Financial Performance - The company's revenue for the year ended December 31, 2023, was RMB 5,307,924,000, an increase of 22.6% compared to RMB 4,327,196,000 in 2022[11] - The net loss for the year was RMB 487,408,000, compared to a profit of RMB 101,775,000 in the previous year[11] - The group's sales cost rose from RMB 3.689 billion in the year ended December 31, 2022, to RMB 5.008 billion in the year ended December 31, 2023, representing an increase of approximately 36%[26] - The sales revenue of colorless glass significantly increased by 41%, contributing RMB 2.82 billion, which accounted for 53.1% of total revenue[71] - The sales revenue of energy-saving and new energy glass surged by 167%, reaching RMB 703 million, following the launch of a new photovoltaic glass production line[72] - The average selling price of glass products in 2023 was RMB 96 per heavy box, a decrease of 11% compared to last year[40] - The average selling price decreased by 11% compared to the previous year, impacting revenue despite increased sales volume[70] Cost and Expenses - Gross profit decreased to RMB 299,511,000 from RMB 638,189,000, reflecting a gross margin drop from 14.7% to 5.6%[11] - The financing cost increased by 46% to RMB 390,000,000 from RMB 268,000,000, primarily due to increased borrowing and rising costs of USD-denominated debt[14] - The group reported a significant increase in administrative expenses to RMB 394,344,000 from RMB 330,717,000, reflecting a rise of 19.3%[11] - The company's administrative expenses rose by 19% to RMB 394 million, primarily due to an increase in employee numbers and average salaries[85] - The group reported other operating expenses of approximately RMB 142 million for the year ended December 31, 2023, compared to none in the previous year, due to asset impairment provisions[28] Assets and Liabilities - The total assets of the company as of December 31, 2023, were RMB 14,960,243,000, compared to RMB 13,285,303,000 in 2022, representing a growth of 12.6%[11] - The total liabilities increased to RMB 12,735,639,000 from RMB 9,994,404,000, indicating a rise of 27.5%[11] - The company's current assets decreased by approximately 9% from RMB 3.666 billion to RMB 3.338 billion, mainly due to reductions in inventory and accounts receivable[87] - The company's current liabilities increased by approximately 45% from RMB 6.489 billion to RMB 9.434 billion, largely due to an increase in accrued expenses and short-term bank loans[87] - The debt-to-equity ratio as of December 31, 2023, was 0.64, up from 0.60 on December 31, 2022, while the current ratio decreased to 0.35 from 0.57 in the same period[99] - The asset-liability ratio increased to 0.85 as of December 31, 2023, from 0.75 as of December 31, 2022[99] Production and Operations - The group currently operates 16 float glass production lines with a daily melting capacity of 8,600 tons, of which 13 lines are operational as of December 31, 2023[30] - In 2023, the photovoltaic glass production volume increased by 54% year-on-year to approximately 24.78 million tons, while the installed capacity of photovoltaic power generation grew by 148% year-on-year to about 217 GW[25] - The group is actively developing energy-saving glass products, such as "online Low-E China Glass Blue," achieving stable mass production[18] - The company aims to improve production line energy consumption indicators and capacity utilization efficiency through technical upgrades and cost-reduction measures[18] - The group is focusing on digital transformation and smart production to improve efficiency and product quality[50] Strategic Initiatives - The company plans to accelerate the smart transformation and digitalization process to enhance operational efficiency[19] - The group plans to continue expanding in the "three new" industries (new glass, new materials, new energy) and enhance its international presence through a "going out" strategy[35] - The group is focusing on the development of overseas emerging markets, with significant contributions from projects in Nigeria and Italy to overall performance[33] - The group has formed a strategic investment cooperation for a new energy glass project in Egypt, aligning with the Belt and Road Initiative[52] - The company aims to enhance its core competitiveness by optimizing production processes in the new energy and deep processing glass sectors[58] Shareholder and Governance - The major shareholder, New Glory Fund L.P., holds 272,926,000 shares, representing 14.86% of the total shares[131] - The second largest shareholder, 凯盛科技集团有限公司, holds 416,424,621 shares, representing 22.68% of the total shares[131] - The company has received annual independence confirmations from all independent non-executive directors, affirming their independence as of the report date[122] - The board of directors will review and determine their remuneration based on performance and market conditions, with no director participating in decisions regarding their own remuneration[125] Market Outlook - The Chinese flat glass industry is expected to experience supply-side contraction due to strict capacity control and enhanced environmental policies, while demand is anticipated to improve with economic recovery and accelerated renovation of old neighborhoods[153] - The float glass market is expected to gradually improve due to structural reforms and macroeconomic adjustments aimed at establishing a long-term mechanism for the real estate sector[168] - The demand for energy-saving new glass products, such as photovoltaic and solar thermal glass, is expected to grow significantly under the national "dual carbon" policy[153] Miscellaneous - The company did not recommend the distribution of a final dividend for the year ended December 31, 2023, consistent with the previous year[101] - Charitable donations for the year amounted to approximately RMB 80,000, a decrease from RMB 530,200 in the previous year[109] - Revenue from the top five customers accounted for 11% of total sales, while 39% of procurement came from the top five suppliers, with the largest supplier accounting for 21% of total procurement[102]

Financial Performance - The group reported total revenue of RMB 5,307,924,000 for the year ending December 31, 2023, compared to RMB 4,327,196,000 in 2022, representing an increase of approximately 22.6%[39]. - The gross profit for the year was RMB 299,511,000, a significant decrease from RMB 638,189,000 in the previous year, indicating a decline of about 53%[39]. - The group incurred a net loss of RMB 487,408,000 for the year, compared to a net profit of RMB 101,775,000 in 2022, reflecting a substantial downturn in financial performance[48]. - The total comprehensive loss for the year was RMB 1,116,831,000, compared to a total comprehensive income of RMB 10,987,000 in the previous year[53]. - The revenue from service contracts decreased to RMB 292,377,000 in 2023 from RMB 326,686,000 in 2022, a decline of approximately 10%[93]. - The net income before tax showed a loss of RMB 550,624,000 in 2023 compared to a profit of RMB 85,318,000 in 2022[108]. - The company reported a basic loss attributable to ordinary equity shareholders of RMB 409,756,000 for the year ended December 31, 2023, compared to a profit of RMB 116,168,000 in 2022[139]. Assets and Liabilities - As of December 31, 2023, the group's cash and cash equivalents amounted to RMB 1.211 billion, a decrease from RMB 1.350 billion as of December 31, 2022, with 53% in RMB, 6% in USD, and 14% in EUR[7]. - The group’s total assets related to property, plant, and equipment, and construction in progress amounted to approximately RMB 2.004 billion as of December 31, 2023, up from RMB 687 million as of December 31, 2022[8]. - The group had total bank loans of RMB 9.423 billion, with 80.6% denominated in RMB and 18.9% in USD[7]. - The total current liabilities rose to RMB 9,433,799,000 in 2023, compared to RMB 6,489,017,000 in 2022, indicating an increase of about 45%[83]. - The total assets minus current liabilities stood at RMB 5,526,444,000 in 2023, down from RMB 6,796,286,000 in 2022, reflecting a decrease of about 19%[83]. - Non-current liabilities decreased to RMB 3,301,840,000 in 2023 from RMB 3,505,387,000 in 2022, a reduction of approximately 6%[83]. - The group reported a net asset value of RMB 2,224,604,000 in 2023, down from RMB 3,290,899,000 in 2022, indicating a decline of about 32%[83]. Operational Highlights - The group has diversified its natural gas supply channels under the "increase production and ensure supply" policy, with demand steadily increasing due to its efficiency and low-carbon advantages[27]. - The group is focusing on digital transformation and smart upgrades to improve operational efficiency[34]. - The company is focusing on optimizing procurement strategies to control raw material costs through centralized and opportunistic purchasing methods, ensuring stable supply and production safety[197]. - The company is enhancing its performance incentive system to encourage employee engagement and support its goals for internationalization and sustainable high-quality development[198]. - The company is implementing intelligent transformation and digitalization strategies, utilizing technologies such as industrial internet and big data to improve production efficiency and product quality[199]. Investments and Acquisitions - The group recorded goodwill of RMB 170.5 million following the acquisition of approximately 51.47% equity in Gansu Daming Technology Co., Ltd. for RMB 312,982,380[25]. - The company agreed to acquire approximately 51.47% equity in Gansu Kaisheng Daming Solar Technology Co., Ltd. for a total consideration of RMB 313,000,000[153]. - The company acquired controlling interest in Gansu Kaisheng Daming Solar Technology Co., which has a production line with a daily melting capacity of 600 tons of ultra-white float glass and various solar-related production lines, enhancing its strategic layout in Northwest China[189]. - The company expects the total net profit of Gansu Daming Group to not be less than RMB 210,000,000 during the warranty period ending December 31, 2026[153]. Employee and Operational Costs - Employee costs increased to RMB 525,980,000 in 2023 from RMB 441,410,000 in 2022, reflecting a rise of approximately 19.1%[130]. - Operating expenses for the year amounted to approximately RMB 1.42 billion, which was not recorded in the previous year, attributed to asset impairment provisions[37]. - The total cost of inventory, including employee costs, R&D costs, and depreciation, amounted to RMB 769,100,000 in 2023, up from RMB 623,600,000 in 2022, representing an increase of approximately 23.4%[130]. Research and Development - The company’s research and development team successfully launched a new offline Low-E glass production line in Jiangsu, and began mass production of transparent conductive oxide (TCO) glass, which is expected to create opportunities in the new energy sector[193]. - Research and development costs (excluding capitalized costs) decreased to RMB 30,476,000 in 2023 from RMB 48,819,000 in 2022, a decline of 37.5%[106]. Market and Economic Conditions - The global economic growth momentum is declining due to geopolitical conflicts and inflation, but the Chinese economy is stabilizing with government efforts to promote high-quality development[187]. - The company continues to focus on overseas emerging market development opportunities, with significant benefits and stable growth from overseas operations[162]. - The company is expanding its market presence in the photovoltaic glass sector, with effective progress in market development for new products[195]. Financial Assistance and Support - Financial assistance received from the largest shareholder, Kaisheng Technology Group Co., Ltd., amounted to RMB 1,298,600,000[62]. - The amount payable to Kaisheng Group and its affiliates as of December 31, 2023, was RMB 1,216,700,000[62]. - The group maintained a stable business relationship with major banks to secure ongoing support for financing of RMB 873,400,000[89]. Tax and Regulatory Matters - The company’s subsidiaries in China are subject to a corporate income tax rate of 25%[136]. - The deferred tax expense for the year was RMB 32,870,000, compared to RMB 74,387,000 in 2022, indicating a decrease of approximately 56%[134].

