Changchai Company, Limited Interim Report 2023
CHANGCHAI COMPANY, LIMITED
INTERIM REPORT 2023
August 2023
1
Changchai Company, Limited Interim Report 2023
Part I Important Notes, Table of Contents and Definitions
The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors,
supervisors and senior management of Changchai Company, Limited (hereinafter referred to
as the “Company”) hereby guarantee the factuality, accuracy and completeness of the
contents of this Report and its summary, and shall be jointly and severally liable for any
misrepresentations, misleading statements or material omissions therein.
Xie Guozhong, the Company’s legal representative and General Manager, and Jiang He, head
of the Company’s financial department (equivalent to financial manager) hereby guarantee
that the Financial Statements carried in this Report are factual, accurate and complete.
All the Company’s directors have attended the Board meeting for the review of this Report
and its summary.
Any plans for the future or other forward-looking statements mentioned in this Report and its
summary shall NOT be considered as promises to investors. Investors and other stakeholders
shall be sufficiently aware of the risk and shall differentiate between plans/forecasts and
promises.
The Company has described in detail the risks it might face in “X Risks Facing the Company
and Countermeasures” in “Part III Management Discussion and Analysis” herein.
The Company has no interim dividend plan, either in the form of cash or stock.
2
Changchai Company, Limited Interim Report 2023
Table of Contents
Part I Important Notes, Table of Contents and Definitions ........................................................... 2
Part II Corporate Information and Key Financial Information ................................................... 6
Part III Management Discussion and Analysis ............................................................................... 9
Part IV Corporate Governance ...................................................................................................... 36
Part V Environmental and Social Responsibility ..........................................................................38
Part VI Significant Events ...............................................................................................................41
Part VII Share Changes and Shareholder Information ............................................................... 47
Part VIII Preference Shares ............................................................................................................53
Part IX Bonds ................................................................................................................................... 54
Part X Financial Statements ........................................................................................................... 55
3
Changchai Company, Limited Interim Report 2023
Documents Available for Reference
(I) The financial statements signed and sealed by the Company’s legal representative, General
Manager and head of the financial department (accountant in charge).
(II) The originals of all the Company’s documents and announcements which were disclosed on the
website designated by the CSRC during the Reporting Period.
(III) The Interim Report disclosed in other securities markets.
The above-mentioned documents available for reference are all kept in the Secretariat of the Board
of Directors of the Company.
This Report has been prepared in both Chinese and English. Should there be any discrepancies or
misunderstandings between the two versions, the Chinese version shall prevail.
4
Changchai Company, Limited Interim Report 2023
Definitions
Term Definition
“Changchai”, the “Company” or Changchai Company, Limited and its consolidated
“we” subsidiaries, except where the context otherwise requires
Changzhou Changchai Benniu Diesel Engine Fittings Co.,
Changchai Benniu
Ltd.
Changchai Wanzhou Changchai Wanzhou Diesel Engine Co., Ltd.
Horizon Investment Changzhou Horizon Investment Co., Ltd.
Changzhou Changchai Horizon Agricultural Equipment
Horizon Agricultural Equipment
Co., Ltd.
Changzhou Fuji Changchai Robin Gasoline Engine Co.,
Changchai Robin
Ltd.
Changchai Machinery Jiangsu Changchai Machinery Co., Ltd.
Xingsheng Real Estate Management Changzhou Xingsheng Real Estate Management Co., Ltd.
Zhenjiang Siyang Zhenjiang Siyang Diesel Engine Manufacturing Co., Ltd.
Expressed in the Chinese currency of Renminbi, expressed
RMB, RMB’0,000
in tens of thousands of Renminbi
The “Reporting Period” or “Current
The period from 1 January 2023 to 30 June 2023
Period”
5
Changchai Company, Limited Interim Report 2023
Part II Corporate Information and Key Financial Information
I Corporate Information
Stock name Changchai, Changchai-B Stock code 000570, 200570
Stock exchange for listing Shenzhen Stock Exchange
Company name in Chinese 常柴股份有限公司
Abbr. (if any) 苏常柴
Company name in English (if
CHANGCHAI COMPANY,LIMITED
any)
Abbr. (if any) CHANGCHAI CO.,LTD.
Legal representative Xie Guozhong
II Contact Information
Board Secretary Securities Representative
Name He Jianjiang
123 Huaide Middle Road,
Office address
Changzhou, Jiangsu, China
Tel. （86）519-68683155
Fax （86）519-86630954
Email address cchjj@changchai.com
III Other Information
1. Contact Information of the Company
Indicate by tick mark whether any change occurred to the registered address, office address and their zip codes,
website address and email address of the Company in the Reporting Period.
□ Applicable √ Not applicable
No change occurred to the said information in the Reporting Period, which can be found in the 2022 Annual
Report.
2. Media for Information Disclosure and Place where this Report is Lodged
Indicate by tick mark whether any change occurred to the information disclosure media and the place for lodging
the Company’s periodic reports in the Reporting Period.
□ Applicable √ Not applicable
6
Changchai Company, Limited Interim Report 2023
The website and media name and website of the stock exchange where the company disclosed its semi-annual
report. The location of the company's semi-annual report remains unchanged during the reporting period, as
detailed in the 2022 annual report.
3. Other Relevant Information
Indicate by tick mark whether any change occurred to other relevant information in the Reporting Period.
□ Applicable √ Not applicable
IV Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
Yes √ No
H1 2023 H1 2022 Change (%)
Operating revenue (RMB) 1,350,517,639.85 1,178,222,492.04 14.62%
Net profit attributable to the listed
131,937,324.66 -14,595,269.61 ——
company’s shareholders (RMB)
Net profit attributable to the listed
company’s shareholders before 5,825,543.98 -5,809,360.07 ——
exceptional gains and losses (RMB)
Net cash generated from/used in
-104,796,816.75 -74,300,501.12 ——
operating activities (RMB)
Basic earnings per share (RMB/share) 0.1870 -0.0207 ——
Diluted earnings per share
0.1870 -0.0207 ——
(RMB/share)
Weighted average return on equity (%) 3.93% -0.48% 4.41%
30 June 2023 31 December 2022 Change (%)
Total assets (RMB) 5,559,083,368.07 5,219,359,853.42 6.51%
Equity attributable to the listed
3,485,429,025.82 3,284,710,665.90 6.11%
company’s shareholders (RMB)
V Accounting Data Differences under China’s Accounting Standards for Business Enterprises
(CAS) and International Financial Reporting Standards (IFRS) and Foreign Accounting
Standards
1. Net Profit and Equity under CAS and IFRS
□ Applicable √ Not applicable
7
Changchai Company, Limited Interim Report 2023
No difference for the Reporting Period.
2. Net Profit and Equity under CAS and Foreign Accounting Standards
□ Applicable √ Not applicable
No difference for the Reporting Period.
VI Exceptional Gains and Losses
√ Applicable □ Not applicable
Unit: RMB
Item Amount Note
Expropriation of the constructions
Gain or loss on disposal of non-current assets on the state-owned land of the
105,395,693.25
(inclusive of impairment allowance write-offs) Changzhou Wuxing branch
company in the Reporting Period
Government grants through profit or loss (exclusive
of government grants consistently given in the
Company’s ordinary course of business at fixed 3,299,056.52
quotas or amounts as per governmental policies or
standards)
Gain or loss on fair-value changes on Increase in the fair value of the
held-for-trading financial assets and liabilities & shares held by wholly-owned
income from disposal of held-for-trading financial subsidiary Horizon Investment in
Jiangsu Liance Electromechanical
assets and liabilities and available-for-sale financial 22,587,377.56
Technology Co., Ltd., Kailong High
assets (exclusive of the effective portion of hedges Technology Co., Ltd., Guilin Stars
that arise in the Company’s ordinary course of Science and Technology Co., Ltd.,
business) and Henan Lantian Gas Co., Ltd.
Non-operating income and expense other than the
-801,809.16
above
Less: Income tax effects 4,621,569.20
Non-controlling interests effects (net of tax) -253,031.71
Total 126,111,780.68
Particulars about other items that meet the definition of exceptional gain/loss:
□ Applicable √ Not applicable
No such cases for the Reporting Period.
Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item listed in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the
Public—Exceptional Gain/Loss Items:
□ Applicable √ Not applicable
No such cases for the Reporting Period.
8
Changchai Company, Limited Interim Report 2023
Part III Management Discussion and Analysis
I Principal Activity of the Company in the Reporting Period
1. Principal Operations of the Company
We mainly specialize in the R&D, manufacture and sales of diesel engines under the brand "Changchai" and
gasoline engines under the brand "Robin". Our products are mainly used in agricultural machinery, small
engineering machinery, light commercial vehicles, generator sets and shipborne machinery and other fields closely
related to people's livelihood.
