Before - CSG Holding



Stock code: 000012 / 200012 Short form of the stock: CSG A / CSG B Notice No.: 2011-034

CSG HOLDING CO., LTD.

SUMMARY of SEMI-ANNUAL REPORT 2011

[pic]

Chairman of the Board:

ZENG NAN

August 2011

§1 Important Notes

1.1 Board of Directors and the Supervisory Committee of CSG Holding Co., Ltd. and its directors, supervisors and senior executives hereby confirm that there are no any fictitious statements, misleading statements, or important omissions carried in this report, and shall take all responsibilities jointly and severally, for the truthfulness, accuracy and completeness of the whole contents.

This summary is abstracted from the full text of Semi-annual Report 2011, which is published on website (.cn). And the investors are suggested to read the full text of semi-annual report to understand more details.

1.2 Except the following director, other directors attended the Board of Director’s meeting in person to deliberate the Semi-Annual Report 2011.

|Name of absentee |Position of absentee |Reason for absence |Name of authorized attendee |

|Guo Yongchun |Director |Business trip |Yan Ganggang |

1.3 The Financial statements in this report are not audited.

1.4 Mr. Zeng Nan, Chairman of the Board & CEO of the Company, CFO Mr. Luo Youming and principle of the financial department Mr. Huang Yanbin confirm that the Financial Report enclosed in this report is true and complete.

1.5 This report is prepared both in Chinese and in English. Should there be any difference in interpretation of the text between the two versions, the Chinese version shall prevail.

§2 Company Profile

2.1 Basic information

|Short form of stock |Southern Glass A, Southern Glass B |

|Stock code |000012、200012 |

|Listed stock exchange |Shenzhen Stock Exchange |

| |Secretary of the Board of Directors |Securities Affairs Representative |

|Name |Wu Guobin |Zhou Hong |

|Address |CSG Building, No.1, 6th Industrial Road, Shekou, |CSG Building, No.1, 6th Industrial Road, Shekou, |

| |Shenzhen, China |Shenzhen, China |

|Telephone |(86) 755-26860666 |(86) 755-26860666 |

|Fax |(86) 755-26692755 |(86) 755-26692755 |

|E-mail |securities@ |securities@ |

2.2 Financial Data Highlights

2.2.1 Major accounting data as of the report period

Unit: RMB Yuan

| |30 June 2011 |31 December 2010 |Increase/decrease at the end of this|

| | | |report period compared with that at |

| | | |the end of last year (%) |

|Total assets |14,083,252,049 |12,469,619,167 |12.94% |

|Equity attributable to equity holders of the Company |6,514,161,319 |6,384,871,209 |2.02% |

|Paid-in capital |2,076,143,060 |2,076,721,060 |-0.03% |

|Net assets per share attributable to equity holders of |3.14 |3.07 |2.28% |

|the Company (RMB/share) | | | |

| |Jan.~Jun. 2011 |Jan.~Jun. 2010 |Increase/decrease in this report |

| | | |period year-on-year (%) |

|Revenue |4,438,534,102 |3,405,068,004 |30.35% |

|Operating profit |1,066,991,954 |801,975,031 |33.05% |

|Total profit |1,108,214,720 |829,278,685 |33.64% |

|Net profit attributable to equity holders of the Company|837,643,342 |635,951,595 |31.71% |

|Net profit attributable to equity holders of the Company|799,302,509 |604,644,926 |32.19% |

|after extraordinary gains and losses | | | |

|Basic earnings per share (RMB/share) Note |0.40 |0.31 |29.03% |

|Diluted earnings per share (RMB/share) Note |0.40 |0.31 |29.03% |

|Weighted average return on equity (%) |12.53% |11.40% |Increase 1.13 percentage points |

|Weighted average return on equity after deducting |11.95% |10.84% |Increase 1.11 percentage points |

|non-recurring gains and losses (%) | | | |

|Net cash from operating activities |942,700,324 |935,836,780 |0.73% |

|Net cash from operating activities per share (RMB/share)|0.45 |0.45 |0.00% |

Note: The financial data in the same period last year have been adjusted as new paid-in capital.

2.2.2 Items of extraordinary gains and losses

√ Applicable □ Inapplicable

Unit: RMB Yuan

|Items of extraordinary gains and losses |Amount |

|Gain and losses on disposal of non-current assets |707,807 |

|Government subsides recognized as gains and losses |33,235,194 |

|Net income of share transfer |5,194,363 |

|Net value of other non-operating expenses |7,279,765 |

|Tax effects on extraordinary gain and losses |-6,247,470 |

|Extraordinary gains and losses of minority interests |-1,828,826 |

|Total |38,340,833 |

2.2.3 Difference on net profit as audited by Chinese Accounting Standard (CAS) and International Accounting Standard (IAS)