Production and Sales Performance - In the first half of 2023, the company produced approximately 24.03 million weight cases of various glass products, a 14% increase year-on-year, while sales rose by 26% to 20.77 million weight cases[11]. - The revenue from energy-saving and new energy glass increased significantly by 97% year-on-year, driven by the launch of a photovoltaic glass production line[28]. - The company reported a decline in revenue from colorless, colored, and coated glass segments due to lower prices driven by a sluggish real estate market in China[9]. - The company’s main business revenue for the first six months of 2023 was RMB 2,107,111,000, an increase of approximately 2% compared to RMB 2,061,978,000 in the same period of 2022[27]. - Revenue from mainland China and Hong Kong accounted for RMB 1,483,987,000, up from RMB 1,400,117,000 in the previous year, showing an increase of approximately 6%[117]. - Revenue from Nigeria decreased to RMB 189,741,000 from RMB 226,815,000, a decline of about 16.4%[117]. Pricing and Cost Analysis - The average selling price of glass products was approximately RMB 93 per weight case, reflecting a 20% decrease compared to the same period last year[11]. - The sales cost for the first six months of 2023 was RMB 2,000,747,000, up about 22% from RMB 1,635,531,000 in the same period of 2022, primarily due to an increase in the quantity of glass products sold[30]. - The average market price of colorless glass decreased by 9% year-on-year, but the company managed to limit the revenue decline to only 1% by increasing the proportion of high-value-added functional glass products[29]. - The overall procurement prices for raw and fuel materials remain high despite some price declines in the first half of 2023[13]. Financial Performance - The gross profit for the first six months of 2023 was RMB 106,364,000, a decrease of approximately 75% compared to RMB 426,447,000 in the same period of 2022, primarily due to a slight increase in sales revenue and a significant rise in cost of sales[32]. - The company recorded a loss of RMB 138,642,000 in the first half of 2023, compared to a profit of RMB 121,149,000 in the same period of 2022, mainly due to the decline in gross profit[38]. - The net loss attributable to equity shareholders was RMB 103,276 thousand, a decline from a profit of RMB 115,708 thousand in the same period last year[92]. - Total comprehensive loss for the period amounted to RMB 653,351 thousand, compared to a total comprehensive income of RMB 83,304 thousand in the prior year[95]. - The company reported a basic and diluted loss per share of RMB 6.132 for the period, compared to earnings per share of RMB 6.881 in the same period last year[92]. Investment and Expansion Strategy - The company is actively expanding into the "new glass, new materials, new energy" sectors, with successful launches of several production lines, including TCO coating technology and Low-E coating glass production lines[14]. - The company plans to continue its "going out" strategy, enhancing overseas market expansion and safety production, aiming to improve the contribution of overseas companies to overall performance[25]. - The company’s strategic focus includes a combination of organic growth, mergers and acquisitions, and international expansion[14]. Research and Development - Research and development costs (excluding capitalized costs and related amortization) surged to RMB 15,940 thousand in the first half of 2023, compared to only RMB 601 thousand in the same period of 2022, indicating a significant increase in investment in innovation[125]. - The company aims to enhance its core competitiveness through technological innovation and the application of proprietary technology in the production of coated glass[19]. Shareholder and Capital Management - The board has decided not to declare an interim dividend for the six months ended June 30, 2023[52]. - The company has a share incentive plan managed by Bank of Communications Trust Co., Ltd., which is responsible for purchasing existing shares on the market[60]. - The total number of issued ordinary shares of the company is 1,836,218,258 shares[54]. - The company maintained a public float of at least 25% of its issued share capital as required by the listing rules[77]. Debt and Financing - Current liabilities increased by approximately 4% from RMB 6,489,017,000 on December 31, 2022, to RMB 6,758,978,000 on June 30, 2023, mainly due to an increase in the current portion of long-term bank loans and other borrowings[41]. - The debt-to-equity ratio as of June 30, 2023, was 0.66, up from 0.60 on December 31, 2022, indicating an increase in leverage[46]. - The group has secured financial support of RMB 2,226,100,000 from its largest shareholder, which is expected to continue[113]. - The group maintains stable long-term relationships with major banks to ensure ongoing support for its financing needs[113]. Operational Efficiency and Digital Transformation - The company is advancing its digital transformation and smart upgrades to improve production efficiency and product quality through the integration of industrial internet, big data, and artificial intelligence technologies[20]. - The company is focusing on optimizing procurement strategies to control raw material costs and ensure stable supply through strategic partnerships with quality suppliers[18]. Employee and Management - The employee count increased to approximately 4,346 as of June 30, 2023, up from about 4,162 on December 31, 2022, primarily due to new production lines and enhanced recruitment of young talent[78]. - The total remuneration for key management personnel was RMB 1,882,000 in the first half of 2023, down from RMB 2,400,000 in the same period of 2022, reflecting a decrease of approximately 21.6%[173]. Market Outlook - The glass industry is expected to enter a traditional peak season in the second half of 2023, with anticipated demand growth due to improved real estate policies and consumption stimulation in the automotive and new energy sectors[21]. - Future outlook includes continued investment in new product development and technology advancements to enhance market competitiveness[185].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不 負責，對其準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公告 全部或任何部份內容而產生或因倚賴該等內容而引致的任何損失承擔任何責 任。 CHINA GLASS HOLDINGS LIMITED * 中 國 玻 璃 控 股 有 限 公司 （於百慕達註冊成立之有限公司） 3300 （股份代號： ） 截至二零二三年六月三十日止六個月之中期業績公告 中國玻璃控股有限公司（「本公司」）董事會（分別為「董事」及「董事會」）謹此宣佈 本公司及其附屬公司（統稱為「本集團」）截至二零二三年六月三十日止六個月之 未經審核綜合中期業績，連同二零二二年同期之比較數字。 ...

Asset Management and Valuation - The estimated useful life for buildings and structures ranges from 8 to 60 years, while machinery and equipment range from 2 to 35 years[1]. - The estimated useful life for intangible assets such as technology is between 5 to 20 years, and customer relationships are estimated at 10 years[5]. - The company reviews the estimated useful lives and residual values of assets annually[5]. - Gains or losses from the disposal of property, plant, and equipment are recognized based on the difference between the net proceeds and the carrying amount[1]. - The company continues to assess impairment indicators for various assets, including property, plant, and equipment, ensuring financial prudence[63]. - The recoverable amount of assets is determined as the higher of fair value less costs to sell and value in use, with future cash flows discounted to present value using a pre-tax discount rate[64]. Lease Accounting - Lease liabilities are initially recognized at the present value of lease payments, discounted using the implicit rate or incremental borrowing rate[10]. - The company does not capitalize short-term leases and low-value asset leases, recognizing lease payments as expenses over the lease term[7]. - The company will reassess lease liabilities if there are changes in lease payments or if the company expects to exercise purchase or renewal options[11]. - The company assesses whether a contract contains a lease at the contract's inception, determining control over the identified asset's use[6]. Financial Management and Risk - The group confirmed expected credit losses for financial assets measured at amortized cost, including cash and cash equivalents, receivables, and other receivables[19]. - The expected credit loss for receivables and contract assets is estimated using a provision matrix based on the group's historical credit loss experience[21]. - The financial risk management details are outlined in the consolidated financial statements, addressing credit, liquidity, interest rate, and currency risks[26]. - The company emphasizes the importance of credit loss and asset impairment assessments based on observable events such as significant financial difficulties of debtors and breaches of contracts[58]. - The company applies a write-off policy for financial assets when there is no realistic prospect of recovery, indicating a proactive approach to managing credit risk[59]. Employee Management and Development - As of December 31, 2022, the total number of employees in the group was 4,162, with a turnover rate of approximately 9.58%[40]. - The employee age distribution shows that 51.4% are aged 30-49, while 14.8% are aged 50-60 and above[41]. - The group implemented a performance-oriented incentive system to enhance employee motivation and optimize performance assessment standards[40]. - The group reported a significant decrease in work-related injuries, with a total of 343 days lost due to injuries in 2022, which is a notable reduction compared to 2021[44]. - The group maintained a zero COVID-19 death toll among employees in 2022, demonstrating effective pandemic control measures[47]. - The group emphasizes the importance of employee training and skill enhancement, organizing training sessions based on business needs[48]. - The company reported a training participation rate of 95.1% for senior management, 97.1% for middle management, and 98.8% for general employees, indicating a strong commitment to employee development[75]. - The average training hours for general employees was 73.9 hours, reflecting the company's investment in workforce skills enhancement[75]. - The company has implemented performance tracking and incentive measures to enhance employee income and morale, fostering a positive work environment[76]. - The company actively promotes health and wellness activities among employees, enhancing team cohesion and corporate identity[76]. - The company conducts annual awards and recognition programs to motivate employees and create a culture of excellence[76]. - The group actively recruits local labor to support the operation of new overseas production lines, contributing to employee growth[40]. Environmental Management and Sustainability - The company invested a total of RMB 131 million in environmental protection facilities and upgrades during the year[91]. - In 2022, the company achieved a 47.70% reduction in sulfur dioxide emissions, a 21.14% reduction in nitrogen oxide emissions, and a 42.39% reduction in particulate matter emissions, despite a 7% decrease in production scale[94]. - The company’s waste management includes approximately 18,000 tons of desulfurization waste, 600 tons of household waste, and 2,000 tons of discarded packaging materials annually[98]. - The company has implemented the ISO 14001 environmental management system across all bases to enhance environmental management levels[88]. - The company’s environmental management systems are subject to annual internal and third-party audits for optimization[88]. - The company emphasizes the development of a circular economy through increased waste heat power generation and wastewater recycling[89]. - The Weihai base was awarded the title of "2022 Shandong Province Green Factory"[90]. - The company ensures that all bases have installed online monitoring systems for real-time environmental compliance[97]. - In 2022, the total greenhouse gas emissions from various production bases amounted to 1,403,308 tons, a decrease from 1,523,658 tons in 2021, representing a reduction of approximately 7.9%[99]. - The company strictly adheres to China's environmental protection laws, with all subsidiaries equipped with complete environmental protection facilities, achieving compliance with emission standards[129]. - The company has not experienced any major environmental pollution incidents in the year, indicating effective environmental management mechanisms[129]. - The company has implemented strict management systems to prevent major environmental pollution incidents and product quality claims[125]. Corporate Governance - The board is responsible for overseeing the group's ESG governance, including risk management and policy implementation[33]. - The board consists of 7 members, including 1 executive director, 3 non-executive directors, and 3 independent non-executive directors, ensuring a balanced structure for independent judgment[193]. - The board has adopted a succession planning policy to ensure orderly transitions for director and CEO appointments[195]. - The company has established a corporate governance framework that includes policies on diversity, remuneration, and compliance with legal and regulatory requirements[190]. - The board is responsible for effective leadership and control of the company, ensuring decisions align with the best interests of the company and its shareholders[197]. - The board delegates authority to management for daily operations, with department heads responsible for various business aspects[199]. - Management is required to provide timely and sufficient information to the board for informed decision-making[200]. - The board monitors the group's operational and financial performance through its committees[198]. - The independent non-executive directors have confirmed their independence according to the guidelines set out in the listing rules[194]. - The company has established appropriate liability insurance for directors and senior officers to address potential legal actions[189]. Strategic Initiatives and Market Position - The group is a leading flat glass manufacturer in China, focusing on R&D and production of energy-saving and environmentally friendly glass[29]. - The company has implemented a "going out" strategy, which has significantly contributed to its revenue growth[111]. - The company has established new departments focusing on new energy and deep processing to align with national sustainable development policies[111]. - The company has optimized procurement strategies to mitigate costs, including centralized and staggered purchasing methods[114]. - The company has established a strategic partnership with over 650 suppliers, including 230 raw material suppliers and 270 main equipment suppliers, ensuring a stable supply chain[166]. - The company is actively promoting low-carbon economic solutions and has invested in the research and development of energy-saving products, including online Low-E coated glass and photovoltaic glass[159]. - The company aims to strengthen its brand "China Glass" and improve capital market management by actively engaging with investor relations and media resources[155]. - The company has developed a strict core technology management system to enhance its research and innovation capabilities in high-end energy-saving products[161]. - The company has adopted a comprehensive quality control system that adheres to ISO 9001:2015 standards, ensuring product quality from design to after-sales service[160]. - The company achieved a total product yield rate of 92.52% in 2022, with a unit weight box comprehensive energy consumption of 12.12 kg standard coal, a decrease of 2.88% compared to 2021[138]. - The company constructed waste heat power generation systems at all bases, utilizing flue gas at 480℃ to generate steam at 2.16Mpa and 430℃, significantly reducing glass production costs[136]. - The company is actively promoting "cost reduction and efficiency enhancement" initiatives, focusing on optimizing raw material and fuel structures to effectively reduce energy consumption[152]. - The company has implemented various risk management and internal control procedures to achieve business objectives and ensure compliance with relevant laws and regulations[157].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不 負責，對其準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公告 全部或任何部份內容而產生或因倚賴該等內容而引致的任何損失承擔任何責 任。 CHINA GLASS HOLDINGS LIMITED * 中 國 玻 璃 控 股 有 限 公司 （於百慕達註冊成立之有限公司） 3300 （股份代號： ） 截至二零二二年十二月三十一日止年度之全年業績公告 中國玻璃控股有限公司（「本公司」）董事會（分別為「董事」及「董事會」）謹此公佈 本公司及其附屬公司（以下統稱「本集團」）截至二零二二年十二月三十一日止年 度之經審核綜合全年業績，以及二零二一年相應年度的可資比較數字。 ...