In the Reporting Period, there were no major changes in the Company's core business and main products.
2. Main Products of the Company
Our main products are divided into two categories: diesel engines and gasoline engines. The details are as follows:
Main Product Application
Graphic display Product description
products features fields
Our diesel engine products include
single-cylinder diesel engines and
High power, low Agricultural
multi-cylinder engines, covering
oil consumption, machinery,
power range from 1.62kW to
low noise, construction
Diesel 117.6kW, and cylinder diameters from
compact machinery,
engine 65mm to 135mm, with one or more
structure, low generator sets,
cylinders. Besides sale in domestic
emission, good shipborne
market, our diesel engines are sold to
reliability machinery
Southeast Asia, South America, the
Middle East and Africa.
Our gasoline engines are mainly
general-purpose small gasoline
engines, covering the power range Simple structure, Agricultural
Gasoline from 1.5kW to 7.0kW. Besides sale in good reliability, machinery, small
engine domestic market, our gasoline engines easy construction
are sold to Southeast Asia, the Middle maintenance machinery
East, Europe and America, Africa,
Japan and other countries and regions.
3. Major Business Models
(1) R&D model
We have established an innovative technology management system for internal combustion engine based on
9
Changchai Company, Limited Interim Report 2023
market demand and forward-looking technologies. Prior to the new products or new technologies development,
the marketing department first conducts market assessment and customer research, and then initiates a project
according to the forecasted market demand; the technology center conducts development according to the project
materials, and collects feedback information from the market and customers in real time during the development
process to ensure technology leadership and product suitability.
(2) Purchasing model
We adopt the "purchase-to-order" purchasing model. The ERP system converts the sales orders, the sales plan
developed by the sales department and the production plan drawn up by the production department into the
demand of parts needed, and the purchasing department organizes the purchase according to such demand.
Meanwhile, the purchasing department makes a plan to guide parts procurement according to the sales
department's sales plan, and provide it to the supplier, and urge the supplier to prepare for the goods.
(3) Production model
We adopt the "make-to-order" production management model. The sales department makes sales plans for
different stages according to the orders in hand, sales data in previous years, market demand judgment and
feedback of existing customers' purchasing intentions. The Company's production department makes the
production plan according to the sales orders displayed in the ERP system, the sales plan made by the sales
department and the reserve inventory demand, and organizes the production task in strict accordance with the plan.
During the production process, the quality assurance department arranges regular inspection to ensure the product
quality.
(4) Sale model
We adopt the sales model of "direct selling + distribution", i.e. the direct selling model for the main engine factory,
and the distribution model for the individual circulation market represented by farmers and overseas market.
4. The Company in the Industry
We are a manufacturer of internal combustion engines and fittings in general equipment manufacturing. According
to the classification of fuel used, internal combustion engines are mainly divided into diesel engines and gasoline
engines. Our diesel engines and gasoline engines are mainly used in non-road mobile machinery fields such as
harvesters, tractors, plant protection machinery, small engineering machinery, and shipborne machinery.
(1) Development pattern and trend of the industry
In terms of policies, at the beginning of 2023, the 20th No. 1 Document guiding the work on agriculture, rural
10
Changchai Company, Limited Interim Report 2023
areas, and farmers issued by the central government demonstrated the government’s intention to attach greater
importance to agriculture and strengthen agricultural development. In a bid to do so, the government will step up
efforts to enhance agricultural science and technology and provide more equipment, drive to tackle key problems
of key and core technologies in agriculture, and make agricultural machinery more intelligent and automated. In
terms of industry concerns, the upgrade and conversion to products that meet the National Emission Standard IV
raise challenges to enterprises. At the end of 2022, the central government appropriated RMB211.5 billion of
agriculture-related transfer payment funds for 2023 in advance, including RMB14.5 billion for subsidies of
agricultural machinery procurement and application. The central government allocated substantive funds for
subsidies and implemented policies to strengthen agriculture and benefit farmers, indicating that the state will
continue to attach great importance to agricultural mechanization.
In terms of industrial development, after a ten-year golden period of development, since 2016, the entire
agricultural machinery industry has entered a period of deep adjustment that has lasted for years. Although
short-term explosive growth was seen in 2020, it went down again, entering a phase of updating existing
machinery from the growth of new machine procurement. The switch to the National Emission Standard IV for
Non-road Vehicles has posed challenges for enterprises, in addition to multiple pressures from the shrinking of the
demand side, premature market overdraft, participation of tycoons from other industries, and the impact of new
energy market on the traditional market. Currently, multiple segmented scenarios still require all-weather and
continuous input and output, which is an advantage of diesel engines that cannot be substituted in a short time.
Furthermore, new development opportunities have been brought about in the process of national strategic
deployment and acceleration of transformation and upgrade. Therefore, the traditional market of agricultural
machinery still has a brilliant future.
China's diesel engine and gasoline engine industries present a pattern of multiple competitions. As the state adopts
increasingly strict environmental protection policy and the emission standards continue to upgrade, the core
technology and key parts of internal combustion engines will be rapidly developed and applied, and the research,
development, promoting and application of environmentally friendly and efficient diesel engines and gasoline
engines will become the mainstream trend, which promotes the wide use of the fuel injection system,
high-efficiency supercharger and high-efficiency after-treatment. In the new normal, the internal combustion
engine industry and agricultural machinery industry will improve the industry's capability of independent
innovation, support the whole machine development, and organize and implement green manufacturing and
11
Changchai Company, Limited Interim Report 2023
intelligent manufacturing, so as to improve the overall strength of the industry. The market share of diesel and
gasoline engines is gradually concentrated in a few large-scale enterprises with technical and capital strength.
The present development trend of internal combustion engine industry is as follows: (1) energy saving and
emission reduction; (2) intelligent manufacturing; (3) lightweight. Medium- and low-end internal combustion
engines with low technical content and low added value will be gradually squeezed out of the market. The
upgrade of emission standards and the market's demand for high-end products will eliminate those small
enterprises with low level of research and development or less technology reserves.
(2) Industry sales in the first half of 2023
Amid a market recovery facilitated by multiple national policies, the upstream and downstream markets in the
internal combustion engine industry were somewhat improved. Despite slightly insufficient market demands, the
sales were gradually growing. On the terminal side, the agricultural machinery and project markets were still
severe in sales.
From January to June 2023, the total sales of internal combustion engines were 21,592,400 units, a decline of
0.20% year on year; the accumulative power was 1,359,215,700 kW, an increase of 6.08% year on year. From
January to June, 2,678,700 diesel engines were sold, an increase of 8.85% year on year. Specifically, 476,900
engines for construction machinery were sold, an increase of 5.88% from the same period last year; 862,100
engines for agricultural machinery were sold, an increase of 32.04% from last year; 33,500 engines for shipborne
machinery were sold, an increase of 62.62% from last year; 190,700 engines for generator sets were sold, an
increase of 22.79% from last year. In the first half, 18,902,100 gasoline internal combustion engines were sold,
down 1.39% year on year.
In terms of the segments of the internal combustion engine market by purpose, from January to June, the sales of
engines for agricultural machinery witnessed a year-on-year decline. To be more specific, 507,800 engines for
construction machinery were sold, up 5.16% year on year; 2,073,600 engines for agricultural machinery were sold,
down 14.13% year on year; 33,500 engines for shipborne machinery were sold, up 62.62% year on year; 767,300
engines for generator sets were sold, up 19.85% year on year.
(3) The Company's position in the market
We mainly specialize in the R&D, manufacture and sales of diesel engines under the brand "Changchai" and
gasoline engines under the brand "Robin". Up to now, we have successfully developed a number of advanced core
technologies with independent intellectual property rights. In terms of diesel engine, according to the statistics of
12
Changchai Company, Limited Interim Report 2023
China Internal Combustion Engine Industry Association (CICEIA), as the largest small- and medium-sized
single-cylinder diesel engine manufacturer in the agricultural machinery industry of China, we have maintained a
high market share of single-cylinder engines, and our market share of single-cylinder diesel engines of some
power ranges has ranked first in China. For many years, in the process of achieving steady economic development
of the enterprise, we developed in a sound manner and cultivated the "Changchai" brand, a famous small diesel
engine brand of China with independent intellectual property rights.