□Applicable √Inapplicable

§3 Change in Share Capital and Particulars about Shareholders

3.1 Statement of change in share capital

√Applicable □ Inapplicable

Unit: share

| |Before the change |Increase / Decrease (+/-) in |After the change |

| | |the report period | |

| |Amount |Proportion |Others |Sub-total |Amount |Proportion |

|1. State-owned shares |0 |0 |0 |0 |0 |0 |

|2. State-owned legal person’s shares |0 |0 |0 |0 |0 |0 |

|3. Other domestic investor’s shares |38,148,000 |1.84% |-19,210,000 |-19,210,000 |18,938,000 |0.91% |

|- Domestic legal person’s shares |0 |0 |0 |0 |0 |0 |

|- Domestic natural person’s shares |38,148,000 |1.84% |-19,210,000 |-19,210,000 |18,938,000 |0.91% |

|4. Foreign investor’s shares |0 |0 |0 |0 |0 |0 |

|- Foreign legal person’s shares |0 |0 |0 |0 |0 |0 |

|- Foreign natural person’s shares |0 |0 |0 |0 |0 |0 |

|5. Senior executives’ shares |1,503,513 |0.07% |3,285,371 |3,285,371 |4,788,884 |0.23% |

|Unrestricted shares |2,037,069,547 |98.09% |15,346,629 |15,346,629 |2,052,416,176 |98.86% |

|1. RMB ordinary shares |1,274,485,555 |61.37% |15,346,629 |15,346,629 |1,289,832,184 |62.13% |

|2. Domestically listed foreign shares |762,583,992 |36.72% |0 |0 |762,583,992 |36.73% |

|3. Overseas listed foreign shares |0 |0 |0 |0 |0 |0 |

|4. Others |0 |0 |0 |0 |0 |0 |

|Total shares |2,076,721,060 |100% |-578,000 |-578,000 |2,076,143,060 |100% |

3.2 Particulars about shares held by the top ten shareholders and the top ten unrestricted shareholders

Unit: share

|Total number of shareholders at the end of the report period |257,040 (211,900 of A-share and 45,140 of B-share) |

|Particulars about shares held by the top ten shareholders: |

|Name |Nature |Proportion |Total |Restricted |shares |

| | | |amount |shares |pledged |

| | | | | |or frozen |

|Xin Tong Chan Development (Shenzhen) Co., Ltd. |- |67,740,000 |3.26% |0 |0 |

|Shenzhen International Holdings (SZ) Limited |- |65,430,000 |3.15% |0 |0 |

|China Ping’an Trust & Investment Co., Ltd. |- |60,035,000 |2.89% |0 |0 |

|China Construction Bank -Yinhua Core Value Select Stock Fund|- |58,600,000 |2.82% |0 |0 |

|ICBC－Guangdong Development Jufeng Stock Investment Fund |- |18,856,148 |0.91% |0 |0 |

|Invesco Funds Series 5 |Foreign legal |14,659,658 |0.71% |0 |0 |

| |person | | | | |

|Guotai Junan Securities (Hong Kong) Limited |Foreign legal |14,582,995 |0.70% |0 |0 |

| |person | | | | |

|Bank of China－Dacheng Blue Chip Steady Securities |- |12,556,347 |0.60% |0 |0 |

|Investment Fund | | | | | |

|Bank of China－e-Fund Shenzhen Stock 100 Open Index |- |12,263,551 |0.59% |0 |0 |

|Securities Investment Fund | | | | | |

|Particulars about the shares held by the top ten unrestricted shareholders: |

|Name of shareholders |Unrestricted |Type of |

| |shares |shares |

|China North Industries Corporation |75,167,934 |A-share |

|Xin Tong Chan Development (Shenzhen) Co., Ltd. |67,740,000 |A-share |

|Shenzhen International Holdings (SZ) Limited |65,430,000 |A-share |

|China Ping’an Trust & Investment Co., Ltd. |60,035,000 |A-share |

|China Construction Bank -Yinhua Core Value Select Stock Fund |58,600,000 |A-share |

|ICBC－Guangdong Development Jufeng Stock Investment Fund |18,856,148 |A-share |

|Invesco Funds Series 5 |14,659,658 |B-share |

|Guotai Junan Securities (Hong Kong) Limited |14,582,995 |B-share |

|Bank of China－Dacheng Blue Chip Steady Securities Investment Fund |12,556,347 |A-share |

|Bank of China－e-Fund Shenzhen Stock 100 Open Index Securities Investment Fund |12,263,551 |A-share |

|Statement on associated relationship among |Among shareholders listed above, Yiwan Industrial Development (Shenzhen) Co., Ltd. and Xin |

|the above shareholders or consistent action |Tong Chan Development (Shenzhen) Co., Ltd. are holding enterprises of Shenzhen International |

| |Holdings Limited. Except for this, there is no associated relationship had been found among |

| |other shareholders. |

3.3 Change in controlling shareholder and the actual controller

□ Applicable √ Inapplicable

§4 Director, Supervisor and Senior Executives

4.1 Change of shares held by director, supervisor and senior executives

□ Applicable √ Inapplicable

§5 Report of the Board of Director

5.1 Main business income classified according to industry:

Unit: RMB’0000

|Industry |Income |Cost |Gross |Increase/ |Increase/ |Increase/decrease in gross profit |

| | | |profit |decrease in |decrease in |year-on-year (%) |

| | | |ratio (%) |income |cost | |

| | | | |year-on-year |year-on-year | |

| | | | |(%) |(%) | |

|Architectural glass |117,440.81 |77,558.52 |33.96% |23.44% |15.70% |Increase 4.42 percentage points |

|industry | | | | | | |

|Solar energy industry |146,013.01 |84,084.30 |42.41% |67.84% |34.61% |Increase 14.22 percentage points |

