914,436|122,406,480|

||||||
|-|-|-|-|-|
||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|
|Total|201,475,268|15,768,749|7,499,108|224,743,125|
|Financial liabilities denominated in foreigncurrency|||||
|Short-term borrowings||62,692,500||62,692,500|
|Payables|104,040,185|257|36,939,407|140,979,849|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
||||||
|-|-|-|-|-|
|Total|104,040,185|62,692,757|36,939,407|203,672,349|

 As at 30 June 2018, if the currency had strengthened/weakened by10% against the USD while all other variables had been held constant, theGroup’s net profit for the year would have been approximately RMB13,497,047 lower/higher (31 December 2017: approximately RMB8,281,982 lower/higher) for various financial assets and liabilities denominated in USD.
As at 30 June 2018, if the currency had strengthened/weakened by10% against the HKD while all other variables had been held constant, theGroup’s net profit for the year would have been approximately RMB5,048,845 higher/lower (31 December 2017: approximately RMB3,988,541higher/lower ) for various financial assets and liabilities denominated in HKD.
Other changes in exchange rate had no significant influence on the Group's operating activities.
(b) Interest rate risk
The Group's interest rate risk arises from long-term interest bearing borrowings including long-term borrowings and bonds payable. Financial liabilities issued at floating rates expose the Group to cash flow interest rate risk. Financial liabilities issued at fixed rates expose the Group to fair value interest rate risk. The Group determines the relative proportions of its fixed rate and floating rate contracts depending on the prevailing market conditions. As at 30 June 2018, theGroup’s long-term interest-bearing debt at variable rates and fixed rates as illustrated below:
||||
|-|-|-|
||30 June 2018|31 December 2017|
|Debt at fixed rates|2,274,000,000|1,425,000,000|
|Debt at variable rates|90,000,000|129,120,000|
|Total|2,364,000,000|1,554,120,000|

 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 theGroup’s outstanding floating rate borrowings, and therefore could have a material adverse effect on theGroup’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 theGroup’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
CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 credit history of the customers is regularly monitored by the Group. In respect of customers with a poor credit history, the Group will use written payment reminders, or shorten or cancel credit periods, to ensure the overall credit risk of the Group is limited to a controllable extent.
(3) Liquidity risk
Cash flow forecasting is performed by each subsidiary of the Group and aggregated by theGroup’s finance department in its headquarters. TheGroup’s finance department at its headquarters monitors rolling forecasts of the Group's short-term and long-term liquidity requirements to ensure it has sufficient cash reserve, while maintaining sufficient headroom on its undrawn committed borrowing facilities from major financial institutions so that the Group does not breach borrowing limits or covenants on any of its borrowing facilities to meet the short-term and long-term liquidity requirements.
As at 30 June 2018, the Group had net current liabilities of approximately RMB 1,466 million and committed capital expenditures of approximately RMB 218 million. Management will implement the following measures to ensure the liquidation risk limited to a controllable extent:
(a) The Group will have steady cash inflows from operating activities;
(b) The Group will pay the debts that mature and finance the construction projects through the existing bank facilities;
(c) The Group will closely monitoring the payment of construction expenditure in terms of payment time and amount.
The financial liabilities of the Group at the balance sheet date are analysed by their maturity date below at their undiscounted contractual cash as follows:
|||||||
|-|-|-|-|-|-|
|30 June 2018||||||
||Within 1 year|1 to 2 years|2 to 5 years|Over 5 years|Total|
|Short-term borrowings|4,044,317,738||||4,044,317,738|
|Notes payable|208,201,622||||208,201,622|
|Accounts payable|1,331,128,942||||1,331,128,942|
|Other payables|620,540,633||||620,540,633|
|Interest payable|73,371,196||||73,371,196|
|Dividend payable|4,875,583||||4,875,583|
|Other current liabilities|300,000||||300,000|
|Non-current liabilities duewithin one year|945,751,458||||945,751,458|
|Long-term payables||641,223,971|224,990,046||866,214,017|
|Long-term borrowings|124,645,000|124,645,000|2,417,851,740||2,667,141,740|
|Total|7,353,132,172|765,868,971|2,642,841,786||10,761,842,929|

|||||||
|-|-|-|-|-|-|
|31 December 2017||||||
||Within 1 year|1 to 2 years|2 to 5 years|Over 5 years|Total|
|Short-term borrowings|3,810,013,826||||3,810,013,826|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
||||||
|-|-|-|-|-|
|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|
|Non-current liabilities duewithin one year|911,348,902|||911,348,902|
|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|
|Total|7,068,756,936|718,326,195|2,142,007,297|9,929,090,428|