Production and Sales Performance - In the first half of 2022, China Glass Holdings produced approximately 21.17 million weight cases of various glass products, a 20% increase compared to the same period last year[11]. - The total sales of glass products reached 16.52 million weight cases, a decrease of 3% year-on-year[11]. - The average selling price of glass products was approximately RMB 116.4 per weight case, reflecting a 1% increase compared to the previous year[11]. Financial Performance - The company's revenue for the first six months of 2022 was RMB 2,061,978,000, an increase of approximately 2% compared to RMB 2,025,214,000 in the same period of 2021[31]. - Gross profit decreased by approximately 40% to RMB 426,447,000 in the first half of 2022, compared to RMB 714,699,000 in the same period of 2021, attributed to rising sales costs despite slight revenue growth[33]. - The company's profit for the first half of 2022 fell to RMB 121,149,000, down from RMB 302,148,000 in the same period of 2021, primarily due to declining gross profit and rising administrative expenses[39]. Cost and Expenses - Sales costs rose by approximately 25% to RMB 1,635,531,000 in the first half of 2022, up from RMB 1,310,515,000 in the previous year, primarily due to increased raw and fuel material costs[32]. - Administrative expenses rose by approximately 22% to RMB 158,350,000 in the first half of 2022, compared to RMB 130,021,000 in the same period of 2021, due to the acquisition of a new production line and costs during cold repair periods[35]. - Financing costs decreased by approximately 9% to RMB 128,787,000 in the first half of 2022, down from RMB 142,011,000 in the same period of 2021, benefiting from lower average interest rates on new borrowings[36]. Market Conditions - The domestic flat glass industry is facing challenges due to a sluggish real estate market and rising raw material costs[9]. - The company is closely monitoring market conditions to adjust procurement and marketing strategies effectively[14]. Strategic Focus and Development - The company is focusing on a mid-to-long-term development strategy that combines natural growth, acquisition growth, and international expansion[14]. - The company is actively promoting new glass, new materials, and new energy projects to enhance operational performance[14]. - The company is focusing on expanding its "three new projects" and enhancing its upstream and downstream industrial chain to achieve new breakthroughs in business development[26]. Shareholder and Equity Information - First Fortune Enterprises Limited holds 272,926,000 shares, representing approximately 14.86% of total shares[57]. - Right Lane Limited owns 307,926,000 shares, accounting for approximately 16.77% of total shares[57]. - The total number of issued shares as of June 30, 2022, is 1,836,218,258 shares[68]. Employee and Management - The group employed approximately 3,788 employees as of June 30, 2022, a slight decrease from 3,822 employees as of December 31, 2021, primarily due to increased efficiency and production line maintenance[104]. - The company plans to strengthen its management functions and implement measures to enhance employee satisfaction and optimize personnel structure for sustainable development[27]. Cash Flow and Financing - The net cash generated from operating activities for the six months ended June 30, 2022, was RMB 562,923,000, compared to RMB 406,726,000 in the previous year, representing a 38.4% increase[139]. - The company has unutilized bank financing of RMB 791,100,000 and plans to secure new financing of RMB 496,700,000[147]. - The company’s major shareholder, China National Building Material Group Corporation, has provided financial support commitments[147]. Assets and Liabilities - Current assets increased from RMB 2,477,825,000 as of December 31, 2021, to RMB 3,048,431,000 as of June 30, 2022, reflecting a growth of about 23%[41]. - Non-current liabilities surged from RMB 1,236,795,000 as of December 31, 2021, to RMB 2,015,736,000 as of June 30, 2022, marking a significant increase of about 63%[43]. - The company’s total liabilities as of June 30, 2022, were RMB 4,133,880,000, an increase of 8.0% from RMB 3,826,420,000 as of December 31, 2021[200]. Compliance and Governance - The company maintained compliance with the Corporate Governance Code, emphasizing the importance of high-quality board governance and effective internal controls[108]. - The audit committee has been established and has reviewed the accounting principles and practices adopted by the group, ensuring transparency and accountability[108]. Other Financial Metrics - Basic earnings per share decreased to RMB 6.881 from RMB 16.480, reflecting a decline of about 58.3%[118]. - The total capital expenditure for property, plant, and equipment for the six months ended June 30, 2022, was RMB 760,000,000, an increase of 42.3% from RMB 534,300,000 in the same period of 2021[178]. - The group recognized a depreciation and amortization expense of RMB 170,547,000 for the six months ended June 30, 2022, compared to RMB 132,541,000 for the same period in 2021, representing an increase of 28.7%[176].

Financial Performance - The total revenue for China Glass Holdings Limited for the year ended December 31, 2021, was RMB 5,065,048,000, representing a 60.5% increase from RMB 3,158,567,000 in 2020[12]. - Gross profit for the same period was RMB 1,733,703,000, up from RMB 738,724,000 in 2020, indicating a significant improvement in profitability[12]. - The operating profit increased to RMB 1,302,052,000 in 2021, compared to RMB 269,554,000 in 2020, reflecting a growth of 383.5%[12]. - Net profit for the year was RMB 801,947,000, a turnaround from a net loss of RMB 98,478,000 in 2020[12]. - The company's revenue increased from RMB 3.159 billion for the year ended December 31, 2020, to RMB 5.065 billion for the year ended December 31, 2021, representing a growth of approximately 60%[44]. - The company's gross profit rose from RMB 739 million for the year ended December 31, 2020, to RMB 1.734 billion for the year ended December 31, 2021, with the gross profit margin increasing from 23% to 34%[47]. - The group's profit for the year ended December 31, 2021, turned from a loss of approximately RMB 98.48 million in 2020 to a profit of approximately RMB 802 million, driven by strong performance in the glass market, increased average selling prices, sales volume, and gross margins[53]. Assets and Liabilities - Total assets as of December 31, 2021, reached RMB 10,380,534,000, an increase from RMB 7,201,243,000 in 2020[12]. - Total liabilities rose to RMB 7,002,511,000 in 2021, compared to RMB 5,033,247,000 in 2020, indicating increased leverage[12]. - The net asset value increased to RMB 3,378,023,000 in 2021, up from RMB 2,167,996,000 in 2020, showing a strong growth in equity[12]. - Current assets increased from RMB 2.151 billion as of December 31, 2020, to RMB 2.478 billion as of December 31, 2021, representing a growth of approximately 15%[56]. - Current liabilities rose from RMB 3.753 billion as of December 31, 2020, to RMB 5.766 billion as of December 31, 2021, an increase of approximately 54%[57]. - The debt-to-equity ratio as of December 31, 2021, was 0.48, slightly down from 0.49 as of December 31, 2020[60]. Market and Production - The company produced 40.93 million weight cases of various glass types in 2021, an increase of 15% compared to the previous year, with sales volume reaching 39.4 million weight cases, up 8% year-on-year[22]. - The average selling price of glass products in 2021 was 123 RMB per weight case, representing a 49% increase from the previous year[22]. - Revenue from colorless glass products reached RMB 2.688 billion, an increase of 97% compared to the previous year; revenue from colored glass products was RMB 640 million, up 44%; revenue from coated glass products was RMB 1.048 billion, up 29%; and revenue from energy-saving and new energy glass products was RMB 472 million, up 17%[44]. - The company has 14 float glass production lines with a daily melting capacity of 7,400 tons, with 13 lines operational as of December 31, 2021[21]. Strategic Plans and Investments - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[11]. - The company plans to accelerate expansion into new glass, new energy, new materials, and deep processing sectors in 2022[18]. - The company aims to enhance product quality and optimize cost structure as part of its growth strategy[27]. - The company plans to focus on expanding into new glass, new materials, and new energy sectors while enhancing upstream and downstream industry chains[40]. - The company aims to implement a long-term development strategy combining organic growth, mergers and acquisitions, and international expansion[40]. - The company is considering strategic acquisitions to enhance its market position, targeting a potential acquisition valued at $100 million[142]. Employee and Management - The number of employees increased to approximately 3,822 as of December 31, 2021, compared to approximately 3,391 as of December 31, 2020, reflecting growth from acquisitions and business expansion[68]. - The company emphasizes the importance of employee relations and has implemented a competitive compensation mechanism to enhance employee motivation[198]. - The management team has extensive experience, with over 30 years in the glass industry, ensuring strong leadership[143]. Related Party Transactions and Agreements - The group acquired a 55% stake in Fujian Longtai Industrial Co., Ltd. for a total consideration of RMB 444.18 million, which was approved by shareholders on July 16, 2021[65]. - The group completed the acquisition of all shares of Huangyu Development Co., Ltd. for a consideration of USD 66.42 million (approximately HKD 516.75 million) on December 28, 2021[66]. - The company has established a related party transaction with the signing of the Suqian Engineering Contract and the Olivotto supply contracts[166][172]. - The independent non-executive directors confirmed that the related party transactions in 2021 were conducted in the ordinary course of business and on normal commercial terms[186]. Dividends and Shareholding - The board recommends a final dividend of HKD 0.05 per share for the fiscal year ending December 31, 2021, to be distributed on July 20, 2022, pending approval at the annual general meeting[77]. - As of December 31, 2021, the total number of issued shares was 1,830,288,258[95]. - The company has arranged appropriate directors and officers liability insurance for legal actions against its directors[93]. - The company maintained a public float of at least 25% of its issued share capital as required by the listing rules[192]. Future Outlook - The company provided a positive outlook for the next fiscal year, projecting a revenue growth of 10% to 12%[142]. - The company anticipates that the glass industry will maintain a tight supply-demand balance in 2022, with potential growth in prices despite various market uncertainties[35].