5.2 Main business income classified according to location:

Unit: RMB’0000

|Location |Income of main business |Increase/decrease in this report period |

| | |compared with the same period in last year|

|Mainland, P.R.C. |323,131.90 |15.96% |

|Hong Kong, P.R.C. |22,538.84 |63.77% |

|Asia (excluding Mainland & Hong Kong, P.R.C.) |30,287.20 |165.19% |

|Europe |54,123.37 |144.81% |

|North America |3,922.89 |316.03% |

|Australia |5,276.05 |65.05% |

|Others |2,047.86 |-76.42% |

5.3 Explanation on reasons of material changes in main operations and its structure

□ Applicable √ Inapplicable

5.4 Explanation on reasons of material changes in profitability of main operations (gross profit ratio) compared with that of the last year

√ Applicable □ Inapplicable

|In report period, the gross profit margin of float glass in flat glass industry decreased compared with the same period of last year |

|due to descending price and ascending cost of float glass. The income and profit of solar energy industry increased observably |

|compared with the same period of last year due to a substantial increase in volume of production and sales as well as gross profit |

|margin. |

5.5 Analysis on reasons of material changes in profit structure compared with the previous year

□ Applicable √ Inapplicable

5.6 Application of the proceeds raised through shares offering

5.6.1 Application of the proceeds raised

□ Applicable √ Inapplicable

5.6.2 Particulars about the changed projects

□ Applicable √ Inapplicable

5.7 The modification plan of Board to the business plan for the second half year

□ Applicable √ Inapplicable

5.8 Estimation on accumulative net profit from the beginning of the year to the end of next report period to be loss probably or the warning of its material change compared with the corresponding period of the last year and explanation on reason

□ Applicable √ Inapplicable

5.9 Explanation of the Management on “Qualified Opinion” from the Certified Public Accountants in the report period by the Board of Directors

□ Applicable √ Inapplicable

5.10 Explanation of the Management on changes and disposal of the issues involved in “Qualified Opinion” from the Certified Public Accountants in the last year by the Board of Directors

□ Applicable √ Inapplicable

§6 Significant Events

6.1 Purchase, sales and reorganization of assets

6.1.1 Purchase of assets

□ Applicable √ Inapplicable

6.1.2 Sales of assets

√ Applicable □ Inapplicable

Unit: RMB’0000

|Transaction party |

6.2 Significant guarantees

√Applicable □ Inapplicable

Unit: RMB’0000

|Particulars about the external guarantee (excluding the controlling subsidiaries) |

|Total amount of external guarantee limit approved during the |0 |Total amount of external guarantee during the report |0 |

|report period (A1) | |period (A2) | |

|Total balance of external guarantee limit approved at the end |0 |Total balance of external guarantee at the end of the |0 |

|of the report period (A3) | |report period (A4) | |

|Guarantee of the Company for the controlling subsidiaries |

|Guaranteed objects |Date & No. of the notice |Amount of guarantee limit |Date of guarantee |

|Balance of guarantee limit approved for controlling |932,959 |Balance of guarantee for controlling subsidiaries at the|106,091 |

|subsidiaries at the end of the report period (B3) | |end of the report period (B4) | |

|Particulars about the guarantee of the Company |

|Total amount of guarantee limit approved in the report period |426,325 |Total amount of guarantee in the report period (A2+B2) |127,665 |

|(A1+B1) | | | |

|Balance of guarantee limit approved at the end of the report |932,959 |Balance of guarantee at the end of the report period |106,091 |

|period (A3+B3) | |(A4+B4) | |

|Proportion of the total guarantee in net assets of the Company (A4+B4) |16.62% |

|Including: |

|Total amount of the guarantee for shareholders, actual controller and correlated parties|0 |

|(C) | |

|The debts guarantee amount provided for the guarantee of which the assets-liability |20,904 |

|ratio exceeded 70% (D) | |

|Total amount of guarantee in net assets of the Company exceeded 50% (E) |0 |

|Total amount of guarantee aforesaid (C+D+E) |20,904 |

|Explanation of joint liabilities |If subsidiaries failed to perform obligations for prepayment, the Company will take all responsibilities jointly |

| |and severally within the guaranteed rage. |

6.3 Current non-operating related credits and liabilities

□ Applicable √ Inapplicable

6.4 Significant lawsuit and arbitrations

□ Applicable √ Inapplicable

6.5 Notes to the other significant events and their influences and analysis on the solutions

√Applicable □ Inapplicable

|A. Implementation of incentive plan |

| |

|According as Restricted A Shares Incentive Plan (hereinafter referred to Incentive Plan) approved by Shareholders’ General Meeting, the |

|Company issued 49.14 million restricted A-shares through private offering in total to 244 specific employees privately in July 2008, at |

|price of RMB 8.58 per share. The raised fund is RMB 421,621,200. |

| |

|On 18 June 2009 and 20 January 2010, the Company has bought back and wrote off total 14,407,500 restricted A shares respectively. Among |

|these, amount 12,062,500 restricted A shares has been bought back and wrote off because the achievement index of the Company 2008 didn’t|