5. Key Performance Drivers
(1) National policy driver
In recent years, various departments of the state have introduced a series of preferential policies to encourage the
development of internal combustion engine industry. In terms of agricultural machinery, the central government
has taken solving the problems relating to "agriculture, rural areas and farmers" as the top priority of the work of
the Party and the government, and issued a series of policies to benefit farmers, creating a good atmosphere for
promoting the development of agriculture and economy and society in rural areas; in terms of construction
machinery, the strategy of "western development", the "eight vertical and eight horizontal" high-speed railway
network plan and the policy of "new rural construction" have all created a good policy environment for the
application of internal combustion engine in downstream construction machinery.
(2) Industrial chain synergy empowers the sustainable development of the Company
We have built our own casting manufacturing and processing plants to meet the use requirements of some diesel
engine parts. In terms of production and quality, we have formed a significant synergy with its own internal
combustion engine assembly team. Our casting manufacturing team and internal combustion engine assembly
team work together to form a mutually reinforcing positive feedback loop to assist the Company in integrating the
internal combustion engine industry chain and building differentiated industry barriers. In terms of collaborative
production, the reduction of external purchase is of great significance for the Company to reduce process flow,
reduce intermediate loss, improve production efficiency, shorten delivery time and increase purchasing bargaining
power. In terms of quality coordination, the self-built foundry can improve our quality control of parts to improve
the yield and reliability of internal combustion engines.
(3) Stable and efficient R&D team
We have experienced technical management team and perfect technical support team. Our key technical personnel
and R&D management personnel have been engaged in internal combustion engine R&D design, production and
13
Changchai Company, Limited Interim Report 2023
manufacturing for a long time. With profound professional knowledge and rich practical experience, they can
make strong forward-looking and scientific judgment in the market direction and technical route. Also, we have
established an effective training mechanism to foster talented persons for the follow-up R&D.
(4) Well-known brand with many well-known customers
The Company, formerly known as Changzhou Diesel Engine Factory, is a national industrial enterprise with a
history of a hundred years and one of the earliest professional internal combustion engine manufacturers in China.
Our diesel and gasoline engines, as power sources of agricultural machinery, construction machinery and
commercial vehicles, show excellent performance in power range, reliability, power per litre, noise control and
emission standards, and have been recognized by customers. We maintained a long-term partnership with major
customers, with cumulative partnership time exceeding 15 years. Many main engine plant customers of the
Company are well-known enterprises in the agricultural machinery industry, with their market shares being at the
forefront of the market.
6. Performance of the Company’s Principal Operations in the Reporting Period
In the first half of 2023, the macro economy was still recovering stably. Affected by factors such as the switch to
the National Emission Standard IV, market overextension, and conservative purchase intentions of users, the
agricultural machinery industry was confronted with a severe challenge and thus entered a downturn for in-depth
adjustments. This tested the Company’s business. In this context, the Company adhered to its annual policy and
goals and seized market opportunities. Additionally, it enhanced internal management and comprehensively
pushed ahead with all tasks. As a result, it surmounted difficulties and achieved excellent operating results. During
the Reporting Period, the Company sold 365.3 thousand diesel engines, gasoline engines and generator sets,
including 78.2 thousand gasoline engines, generating total sales revenue of RMB1.351 billion, an increase of
14.62% year-on-year.
In terms of product development and application, the Company enhanced the batch application and market testing
and tracking of products that met the National Emission Standard IV for Non-Road Engines and optimized the
product performance on an ongoing basis in combination with the users’ feedback and demands. At the same time,
the Company advanced the development of products designed for its expansion into new fields, diversified
products in different power ranges, and carried out orderly experiments for product application in the market.
These efforts earned two of the Company’s products, namely 3M78 and L24, a title of High-tech Products of
Changzhou. Additionally, two new products, 4G29 and 4G36V16, passed the acceptance inspection for the
14
Changchai Company, Limited Interim Report 2023
appraisal of Jiangsu Province for new products and technologies.
In terms of market services, the Company further optimized the sales network and product mix of single-cylinder
engines in the circulation market and consolidated its market application share in the industrial cluster. Moreover,
all products in the required power ranges of the main engine plant customers were adjusted to fully meet the
National Emission Standard IV, thus helping the Company consolidate the market share of its advantageous
products and expand the application of new models. Meanwhile, efforts were redoubled to improve the services
that met the National Emission Standard IV and optimize the service resources. Training on the products in
compliance with the National Emission Standard IV was conducted on an ongoing basis, and policies on services
during the busy season were adjusted. Doing so further consolidated the service resources. Furthermore, thanks to
the increasingly stable foreign trade environment, foreign trade witnessed a significant increment in the traditional
market.
In terms of quality management, the Company strictly controlled the quality of products in compliance with the
National Emission Standard IV in order to continuously improve their quality stability and reliability. To this end,
the Company carried out targeted quality improvement and enhanced the control of the whole process, hoping to
produce increasingly stable and satisfactory products.
In terms of internal management, safety risk control and hazard inspection and remediation were organized to
prevent and mitigate miscellaneous safety risks, facilitate the completion of the safe production activity plan, and,
more importantly, boost the Company’s capability of safe production. Additionally, a range of publicity activities
in production and operation, corporate culture, and brand image publicity was organized to celebrate the 110th
anniversary of the Company and enhance the development of corporate culture. This delivered excellent results.
During the Reporting Period, the Changzhou Wuxing branch company, together with other houses within the
scope of expropriation of the passenger train factory area (phases I and II) project, was expropriated by the
government. Hence, the Company signed the Agreement on the Expropriation of the Properties of the Wuxing
Branch Company on State-owned Land in Changzhou City and the Compensation with Changzhou Zhonglou
District Housing and Urban-Rural Development Bureau, and received the first compensation payment of RMB70
million on 28 June 2023.
II Core Competitiveness Analysis
1. Advantages in Brand
15
Changchai Company, Limited Interim Report 2023
Changchai is a national industrial enterprise with a history of over one hundred years. It is one of the earliest
professional manufacturers of internal combustion engines in China. The brand "Changchai" is the earliest
domestic trademark of production goods known as China's well-known trademarks. The diesel engine of
"Changchai" brand is China's brand-name product. The enterprise has been certified by ISO9001 and IATF16949
quality systems, ISO14001 environmental management system, IATF16949 automotive product quality
management system, and accessed to the national export-free enterprise qualification. Changchai was honorably
ranked among “the Top One Hundred Chinese Enterprises in Engineering Industry” and “China Pacesetter
Enterprise of Industrial Industry” for several times, and was awarded the honorary title of “State-level Enterprise
of Observing Contracts and Keeping Promise”, “China's Agricultural Machinery Parts and Components Leading
Enterprises”, “China's Agricultural Machinery AAA Credit Enterprise”, “Quality Management Excellence Award
of Jiangsu Province” and “Mayor Quality Award of Changzhou City”. The Company has been among the 10 users’
most satisfied leading brands in “Jing Geng” competition for many years. During the Reporting Period, the
Company was awarded honorary titles such as Top 500 Machinery Industry In China, and National Demonstration
Enterprise of Product and Service Quality Integrity. For many years, in the process of achieving steady economic
development of the enterprise, we developed in a sound manner and cultivated the “Changchai” brand, a famous
small diesel engine brand of China with independent intellectual property rights.
2. Advantages in Technology
The Company has a state-level technology center and post-doctoral research station, and a research center of small
and medium-power internal combustion engine engineering and technology in Jiangsu Province. Currently, it is
mainly engaged in production of small and medium-power single-cylinder and multi-cylinder diesel engine. It has
a complete product range, a wide power level coverage, a high reputation and intellectual property rights for its
main products. During the Reporting Period, the Company passed the performance re-appraisal by Jiangsu
Provincial Engineering Centre; and two multi-cylinder diesel engines, 4G36V16 and 4G29, passed the new
product appraisal. In the period, the Company filed a total of six patent applications, all of which have been
accepted by the China National Intellectual Property Administration, and were granted 13 patents. So far, the
Company has 163 patents, including 15 invention patents.
3. Advantages in Marketing
Changchai has built up a sales service network covering the whole country, with 24 sales service centers and 693
designated maintenance stations. In addition, in order to meet the National Emission Standard IV for Non-Road
16
Changchai Company, Limited Interim Report 2023
Vehicles and provide better after-sales service for customers, a service monitoring platform with Changchai
characteristics has been put in place. With a perfect diesel sales service network system, the Company is able to
provide high quality, efficient and timely services for customers.
III Core Business Analysis
Overview
See contents under the heading “I Principal Activity of the Company in the Reporting Period”.