Production and Sales Performance - As of June 30, 2021, the group has 13 float glass production lines with a daily melting capacity of 6,900 tons following the acquisition of Fujian Longtai Industrial Co., Ltd.[24] - In the first half of 2021, the group produced approximately 17.58 million weight cases of various glass products, a 2% increase year-on-year, and sold 17.06 million weight cases, a 15% increase year-on-year[25] - The average selling price of glass products was approximately RMB 114.5 per weight case, representing a 51% increase compared to the same period last year[25] Financial Performance - The company's revenue for the first half of 2021 was RMB 2.025 billion, a 73% increase compared to RMB 1.173 billion in the same period of 2020[45] - Gross profit for the first half of 2021 reached RMB 715 million, a significant increase of about 283% from RMB 187 million in the same period of 2020[47] - The net profit for the first half of 2021 turned to RMB 302 million from a loss of RMB 277 million in the first half of 2020, marking a turnaround[53] Strategic Initiatives - The company is focusing on three major strategies to enhance performance, including optimizing product structure and accelerating the construction of new energy material projects[28] - The acquisition of Fujian Longtai has expanded the company's strategic layout into the South China market[28] - The company plans to focus on the float glass main business and advance projects in Kazakhstan and Longyan B line, as well as strategic layout in the pharmaceutical glass market[39] Market Conditions - The company expects the glass industry to maintain a tight supply-demand balance in the second half of 2021, with stable demand from the real estate sector[36] - The company anticipates raw material prices, particularly soda ash, to remain high due to strong downstream demand[37] Cost and Expenses - Sales cost for the first half of 2021 was RMB 1.311 billion, up approximately 33% from RMB 986 million in the first half of 2020[46] - The prices of raw materials such as soda ash and minerals have shown a slight increase in the first half of 2021 due to strong market demand[26] - Fuel prices have rebounded due to significant increases in crude oil prices, with low-sulfur fuel oil experiencing the most notable price rise[26] Shareholder Information - The group did not declare an interim dividend for the six months ended June 30, 2021, consistent with the previous year[68] - The board proposed a distribution of HKD 0.05 per ordinary share, subject to shareholder approval[69] - First Fortune Enterprises Limited and Legend Holdings Corporation each hold approximately 15.08% and 22.80% of the total shares, respectively, as of June 30, 2021[77][79] Share Option Plans - The company has implemented a share option scheme to incentivize eligible participants, enhancing shareholder value[86][87] - The new share option plan aims to reward eligible participants for enhancing the company's value and maintaining business relationships beneficial for growth[102] - The maximum number of shares that can be granted under the new share option plan is capped at 10% of the total issued shares as of February 19, 2016, amounting to 181,014,705 shares[106] Employee Information - As of June 30, 2021, the group employed approximately 3,436 employees, a slight increase from 3,391 employees as of December 31, 2020, reflecting natural business growth[118] Cash Flow and Liquidity - The group recorded net current liabilities of RMB 1.869 billion as of June 30, 2021, compared to RMB 1.602 billion as of December 31, 2020[61] - The company believes it has sufficient funds to meet its liabilities due within at least the next twelve months, supporting the appropriateness of preparing financial statements on a going concern basis[178] Research and Development - The group is actively involved in the research and development of glass production technology, focusing on energy-saving and new energy glass products[182] - Research and development costs (excluding capitalized costs) for the six months ended June 30, 2021, were RMB 484 thousand, slightly up from RMB 448 thousand in 2020, indicating a growth of about 8%[198] Taxation - The estimated corporate income tax provision for the six months ended June 30, 2021, was RMB 90,292 thousand, significantly higher than RMB 8,971 thousand in 2020, indicating a growth of approximately 908%[199]

[Company Information](index=3&type=section&id=Company%20Information) This section provides key contact and service information for the company, including board members, senior management, registered office, and auditors [Board of Directors and Senior Management](index=3&type=section&id=Board%20of%20Directors%20and%20Senior%20Management) This section lists the company's board members and senior management, including executive, non-executive, and independent non-executive directors, and committee compositions - Board members include Executive Director Mr. Lü Guo (CEO), Mr. Cui Xiangdong (retired on April 1, 2021), Non-Executive Directors Mr. Peng Shou (Chairman), Mr. Zhou Cheng (Honorary Chairman), Mr. Zhao Linghuan, Mr. Zhang Jinshu, and Independent Non-Executive Directors Mr. Zhang Baiheng, Mr. Zhao Lihua (passed away on December 22, 2020), and Mr. Chen Huachen[6](index=6&type=chunk) - Senior management includes Mr. Li Ping, Mr. Yang Hongfu, Mr. Xu Ning, Mr. Wang Jianxun (retired on January 1, 2021), and Mr. Han Liming[6](index=6&type=chunk) [Company Contact and Service Institutions](index=3&type=section&id=Company%20Contact%20and%20Service%20Institutions) This section details the company's registered office, main business locations, share registrars, principal bankers, auditor, and stock code - The company's registered office is in Bermuda, its principal place of business in Hong Kong is in Shun Tak Centre, Central, and its principal place of business in China is in Chaoyang District, Beijing[6](index=6&type=chunk) - Principal bankers include China Construction Bank, Bank of Shanghai, and Bank of Communications, with KPMG as the auditor[8](index=8&type=chunk) - The company's stock code is HKEX: 3300, and its website is www.chinaglassholdings.com[8](index=8&type=chunk) [Financial Highlights](index=5&type=section&id=Financial%20Highlights) This section presents a concise overview of the group's financial performance, assets, and liabilities for the reporting period [Performance Overview](index=5&type=section&id=Performance%20Overview) The group's revenue increased significantly by 33% to RMB 3.159 billion in FY2020, but it recorded a net loss of RMB 98.48 million due to increased impairment losses on receivables and reduced government subsidies 2020 vs 2019 Performance Comparison (RMB thousand) | Indicator | 2020 | 2019 | | :-------- | :---------- | :---------- | | Revenue | 3,158,567 | 2,369,230 | | Gross Profit | 738,724 | 284,642 | | Operating Profit | 269,554 | 275,258 | | Profit Before Tax | 5,155 | 89,428 | | Net (Loss)/Profit for the Year | (98,478) | 72,704 | - Revenue increased by **33% year-on-year**, primarily due to improved glass market conditions, leading to higher sales volume and average selling prices[26](index=26&type=chunk) - The group turned from profit to loss for the year, mainly due to increased impairment losses on receivables and reduced non-recurring government subsidies from relocation[26](index=26&type=chunk) [Assets and Liabilities Overview](index=5&type=section&id=Assets%20and%20Liabilities%20Overview) The group's total assets and liabilities slightly increased by the end of 2020, leading to a minor decrease in net assets and an expanded net current liabilities 2020 vs 2019 Assets and Liabilities Comparison (RMB thousand) | Indicator | 2020 | 2019 | | :-------- | :---------- | :---------- | | Total Assets | 7,201,243 | 7,188,111 | | Total Liabilities | (5,033,247) | (4,938,392) | | Net Assets | 2,167,996 | 2,249,719 | - Total assets increased from **RMB 7,188,111 thousand in 2019 to RMB 7,201,243 thousand in 2020**, while total liabilities increased from **RMB 4,938,392 thousand in 2019 to RMB 5,033,247 thousand in 2020**[12](index=12&type=chunk) - Net assets decreased from **RMB 2,249,719 thousand in 2019 to RMB 2,167,996 thousand in 2020**[12](index=12&type=chunk) [Chairman's Report](index=6&type=section&id=Chairman's%20Report) The Chairman's report reviews the company's operational performance in 2020 and outlines strategic plans and outlook for 2021 [2020 Operating Review](index=6&type=section&id=2020%20Operating%20Review) Despite global challenges, the company achieved significant revenue growth and improved gross margin in 2020, driven by its core float glass business and optimized management - In 2020, the group's operating revenue increased by **33% year-on-year**, and gross profit margin improved by **11 percentage points year-on-year**, achieving significant operational results[16](index=16&type=chunk) - The company optimized its organizational structure, establishing a comprehensive information management model integrating "marketing, procurement, production technology, finance, and investment"[16](index=16&type=chunk) - Both Nigeria and Italy projects achieved stable production and operation growth, and the company will continue to adhere to its "going out" and "Belt and Road" development strategies[16](index=16&type=chunk) [2021 Outlook and Strategy](index=6&type=section&id=2021%20Outlook%20and%20Strategy) The company plans to expand into photovoltaic and deep processing sectors, enhance R&D, optimize product structure, and implement refined management to improve profitability in 2021 - In 2021, the company will accelerate its expansion into the photovoltaic and deep processing sectors, increase R&D efforts, optimize product structure, and foster synergistic effects across the upstream and downstream industrial chains[16](index=16&type=chunk) - Management will deepen the "five-unified" business model, implement the "three-refinements" management philosophy, reduce non-profitable companies, lower operating costs, and enhance the company's profitability[16](index=16&type=chunk) [Management Discussion and Analysis](index=7&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth analysis of the group's market conditions, operational performance, financial results, and future plans, including the impact of COVID-19 [Market and Business Review](index=7&type=section&id=Market%20and%20Business%20Review) In 2020, China's flat glass industry benefited from supply-side reforms and strong demand, while the group maintained 13 float glass production lines and diversified into specialized glass - In 2020, China's GDP grew by **2.3% year-on-year**, becoming one of the few major economies with positive economic growth[21](index=21&type=chunk) - The flat glass industry benefited from supply-side structural reforms, environmental policies, accelerated real estate construction, the booming photovoltaic industry, and the release of real estate completion demand, maintaining high overall prices[21](index=21&type=chunk) - The group operates **10 out of 13 float glass production lines** (daily melting capacity of 6,650 tonnes/day) and owns one Low-E glass production line, one ultra-thin photovoltaic encapsulation material production line for double-glass modules, and a pharmaceutical glass production line technical service company[22](index=22&type=chunk) [Raw Materials and Manufacturing Costs](index=7&type=section&id=Raw%20Materials%20and%20Manufacturing%20Costs) Raw material prices were stable in 2020, while soda ash prices fluctuated, and fuel prices showed mixed trends with imported petroleum coke rising and natural gas stabilizing - Throughout 2020, domestic soda ash prices fluctuated significantly, showing an L-shape in the first half, a strong rebound in the third quarter, and a notable decline in the fourth quarter[23](index=23&type=chunk) - Prices for mineral raw materials (silica sand, limestone, dolomite, etc.) remained relatively stable[23](index=23&type=chunk) - In terms of fuel, the market price of imported low-sulfur petroleum coke slightly increased and consolidated at a high level, fuel oil prices continuously declined before a strong rebound, and natural gas prices stabilized after hovering at a low level[23](index=23&type=chunk) [Production, Sales and Selling Price](index=7&type=section&id=Production%2C%20Sales%20and%20Selling%20Price) In 2020, the group's glass production volume increased by 14%, sales volume by 23%, and average selling price by 10% 2020 Production, Sales and Selling Price Data | Indicator | 2020 Data | Year-on-Year Change | | :-------- | :---------- | :------------------ | | Glass Production Volume | 35.44 million weight cases | Up 14% | | Glass Sales Volume | 36.60 million weight cases | Up 23% | | Average Selling Price | RMB 83/weight case | Up 10% | [Profitability Analysis and COVID-19 Impact](index=8&type=section&id=Profitability%20Analysis%20and%20COVID-19%20Impact) Group sales revenue increased by 33% in 2020, but a net loss was recorded due to higher impairment losses on receivables and reduced non-recurring government subsidies, with effective COVID-19 response measures implemented - In 2020, sales revenue was approximately **RMB 3.159 billion**, an increase of **33% year-on-year**, mainly due to improved glass market conditions, leading to higher sales volume and average selling prices[26](index=26&type=chunk) - The group recorded a net loss of **RMB 98.48 million** for the year, primarily due to increased impairment losses on receivables and reduced non-recurring government subsidies from relocation[26](index=26&type=chunk) - To cope with the COVID-19 pandemic, the group