|satisfied unlocking conditions in 2009, amount 2,345,000 restricted A shares has been bought back and wrote off because 22 former |

|incentive staffs resigned and didn’t accord with the qualification of incentive plan. |

| |

|On 13 May 2010, the Company implemented 2009 Annual Equity Distribution Plan, namely sending RMB 3.50 (tax included) in cash for every |

|10 shares to all shareholders, and provided share capital converted from capital reserves with 7 shares increased for each 10 shares at |

|the same time. The amount of invigorative restricted A shares add from 34,732,500 shares to 59,045,250 shares |

| |

|On 26 March 2010, the 13th meeting of the 5th Board of Directors examined and considered that the Phase II restricted shares held by |

|incentive staffs satisfied unlocking conditions according to the regulations of Restricted A Shares Incentive Plan. On 25 June 2010, |

|there was total 19,035,750 restricted A shares held by 214 incentive staffs met qualification of unlock and has been listed for trading.|

| |

|On 30 July 2010 and 28 January 2011, the Company has bought back and wrote off total 2,439,500 restricted A shares respectively because |

|there were 14 former incentive staffs had resigned and didn’t accord with the qualification of incentive plan. |

| |

|On 18 March 2011, the 20th meeting of the 5th Board of Directors examined and considered that the Phase III restricted shares held by |

|incentive staffs satisfied unlocking conditions according to the regulations of Restricted A Shares Incentive Plan. On 24 June 2010, |

|there was total 18,632,000 restricted A shares held by 206 incentive staffs met qualification of unlock and has been listed for trading.|

| |

|At present, the amount of 306,000 restricted A-shares held by 2 original incentive staffs still are in the process of buying back and |

|writing off. |

| |

|Details of the aforesaid could be found in relevant notices published on China Securities Journal, Securities Times, Hong Kong Wen Wei |

|Po and Juchao Information website (.cn) dated 19 June 2009 as well as published on China Securities Journal, Securities |

|Times, Hong Kong Commercial Daily and Juchao Information website (.cn) dated 22 January, 26 May, 24 June, 31 July 2010, |

|and 29 January, 22 March, 16 April, 4 June and 23 June 2011. |

| |

|B. Corporate bonds |

| |

|On 23 November 2009, the 2nd Extraordinary Shareholders’ General Meeting 2009 of the Company approved Proposal on Issuing Corporate |

|Bonds, and agreed the Company to issue unsecured corporate bonds with the amount of RMB 2 billion, the duration lasts less than 7 years |

|(including 7). The bonds with single period or multiple periods both are allowed, and the Company doesn’t plan to distribute and sell |

|bonds to the original shareholders preferentially. These raised funds intend to be used in paying back for short-term bank borrowings |

|and complementing operation capitals of the Company. On the premise of fulfilling listed conditions, Shareholders’ General Meeting of |

|Shareholders authorized Board of Directors to deal with the listing issues of the corporate bonds according to relevant regulations of |

|Stock Exchanges. |

| |

|On 11 October 2010, the bond issuance of the Company have received the approval of Reply on Public Bond Issuance of CSG Holding Co., |

|Ltd. (ZJXK[2010] No. 1369) issued from CSRC. |

| |

|On 18 October 2010, the Notice of Company Bond Issuance 2010 have published with totaling amount of RMB 2 billion, RMB 100 per piece for|

|issue price. The issuance adopted the combination of publicly offered to social investors on net and agreement offered to institution |

|investor off net. |

| |

|On 25 October 2010, the bond offering have been closed with the situation as: the bond divided into two varieties with 5-year and |

|7-year, in which variety I was the 5-year product with RMB 1 billion issuance scale, variety II was the 7-year product with RMB 1 |

|billion issuance scale. At the same time, attached with option of up-regulate coupon rate of issuer and re-sale option of investors. |

|More details found in Notice of Issuance Results on Company Bond 2010 published at China Securities Journal, Securities Times, Hong Kong|

|Commercial Daily and Juchao Website (.cn) dated 26 October 2010. The bond listed on 10 November 2010. The short form of |

|the stock for 5-year bond is “10CSG01”, and the stock code is 112021; the short form of the stock for 7-year bond is “10CSG02”, and the |

|stock code is 112022. |

| |

|C. Non-public issue of A stock to specific investors |

| |

|The Company plans to issue less than 0.25 billion shares of A stock to no more than 10 specific investors through private placement. The|

|total amount raised couldn’t be beyond RMB 4 billion. This event has been approved on the 2nd extraordinary shareholders’ meeting of |

|2011, and still waiting for approval from CSRC. More details will be found in relevant notices published at China Securities Journal, |

|Securities Times, Hong Kong Commercial Daily and Juchao Website (.cn) dated 19 January, 22 March and 8 April 2011.. |

| |

|D. Short-term financing bond |

| |

|On 15 April 2011, the Annual Shareholders’ General Meeting of the Company approved the proposal of issuing short-term financing bond. |

|The meeting agreed the Company to apply for short-term financing bond issuance with RMB0.7 billion limit. Declaration material has been |

|submitted to National Association of Financial Market Institutional Investors by the Company. |