 XI. Disclosure of fair value
1. Fair value of financial assets and financial liabilities not measured at fair value
TheGroup’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.
30 June 2018 31 December 2017
Carrying amount F a ir value Carrying amount F a ir value
Financial liabilities -
Medium term notes
2,000,000,000 2,005,577,600 1,200,000,000 1,171,444,800 Total
2,000,000,000 2,005,577,600 1,200,000,000 1,171,444,800 The fair values of payables and medium-term notes are the present value of the contractually determined stream of future cash flows at the rate of interest applied at that time by the market to instruments of comparable credit status and providing substantially the same cash flows on the same terms, thereinto bonds payable belongs to Level 1 and medium term notes belong to Level 2. XII. Related party and related Transaction
1. The subsidiaries
The general information and other related information of the subsidiaries are set out in attached note.
2. Joint venture of the Company
On June 30, 2018, the Company has no joint venture.
CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 3. Other related parties
|||
|-|-|
|Name of other related parties|Relations between other related parties and the Company|
||Persons acting in concert with the first majority shareholder of the|
|Shenzhen Jushenghua Co. Ltd.||
||Group|
|Yichang Hongtai Real Estate Co. Ltd|Other related parties and their affiliates.|

4. Receivables from related parties
(1) Receivable item
|||||||
|-|-|-|-|-|-|
|Name of the||Closing banlance||Opening banlance||
||Related parties|||||
|item||Book balance|Bad debt provision|Book balance|Bad debt provision|
|Other|Yichang Hongtai RealEstate Co. Ltd|171,000,000||||
||||3,420,000|171,000,000|3,420,000|
|receivables||||||