Year-on-year changes in key financial data:
Unit: RMB
Main reason for
H1 2023 H1 2022 Change (%)
change
Operating revenue 1,350,517,639.85 1,178,222,492.04 14.62%
Cost of sales 1,168,898,203.83 1,051,395,232.42 11.18%
Selling expense 62,131,032.17 51,759,201.38 20.04%
During the Reporting
Period, the
wholly-owned
subsidiary, Jiangsu
Changchai
Administrative Machinery Co., Ltd.,
52,877,371.06 40,216,534.11 31.48% has entered the
expense production and
operation stage,
while it was still in
the construction
stage in the same
period of last year.
Decreased exchange
gains and interest
Finance costs -4,976,652.95 -13,000,719.98 ——
income in the
Reporting Period
During the Reporting
Period,increase in the
stock prices of
Jiangsu Liance
Electromechanical
Technology Co.,
Ltd., Kailong High
Income tax expense 7,189,328.33 -6,206,048.88 —— tech Co., Ltd., Guilin
Xingchen
Technology Co.,
Ltd., and Henan
Lantian Gas Co.,
Ltd. held by
wholly-owned
subsidiary Housheng
17
Changchai Company, Limited Interim Report 2023
Investment ,
corresponding to the
increase in deferred
income tax expenses
provisioned.
R&D investments 35,839,071.42 40,159,787.47 -10.76%
During the Reporting
Period, most of the
Company’s
multi-cylinder diesel
engine customers
were supporting
companies of main
engine, which are
usually given longer
Net cash generated payment days and
from/used in operating -104,796,816.75 -74,300,501.12 —— the Company
activities properly allowed
customers’ buying on
credit for more
markets to step up
efforts to expand the
market due to the
product emission
upgrading, resulting
in relatively lower
cash inflow.
The Company
acquired a 41.5%
Net cash generated interest in Zhenjiang
Siyang in the same
from/used in investing -45,360,077.56 -86,580,833.90 ——
period of last year,
activities with no comparable
investment in the
current period.
Some bank
acceptance notes
with low credit
Net cash generated ratings were
discounted in the
from/used in financing -8,886,489.92 27,896,685.26 ——
same period of last
activities year, with no
comparable
investment in the
current period.
Net increase in cash
-159,043,384.23 -132,984,649.76 ——
and cash equivalents
Significant changes to the profit structure or sources of the Company in the Reporting Period:
□ Applicable √ Not applicable
Breakdown of operating revenue:
H1 2023 H1 2022 Change (%)
18
Changchai Company, Limited Interim Report 2023
As % of total As % of total
Operating
operating Operating revenue operating
revenue
revenue (%) revenue (%)
Total 1,350,517,639.85 100% 1,178,222,492.04 100% 14.62%
By operating division
Internal
combustion 1,333,099,509.22 98.71% 1,161,021,786.32 98.54% 14.82%
engines
Other 17,418,130.63 1.29% 17,200,705.72 1.46% 1.26%
By product category
Diesel engines 1,246,906,709.16 92.33% 1,079,645,157.01 91.63% 15.49%
Gasoline
82,791,314.55 6.13% 73,850,875.09 6.27% 12.11%
engines
Other 20,819,616.14 1.54% 24,726,459.94 2.10% -15.80%
By operating segment
Domestic 1,114,906,055.18 82.55% 1,019,205,712.35 86.50% 9.39%
Overseas 235,611,584.67 17.45% 159,016,779.69 13.50% 48.17%
Unit: RMB
Operating division, product category or operating segment contributing over 10% of operating revenue or
operating profit:
√ Applicable □ Not applicable
Unit: RMB
YoY
YoY
change in
Gross change in YoY change
gross
Operating revenue Cost of sales profit operating in cost of
profit
margin revenue sales (%)
margin
(%)
(%)
By operating division
Internal
combustion 1,333,099,509.22 1,156,456,220.22 13.25% 14.82% 11.33% 2.72%
engines
By product category
Diesel engines 1,246,906,709.16 1,085,807,867.36 12.92% 15.49% 12.35% 2.44%
Gasoline
82,791,314.55 67,045,804.51 19.02% 12.11% 6.10% 4.58%
engines
By operating segment
Domestic 1,114,906,055.18 939,907,304.69 15.70% 9.39% 4.81% 3.69%
19
Changchai Company, Limited Interim Report 2023
Overseas 235,611,584.67 228,990,899.14 2.81% 48.17% 48.14% 0.02%
Core business data of the prior period restated according to the changed statistical caliber for the Reporting
Period:
□ Applicable √ Not applicable
IV Analysis of Non-Core Businesses
√ Applicable □ Not applicable
Unit: RMB
As % of gross Recurrent
Amount Main reason/source
profit or not
Return on Stock dividends and income from
3,226,921.70 2.25% Yes
investment cash management
Increased prices of the shares held
by wholly-owned subsidiary
Horizon Investment in Jiangsu
Liance Electromechanical
Gains/losses on
Technology Co., Ltd., Kailong
changes in fair 19,360,455.86 13.51% No
High Technology Co., Ltd.,
value
Guilin Stars Science and
Technology Co., Ltd., and Henan
Lantian Gas Co., Ltd. during the
Reporting Period
Asset impairment
-565,273.49 -0.39% Inventory valuation loss No
loss
Non-operating Trademark infringement damage
495,538.97 0.35% No
income income
Non-operating Mainly caused by compensation
1,297,348.13 0.91% No
expense matters
Expropriation of the constructions
Asset disposal on the state-owned land of the
105,395,693.25 73.55% No
income Changzhou Wuxing branch
company in the Reporting Period
V Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB
30 June 2023 31 December 2022 Change
As % of As % of in Reason for any
Amount total Amount total percent significant change
assets assets age (%)
Monetary
851,514,113.92 15.32% 930,013,350.97 17.82% -2.50%
assets
Accounts 934,790,431.84 16.82% 370,322,179.77 7.10% 9.72% Most of the
20
Changchai Company, Limited Interim Report 2023
receivable Company’s
multi-cylinder diesel
engine customers are
supporting
companies of main
engine, which are
usually given longer
payment days and the
Company properly
allowed customers’
buying on credit for
more markets to step
up efforts to expand
the market due to the
product emission
upgrading
Inventories 557,524,141.36 10.03% 571,996,881.74 10.96% -0.93%
Investment
40,942,541.87 0.74% 42,160,779.65 0.81% -0.07%
property
Fixed assets 683,448,533.29 12.29% 720,061,387.76 13.80% -1.51%
Construction
30,905,577.10 0.56% 30,281,547.56 0.58% -0.02%
in progress
Short-term
110,447,699.49 1.99% 115,437,700.65 2.21% -0.22%
borrowings
Contract
33,094,812.97 0.60% 32,843,692.83 0.63% -0.03%
liabilities
2. Major Assets Overseas
□ Applicable √ Not applicable
3. Assets and Liabilities at Fair Value
√ Applicable □ Not applicable
Unit: RMB
Gain/loss Impairme
Cumulati
on nt
ve Purchase Sold in
fair-value allowance
Beginnin fair-value d in the the Other Ending
Item changes made in
g amount changes Reporting Reporting changes amount
in the the
through Period Period
Reporting Reporting
equity
Period Period
21
Changchai Company, Limited Interim Report 2023
Financia
l assets
Held-for
-trading
financial
assets
(exclusi 370,103,6 19,360,45 605,127,7 633,120,9 361,470,8
ve of 02.57 5.86 34.16 83.27 09.32
derivati
ve
financial
assets)
Investm
ents in
other 955,560,2 844,650,3 1,042,219
equity 40.08 90.08 ,240.08
instrume
nts
Subtotal
of 1,325,663 19,360,45 844,650,3 605,127,7 633,120,9 1,403,690
financial ,842.65 5.86 90.08 34.16 83.27 ,049.40
assets
412,809,5 705,680.7 413,515,2
Others
87.93 7 68.70
Total of
1,738,473 20,066,13 844,650,3 605,127,7 633,120,9 1,817,205
the
,430.58 6.63 90.08 34.16 83.27 ,318.10
above
Financia
l
0.00 0.00
liabilitie
s
Significant changes to the measurement attributes of the major assets in the Reporting Period:
□ Yes √ No
4. Restricted Asset Rights as at the Period-End
Item Ending carrying amount Reason for restriction
Security deposits associated with bank
Monetary assets 173,206,532.10
acceptance notes, environment, etc.