6.5.1 Particulars about securities investment

□Applicable √Inapplicable

6.5.2 Equity of other listed companies held

√Applicable □Inapplicable

Unit: RMB Yuan

|Stock Code |Stock |Initial |Proportion |

| |Abbr. |Investment |of equity |

| | | |held |

|Commitments for Share |The original |The Company has implemented share merger reform in May 2006. |By the end of the |

|Merger Reform |non-tradable |Till June 2008, the share of the original non-tradable |report period, the|

| |shareholder Shenzhen |shareholders which holding over 5% total shares of the Company |original |

| |International Holdings |had all released. Therein, the original non-tradable shareholder|non-tradable |

| |(SZ) Limited and Xing |Shenzhen International Holdings (SZ) Limited (with former name |shareholders of |

| |Tong Chan Industrial |of Yiwan Industrial Development (Shenzhen) Co., Ltd. ) and Xing |the Company have |

| |Development (Shenzhen) |Tong Chan Industrial Development (Shenzhen) Co., Ltd. both are |strictly carried |

| |Co., Ltd. |wholly-funded subsidiaries to Shenzhen International Holdings |out their |

| | |Limited (hereinafter Shenzhen International for short) listed in|promises. |

| | |Hong Kong united stock exchange main board. On 9 July 2009, | |

| | |Shenzhen International held the Shareholders’ General Meeting | |

| | |and authorized its board of directors to sale the CSG A share | |

| | |held by Shenzhen International at price of no less than RMB 8.5.| |

| | |At the same time, Shenzhen International made commitment that it| |

| | |would strictly carry out related regulations of Securities Law, | |

| | |Administration of the Takeover of Listed Companies Procedures | |

| | |and Guiding Opinions on the Listed Companies’ Transfer of | |

| | |Original Shares Released from Trading Restrictions issued by | |

| | |CSRC during implementing share decreasingly-held plan and take | |

| | |information disclosure responsibility timely. | |

|Commitments for share |- |- |- |

|restricted trade | | | |

|Commitments made in |- |- |- |

|Acquisition Report or | | | |

|Reports on Change in | | | |

|Interests | | | |

|Commitments made in |- |- |- |

|Material Assets | | | |

|Reorganization | | | |

|Commitments made in |- |- |- |

|issuing | | | |

|Other commitments |- |- |- |

|(including additional | | | |

|commitments) | | | |

6.5.5 Proposal of profit distribution preplan or share conversion from capital public reserve

in the report period

□Applicable √Inapplicable

6.5.6 Other comprehensive income

Unit: RMB Yuan

|Items |Jan.~Jun. 2011 |Jan.~Jun. 2009 |

|1. Gain from available-for-sale financial assets | | |

|Less: Classified into other comprehensive income before and transferred into profit | |-6,184,231 |

|and loss – net | | |

|Subtotal | |-6,184,231 |

|2. Difference on translation of foreign currency financial statements |127,450 |1,913,104 |

|Subtotal |127,450 |1,913,104 |

|3. Others |1,450,000 | |

|Subtotal |1,450,000 | |

|Total |1,577,450 |-4,271,127 |

6.6 Particulars about the reception to investors in the report period

|Date |Place |Method |Name |

|2011.1.19 |Conference room |Interview |Acru Asset Management |

| | | |Kim Eng Securities (H.K.) Ltd. |

|2011.1.25 |Conference room |Telephone |Taiwan Sino Pac Securities |

|2011.2.21 |Conference room |Telephone |CLSA limited |

|2011.4.22 |Conference room |Interview |AXA SPDB Investment Managers |

| | | |Lordabbett China Assets Management |

|2011.4.25 |Conference room |Interview |Huachuang Securities Co., Ltd. |

|2011.4.26 |Conference room |Interview |Hanlun Investment Consultant (Shanghai) Co., Ltd. |

|2011.4.26 |Conference room |Telephone |Unify Securities Investment Trust Co., Ltd. |

| | | |Prudential Securities Investment Trust Co., Ltd. |

|2011.5.17 |Conference room |Telephone |VL Asset Management |

|2011.5.31 |Conference room |Telephone |Central China Securities Co., Ltd. |

|2011.6.2 |Conference room |Interview |Lion Fund Management Co., Ltd. |

|2011.6.7 |Conference room |Interview |J Capital Research, Aeris International S.A. |

|2011.6.27 |Conference room |Interview |CICC |

|2011.6.30 |Conference room |Interview |KGI Asia |

| | | |Taishin Securities Investment Trust Co., Ltd. |

| | | |Cathay Securities Investment Trust Co., Ltd. |

| | | |Prudential Securities Investment Trust Co., Ltd. |

| | | |Sinolink Securities Co., Ltd. |

| | | |Yintai Securities Co., Ltd. |

| | | |China Merchants Fund Management Co., Ltd. |

| | | |Shenzhen Flying Tiger Fund Management Co., Ltd. |

|Content discussed |Introducing the disclosed information about operation and production of the |