maintained safe inventory levels of raw materials and fuel, adjusted its sales strategy to focus on overseas markets, resulting in a **doubling of export sales volume** in the first quarter year-on-year[27](index=27&type=chunk) [Key Initiatives in 2020](index=8&type=section&id=Key%20Initiatives%20in%202020) In 2020, the group deepened its three major strategies, implemented a "five-unified" management model, strengthened procurement and marketing, improved performance incentives, and managed COVID-19 prevention - Continued to implement key work for the three major strategies, including improving product quality, reducing production costs, exploring potential high-quality projects, ensuring stable operation of the Nigeria project, and addressing delays in the Kazakhstan project[28](index=28&type=chunk) - Deepened management system reforms, implemented a "five-system" business management model for "marketing, procurement, production technology, finance, and investment" under unified group headquarters management, and established a Capital Management Committee and a Price Management Committee[29](index=29&type=chunk) - Strengthened procurement and marketing management by reducing costs through centralized and off-peak procurement, establishing a long-term price control mechanism, and developing diversified sales strategies[33](index=33&type=chunk) - Improved the performance incentive system by establishing a "Performance Contract" assessment mechanism and strengthening compliance supervision through various special audits[34](index=34&type=chunk) - Established an epidemic prevention leading group and formulated and activated a COVID-19 prevention and control emergency plan to strengthen epidemic prevention[35](index=35&type=chunk) [Market Outlook and 2021 Work Plan](index=9&type=section&id=Market%20Outlook%20and%202021%20Work%20Plan) The company anticipates global economic recovery and sustained high prosperity in the flat glass industry in 2021, planning to focus on core float glass, accelerate photovoltaic and deep processing projects, and expand overseas - The Organisation for Economic Co-operation and Development (OECD) projects global economic growth of approximately **5.6% in 2021**, with China's economy expected to return to a rapid development level[36](index=36&type=chunk) - The flat glass industry is expected to maintain high prosperity in 2021, with supply remaining constrained and demand likely to expand due to high certainty in the real estate and automotive sectors[36](index=36&type=chunk) - The 2021 work plan includes focusing on the core float glass business to improve performance, deepening the "five-unified" system management, accelerating the construction of photovoltaic and deep processing projects, expanding overseas business (Nigeria, Kazakhstan, Italy pharmaceutical glass technology), strengthening human resource management, and continuing epidemic prevention efforts[39](index=39&type=chunk)[40](index=40&type=chunk) [Financial Review](index=11&type=section&id=Financial%20Review) In 2020, group revenue grew by 33% to RMB 3.159 billion, with gross profit increasing significantly, but other income decreased, and administrative expenses, impairment losses, financing costs, and income tax expenses rose 2020 Key Financial Indicators Change (RMB thousand) | Indicator | 2020 | 2019 | Change Rate | | :----------------- | :---------- | :---------- | :-------- | | Revenue | 3,158,567 | 2,369,230 | +33% | | Cost of Sales | (2,419,843) | (2,084,588) | +16% | | Gross Profit | 738,724 | 284,642 | +159% | | Gross Profit Margin | 23% | 12% | +11pp | | Other Income | 30,413 | 319,597 | -90.5% | | Administrative Expenses | 287,656 | 241,128 | +19% | | Impairment Loss on Receivables | 122,739 | 20,528 | +498% | | Financing Costs | 263,674 | 185,728 | +42% | | Net Income Tax Expense | 103,633 | 16,724 | +520% | - Revenue from clear glass, tinted glass, and coated glass products increased by **58%, 39%, and 46% respectively**, while revenue from energy-saving and new energy glass products decreased by **19%**[43](index=43&type=chunk) - Current assets decreased by approximately **1% to RMB 2.151 billion**, current liabilities increased by approximately **7% to RMB 3.753 billion**, and non-current liabilities decreased by approximately **10% to RMB 1.281 billion**[52](index=52&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk) [Capital Structure and Liquidity](index=13&type=section&id=Capital%20Structure%20and%20Liquidity) As of year-end 2020, the group's cash and bank balances increased to RMB 806 million, while outstanding loans also rose to RMB 3.44 billion, leading to higher debt-to-equity and debt-to-asset ratios and an expanded net current liabilities 2020 Capital Structure and Liquidity Indicators | Indicator | 2020 | 2019 | | :----------------- | :---------- | :---------- | | Cash and Bank Balances | RMB 806 million | RMB 584 million | | Outstanding Bank and Other Borrowings | RMB 3.44 billion | RMB 3.212 billion | | Debt-to-Equity Ratio | 0.49 | 0.46 | | Current Ratio | 0.57 | 0.62 | | Net Current Liabilities | RMB 1.602 billion | RMB 1.345 billion | | Debt-to-Asset Ratio | 0.70 | 0.69 | - Of the outstanding bank and other borrowings, **56.8% were denominated in RMB**, **36.1% in USD**; **62% adopted fixed interest rates**, and **38% adopted floating interest rates**[57](index=57&type=chunk) [Pledged Assets and Contingent Liabilities](index=13&type=section&id=Pledged%20Assets%20and%20Contingent%20Liabilities) As of year-end 2020, approximately RMB 763 million in property, plant, and equipment, construction in progress, inventories, and land use rights, along with RMB 110 million in trade and bills receivables, were pledged for bank loans totaling RMB 601 million, with no significant contingent liabilities - Approximately **RMB 763 million** of property, plant and equipment, construction in progress, inventories, and land use rights were pledged[59](index=59&type=chunk) - Approximately **RMB 110 million** of trade and bills receivables were pledged[59](index=59&type=chunk) - The total pledged amount was approximately **RMB 601 million**[59](index=59&type=chunk) - The group had no significant contingent liabilities[60](index=60&type=chunk) [Significant Investments and Future Plans](index=13&type=section&id=Significant%20Investments%20and%20Future%20Plans) The group had no significant investments or disposals in 2020 but plans to acquire a controlling stake in Fujian Longtai Industrial Co., Ltd. in early 2021 to expand its float and photovoltaic glass production lines - For the year ended December 31, 2020, the group had no significant investments or acquisitions of capital assets, nor any significant acquisitions or disposals of subsidiaries and associates or significant investments[61](index=61&type=chunk) - On February 4, 2021, the company proposed to acquire **51% or more equity interest** in Fujian Longtai Industrial Co., Ltd. (which is establishing float glass and photovoltaic glass production lines)[61](index=61&type=chunk) - The potential acquisition is expected to be funded by the company's internal resources[61](index=61&type=chunk) [Human Resources and Remuneration](index=14&type=section&id=Human%20Resources%20and%20Remuneration) As of year-end 2020, the group employed approximately 3,391 staff globally, a slight decrease due to efficiency improvements and retirements, offering competitive remuneration and share option/award schemes - As of December 31, 2020, the group employed approximately **3,391 staff globally**, a decrease compared to 2019[64](index=64&type=chunk) - The decrease in employees was mainly due to improved efficiency, reduced workforce due to production line shutdowns for cold repair at individual production bases, and an increase in retired workers[64](index=64&type=chunk) - The company has conditionally adopted a share option scheme and a share award scheme for eligible participants and certain employees[64](index=64&type=chunk) [Final Dividend and Exchange Rate Risk](index=14&type=section&id=Final%20Dividend%20and%20Exchange%20Rate%20Risk) The board did not recommend a final dividend for 2020. The group faces exchange rate fluctuation risks as its transactions and monetary assets are primarily denominated in RMB, HKD, and USD, with no hedging derivatives used in 2020 - The directors do not recommend the payment of a final dividend for the year ended December 31, 2020[65](index=65&type=chunk) - The group's transactions and monetary assets are primarily denominated in RMB, HKD, and USD, exposing it to exchange rate fluctuation risks[66](index=66&type=chunk) - For the year ended December 31, 2020, the group did not use any derivative instruments for hedging[66](index=66&type=chunk) [Major Customers and Suppliers](index=14&type=section&id=Major%20Customers%20and%20Suppliers) In 2020, sales to the top five customers accounted for less than 30% of total sales, while purchases from the top five suppliers represented 48% of total purchases, with no directors or major shareholders holding interests in the top five suppliers - Revenue from sales of goods or provision of services to the **top five customers accounted for less than 30%** of the group's total sales for the year[67](index=67&type=chunk) - **48% of the group's purchases** were from its top five suppliers, with the largest supplier accounting for **34%** of the group's total purchases for the year[67](index=67&type=chunk) - No directors, their close associates, or any shareholder of the company (to the best of the directors' knowledge, holding 5% or more of the company's issued share capital) had any interest in the group's top five suppliers[67](index=67&type=chunk) [Directors' Report](index=15&type=section&id=Directors'%20Report) The Directors' Report provides an overview of the group's business, financial performance, board composition, directors' interests, major shareholders, and corporate governance matters [Business Overview and Financial Performance](index=15&type=section&id=Business%20Overview%20and%20Financial%20Performance) The group's core business involves glass production and related services, recording a loss in 2020 with no final dividend recommended, and a five-year financial summary is provided - The group is principally engaged in the production, marketing, and distribution of glass and glass products, the design and installation of pharmaceutical glass production lines, and the research and development of glass production technology[426](index=426&type=chunk) - The group recorded a loss for the year ended December 31, 2020, and the board does not recommend the payment of a final dividend[71](index=71&type=chunk)[72](index=72&type=chunk) - A summary of the group's results, assets, and liabilities for the past five years is presented on page 4 of this annual report[73](index=73&type=chunk) [Board Composition and Independence](index=16&type=section&id=Board%20Composition%20and%20Independence) The board comprises executive, non-executive, and independent non-executive directors; a temporary shortfall in independent non-executive directors due to a resignation is being addressed, and all independent directors have confirmed their independence - The board members include Mr. Cui Xiangdong (Executive Director), Mr. Peng Shou (Chairman, Non-Executive Director), Mr. Zhou Cheng (Honorary Chairman, Non-Executive Director), Mr. Zhao Linghuan (Non-Executive Director), Mr. Zhang Jinshu (Non-Executive Director), Mr. Zhang Baiheng (Independent Non-Executive Director), Mr. Zhao Lihua (passed away on December 22, 2020, Independent Non-Executive Director), and Mr. Chen Huachen (Independent Non-Executive Director)[80](index=80&type=chunk) - Due to the passing of Mr. Zhao Lihua, the number of independent non-executive directors fell below the minimum requirement of three and less than one-third of the board, for which the company has applied to the Stock Exchange for a three-month extension until June 22, 2021, to re-comply[80](index=80&type=chunk) - The company has received annual confirmations of independence from all independent non-executive directors and considers them to be independent as of the date of this report[81](index=81&type=chunk) [Directors' Interests and Remuneration](index=16&type=section&id=Directors'%20Interests%20and%20Remuneration) In 2020, no directors or their associates had significant interests in major transactions, while certain directors held company shares and share options, with remuneration determined by the Remuneration Committee based on various factors - For the year 2020, no director or any entity connected with a director had any material interest, directly or indirectly, in any significant transaction, arrangement, or contract entered into by the company or any of its subsidiaries and fellow subsidiaries[82](index=82&type=chunk) Directors' and Chief Executive's Share and Share Option Holdings as of December 31, 2020 | Name | Capacity | Total Ordinary Shares (L) | Approximate Percentage of Shareholding | | :--------- | :------------------------- | :---------------- | :----------------------------- | | Mr. Cui Xiangdong | Beneficial Owner / Controlled Corporation Interest | 19,532,000 | 1.08% | | Mr. Zhou Cheng | Beneficial Owner | 22,672,633 | 1.25% | | Mr. Lü Guo | Beneficial Owner | 8,412,096 | 0.46% | - Directors' remuneration is recommended by the Remuneration Committee, reviewed and determined with reference to each director's duties, responsibilities, involvement in company affairs, skills, knowledge, and performance, as well as the company's results and/or profitability, and prevailing market conditions for similar appointments[83](index=83&type=chunk) [Major