Buildings 1,422,559.69 Collateral for bank loan
Land use right 863,218.81 Collateral for bank loan
22
Changchai Company, Limited Interim Report 2023
Plant and equipment 25,771,609.33 Collateral for bank loan
Payment obligations in relation
to discounted notes that were 110,000,000.00
undue
Payment obligations in relation
to transferred notes that were 103,721,703.95
undue
Total 414,985,623.88
VI Investments Made
1. Total Investment Amount
□ Applicable √ Not applicable
2. Major Equity Investments Made in the Reporting Period
□ Applicable √ Not applicable
3. Major Non-Equity Investments Ongoing in the Reporting Period
□ Applicable √ Not applicable
4. Financial Investments
(1) Securities Investments
√ Applicable □ Not applicable
Unit: RMB
Gain/ Accu
loss mula
Initia Acco on ted Purc Gain/
Begi Sold
untin fair fair hase loss Endi
Varie Code Nam l nnin in Acco Fund
g value value d in in ng
ty of of e of g the untin ing
inves meas chan chan the the carry
carry Repo
secur secur secur urem ges ges Repo Repo ing g sourc
tmen ing rting
ent in the recor rting rting amou
ity ity ity amou Perio title e
meth Repo ded Perio Perio nt
t cost nt d
od rting in d d
Perio equit
d y
Dom Foto Fair 449, 491, Inves
41,78 406,0 Self-
estic/ 6001 n value 516, 300, tmen
4,000 45,00 0.00 0.00 0.00 0.00 fund
forei 66 Moto meth 000. 000. t in
.00 0.00 ed
00 00
gn r od other
23
Changchai Company, Limited Interim Report 2023
stock equit
y
instr
umen
ts
Inves
tmen
Dom t in
Bank Fair
estic/ 129, 171, other Self-
of 42,78 value 170,5
6009 204, 990,
forei 6,000 86,00 0.00 0.00 0.00 0.00 equit fund
19 Jiang meth 000. 000.
gn .00 0.00 y ed
00 00
su od
stock instr
umen
ts
Kailo Held
Dom -for-t
ng Fair 23,0 radin
estic/ 20,00 13,59 9,417 9,41 Self-
3009 High value 09,5 g
forei 1,268 2,411 ,096. 0.00 0.00 0.00 7,09 fund
12 Tech meth 07.0 finan
gn .00 .00 00 6.00 ed
0 cial
nolo od
stock asset
gy s
Held
Dom Lian -for-t
Fair
estic/ ce 68,9 radin Self-
7,200 value 60,06 8,884 8,88
6881 47,2 g
forei Tech ,000. 2,400 ,800. 0.00 0.00 0.00 4,80 fund
13 meth 00.0 finan
gn nolo 00 .00 00 0.00 ed
0 cial
od
stock gy asset
s
Held
Dom -for-t
Fair radin
estic/ Lanti 20,9 267, Self-
6053 160,7 value 247,0 20,96 g
forei an 0.00 0.00 0.00 60.0 960. fund
68 44.76 meth 00.00 0.00 finan
gn Gas 0 00 ed
cial
od
stock asset
s
Stars Held
Dom Scien -for-t
Fair
estic/ ce radin Self-
3,600 value 4,837 594, 5,43
8328 594,0 g
forei and ,000. ,500. 0.00 0.00 0.00 000. 1,50 fund
85 meth 00.00 finan
gn Tech 00 00 00 0.00 ed
cial
od
stock nolo asset
gy s
578, 18,9 760,
115,5 655,3 18,91
720, 16,8 946,
Total 32,01 -- 70,31 6,856 0.00 0.00 -- --
000. 56.0 167.
2.76 1.00 .00
00 0 00
24
Changchai Company, Limited Interim Report 2023
(2) Investments in Derivative Financial Instruments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
5. Use of Raised Funds
√ Applicable □ Not applicable
(1) Overall Use of Raised Funds
√ Applicable □ Not applicable
Unit: RMB’0,000
Total
Proport Raised
Total raised
Total Total ion of Total Use funds
raised funds
raised accumu total raised and that
funds with
funds lative accumu funds owners have
Year Method that altered
Total that raised lative that hip been
for of have purpos
raised have funds raised have change left
fund-ra fund-ra been es
funds been with funds not of unused
ising ising used in during
used altered with been unused for
the the
accumu purpos altered used raised over
current Reporti
latively es purpos yet funds two
period ng
es years
Period
Deposit
ed in
the
special
Non-pu account
blic for
21,178. 54,355. 8,985.9 8,985.9
2021 63,500 0 0 0.00% raised
offerin 19 72 8 8
funds
g and put
into
cash
manage
ment
21,178. 54,355. 8,985.9 8,985.9
Total -- 63,500 0 0 0.00% --
19 72 8 8
Explanation of the overall use of raised funds
On 17 December 2020, the Company received the Reply Concerning the Approval of the Non-public Offering
of Shares of Changchai Co., Ltd. (CSRC Permit [2020] No. 3374) from the China Securities Regulatory
Commission, which approved the non-public offering of up to 168,412,297 shares of the Company. On June 11,
2021, the subscribers of this non-public offering have fully remitted the subscription funds to the bank account
designated by the sponsor institution, and the total amount of funds raised was RMB634,999,996.40. After
deducting various issuance fees, the actual net amount raised this time is 620,665,733.97 yuan, including an
additional registered capital of 144,318,181.00 yuan and an additional capital reserve of 476,347,552.97 yuan.
25
Changchai Company, Limited Interim Report 2023
On June 16, 2021, Notary Tianye Certified Public Accountants (Special General Partnership) conducted a
capital verification of the above-mentioned raised funds and issued the "Capital Verification Report on the Non
Public Development of Stocks of Changchai Co., Ltd." (Su Gong W [2021] B062). After deducting the
recommendation and underwriting fees, the underwriter of the recommendation actually received
622,499,996.40 yuan of raised funds, which were deposited in three special accounts for raised funds opened by
the company and Changchai Machinery, and signed a tripartite supervision agreement for raised funds with the
recommendation institution and the account opening bank. There is no significant difference between the
tripartite regulatory agreement and the model tripartite regulatory agreement of the Shenzhen Stock Exchange,
and our company strictly follows and fulfills it when using the raised funds.As of 30 June 2023, RMB543.5572
million of raised funds has been used cumulatively, with the unused raised funds being RMB89.8598 million.
(2) Committed Projects of Raised Funds
√ Applicable □ Not applicable
Unit: RMB’0,000
Accu
Wheth Wheth
mulati Invest
er er
The ve ment Date
projec Benefi there
Total invest invest progre when Wheth
ts Adjust ts are
Committed comm ment ment ss as the er the
have ed record materi
investment itted amou amou of the projec estima
been total ed al
projects and invest nt nt as end of ts are ted
altere invest during chang
investment of ment during of the the ready benefi
d ment the es in
excessive raised with the end of Repor for ts are
(inclu amou Repor the
funds raised Repor the ting their reache
ding nt (1) ting projec
funds ting Repor Period intend d
partial Period t
Period ting (3) = ed use
altern feasibi
Period (2)/(1)
ation) lity
(2)
Committed investment projects
Relocation project
54,76 54,76 20,91 53,33 97.39 May -1,937
of light engines No No No
6.71 6.71 9.43 7.75 % 2022 .34
and casting
Innovation
Dece Not
capacity building 8,733. 7,299. 258.7 1,017. 13.95
No mber 0 applic No
project of the 29 86 6 97 %
2023 able
technical center
Subtotal of
committed 63,50 62,06 21,17 54,35 -1,937
-- -- -- -- --
investment 0.00 6.57 8.19 5.72 .34
projects
Investment of excessive raised funds
Not applicable
Total -- 63,50 62,06 21,17 54,35 -- -- -1,937 -- --
26
Changchai Company, Limited Interim Report 2023
0.00 6.57 8.19 5.72 .34
Light engine and casting relocation project: 1) Reasons for payment not meeting the
planned schedule: As of June 30, 2023, the investment progress of the project's raised
funds was 97.39%, and the remaining funds not invested were mainly the final payment
for some equipment that had not been finally accepted. 2) The reason for the failure to
achieve benefits during this reporting period is that the project consists of multiple
production lines such as casting and single cylinder machine assembly. Currently, casting
Cases and reasons has been officially put into operation and the main customer is the parent company.
for failing to However, due to the market situation, internal and external orders have decreased to a
reach the planned certain extent, leading to a slowdown in production capacity release; Moreover, all single
progress or cylinder machine assembly employees have not yet relocated to the project address and
predicted return are still in the process of gradual relocation, so the expected benefits have not been
(by specific achieved in this period.
projects) Technical Center Innovation Capacity Building Project: Reasons for not achieving the
planned progress: The company adhered to the principle of saving funds and improving
asset utilization at the beginning of the independent project, borrowed some original
equipment, and used technological innovation methods to complete some of the research
and development process, saving some capital expenses; There is still some unpaid
balance in the signed contract. The project is expected to be completed before the
scheduled availability date.