| |Company. |

§7 Financial Statement

7.1 Auditor’s opinion

|Financial Statement |√Non-audited □Audited |

7.2 Financial Statement

7.2.1 Consolidated and company balance sheets

Prepared by: CSG Holding Co., Ltd. 30 June 2011 Unit: RMB Yuan

| |30 June 2011 |31 December 2010|30 June 2011 |31 December 2010|

|ASSETS |Consolidated |Consolidated |Company |Company |

|Current assets | | | | |

|Cash at bank and on hand |817,753,586 |787,481,275 |241,032,010 |373,901,165 |

|Notes receivable |404,578,807 |362,674,115 |- |- |

|Accounts receivable |498,737,381 |242,201,307 |- |- |

|Advances to suppliers |159,155,350 |107,782,146 |40,000 |40,000 |

|Other receivables |56,058,241 |66,622,324 |1,112,629,656 |811,564,853 |

|Dividends receivable |1,000,000 |- |767,000 |5,298,425 |

|Inventories |540,096,350 |478,735,794 |- |- |

|Other current assets |43,043,034 |24,914,873 |- |- |

|Total current assets |2,520,422,749 |2,070,411,834 |1,354,468,666 |1,190,804,443 |

|Non-current assets | | | | |

|Long-term receivables |- |- |2,336,923,424 |2,316,038,617 |

|Long-term equity investments |65,803,688 |65,501,259 |4,247,099,303 |3,633,845,531 |

|Fixed assets |8,913,679,619 |8,830,895,516 |15,185,355 |27,627,216 |

|Construction in progress |1,759,117,742 |786,077,413 |- |- |

|Intangible assets |491,707,217 |381,276,917 |3,759,133 |5,600,854 |

|Development expenditure |8,051,607 |3,142,226 |- |- |

|Goodwill |18,404,380 |18,404,380 |- |- |

|Long-term prepaid expense |1,013,682 |1,002,500 |- |- |

|Deferred tax assets |71,279,625 |79,877,237 |- |- |

|Other non-current assets |233,771,740 |233,029,885 |- |21,840,000 |

|Total non-current assets |11,562,829,300 |10,399,207,333 |6,602,967,215 |6,004,952,218 |

|TOTAL ASSETS |14,083,252,049 |12,469,619,167 |7,957,435,881 |7,195,756,661 |

|Current liabilities | | | | |

|Short-term borrowings |1,431,767,595 |877,132,815 |163,203,120 |111,620,900 |

|Notes payable |290,290,777 |237,891,481 |- |- |

|Accounts payable |1,032,541,909 |950,310,253 |- |- |

|Advances from customers |121,160,227 |161,127,001 |- |- |

|Employee benefits payable |89,970,554 |186,997,327 |9,470,744 |97,163,797 |

|Taxes payable |60,340,191 |121,232,388 |1,123,421 |1,198,110 |

|Interest payable |80,656,171 |24,589,510 |4,391,471 |1,314,600 |

|Dividends payable |8,575,442 |687,627 |687,627 |687,627 |

|Other payables |327,764,060 |161,386,242 |963,208,652 |480,805,365 |

|Current portion of non-current liabilities |239,941,166 |75,690,541 |- |- |

|Other liabilities |2,926,872 |2,926,872 |- |- |

|Total current liabilities |3,685,934,964 |2,799,972,057 |1,142,085,035 |692,790,399 |

|Non-current liabilities | | | | |

|Long-term borrowings |1,173,938,410 |728,203,612 |- |- |

|Bonds payable |1,980,438,506 |1,978,479,422 |1,980,438,506 |1,978,479,422 |

|Special payables |1,000,000 |700,008 |- |- |

|Deferred tax liabilities |25,820,148 |29,507,743 |7,937,236 |8,149,616 |

|Other non-current liabilities |273,970,448 |173,537,976 |- |- |

|Total non-current liabilities |3,455,167,512 |2,910,428,761 |1,988,375,742 |1,986,629,038 |

|Total liabilities |7,141,102,476 |5,710,400,818 |3,130,460,777 |2,679,419,437 |

|Owners' equity | | | | |

|Paid-in capital |2,076,143,060 |2,076,721,060 |2,076,143,060 |2,076,721,060 |

|Capital surplus |1,325,907,290 |1,309,834,212 |1,378,645,640 |1,359,890,506 |

|Less：Treasury shares |(306,000) |(578,000) |(306,000) |(578,000) |

|Special reserve |8,086,016 |5,683,705 |- |- |

|Surplus reserve |506,530,148 |506,530,148 |506,530,148 |506,530,148 |

|Undistributed profits |2,595,692,336 |2,484,699,065 |865,962,256 |573,773,510 |

|Difference on translation of foreign currency financial |2,108,469 |1,981,019 |- |- |

|statements | | | | |

|Total equity attributable to equity holders of the Company |6,514,161,319 |6,384,871,209 |4,826,975,104 |4,516,337,224 |

|Minority interests |427,988,254 |374,347,140 |- |- |

|Total owners' equity |6,942,149,573 |6,759,218,349 |4,826,975,104 |4,516,337,224 |

|TOTAL LIABILITIES AND OWNER'S EQUITY |14,083,252,049 |12,469,619,167 |7,957,435,881 |7,195,756,661 |

7.2.2 Consolidated and company income statement

Prepared by: CSG Holding Co., Ltd. From January to June 2011 Unit: RMB Yuan

| |Jan.~Jun. 2011 |Jan.~Jun. 2010 |Jan.~Jun. 2011 |Jan.~Jun. 2010 |

|Items |Consolidated |Consolidated |Company |Company |

|Revenue |4,438,534,102 |3,405,068,004 |1,413,307 |- |

|Less: Cost of sales |(2,876,324,402) |(2,205,963,565) |(371,240) |- |

|Taxes and surcharges |(27,343,805) |(2,454,555) |- |- |

|Selling and distribution expenses |(139,454,241) |(124,564,573) |- |- |

|General and administrative expenses |(264,759,103) |(220,592,531) |(34,248,907) |(29,259,218) |