5. Related party commitment
The commitments in relation to related parties contracted for but not yet necessary to be recognised on the balance sheet by the Group as at the balance sheet date are as follows:
On 22 November 2016, the Company received a letter from its shareholder, Jushenghua, stating that to support theGroup’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 theCompany’s operation; where the actual lender agrees with the extension application, the term of the borrowing is extended accordingly.
XIII. Share Payment
1. Overall situation of share payment
√ Applicable□ Non-applicable
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
CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 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. Unlock Schedule Unlock Time Unlock Ratio First unlock from the date of the first transaction 12 months after the award date to the date of 40% the last transaction within 24 months from the grant date.
Second unlock from the date of the first trading day 24 months after the grant date to the date of 30% the last trading day within 36 months from the grant date
Third unlock from the date of the first trading day 36 months after the grant date to the day of 30% the last trading day within 48 months from the grant date
2. Equity-settled share payment
√ Applicable□ Non-applicable
Method for Determining the Fair Value of Equity Black-Scholes Model
Instruments on the Grant Date
Determination of the number of vesting equity Based on the latest information on the change in the number of instruments 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 current Not applicable
estimates and previous estimates
Cumulative amount of equity-settled share-based
103,830,195
payment in capital reserves
Total equity confirmed by equity-settled
95,635,500
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.
CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 In the first half of 2018, 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 95,635,500.
3. Share payment in cash
□Applicable√ Non-applicable
XIV. Commitments and contingencies
1. Significant commitments
Important commitments on balance sheet date.
(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:
30 June 2018 31 December 2017 Buildings, machinery and equipment 217,726,070 150,418,893 (2) Operating lease commitments
The future minimum lease payments due under the signed irrevocable operating leases contracts are summarized as follows: 30 June 2018 31 December 2017 Within 1 year
2,911,953 3,675,748 1 to 2 years
1,944,336 1,914,948 2 to 3 years
1,300,108 1,472,224 Over 3 years
2,656,252 3,443,641 Total
8,812,649 10,506,561 XV. Other significant events
1. Segment information
(1) Definition foundation and accounting policy of segment
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 other building energy - saving materials, the silica for the production thereof, etc.
- Solar energy segment, engaged in manufacturing and sales of polycrystalline silicon and solar battery and applications, etc.
CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 - 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 eachsegment’s revenue.
(2)Financial information of segment
Unit: RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||Electronic glass||||||
||Glass industry|and displays|Solar energy industry|Others|Unallocated|Elimination|Total|
|Revenue from externalcustomers|3,612,878,032|436,685,900|1,420,997,880||607,786||5,471,169,598|
|Inter-segment revenue|52,785,600|242,621|16,016,462||30,101,282|-99,145,965||
|Interest income|1,136,795|87,494|162,504|311|21,646,314||23,033,418|
|Interest expenses|93,306,653|10,576,695|50,461,160||49,186,999||203,531,507|
|Asset impairmentlosses|3,069,970|-136,967|766,724||-46,118||3,653,609|
|Depreciation andamortisation expenses|296,233,712|64,199,352|157,440,200|12,005|3,593,844||521,479,113|
|Total profit/(loss)|515,942,875|62,163,871|-58,388,826|-13,019|-96,162,032|-3,089,648|420,453,221|
|Income tax(expenses)/income|72,809,465|4,251,301|-13,871,995||-1,817,667||61,371,104|
|Net profit/(loss)|443,133,410|57,912,570|-44,516,831|-13,019|-94,344,365|-3,089,648|359,082,117|
|Total assets|8,890,658,347|3,147,841,600|5,031,590,904|653,411|3,454,067,494||20,524,811,756|
|Total liabilities|3,288,898,941|754,504,302|1,506,784,163|2,504,400|5,855,655,900||11,408,347,706|
|Increase in non-currentassets (i)|106,223,491|146,160,834|19,499,210||3,892,727||275,776,262|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 (3) Other statement
TheGroup’s revenue from external customers domestically and in foreign countries or geographical areas, and the total non-current assets other than financial assets and deferred tax assets located domestically and in foreign countries or geographical areas are as follows:
||||
|-|-|-|
|Revenue from external customers|Jan.-Jun. 2018|Jan.-Jun. 2017|
|Mainland|4,691,225,341|4,453,794,331|
|Hong Kong|152,221,834|159,110,247|
|Europe|37,480,049|10,469,923|
|Asia (other than Mainland and Hong Kong)|538,291,685|284,803,871|
|Australia|29,949,405|23,668,506|
|North America|18,072,258|9,235,672|
|Other regions|3,929,026|3,255,311|
|Total|5,471,169,598|4,944,337,861|
|Total non-current assets|30 June 2018|31 December 2017|
|Mainland|14,273,593,858|14,505,740,522|
|Hong Kong|12,915,627|12,798,642|
|Total|14,286,509,485|14,518,539,164|

 The Group has a large number of customers, but no revenue from a single customer exceed10% or more of theGroup’s revenue. XVI. Notes to Financial Statements of the Parent Company
1. Other accounts receivable
(1) Other accounts receivable disclosed by category:
Unit: RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Openning balance|||||
||||Bad debt||||||||
||Book balance|||||Book balance||Bad debt provision|||
|Category|||provision||||||||
||||||Book value|||||Book value|
|||||Propor|||||||
||Amount|Proportion|Amount|||Amount|Proportion|Amount|Proportion||
|||||tion|||||||
|Other accounts|||||||||||
|receivable|||||||||||
|withdrawn bad|||||||||||
|debt provision|2,814,602,307|100%|3,462,906||2,811,139,401|2,403,843,840|100%|3,509,024||2,400,334,816|
|according to|||||||||||
|credit risks|||||||||||
|characteristics|||||||||||
|Total|2,814,602,307|100%|3,462,906||2,811,139,401|2,403,843,840|100%|3,509,024||2,400,334,816|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018 Other accounts receivable with large amount and were provided bad debt provisions individually at end of period.
□ Applicable√ Non-applicable
Other accounts receivable in the portfolio on which bad debt provisions were provided on aging analysis basis
□ Applicable√ Non-applicable
Other accounts receivable in the portfolio on which bad debt provisions were provided on percentage basis
√ Applicable□ Non-applicable
Unit: RMB
|||||
|-|-|-|-|
||Closing balance|||
|Name of portfolio||||
||Other receivable accounts|Bad debt provision|proportion%|
|portfolio 1|2,145,321|42,906|2%|
|portfolio 2|2,812,456,986|3,420,000||
|Total|2,814,602,307|3,462,906||