Explanations of
the material
Not applicable
changes in the
project feasibility
Amount, use, and
use progress of
Not applicable
excessive raised
funds
Applicable
Occurred in the prior year
Implementation The Proposal on Adding Implementation Location to the Private Placement Raised Funds
of location Investment Project of Innovation Capacity Building of the Technical Centre was approved
changes in the at the 13th Meeting of the 9th Board of Directors and the 12th Meeting of the 9th
investment Supervisory Committee of the Company on 22 August 2022. The Company decided to
projects with the add the sites of certain branches of the Company as the parent and wholly-owned
raised funds subsidiary Changchai Machinery as locations to place the R&D equipment and
implement the R&D project. This change will not re-purpose the raised funds and will
help carry forward the technical innovation project.
Implementation
of method
Not applicable
adjustments to the
investment
27
Changchai Company, Limited Interim Report 2023
projects with the
raised funds
Applicable
Prior to the availability of the raised funds, in order to ensure the smooth implementation
of the investment projects with raised funds, the Company used its own funds to invest in
part of the investment projects with raised funds and paid part of the issuance expenses.
As of 17 June 2021, the cumulative amount of the Company's self-financing funds
pre-invested in the investment projects with raised funds was RMB181,803,327.94, the
amount of issuance expenses advanced was RMB2,358,490.56, totaling
RMB184,161,818.50, and the proposed replacement amount was RMB184,161,818.50.
The capitals were verified by the Gongzheng Tianye Accounting Firm (Special General
Early investment
Partnership), and the Verification Report on the Pre-investment of Self-financing Funds
and placement
into the Investment Project with Raised Funds and the Payment of Issuance Expenses by
concerning the
Self-financing Funds of Changchai Co., Ltd. (S.G.W [2021] E1347) was issued on 25
investment
June 2021. On 28 June 2021, the Third Interim Meeting of the Board of Directors of the
projects with the
Company in 2021 deliberated and approved the Proposal on Replacing the Funds
raised funds
Pre-invested in the Project and Advanced Issuance Expenses with the Raised Funds,
agreeing to use the raised funds from the non-public offering of shares to replace the
self-financing funds totaling RMB184,161,818.50 that had been pre-invested in the
project prior to the availability of the raised funds. In addition, Xingye Securities Co.,
Ltd. and Donghai Securities Co., Ltd. issued a verification opinion on the use of raised
funds to replace self-financing funds that had been invested in advance in the projects
with raised funds. For details, see the Announcement on the Use of Raised Funds to
Replace Pre-invested Project Funds and Advanced Issue Expenses (Announcement No.
2021-036) published on Cninfo (http://www.cninfo.com.cn) on 30 June 2021.
Temporary
replenishment of
working capital Not applicable
with the idle
raised funds
Surplus raised
funds for project
implementation Not applicable
and reasons for
the surplus
Use and
ownership change Some are deposited in the special account for raised funds and some temporarily idle
of unused raised raised funds are used to purchase wealth management products
funds
Problems in the On 13 July 2021, the Fourth Interim Meeting of the Board of Directors of the Company in
use of raised 2021 deliberated and approved the Proposal on Changing the Implementation Entity of
28
Changchai Company, Limited Interim Report 2023
funds and Some Investment Projects with Raised Funds, agreeing to change the implementation
disclosure, or entity of the Company's investment projects with funds raised through non-public
other cases offering of shares, the "relocation project of light engines and casting", from Changchai
Machinery, a wholly-owned subsidiary of the Company, to the parent company of
Changchai Co., Ltd. The matter did not change the use and implementation of the funds
raised and was not a significant change in the investment projects with raised funds.
The Proposal on Adding Implementation Entity to the Private Placement Raised Funds
Investment Project of Relocation of Light Engines and Casting was approved at the 13th
Meeting of the 9th Board of Directors and the 12th Meeting of the 9th Supervisory
Committee of the Company on 22 August 2022. As such, the Company intended to add
Changchai Machinery as another operating entity with the Company as the parent to
jointly operate the relocation project for better operational flexibility and stronger market
competitiveness.
(3) Altered Projects of Raised Funds
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VII Sale of Major Assets and Equity Investments
1. Sale of Major Assets
√ Applicable □ Not applicable
Relati O C
onshi w re
Net
Ratio R p ne di
profit
of the el betwe rs to
contri Execu In
net at en hi r’
buted ted as de
Tra profit ed the p s
to the sched x
nsa contri -p transa of ri D
Comp uled to
Tra ctio buted ar ction th g is
Dat any or dis
nsa n by the ty party e ht cl
e from not; if cl
ctio Asset pric Effect on the sale Pricing tr and as s os
of the not, os
n sold e Company of the principle an the set an ur
sal period give ed
par (R asset sa Com in d e
e -begin reason inf
ty MB to the ct pany vo li da
to the s and or
’0,0 Comp io (appli lv ab te
date measu m
00) any’s n cable ed ili
of sale res ati
total or for ha ti
(RMB taken on
profit n relate s es
’0,000
(%) ot d-part be in
)
y en v
transa all ol
29
Changchai Company, Limited Interim Report 2023
ctions tra ve
) ns d
fer ha
re ve
d be
or en
no al
t l
tr
an
sf
er
re
d
or
n
ot
The Wuxing branch The
Ch company is one of the demolitio
ang Company's light n and
The
zho engine production relocatio
Comp
u bases, which has n
any's
Zh ceased production as compens
prope
ong of the date of sale, and ation
rties
lou part of the equipment amount
and
Dis and production lines was
its
tric have been relocated to determin
annex
t Jiangsu Changchai ed by
es Yes,
Ho 14 Machinery Co., Ltd. 77.44 taking
locate imple
usi Jun which is the % the N
d in 11, N N/ mente See
ng e 0 implementation body evaluatio N/A /
Xinxi 700 o A d as note 1
and 20 of the light engine and n result A
n plann
Ur 23 casting relocation as
Villag ed
ban project of the reference
e
-Ru non-public offering ,
Com
ral project. The combinin
mitte
De expropriation will not g with
e,
vel have a significant the local
Wuxi
op impact on the demolitio
ng
me Company's production n and
Town
nt and operation. relocatio
ship
Bur The Company will n
eau account for the compens
expropriation in ation
30
Changchai Company, Limited Interim Report 2023
accordance with the policy,
Accounting Standards and
for Business mutual
Enterprises and other consultati
relevant regulations. on on
adding
relevant
relocatio
n
compens
ation,
incentive
s, etc.
Note 1: See the following announcements disclosed on http://www.cninfo.com.cn:
1) Reminder on the Intention of the People's Government of Zhonglou District, Changzhou City to Expropriate
Properties of the Wuxing Branch Company (Announcement No. 2023-016) disclosed on 19 April 2023;
2) Announcement on the Resolutions of the 17th Meeting of the Ninth Board of Directors (Announcement No.
2023-021), and Announcement on the Intention to Sign the Agreement on the Expropriation of the Properties of
the Wuxing Branch Company on State-owned Land in Changzhou City and the Compensation (Announcement No.
2023-022), both disclosed on 26 May 2023;
3) Announcement on the Resolutions of the First Extraordinary General Meeting of Shareholders in 2023
(Announcement No. 2023-035) disclosed on 13 June 2023; and
4) Announcement on Progress on the Expropriation of Properties on State-owned Land of the Wuxing Branch
Company and the Compensation (Announcement No. 2023-042) disclosed on 29 June 2023.
2. Sale of Major Equity Investments
□ Applicable √ Not applicable
VIII Principal Subsidiaries and Joint Stock Companies
√ Applicable □ Not applicable
Principal subsidiaries and joint stock companies with an over 10% effect on the Company’s net profit:
Unit: RMB
Relatio
nship
with Principal Registere Total Net Operatin Operating Net
Name
the activity d capital assets assets g revenue profit profit
Compa
ny
Changchai Subsidi Production 55,063,0 153,669, 78,777,8 122,681, -1,256,37 -1,272,54
31
Changchai Company, Limited Interim Report 2023
Benniu ary of diesel 00.00 633.65 41.60 208.07 7.50 0.30
engine
accessories
Diesel
Changchai Subsidi 85,000,0 71,003,9 49,477,0 26,190,0 976,591.5 212,968.
engine
Wanzhou ary 00.00 81.46 76.95 43.15 2 83
assembly
External
Horizon Subsidi investment 40,000,0 113,700, 95,581,3 19,383,28 14,650,2
0.00
Investment ary and 00.00 314.85 84.34 4.61 82.95
consulting
agricultural
Horizon machinery
Agricultura Subsidi product of 10,000,0 6,824,92 -15,647,6 3,010,16 -593,158. -593,158.
l ary rice 00.00 8.69 24.60 6.17 00 00
Equipment transplanter
etc.