|Financial (expenses)/income - net |(65,210,104) |(57,476,189) |(1,703,817) |1,098,426 |

|Asset impairment losses |(4,947,285) |(1,096,604) |- |- |

|Add: Investment income |6,496,792 |9,055,044 |1,053,340,716 |705,828,171 |

|Operating profit |1,066,991,954 |801,975,031 |1,018,430,059 |677,667,379 |

|Add: Non-operating income |41,905,050 |30,048,303 |200,000 |220,000 |

|Less: Non-operating expenses |(682,284) |(2,744,649) |(3,622) |(17,412) |

|Including: Loss on disposal of non-current assets |(360,947) |(553,809) |(3,622) |(4,944) |

|Total profit |1,108,214,720 |829,278,685 |1,018,626,437 |677,869,967 |

|Less: Income tax expenses |(189,427,287) |(127,600,069) |212,380 |- |

|Net profit |918,787,433 |701,678,616 |1,018,838,817 |677,869,967 |

|Attributable to equity holders of the Company |837,643,342 |635,951,595 | | |

|Minority interests |81,144,091 |65,727,021 | | |

|Earnings per share | | | | |

|- Basic |0.40 |0.31 | | |

|- Diluted |0.40 |0.31 | | |

|Other comprehensive income |1,577,450 |(4,271,127) |- |(9,055,044) |

|Total comprehensive income |920,364,883 |697,407,489 |1,018,838,817 |668,814,923 |

|Total comprehensive income attributable to equity |839,220,792 |631,680,468 | | |

|holders of the Company | | | | |

|Total comprehensive income attributable to minority |81,144,091 |65,727,021 | | |

|interests | | | | |

7.2.3 Consolidated and company cash flow statement

Prepared by: CSG Holding Co., Ltd. From January to June 2011 Unit: RMB Yuan

| |Jan.~Jun. 2011 |Jan.~Jun. 2010 |Jan.~Jun. 2011 |Jan.~Jun. 2010 |

|Items |Consolidated |Consolidated |Company |Company |

|Cash flows from operating activities | | | | |

|Cash received from sales of goods or rendering of services |4,632,052,605 |3,837,181,164 |- |- |

|Refund of taxes and surcharges |127,969,773 |13,393,936 |- |- |

|Cash received relating to other operating activities |48,874,065 |25,752,999 |2,523,703 |1,754,526 |

|Sub-total of cash inflows |4,808,896,443 |3,876,328,099 |2,523,703 |1,754,526 |

|Cash paid for goods and services |(2,678,916,277) |(2,073,921,416) |- |- |

|Cash paid to and on behalf of employees |(482,145,788) |(322,438,294) |(122,863,889) |(69,084,371) |

|Payments of taxes and surcharges |(534,625,872) |(366,576,042) |(357,258) |(798,881) |

|Cash paid relating to other operating activities |(170,508,182) |(177,555,567) |(3,833,256) |(4,357,263) |

|Sub-total of cash outflows |(3,866,196,119) |(2,940,491,319) |(127,054,403) |(74,240,515) |

|Net cash flows from operating activities |942,700,324 |935,836,780 |(124,530,700) |(72,485,989) |

|Cash flows from investing activities | | | | |

|Cash received from disposal of investments |- |10,401,160 |133,000,000 |10,401,160 |

|Cash received from returns on investments |- |- |991,823,922 |244,489,057 |

|Net cash received from disposal of fixed assets, intangible |873,720 |10,428,461 |　- |- |

|assets and other long-term assets | | | | |

|Cash received from disposal of subsidiaries and other companies|182,582,884 |- |150,500,000 |- |

|Cash received relating to other investing activities |80,502,447 |- |122,766,734 |161,767,878 |

|Sub-total of cash inflows |263,959,051 |20,829,621 |1,398,090,656 |416,658,095 |

|Cash paid to acquire fixed assets, intangible assets and other |(1,589,103,709) |(736,904,427) |(346,505) |(844,493) |

|long-term assets | | | | |

|Cash paid to acquire investments |(55,535,338) |- |(715,834,546) |(183,126,000) |

|Cash paid to acquire subsidiaries and other companies |　- |- |　- |- |

|Cash paid relating to other investing activities |(10,000,000) |(11,523,976) |(10,000,000) |- |

|Sub-total of cash outflows |(1,654,639,047) |(748,428,403) |(726,181,051) |(183,970,493) |

|Net cash flows from investing activities |(1,390,679,996) |(727,598,782) |671,909,605 |232,687,602 |

|Cash flows from financing activities | | | | |

|Cash received from capital contributions |156,000,472 |- |- |- |

|Including: Cash received from capital contributions by minority|156,000,472 |- |- |- |

|shareholders of a subsidiaries | | | | |

|Cash received from borrowings |2,327,865,348 |610,431,052 |163,565,640 |114,276,500 |