Other receivable accounts in the portfolio on which bad debt provisions were provided on other basis
□ Applicable√ Non-applicable
(2) Accounts receivable withdraw, reversed or collected during the reporting period
The amount of provision for bad debts during the report period was RMB760. The amount of the reversed or collected part during the report period was RMB 46,878.
(3) Other accounts receivable classified by the nature of accounts
Unit: RMB
||||
|-|-|-|
|Nature of accounts|Ending book balance|Beginning book balance|
|Accounts receivable of related party|2,812,456,986|2,399,392,648|
|Others|2,145,321|4,451,192|
|Total|2,814,602,307|2,403,843,840|

 (4) Top 5 of the closing balance of the other accounts receivable collated according to the arrears party Unit: RMB
|||||||
|-|-|-|-|-|-|
|||||Proportion of the total|Closing|
||Nature of|||||
|Name of the company||Closing balance|Ages|year end balance of the|balance of bad|
||accounts|||||
|||||accounts receivable (%)|debt provision|
|Yichang CSG Polysilicon Co., Ltd.|Subsidiary|1,377,570,600|Within 1 year|49%||
|Yichang CSG Display Co.,Ltd..|Subsidiary|307,293,852|Within 1 year|11%||
|Qingyuan CSG Energy Conservation|Subsidiary|||||
|||256,179,923||9%||
|New Meterials Co., Ltd.|||Within 1 year|||
|Yichang Hongtai Real Estate Co. Ltd|Related party|171,000,000|4 to 5 years|6%|3,420,000|
|Shenzhen Nanbo Display Technology|Subsidiary|144,702,069|Within 1 year|5%||

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
|||||||
|-|-|-|-|-|-|
|Co., Ltd.||||||
|Total|--|2,256,746,444|--|80%|3,420,000|

 2. Long-term equity investment
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||Impairment|||Impairment||
||Book balance||Book value|Book balance||Book value|
|||provision|||provision||
|Investment in|||||||
||4,911,117,578|15,000,000|4,896,117,578|4,810,987,652|15,000,000|4,795,987,652|
|subsidiaries|||||||
|Total|4,911,117,578|15,000,000|4,896,117,578|4,810,987,652|15,000,000|4,795,987,652|

 (1) Inventment in subsidiaries
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||||||Provision for|Closing balance|
||Opening|Increase in|Decrease in||||
|Invested company||||Closing balance|impairment of the|of impairment|
||balance|the term|the term||||
||||||current period|provision|
|Chengdu CSG Glass Co., Ltd.|146,977,347|3,480,978||150,458,325|||
|Sichuan CSG Energy Conservation|115,546,714|2,989,152||118,535,866|||
|Tianjin Energy Conservation Glass Co. Ltd|243,191,428|3,366,378||246,557,806|||
|Dongguan CSG Architectural Glass Co., Ltd.|193,916,049|3,467,028||197,383,077|||
|Dongguan CSG Solar Glass Co., Ltd.|349,801,154|4,135,152||353,936,306|||
|Yichang CSG Polysilicon Co., Ltd.|633,464,168|5,906,676||639,370,844|||
|Wujiang CSG North-east Architectural Glass|||||||
||251,516,189|2,363,622||253,879,811|||
|Co., Ltd.|||||||
|Hebei CSG Glass Co., Ltd.|262,265,341|3,115,692||265,381,033|||
|China Southern Glass (Hong Kong) Limited|85,802,602|704,790||86,507,392|||
|Wujiang CSG Glass Co., Ltd.|562,527,754|4,063,524||566,591,278|||
|Hebei Panel Glass Co., Ltd.|243,271,470|2,435,250||245,706,720|||
|Jiangyou CSG Mining Development Co.|||||||
||100,837,599|1,313,604||102,151,203|||
|Ltd.|||||||
|Xianning CSG Glass Co Ltd.|177,295,494|2,960,502||180,255,996|||
|Xianning CSG Energy Conservation Glass Co|||||||
||161,543,844|3,060,774||164,604,618|||
|Ltd.|||||||
|Qingyuan CSG Energy Saving New Materials|||||||
||300,376,848|2,231,838||302,608,686|||
|Co.,Ltd|||||||