Gasoline
Changchai Subsidi 37,250,0 117,886, 97,562,0 82,791,3 9,401,412 8,180,80
engines
Robin ary 00.00 692.47 37.80 14.55 .58 9.75
assembly
Internal
combustion
Changchai Subsidi 300,000, 592,685, 258,078, 43,818,5 -19,380,2 -19,373,3
engine and
Machinery ary 000.00 799.88 854.01 22.52 29.04 66.46
related
accessories
Xingsheng
Real estate
Real Estate Subsidi 1,000,00 3,374,31 522,108. 1,207,46 -132,801. -37,109.3
manageme
Manageme ary 0.00 5.88 72 7.09 40 2
nt service
nt
Manufactur
ing and
Zhenjiang Subsidi marketing 2,000,00 115,324, 97,155,1 38,098,3 8,214,000 6,969,59
Siyang ary of diesel 0.00 977.87 13.08 12.48 .25 2.70
engines for
ships
Subsidiaries obtained or disposed of in the Reporting Period:
□ Applicable √ Not applicable
IX Structured Bodies Controlled by the Company
□ Applicable √ Not applicable
32
Changchai Company, Limited Interim Report 2023
X Risks Facing the Company and Countermeasures
(1) Market risk
Due to factors such as subsidy policy change, tight supply chain, upgrading of the National Emission Standard IV
for Non-road Vehicles, and intensified existing competition, the agricultural machinery industry has still been in a
period of deep adjustment. The diesel engine market faces limited total demand, the delivery capacity and
environment of products need to be improved, and the lower user revenue compromises the increase in the
demand side.
Countermeasures: First, the Company solidifies the traditional supporting fields, further expands the Company’s
advantages in the field of agricultural machinery, and continues to promote the mass production of the full range
of models that meet the National Emission Standard IV for Non-road Vehicles to ensure the continuous supply
level of supply chains and meet market demands.
Second, the Company expands applications in shipborne generator sets, high-speed rice transplanters, cold chain
vehicles, excavators and other small construction machinery, conducts in-depth research and development in new
areas and development and supporting of key products. The Company further optimises the performance of
outboard engines, which have been put into production and introduced to the market in the first half of the year.
These engines are for yachts, lifeboats, fishing boats, salvage boats, etc., which are well received.
Third, the Company creates the “internal combustion engine+” mode, actively promotes the application of
advanced technologies such as the Internet, big data, artificial intelligence and new materials to product
development, further improves the diesel engines’ functions of intelligent control, real-time monitoring and big
data collection and analysis, accelerates the R&D of intelligent terminals and hybrid power, promotes the products
to develop towards the high end, and builds new competitive edges.
(2) Industrial risk
In recent years, the state advocates energy conservation and emission reduction. New energy power represented
by pure electric, hybrid power and hydrogen fuel power has grabbed the market share of diesel engine to a certain
extent. At present, new energy power is mainly used in vehicles. Its use in agricultural machinery is still facing
problems such as high cost and complex operating environment. However, as breakthroughs have been made in
new energy battery technology, the local application scenario of diesel engine may be replaced by new energy
power.
33
Changchai Company, Limited Interim Report 2023
Countermeasures: First, the Company strengthens exploration in the new energy sector, and actively promotes
project construction and development.
Second, the Company makes proper efforts in product R&D, develops efficient and eco-friendly products, and
expands new development directions and application areas. At present, the Company is pushing forward in an
orderly manner the research and development of the hybrid-electric engine project, installing, debugging and
further optimising the project equipment and prototype.
Finally, the Company actively looks for high-quality investment targets in the upstream and downstream of the
industry, effectively integrates resources and enhances the quality of development. After the acquisition of
Zhenjiang Siyang by the Company, the two sides have been steadily integrating and sharing resources in various
areas such as production organisation, procurement system and emission upgrade declaration, which is beneficial
to the Company's expansion of its product chain, improvement of its business structure, and promotion of its
long-term development.
(3) Foreign trade risk
In the context of the complex and changeable global economic environment and the turmoil in the breadbasket of
Europe caused by the Russia-Ukraine conflict, the prices of imported agricultural products, fertilizer, feed, oil, and
gas increase, which directly compromise the planting costs and purchasing power of farmers. The unstable factors
have brought about certain impacts on product export.
Countermeasures: First, the Company will pay close attention to the relevant dynamics, actively deal with the
foreign trade market changes, as well as strengthen the maintenance and management of overseas key markets and
customers, so as to increase the market share.
Second, it will intensify efforts in the development of emerging markets and new users, enhance market research,
look for new marketing points, and endeavor to improve the sales of high-value-added products.
Third, it pays attention to the risk control of customer payments, improves internal process control, and focuses on
timely prevention to solve any possible problems.
(4) Foreign exchange risk
Some of the Company’s exports are settled in USD. In the future, due to the significant exchange rate fluctuation
of RMB against USD, the Company may face the risk of adverse impact on product sales due to exchange rate
fluctuation.
34
Changchai Company, Limited Interim Report 2023
Countermeasures: First, the Company will enhance risk control to ensure its capital security, constantly pay
attention to the depreciation of currencies and shortage of USD in the market, and lower risk by changing
payment methods change and insuring export credit insurance.
Second, the Company will promptly adjust product prices and payment terms to cope with fluctuations in
exchange rates and material prices.
(5) Talent risk
The Company needs high-level talents, highly skilled talents and lacks talents to help the Company improve its
operational efficiency and strengthen technological innovation to cope with the increasingly fierce market
competition and industry development trend. Therefore, the demand for professional talents and senior
management talents has increased significantly.
Countermeasures: First, the Company has stepped up efforts to cultivate and appoint young leaders and recruited
more professional talents.
Second, the Company has recruited advanced talents through multiple approaches, and constantly enhanced the
development of skill experts, technical and management personnel, and workers and technicians so as to raise the
contribution rate of human resources in all respects.
Third, the Company promotes the appraisal and incentive reform programme, improves the appraisal and
incentive mechanism for executives, effectively mobilises their enthusiasm, and enhances the efficiency and
quality at work.
35
Changchai Company, Limited Interim Report 2023
Part IV Corporate Governance
I Annual and Extraordinary General Meeting Convened during the Reporting Period
1. General Meetings Convened during the Reporting Period
Investor Index to
Date of the Date of
Meeting Type participati disclosed
meeting disclosure
on ratio information
All proposals
were approved.
See
The 2022 Annual Annual general Announcement
32.52% 18 May 2023 19 May 2023
General Meeting meeting No. 2023-020 on
Resolutions of
the 2022 Annual
General Meeting.
All proposals
were approved.
See
The First
Announcement
Extraordinary Extraordinary
No. 2023-035 on
general 32.33% 12 June 2023 13 June 2023
General Meeting in Resolutions of
meeting
the First
2023
Extraordinary
General Meeting
in 2023.