|Cash received from issuing bonds |-　 |- |- |- |

|Cash received from other financing activities |142,976,786 |4,064,616 |- |- |

|Sub-total of cash inflows |2,626,842,606 |614,495,668 |163,565,640 |114,276,500 |

|Cash repayments of borrowings |(1,163,245,143) |(492,803,079) |(111,983,420) |(114,276,500) |

|Cash payments for interest expenses and distribution of |(894,331,088) |(546,135,631) |(728,697,705) |(428,708,921) |

|dividends or profits | | | | |

|Including: Cash payments for dividends or profit to minority |(122,822,796) |(80,286,898) |-　 |- |

|shareholders of subsidiaries | | | | |

|Cash payments relating to other financing activities |(9,053,915) |(18,200,016) |(2,762,840) |(8,840,400) |

|Sub-total of cash outflows |(2,066,630,146) |(1,057,138,726) |(843,443,965) |(551,825,821) |

|Net cash flows from financing activities |560,212,460 |(442,643,058) |(679,878,325) |(437,549,321) |

|Effect of foreign exchange rate changes on cash and cash |(2,618,291) |(1,479,110) |(369,735) |(101,196) |

|equivalents | | | | |

|Net increase/(decrease) in cash and cash equivalents |109,614,497 |(235,884,170) |(132,869,155) |(277,448,904) |

|Add: Cash and cash equivalents at beginning of year |660,213,739 |635,618,163 |373,901,165 |370,558,509 |

|Cash and cash equivalents at end of year |769,828,236 |399,733,993 |241,032,010 |93,109,605 |

7.2.4 Consolidated statement of changes in owner’s equity

Prepared by: CSG Holding Co., Ltd. 2010 Unit: RMB Yuan

| |Attributable to equity holders of the Company | | |

|Items |Paid-in |Capital |Less: |

| |capital |surplus |Treasury shares|

|Items |Paid-in |Capital |Less: |Special |Surplus |Undistributed |

| |capital |surplus |Treasury |reserve |reserves |profits |

| | | |shares | | | |

|Movement for the year 2010 | | | | | | |

|Other comprehensive income |- |(6,184,231) |- |- |- |(6,184,231) |

|Capital contribution and withdrawal by owners | | | | | | |

|-Share-based payments recognized in owner’s |(2,904,000) |51,555,565 |914,500 |- |- |49,566,065 |

|equity | | | | | | |

|Capital surplus transfer to paid-in capital |855,886,936 |(855,886,936) |- |- |- |- |

|Profit distribution |- |- |- |69,475,546 |(497,419,014) |(427,943,468) |

|- Appropriation to surplus reserves |- |- |- |69,475,546 |(69,475,546) |- |

|- Profit distribution to equity owners |- |- |- |- |(427,943,468) |(427,943,468) |

|Balanced at 31 December 2010 |2,076,721,060 |1,359,890,506 |(578,000) |506,530,148 |573,773,510 |4,516,337,224 |

|Balance at 1 January 2011 |2,076,721,060 |1,359,890,506 |(578,000) |506,530,148 |573,773,510 |4,516,337,224 |

|Movement for the first half year ended 30 June | | | | | | |

|2011 | | | | | | |

|Other comprehensive income |- |- |- |- |- |- |

|Capital contribution and withdrawal by owners | | | | | | |

|-Share-based payments recognized in owner’s |(578,000) |18,755,134 |272,000 |- |- |18,449,134 |

|equity | | | | | | |

|Profit distribution |- |- |- |- |(726,650,071) |(726,650,071) |

|- Appropriation to surplus reserves |- |- |- |- |- |- |

|- Profit distribution to equity owners |- |- |- |- |(726,650,071) |(726,650,071) |

|Balance at 30 June 2011 |2,076,143,060 |1,378,645,640 |(306,000) |506,530,148 |865,962,256 |4,826,975,104 |

7.3 Notes to the financial statements

7.3.1 If any change has taken place in the accounting policy, accounting estimation and accounting error correction, provide relevant contents, reasons and influence.

□Applicable √Inapplicable

7.3.2 If material change has taken place in the consolidation scope, provide relevant reasons and influence.

√Applicable □Inapplicable

|A. Heyuan CSG PV Encapsulation Material Co., Ltd. was established in Heyuan, Guangdong on 28 December 2010. The Company held 75% |

|equity. At end of 30 June 2011, the company still in preparation. |

| |

|B. Xianning CSG Glass Co., Ltd. was established in Xiangning, Hubei on 17 March 2011. The Company held 100% equity. At end of 30 June|

|2011, the company still in preparation. |

| |

|C. Qingyuan CSG Energy Conservation New-materials Co., Ltd. was established in Qingyuan, Guangdong on 5 May 2011. The Company held |

|75% equity. At end of 30 June 2011, the company still in preparation. |

| |

|D. The Company sold 100% equity of Dongguan CSG Ceramics Technology Co., Ltd.. The subsidiary was not in the consolidation scope in |

|the report period. |

7.3.3 If received non-standard audit reports, list the notes of relating matters

□Applicable √Inapplicable

Board of Directors of

CSG Holding Co., Ltd.

5 August 2011

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