Shareholders' Interests](index=18&type=section&id=Major%20Shareholders'%20Interests) As of year-end 2020, several entities and individuals, including First Fortune Enterprises Limited, Lenovo Hony (International) Co., Ltd., and China National Building Materials Group Co., Ltd., were identified as major shareholders with varying equity interests Major Shareholders' Shareholdings as of December 31, 2020 | Shareholder Name/Entity | Capacity | Total Ordinary Shares (L) | Approximate Percentage of Shareholding | | :-------------------------------- | :------------------------ | :---------------- | :----------------------------- | | First Fortune Enterprises Limited | Beneficial Owner | 272,926,000 | 15.08% | | Lenovo Hony (International) Co., Ltd. | Controlled Corporation Interest | 272,926,000 | 15.08% | | Easylead Management Limited | Controlled Corporation Interest | 377,676,740 | 20.86% | | Right Lane Limited | Controlled Corporation Interest | 412,676,740 | 22.80% | | Lenovo Holdings Co., Ltd. | Controlled Corporation Interest | 412,676,740 | 22.80% | | Kaisheng Technology Group Co., Ltd. | Beneficial Owner / Controlled Corporation Interest | 416,424,621 | 23.01% | | China National Building Materials Group Co., Ltd. | Controlled Corporation Interest | 416,424,621 | 23.01% | | Bank of Communications Trustee Limited | Trustee | 152,000,000 | 8.40% | - Lenovo Holdings Co., Ltd. is a direct wholly-owned subsidiary of Right Lane Limited and is therefore deemed to have an interest in the shares held by Right Lane Limited[101](index=101&type=chunk) - China National Building Materials Group Co., Ltd. is a wholly-owned subsidiary of Kaisheng Technology Group Co., Ltd. and is therefore deemed to have an interest in the shares held by Kaisheng Technology Group Co., Ltd[101](index=101&type=chunk) [Share Option Schemes](index=20&type=section&id=Share%20Option%20Schemes) The company operates an expired but still effective old share option scheme and a new scheme adopted in 2016, with 330,000 options lapsing under the old scheme in 2020 and no activity under the new scheme - The old share option scheme was adopted on May 30, 2005, to incentivize eligible participants, with the subscription price not less than the highest of the closing price on the offer date, the average closing price for the preceding five business days, or the nominal value of the shares[105](index=105&type=chunk)[107](index=107&type=chunk) - The old share option scheme expired on June 22, 2015, but options already granted remain valid, and no further options will be granted under the old scheme[111](index=111&type=chunk)[113](index=113&type=chunk) 2020 Old Share Option Scheme Details | Participant | Grant Date | Exercise Price per Share (HKD) | Held at Jan 1, 2020 | Lapsed During Year | Held at Dec 31, 2020 | | :---------- | :--------- | :----------------------------- | :------------------ | :----------------- | :------------------- | | Cui Xiangdong | 13/5/2015 | 1.25 | 4,800,000 | – | 4,800,000 | | Lü Guo | 13/5/2015 | 1.25 | 1,400,000 | – | 1,400,000 | | Employees | 13/5/2015 | 1.25 | 25,590,000 | (330,000) | 25,260,000 | | Total | | | 30,390,000 | (330,000) | 30,060,000 | - The new share option scheme was adopted on February 19, 2016, with no options granted, exercised, cancelled, or lapsed during 2020[118](index=118&type=chunk) [Share Award Scheme](index=24&type=section&id=Share%20Award%20Scheme) Adopted in 2011 to reward and retain employees, the Share Award Scheme saw the trustee purchase 36.38 million shares for HKD 14.59 million in 2020, but no shares were granted or vested to employees - The Share Award Scheme was adopted on December 12, 2011, to recognize the contributions of selected employees, provide incentives, and attract talent[129](index=129&type=chunk)[130](index=130&type=chunk) - Bank of Communications Trustee Limited was appointed as the trustee to purchase existing shares of the company in the market with cash contributed by the group and hold them in trust for the group's employees[131](index=131&type=chunk) - For the year ended December 31, 2020, the trustee purchased **36,380,000 shares** in the market at a total purchase price of **HKD 14,592,850**[132](index=132&type=chunk) - For the year ended December 31, 2020, no shares were granted or vested to the group's directors and employees under the Share Award Scheme[132](index=132&type=chunk) [Biographies of Directors, Senior Management and Company Secretary](index=25&type=section&id=Biographies%20of%20Directors%2C%20Senior%20Management%20and%20Company%20Secretary) This section provides detailed biographies of the company's executive, non-executive, and independent non-executive directors, senior management, and company secretary, highlighting their professional backgrounds and industry experience - Mr. Cui Xiangdong is an Executive Director, an accountant and senior economist, with over **30 years of experience** in the building materials industry, enterprise management, and marketing[135](index=135&type=chunk) - Mr. Peng Shou is the Chairman and Non-Executive Director, an academician of the Chinese Academy of Engineering, a professor-level senior engineer, and an expert in inorganic material R&D and engineering design and consulting, with over **35 years of experience** in the building materials industry[136](index=136&type=chunk)[137](index=137&type=chunk) - Mr. Lü Guo is the CEO, a researcher-level senior engineer, with over **30 years of experience** in enterprise management in the glass industry[146](index=146&type=chunk) - Ms. Guo Youli is the Company Secretary, a Fellow of The Chartered Governance Institute and The Hong Kong Chartered Governance Institute, holding dual qualifications as a Chartered Secretary and Chartered Governance Professional[150](index=150&type=chunk) [Connected Transactions and Continuing Connected Transactions](index=29&type=section&id=Connected%20Transactions%20and%20Continuing%20Connected%20Transactions) In FY2020, the group engaged in various connected transactions, including environmental contracts, financial assistance, engineering and supply contracts, and procurement agreements, all compliant with listing rules and deemed fair and reasonable by independent non-executive directors - Entered into a Xianyang Flue Gas Treatment Contract with Shenzhen Kaisheng Technology Engineering Co., Ltd. for a total price of **RMB 13.12 million**, for the renovation and upgrade of flue gas treatment systems[153](index=153&type=chunk)[154](index=154&type=chunk) - Provided a one-year non-revolving loan of up to **USD 3.6 million** at an annual interest rate of **7%** to joint venture Belt and Road Glass Management Limited for the Kazakhstan project construction and working capital needs[158](index=158&type=chunk) - Entered into a Jiangsu Engineering Contract with China National Building Material International Engineering Group Co., Ltd. for a total price of approximately **RMB 50 million**, for the supply and installation of mechanical equipment for a new solar glass production line[160](index=160&type=chunk)[164](index=164&type=chunk) - Olivotto Glass Technologies S.p.A. entered into three supply contracts with Kaisheng Junheng Co., Ltd. and CNBM Bengbu Glass Industry Design & Research Institute Co., Ltd. for a total price of **EUR 4.65 million**, for the construction and upgrade of a Danner tube production line[160](index=160&type=chunk)[165](index=165&type=chunk) - Entered into a Procurement Framework Agreement with Anhui Huaguang Optoelectronic Materials Technology Group Co., Ltd. for a three-year service period, with annual caps of **RMB 890 million (2020), RMB 900 million (2021), and RMB 980 million (2022)**, for the procurement of raw materials and fuel[176](index=176&type=chunk)[179](index=179&type=chunk) - Independent non-executive directors confirmed that the continuing connected transactions were entered into in the ordinary and usual course of the group's business, on normal or better commercial terms, and were fair and reasonable to the company's shareholders[180](index=180&type=chunk) [Other Corporate Governance Matters](index=37&type=section&id=Other%20Corporate%20Governance%20Matters) In 2020, the group maintained public float, had no stock-linked agreements, and reported no significant post-period events, emphasizing strong relationships with stakeholders, environmental compliance, and risk management - For the year 2020, save for the purchase of shares for the Share Award Scheme, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[187](index=187&type=chunk) - The company has maintained a public float of not less than **25%** of the company's issued share capital as required by the Listing Rules[188](index=188&type=chunk) - The group values its relationships with employees, customers, and suppliers, striving to create a positive work environment, provide quality products and services, and establish long-term strategic partnerships[192](index=192&type=chunk)[195](index=195&type=chunk)[196](index=196&type=chunk) - The group strictly enforces environmental protection laws and regulations, with its environmental facilities being industry-leading and all environmental indicators meeting or exceeding national standards[197](index=197&type=chunk) - For the year 2020 and up to the date of this report, the group has not experienced any significant impact on its business and operations due to serious violations of applicable laws and regulations[199](index=199&type=chunk) - The group's business operations are affected by changes in market conditions, industry standards, environmental regulations, industry competition, and customer demand, and measures have been taken to address uncertainties[203](index=203&type=chunk) [Environmental, Social and Governance Report](index=40&type=section&id=Environmental%2C%20Social%20and%20Governance%20Report) This report details the group's commitments and performance in environmental protection, social responsibility, and corporate governance, including employee welfare, sustainable development, and ethical conduct [I. Working Environment](index=40&type=section&id=I.%20Working%20Environment) The group adheres to labor laws, offers competitive remuneration, prioritizes occupational health and safety with zero COVID-19 cases in 2020, and invests in diverse employee training and activities - The group strictly complies with the "Labor Law of the People's Republic of China," the "Labor Contract Law of the People's Republic of China," and other relevant applicable laws and regulations, providing competitive remuneration and social insurance[208](index=208&type=chunk) 2020 Employee Count by Age, Region, and Gender | Year | Total Employees | Under 35 | 35-60 | Over 60 | Shandong | Shaanxi | Jiangsu | Inner Mongolia | Other | Male | Female | | :----- | :-------------- | :------- | :------ | :------- | :------- | :------ | :------- | :------------- | :---- | :--- | :----- | | 2020 | 3,391 | 647 | 2,729 | 15 | 1,088 | 497 | 1,127 | 266 | 413 | 2,882 | 509 | | 2019 | 3,419 | 583 | 2,830 | 6 | 1,111 | 509 | 1,173 | 284 | 342 | 2,906 | 513 | - The group strictly complies with safety production regulations, formulating standardized safety production management systems and occupational health and safety management systems, achieving **zero work-related fatalities in 2020**[213](index=213&type=chunk) - During the global COVID-19 pandemic in 2020, the group's domestic and overseas bases actively carried out epidemic prevention work, achieving **zero confirmed COVID-19 cases**[215](index=215&type=chunk)[216](index=216&type=chunk)[217](index=217&type=chunk) - In 2020, the group provided employees with new employee onboarding training, on-the-job skills training, professional position advancement training, internal trainer training, specialized training for overseas personnel, and comprehensive skills training for senior executives, with the percentage of trained employees reaching **97.1%**[220](index=220&type=chunk) - The group adheres to fair, open, and voluntary recruitment principles, strictly prohibits child labor and forced labor, and embraces diversity, with **no cases of labor standard violations in 2020**[223](index=223&type=chunk)[226](index=226&type=chunk)[228](index=228&type=chunk) [II. Environmental Protection and Sustainable Development](index=45&type=section&id=II.