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
||||||
|-|-|-|-|-|
|Shenzhen CSG Financial Leasing Co., Ltd.|133,500,000||133,500,000||
|Shenzhen CSG PV Energy Co., Ltd.|100,052,985|618,360|100,671,345||
|Shenzhen Nanbo Display Technology Co., Ltd.|542,691,888|6,393,726|549,085,614||
|Xianning CSG Photoelectric Glass Co., Ltd.|38,470,534|39,323,724|77,794,258||
|Others(ii)|167,938,244|8,199,156|176,137,400|15,000,000|
|Total|4,810,987,652|100,129,926|4,911,117,578|15,000,000|

 (2) Other notes
(i) As at June 30, 2018, long-term equity investment in subsidiaries contained the restricted stocks granted by the Company to the Employees of subsidiaries of the company, and the Company did not charge any fees for the restricted stocks which was deemed as an increase of costs of Long-term equity investment for subsidiaries by RMB 177,962,267 (31 December 2017: RMB114,582,341). (ii) The subsidiaries which have made provision for impairment were basically closed down in the previous year, and the provision for impairment for the long-term equity investment of them had been made by the Company according to the recoverable amount. 3. Operating income and operating costs
Unit: RMB
||||||
|-|-|-|-|-|
||Occurred in this term||Occurred in previous term||
|Item|||||
||Income|Costs|Income|Costs|
|Main business|||||
|Other business|30,709,068||27,295,266||
|Total|30,709,068||27,295,266||

4. Investment income
Unit: RMB
||||
|-|-|-|
|Item|Occurred in this term|Occurred in previous term|
|Long-term equity investment accounted by cost method|231,537,606||
|Total|231,537,606||

XVII. Supplementary Information
1. Statement of non-recurring gains and losses
√Applicable
□
Not applicable
Unit: RMB
||||
|-|-|-|
|Item|Amount|Note|

CSG HOLDING CO., LTD. Financial Report of Semi-annual Report 2018
||||
|-|-|-|
|Gains or losses on disposal of non-current assets|-567,830||
|Government grants recognised in profit or loss for current period (not including the subsidy enjoyed in|22,013,800||
|quota or ration according to national standards, which are closely relevant to enterprise’s business)|||
|Non-operating income and expenses other than aforesaid items|1,567,244||
|Less: Effect of income tax|3,453,960||
|Effect of minority interests|771,819||
|Total|18,787,435|--|

 Explain reasons for the extraordinary profit (gain)/loss defined byQ&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss inQ&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss.
□Applicable√ Not applicable
2. Return on net assets and earnings per share
|||||
|-|-|-|-|
||The weighted|Earnings per share||
|Profit in the report period|average net|Basic earnings per|Diluted earnings per|
||assets ratio|share (RMB/share)|share (RMB/share)|
|Net profit attributable to shareholders of the listed company(RMB)|4.09%|0.13|0.12|
|Net profit attributable to shareholders of the listed company after||||
||3.87%|0.12|0.12|
|deducting non-recurring gains and losses(RMB)||||

3. Difference of accounting data under domestic and overseas accounting standards
(1) Differences of the net profit and net assets disclosed in financial report prepared under international and Chinese accounting standards
□ Applicable√ Not applicable
(2) Difference of the net profit and net assets disclosed in financial report prepared under overseas and Chinese accounting standards
□ Applicable√ Not applicable