%20Environmental%20Protection%20and%20Sustainable%20Development) The group is committed to green development, complying with environmental laws, investing in pollution control, achieving emission standards, reducing greenhouse gas emissions, and promoting low-carbon operations and energy-efficient products - The group has formulated an "Environmental Management System," implementing a policy of "prevention first, combining prevention and control, and comprehensive treatment," with all bases certified under the **ISO14001 Environmental Management System**[232](index=232&type=chunk) - In 2020, environmental facility operating expenses were approximately **RMB 83.35 million**, a **14% increase year-on-year**, with over **RMB 40 million** invested in environmental facility upgrades[235](index=235&type=chunk) - All of the group's production bases achieved compliant emissions for atmospheric pollutants (sulfur dioxide, nitrogen oxides, particulate matter), with nitrogen oxide emissions decreasing by **over 20%**[239](index=239&type=chunk)[240](index=240&type=chunk) 2020 Atmospheric Pollutant Emissions (tonnes) | No. | Pollutant Name | Suqian Base | Weihai Base | Shaanxi Base | Wuhai Base | Dongtai Base | Linyi Base | 2020 Total | 2019 Total | | :-- | :------------- | :---------- | :---------- | :----------- | :--------- | :----------- | :--------- | :--------- | :--------- | | 1 | Sulfur Dioxide | 18.2 | 101.8 | 24.8 | 120.8 | 168.9 | 2.2 | 437 | 494 | | 2 | Nitrogen Oxides | 20.6 | 339.9 | 184.1 | 505.6 | 259.6 | 13.3 | 1,323 | 1,720 | | 3 | Particulate Matter | 1.7 | 45.4 | 1.8 | 26.0 | 22.9 | 4.8 | 102 | 103 | - In 2020, the group generated approximately **140 tonnes of denitration waste catalysts**, with a **100% legal disposal rate**, and non-hazardous waste (desulfurization slag, domestic waste, waste material packaging bags) was all recycled[242](index=242&type=chunk)[244](index=244&type=chunk) 2020 Greenhouse Gas Emissions (tCO2) | Base | Emissions from Fossil Fuel Combustion | Emissions from Carbon Oxidation in Raw Materials | Emissions from Raw Material Decomposition | Emissions from Net Purchased Electricity | | :--------- | :---------------------------- | :--------------------------------------- | :-------------------------------- | :------------------------------------- | | Dongtai Base | 199,022 | 381 | 757,289 | 1,762 | | Weihai Base | 328,979 | 0 | 93,922 | 64,765 | | Suqian Base | 20,958 | 81 | 20,690 | 1,617 | | Linyi Base | 88,788 | 0 | 35,302 | 11,057 | | Wuhai Base | 106,757 | 281 | 44,309 | 23,117 | | Shaanxi Base | 127,848 | 132 | 32,142 | 16,891 | Group Greenhouse Gas Emissions (tCO2) | Year | Total | | :----- | :---------- | | 2020 | 1,294,588 | | 2019 | 1,262,895 | | 2018 | 1,516,000 | - All of the group's bases have constructed waste heat power generation systems, utilizing flue gas from glass melting furnaces to generate electricity for self-use, thereby reducing production costs[249](index=249&type=chunk) - In 2020, the group's total energy consumption included **280.06 million cubic meters of coke oven gas**, **96,176 tonnes of petroleum coke powder**, **45,013 tonnes of fuel oil**, **61.74 million cubic meters of natural gas**, **226.10 million kWh of electricity**, and **53,050 tonnes of coal**[253](index=253&type=chunk) - In 2020, the group's total water consumption was **2.8372 million tonnes**, with all production wastewater at each base recycled, and production lines adopting closed-loop circulating water systems, achieving a circulating rate of **over 98%** for indirect cooling water[256](index=256&type=chunk)[257](index=257&type=chunk) - The group actively promotes low-carbon economic solutions, adjusts its product and energy structures, and increases R&D investment in energy-saving products such as on-line Low-E coated glass, on-line Sun-E energy-saving coated glass, and photovoltaic glass[258](index=258&type=chunk) [III. Corporate Governance](index=52&type=section&id=III.%20Corporate%20Governance) The group maintains stringent quality control, is ISO9001-2015 certified, focuses on R&D for high-value products, implements dynamic and green supply chain management, ensures effective customer service, and upholds anti-corruption policies with no related lawsuits in 2020 - The group implements full-process quality control from "product design—product manufacturing—after-sales service" and operates strictly in accordance with the **ISO9001-2015 Quality Management System** requirements[260](index=260&type=chunk) - In 2020, the group had **no sold products that required recall** due to safety and health reasons[261](index=261&type=chunk) - The group achieved excellent results in R&D of energy-saving glass and high-value-added products, including winning the **Second Prize of the National Technology Invention Award** and achieving mass production of on-line Low-E glass products with an emissivity of **≤0.13**[262](index=262&type=chunk) 2020 Production Volume of Energy-Saving and High-Value-Added Glass (ten thousand tonnes) | Product | Dongtai Base | Weihai Base | Suqian Base | Total | | :-------------------------------- | :----------- | :---------- | :---------- | :---- | | On-line LOW-E Coated | 1.19 | 0.39 | 0 | 1.58 | | On-line SUN-E Ⓣ Energy-Saving Coated | 7.10 | 4.67 | 0 | 11.77 | | Automotive / Rearview Mirror / Electronic / Photovoltaic Glass | 0 | 0 | 6.29 | 6.29 | - The group has established long-term strategic partnerships with **over 200 qualified suppliers**, implementing dynamic management and a green supply chain management philosophy[268](index=268&type=chunk)[269](index=269&type=chunk) - The group operates a national marketing service and complaint hotline, and has established a strict customer complaint feedback mechanism, with a total of **353 quality complaints in 2020**, all of which were processed and resolved[273](index=273&type=chunk)[276](index=276&type=chunk) - The group has an internal Compliance Supervision Department to strengthen internal controls and support internal anti-corruption reporting, with **no corruption lawsuits occurring in 2020**[277](index=277&type=chunk) [IV. Social Responsibility](index=55&type=section&id=IV.%20Social%20Responsibility) In 2020, the group actively responded to the COVID-19 pandemic, simultaneously engaging in social welfare activities, and encouraging employees to participate in community service, poverty alleviation, and environmental protection - The group actively procured epidemic prevention materials, and while doing a good job in epidemic prevention and control, it actively undertook social responsibilities and engaged in social welfare activities[278](index=278&type=chunk) - The Weihai base organized party members to donate to "support COVID-19 work"; the Linyi base donated to impoverished villagers; and the Wuhai base participated in donation activities for out-of-school children[278](index=278&type=chunk) - Overseas bases responded to the "Belt and Road" initiative, fulfilling social responsibilities, with the Nigerian company helping local employees master production technology and increase their income through "teaching, helping, and guiding"[278](index=278&type=chunk) [Corporate Governance Report](index=56&type=section&id=Corporate%20Governance%20Report) This report outlines the company's adherence to corporate governance codes, detailing board responsibilities, committee functions, director appointments, and communication with shareholders [Compliance with Corporate Governance Code and Model Code](index=56&type=section&id=Compliance%20with%20Corporate%20Governance%20Code%20and%20Model%20Code) The company largely complied with the Corporate Governance Code in 2020, with minor deviations regarding the Chairman's meetings with IEDs and temporary insufficient IEDs on the Nomination Committee, while all directors adhered to the Model Code for securities transactions - The company has complied with the applicable code provisions of the Corporate Governance Code, except for the deviations listed in Corporate Governance Code provisions A.2.7 and A.5.1[282](index=282&type=chunk) - Deviation from A.2.7: The Chairman did not hold meetings with independent non-executive directors without the presence of other directors[282](index=282&type=chunk) - Deviation from A.5.1: The number of members of the Nomination Committee was insufficient due to the passing of independent non-executive director Mr. Zhao Lihua, and the company has applied for a three-month extension to re-comply with the requirements[283](index=283&type=chunk) - All directors have confirmed that they have complied with the Model Code for Securities Transactions by Directors of Listed Issuers throughout the financial year ended December 31, 2020[284](index=284&type=chunk) [Board Responsibilities and Composition](index=57&type=section&id=Board%20Responsibilities%20and%20Composition) The board is responsible for company leadership, strategy, performance monitoring, and risk management, meeting at least four times annually, with distinct roles for Chairman and CEO, and a diverse composition of seven directors - The board's primary roles are to establish company values, formulate strategies, monitor operational and financial performance, and develop risk management policies[287](index=287&type=chunk) - The board plans to hold at least **four meetings annually**, and a total of **4 meetings** were held in 2020[287](index=287&type=chunk) - The roles of Chairman and Chief Executive Officer are held by different individuals to maintain independence and balanced judgment[292](index=292&type=chunk) - As of the date of the annual report, the board comprises **seven directors**, including one executive director, four non-executive directors, and two independent non-executive directors[293](index=293&type=chunk) - There are no financial, business, family, or other material relationships among board members, ensuring independence[293](index=293&type=chunk) [Appointment and Continuous Development of Directors](index=58&type=section&id=Appointment%20and%20Continuous%20Development%20of%20Directors) Director appointments, re-election, and removal follow company articles, with non-executive directors serving terms not exceeding three years; the board ensures new directors are informed and encourages continuous professional development - In accordance with the company's Bye-laws, the board may appoint individuals to fill casual vacancies or as additional members, who must stand for re-election at the next general meeting; at least **one-third of the directors** must retire by rotation annually[295](index=295&type=chunk) - All non-executive directors and independent non-executive directors are appointed by the company for terms not exceeding **three years**[295](index=295&type=chunk) - The board ensures that each newly appointed director has an appropriate understanding of the group's operations and business, and continuously updates directors on legal and regulatory developments[297](index=297&type=chunk) - In 2020, directors engaged in continuous professional development by attending seminars/conferences/forums, reading newspapers/publications/magazines, and reviewing memoranda/materials provided by the company[304](index=304&type=chunk)[305](index=305&type=chunk) [Board Committees](index=61&type=section&id=Board%20Committees) The board has established Audit, Nomination, Remuneration, and Strategy Committees, each with defined responsibilities for financial oversight, board structure, compensation policy, and long-term strategy, holding regular meetings - The board currently has an Audit Committee, a Nomination Committee, a Remuneration Committee, and a Strategy Committee, all empowered by the board according to their respective terms of reference[308](index=308&type=chunk) - The primary responsibilities of the Audit Committee are to make recommendations on the appointment, reappointment, and removal of external auditors; review financial statements and significant opinions on financial reporting; and oversee the group's financial reporting system, risk management, and internal control systems[309](index=309&type=chunk) - The primary responsibilities of the Nomination Committee include reviewing the structure, size, and composition of the board; identifying individuals with suitable qualifications to become directors and advising the board; and making recommendations to the board on the appointment or re-appointment of directors and succession planning[312](index=312&type=chunk) - The primary responsibilities of the Remuneration Committee include making recommendations to the board on the overall remuneration policy and structure for the group's directors and senior management, and on establishing formal and transparent procedures for such remuneration[326](index=326&type=chunk) - The Strategy Committee is primarily responsible for reviewing the company's medium and long-term strategies[328](index=328&type=chunk) 2020 Board and Board Committee Meeting Attendance Record | Director Name | Board Meetings | Audit Committee Meetings | Nomination Committee Meetings | Remuneration Committee Meetings | AGM | EGM | | :---------------- | :------------- | :----------------------- | :---------------------------- | :------------------------------ | :-- | :-- | | Mr. Cui Xiangdong | 4/4 | – | – | – | 1/1 | 1/1 | | Mr. Peng Shou | 4/4 | 2/2 | – | 2/2 | 0/1 | 0/1 | | Mr. Zhao Linghuan | 4/4 | – | – | – | 1/1 | 0/1 | | Mr. Zhou Cheng | 4/4 | – | 1/1 | – | 1/1 | 1/1 | | Mr. Zhang Jinshu | 4/4 | – | – | – | 1/1 | 1/1 | | Mr. Zhang Baiheng | 4/4 | 2/2 | 1/1 | 2/2 | 1/1 | 1/1 | | Mr. Zhao Lihua | 3/4 | 2/2 | 1/1 | 2/2 | 1/1 | 0/1 | | Mr. Chen Huachen | 4/4 | 2/2 | – | – | 1/1 | 1/1 | [Accountability, Audit and Risk Management](index=67&type=section&id=Accountability%2C%20Audit%20and%20Risk%20Management) The board is accountable to shareholders for financial statements and internal controls, with KPMG as auditor. The board and Audit Committee oversee effective risk management and internal control systems, which were deemed effective and adequate in 2020 - Directors confirm their responsibility for preparing the group's financial statements for the financial year ended December 31, 2020, and believe that the financial statements truly and fairly reflect the group's results and state of affairs[334](index=334&type=chunk) - For the year 2020, the total fees payable to KPMG for annual audit services and interim review, as well as other services, amounted to **RMB 6.98 million**, with non-audit service fees of **RMB 0.2 million**[337](index=337&type=chunk) - The board is solely responsible for evaluating and determining the nature and extent of risks it is willing to undertake in achieving the company's strategic objectives, and for establishing and maintaining sound and effective risk management and internal control systems for the group[339](index=339&type=chunk) - The Audit Committee assists the board in leading management and overseeing the design, implementation, and monitoring of risk management and internal control systems[340](index=340&type=chunk) - The board and the Audit Committee consider the risk management and internal control systems to be effective and adequate[341](index=341&type=chunk) [Company Secretary and Shareholders' Rights](index=69&type=section&id=Company%20Secretary%20and%20Shareholders'%20Rights) The Company Secretary advises on corporate governance, ensuring proper board procedures. Shareholders can convene extraordinary general meetings and propose resolutions, with inquiries directed to the company's principal office. A dividend policy balances shareholder expectations with capital management - Ms. Guo Youli, the Company Secretary, is a full-time employee of the company, responsible for advising the board on corporate governance matters and ensuring proper board procedures are followed[343](index=343&type=chunk) - Shareholders holding not less than **one-tenth of the paid-up share capital** of the company carrying voting rights may, in accordance with Section 74 of the Bermuda Companies Act, require the directors to convene an extraordinary general meeting[344](index=344&type=chunk) - Shareholders may, in accordance with Sections 79 and 80 of the Companies Act, require the company to give notice to shareholders or circulate statements regarding resolutions to be moved at an annual general meeting[347](index=347&type=chunk) - Shareholders wishing to make inquiries and raise concerns with the board may send their questions by post to the company's principal place of business in Hong Kong[353](index=353&type=chunk) - The company has adopted a dividend policy aimed at balancing shareholder expectations with prudent capital management and ensuring the group's ability to continue as a going concern[354](index=354&type=chunk)[355](index=355&type=chunk) [Communication with Shareholders](index=72&type=section&id=Communication%20with%20Shareholders) The company values shareholder communication, utilizing general meetings and a dedicated policy, and maintains high corporate transparency through its website and the HKEX website for timely information disclosure - The company recognizes the importance of communication with shareholders and places high emphasis on it, with general meetings providing an excellent channel for the board and shareholders to communicate and exchange views[360](index=360&type=chunk) - The board has adopted a shareholder communication policy and regularly reviews it to ensure its effectiveness[360](index=360&type=chunk) - The company's website (www.chinaglassholdings.com) contains corporate information, interim and annual reports, announcements, and circulars published by the company, as well as updates on the group's latest developments[363](index=363&type=chunk) [Independent Auditor's Report](index=74&type=section&id=Independent%20Auditor's%20Report) This report presents the independent auditor's opinion on the group's consolidated financial statements, highlighting key audit matters and outlining the responsibilities of both directors and auditors [Opinion and Basis for Opinion](index=74&type=section&id=Opinion%20and%20Basis%20for%20Opinion) KPMG issued an unmodified opinion on the group's consolidated financial statements for FY2020, affirming their fair presentation in accordance with HKFRS and compliance with the Companies Ordinance, based on an audit conducted under HKSA - The auditor issued an unmodified opinion on the consolidated financial statements, believing they present a true and fair view of the group's consolidated financial position as of December 31, 2020, and its consolidated financial performance and consolidated cash flows for the year then ended, in accordance with Hong Kong Financial Reporting Standards[367](index=367&type=chunk) - The audit was conducted in accordance with Hong Kong Standards on Auditing issued by the Hong Kong Institute of Certified Public Accountants, and the auditor is independent of the group and has fulfilled its ethical responsibilities[367](index=367&type=chunk) [Key Audit Matters](index=74&type=section&id=Key%20Audit%20Matters) The auditor identified three key audit matters: assessing the group's going concern ability, potential impairment of property, plant, and equipment, and the inherent subjectivity in goodwill impairment assessment - Key audit matters include assessing the group's **going concern ability**, as the group had net current liabilities of **RMB 1,601,920 thousand** as of December 31, 2020, and management used significant key assumptions in its cash flow forecasts[370](index=370&type=chunk) - Key audit matters also include the potential impairment of **property, plant and equipment**, as it is the most significant asset amount in the consolidated statement of financial position, and management exercised significant judgment in assessing its recoverable amount[376](index=376&type=chunk) - The assessment of potential **goodwill impairment** is also a key audit matter due to its inherent subjectivity and the need for significant judgment and estimates, involving goodwill of **EUR 12.5 million** arising from the acquisition of OGT Group[380](index=380&type=chunk) [Responsibilities of Directors and Auditor](index=79&type=section&id=Responsibilities%20of%20Directors%20and%20Auditor) Directors are responsible for preparing fair financial statements and internal controls, while the auditor's role is to provide reasonable assurance against material misstatement and report to shareholders, exercising professional judgment and communicating with the Audit Committee - Directors are responsible for preparing consolidated financial statements that give a true and fair view in accordance with Hong Kong Financial Reporting Standards and the disclosure requirements of the Hong Kong Companies Ordinance, and for such internal control as they determine is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error[383](index=383&type=chunk) - The auditor's objective is to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion[384](index=384&type=chunk) - The auditor communicated with the Audit Committee regarding the planned scope and timing of the audit, significant audit findings, including any significant deficiencies in internal control that were identified during the audit[385](index=385&type=chunk) [Consolidated Financial Statements](index=82&type=section&id=Consolidated%20Financial%20Statements) This section presents the group's complete set of consolidated financial statements, including the income statement, statement of comprehensive income, balance sheet, statement of changes in equity, and cash flow statement [Consolidated Statement of Profit or Loss](index=82&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) For the year ended December 31, 2020, the group reported revenue of RMB 3,158,567 thousand and a gross profit of RMB 738,724 thousand, but ultimately recorded a net loss of RMB 98,478 thousand due to increased financing costs and income tax expenses Consolidated Statement of Profit or Loss Key Data (RMB thousand) | Indicator | 2020 | 2019 | | :-------------------------- | :---------- | :---------- | | Revenue | 3,158,567 | 2,369,230 | | Cost of Sales | (2,419,843) | (2,084,588) | | Gross Profit | 738,724 | 284,642 | | Other Income | 30,413 | 319,597 | | Operating Profit | 269,554 | 275,258 | | Financing Costs | (263,674) | (185,728) | | Profit Before Tax | 5,155 | 89,428 | | Income Tax | (103,633) | (16,724) | | Net (Loss)/Profit for the Year | (98,478) | 72,704 | | Basic (Loss)/Earnings Per Share (RMB cents) | (5.07) | 4.87 | [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=83&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the year ended December 31, 2020, the group reported a net loss of RMB 98,478 thousand, with total comprehensive loss of RMB 69,444 thousand after positive foreign exchange differences from financial statement translation Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data (RMB thousand) | Indicator | 2020 | 2019 | | :--------------------------------------- | :---------- | :---------- | | Net (Loss)/Profit for the Year | (98,478) | 72,704 | | Other Comprehensive Income: | | | | - Net Change in Fair Value Reserve (Non-reclassifiable) | (31) | (191) | | - Exchange Differences | 29,065 | (9,840) | | Total Comprehensive (Loss)/Income for the Year | (69,444) | 62,673 | [Consolidated Statement of Financial Position](index=84&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of December 31, 2020, the group's total assets were RMB 7,201,243 thousand, with net current liabilities of RMB 1,601,920 thousand and net assets of RMB 2,167,996 thousand Consolidated Statement of Financial Position Key Data (RMB thousand) | Indicator | 2020 | 2019 | | :------------------------- | :---------- | :---------- | | Total Non-Current Assets | 5,050,642 | 5,011,321 | | Total Current Assets | 2,150,601 | 2,176,790 | | Total Current Liabilities | 3,752,521 | 3,521,826 | | Net Current Liabilities | (1,601,920) | (1,345,036) | | Total Assets Less Current Liabilities | 3,448,722 | 3,666,285 | | Total Non-Current Liabilities | 1,280,726 | 1,416,566 | | Net Assets | 2,167,996 | 2,249,719 | | Total Equity | 2,167,996 | 2,249,719 | - Property, plant and equipment was the largest non-current asset, totaling **RMB 4,265,335 thousand**[401](index=401&type=chunk) - Cash and bank balances amounted to **RMB 806,137 thousand**[401](index=401&type=chunk) [Consolidated Statement of Changes in Equity](index=85&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) For the year ended December 31, 2020, total equity attributable to equity holders decreased from RMB 2,077,123 thousand at the beginning of the year to RMB 2,010,404 thousand at year-end, primarily due to the net loss for the year and share purchases under the share award scheme Consolidated Statement of Changes in Equity Key Data (RMB thousand) | Indicator | Balance at Jan 1, 2020 | Loss for the Year | Other Comprehensive Income | Shares Purchased Under Share Award Scheme | Capital Contribution from Non-Controlling Shareholders | Balance at Dec 31, 2020 | | :------------------------- | :--------------------- | :---------------- | :------------------------- | :---------------------------------------- | :------------------------------------- | :---------------------- | | Share Capital | 84,867 | – | – | – | – | 84,867 | | Share Premium | 1,780,249 | – | – | – | – | 1,780,249 | | Shares Held for Share Award Scheme | (64,253) | – | – | (11,436) | – | (75,689) | | Retained Profits | 676,791 | (84,713) | – | – | – | 592,078 | | Total Equity Attributable to Equity Holders of the Company | 2,077,123 | (84,713) | (55,677) | (11,436) | 394 | 2,010,404 | | Non-Controlling Interests | 172,596 | (13,765) | (13,767) | – | (1,237) | 157,592 | | Total Equity | 2,249,719 | (98,478) | (69,444) | (11,436) | (1,237) | 2,167,996 | [Consolidated Statement of Cash Flows](index=88&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) For the year ended December 31, 2020, the group generated net cash from operating activities of RMB 629,377 thousand, used net cash of RMB 397,765 thousand in investing activities, and RMB 84,616 thousand in financing activities, resulting in a net increase in cash and cash equivalents of RMB 146,996 thousand Consolidated Statement of Cash Flows Key Data (RMB thousand) | Indicator | 2020 | 2019 | | :------------------------------------ | :---------- | :---------- | | Net Cash From Operating Activities | 629,377 | 138,344 | | Net Cash Used In Investing Activities | (397,765) | (240,552) | | Net Cash (Used In)/From Financing Activities | (84,616) | 94,218 | | Net Increase/(Decrease) in Cash and Cash Equivalents | 146,996 | (7,990) | | Cash and Cash Equivalents at January 1 | 565,188 | 570,832 | | Effect of Foreign Exchange Rate Changes | (14,070) | 2,346 | | Cash and Cash Equivalents at December 31 | 698,114 | 565,188 | - Operating cash flow significantly increased, primarily due to profit before tax, depreciation and amortization, decrease in inventories, and decrease in trade and other receivables[420](index=420&type=chunk) - Investing cash outflow was mainly for the purchase of property, plant and equipment, partially offset by proceeds from relocation of production plants and disposal of property[420](index=420&type=chunk) - Financing cash outflow was primarily for repayment of bank and other borrowings, redemption of convertible bonds, and payment of borrowing costs[423](index=423&type=chunk) [Notes to the Consolidated Financial Statements](index=90&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes provide comprehensive supplementary information to the financial statements, detailing accounting policies, judgments, estimates, segment reporting, income, expenses, assets, liabilities, equity, related party transactions, and financial risk management - The group is principally engaged in the production, marketing, and distribution of glass and glass products, the design and installation of pharmaceutical glass production lines, and the research and development of glass production technology[426](index=426&type=chunk) - As of December 31, 2020, the group had net current liabilities of **RMB 1,601,920 thousand**, but the directors believe the group has sufficient funds to meet liabilities due in the next 12 months, thus preparing financial statements on a going concern basis[431](index=431&type=chunk) - Revenue increased by **33% in 2020**, primarily from sales of glass products (**RMB 3,024,433 thousand**) and service contracts (**RMB 115,230 thousand**)[569](index=569&type=chunk) - Other income significantly decreased to **RMB 30,413 thousand in 2020**, mainly because the net gains from relocation of production plants (**R