2. Extraordinary General Meetings Convened at the Request of Preference Shareholders with Resumed
Voting Rights
□ Applicable √ Not applicable
II Change of Directors, Supervisors and Senior Management
√ Applicable □ Not applicable
Name Title of office Type of change Date Reason
Chairman of the
Li Desen Elected 12 June 2023 Re-election
Board
Vice Chairman of
Zhang Xin Elected 12 June 2023 Re-election
the Board
Xie Guozhong Director Elected 12 June 2023 Re-election
Tan Jie Director Elected 12 June 2023 Re-election
Independent
Jia Bin Elected 12 June 2023 Re-election
Director
Chairman of the
Ni Mingliang Elected 12 June 2023 Re-election
Supervisory
36
Changchai Company, Limited Interim Report 2023
Committee
Shi Xingyu Supervisor Elected 12 June 2023 Re-election
Lin Wei Supervisor Elected 12 June 2023 Re-election
Appointed by the
Xie Guozhong General Manager Appointed 12 June 2023
Board of Directors
Deputy General Appointed by the
Wang Jing Appointed 12 June 2023
Manager Board of Directors
Appointed by the
Wang Weifeng Chief Engineer Appointed 12 June 2023
Board of Directors
Left office upon the Left office upon the
Chairman of the
Shi Xinkun expiry of the term 12 June 2023 expiry of the term
Board
of office of office
Left office upon the Left office upon the
Lin Tian Director expiry of the term 12 June 2023 expiry of the term
of office of office
Director and Left office upon the Left office upon the
Xu Yi Deputy General expiry of the term 12 June 2023 expiry of the term
Manager of office of office
Left office upon the Left office upon the
Independent
Xing Min expiry of the term 12 June 2023 expiry of the term
Director
of office of office
Left office upon the Left office upon the
Zhang Xin General Manager expiry of the term 12 June 2023 expiry of the term
of office of office
Left office upon the Left office upon the
Deputy General
Yin Lihou expiry of the term 12 June 2023 expiry of the term
Manager
of office of office
Left office upon the Left office upon the
Deputy General
Xie Guozhong expiry of the term 12 June 2023 expiry of the term
Manager
of office of office
Chairman of the Left office upon the Left office upon the
He Jianguang Supervisory expiry of the term 12 June 2023 expiry of the term
Committee of office of office
Left office upon the Left office upon the
Chen Lijia Supervisor expiry of the term 12 June 2023 expiry of the term
of office of office
Left office upon the Left office upon the
Ge Jiangli Supervisor expiry of the term 12 June 2023 expiry of the term
of office of office
III Interim Dividend Plan
□ Applicable √ Not applicable
The Company has no interim dividend plan, either in the form of cash or stock.
IV Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures for
Employees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
37
Changchai Company, Limited Interim Report 2023
Part V Environmental and Social Responsibility
I Major Environmental Issues
Indicate by tick mark whether the Company or any of its subsidiaries was identified as a key polluter by the
environment authorities.
□ Yes √ No
Administrative punishments received in the Reporting Period due to environmental issues: N/A
Other environmental information with reference to a key polluter:
The company and its subsidiaries are not listed as key pollutant discharge units by the environmental protection
department. The company and its subsidiaries conscientiously implement environmental protection laws and
regulations such as the Environmental Protection Law of the People's Republic of China, the Water Pollution
Prevention and Control Law of the People's Republic of China, the Air Pollution Prevention and Control Law of
the People's Republic of China, the Environmental Noise Pollution Prevention and Control Law of the People's
Republic of China, and the Solid Waste Pollution Prevention and Control Law of the People's Republic of China
in their daily production and operation, and pay environmental protection taxes in accordance with the law, There
were no penalties for environmental violations during the Reporting Period.
Actions taken during the Reporting Period to reduce carbon emissions and the impact:
√ Applicable □Not applicable
The company adheres to a healthy, green, and harmonious development model, continuously promoting recyclable
products and environmentally friendly materials to achieve the goal of reducing pollution and carbon emissions.
During the reporting period, the comprehensive energy consumption of the company's output value was 0.014
tons of standard coal, compared to 0.02 tons of standard coal in the same period last year, a year-on-year decrease
of 30%.
Reasons for not disclosing other environment-related information:
N/A
II Social Responsibility
In the Reporting Period, the Company adhered to the core values of "Customer First, Employee Oriented,
Enhancing Shareholder Returns, and Creating Value for Society", and took "Providing Green Power for a Better
Life" as its mission, and operated steadily around its operational policy. Also, the Company conscientiously
fulfilled its responsibilities and obligations to shareholders, employees, consumers, suppliers and other parties, in
an effort to achieve win-win outcomes for all parties, and to take an active part in the construction of a
harmonious society.
In strict accordance with the requirements of the Company Law, the Securities Law, the Code of Corporate
Governance for Listed Companies, the Listing Rules of Shenzhen Stock Exchange, other relevant laws and
regulations and the Articles of Association, the Company standardized its operation, and formed an internal
management and control policy system in which the Shareholders' General Meeting, the Board of Directors and
the Supervisory Committee restrict each other and operate effectively. According to the internal control policy
system, the Company defined the responsibilities and authorities for parties in charge of decision-making,
38
Changchai Company, Limited Interim Report 2023
execution and supervision, effectively divided responsibilities and formed a balance mechanism, and continuously
improved the standardized operation level of the Company.
Protection of the rights and interests of investors: The Company has exercised its functions and powers in strict
accordance with relevant laws and regulations to effectively protect the rights and interests of all shareholders. In
the Reporting Period, the Company conducted an online results presentation of Annual Report 2022, earnestly
organized the management of investors, communicated with shareholders effectively, accurately and completely,
and treated all shareholders fairly. The Company complied with the dividend commitment and completed the
payment of the 2022 final dividend of RMB7.0569 million during the Reporting Period. The Company's
information disclosure is legal and compliant, and the content disclosed is true, accurate and complete to
safeguard shareholders' right to know, and provide investors with a sufficient investment basis. The Company
attaches great importance to the management of insider information. In the Reporting Period, there was no insider
trading or damage to the interests of shareholders.
Protection of creditors' equity: The Company established a systematic internal control system that covers financial
management, investment management, financing management, asset management, fund management, accounting
management and current account management. Moreover, prudent financial management plan was implemented,
accounting supervision was conducted in accordance with the law, and the Company's assets were effectively
utilized to improve the Company's economic benefits and ensure the security of the Company's assets and funds
effectively.
Protection of employees' rights and interests: The Company upholds the people-oriented concept in talent
management. Specifically, the Company paid attention to the comprehensive ability improvement and personal
career development of employees, and improved and developed employees' abilities by combining theory and
practice. The Company has made considerate arrangements for employees, including festive perks, health
check-ups, medical recuperation, benefits provided through the labor union service cards, assistance to employees
in need, and other philanthropic initiatives. The Company actively improved the working environment of
employees, and properly monitored employees' health to effectively guarantee the occupational safety and health
of employees. The Company has strictly observed the Labor Law and the Labor Contract Law, protected the
legitimate rights and interests of employees according to law, properly addressed reasonable needs of employees,
and built harmonious and stable relations between employees and employer.
Protection of the rights and interests of customers and consumers: The Company has established good long-term
partnerships with its customers, is committed to providing customers with quality, efficient and timely services,
and has been recognized and honored as a high-quality supplier by many customers. Additionally, the Company
has been awarded the honorable titles of Excellent Supplier of World Agriculture Machinery and Excellent
Supplier of Dongfeng Agricultural Machinery for several consecutive years. During the Reporting Period, the
Company won the prestigious title of the National Model Enterprise for Trustworthy Product and Service Quality.
Additionally, it conducted multiple training sessions on products compliant with the National Emission Standard
IV in the market and continuously enhanced the skills of its market service personnel and integrated social service
resources to deliver services in line with the National Emission Standard IV.
Protection of suppliers’ rights and interests: The Company enhanced supplier management while observing the
Contract on the Application and Procurement of Parts and the Quality Assurance Agreement for Suppliers,
optimized the capacity and supply allocation for parts, intensified inventory and plan management, and paid
suppliers for the goods promptly pursuant to the contracts. According to the assessment results and actual supply
situation, the Company constantly has adjusted and optimized its supply system, and supported the technology
growth and progress of suppliers, in an effort to create a virtuous cycle of supply relations.
39
Changchai Company, Limited Interim Report 2023
In terms of safe production, to build a safe Changchai, the Company fully implemented policies and emergency
response mechanisms for security protection and fire safety. Additionally, it launched the “Life above All,
Eliminate All Hazards” special action on fire safety and pushed ahead with remediation measures by the timeline
of the special action. In the process, four fire drills were organized.
In terms of cultural development, on its 110th anniversary, the Company fully showcased its new image in
innovation, product R&D, equipment enhancement, quality improvement, and corporate culture development.
Additionally, it launched multiple themed activities, such as the “Celebrate the 110th Anniversary, Display Our
Presence” orienteering hiking for employees, to display the Company’s presence on all fronts from multiple
perspectives, enhance the Company’s cohesion and motivation for growth, and boost the employees’ sense of
belonging and obtainment. Moreover, during the period, the Company cooperated with the Economy 30 Minutes
program of China Central Television (“CCTV”) to shoot a special report on strengthening the weak spots in
domestic agricultural machinery. It also enhanced the publicity of Changchai’s brand image and new flagship
products. Doing so continuously boosted Changchai’s “Centennial Changchai, Timeless Classic” positive image.
The Company actively promoted the R&D of high-quality products, accelerated product update, and promoted the
application of products to serve the construction of agriculture, rural areas and farmers. The Company continued
to implement energy conservation and emission reduction measures to improve energy efficiency, reduce
consumption and protect the environment. The Company took solid steps for charity to give back to society. The
Company always remembers its social responsibilities, and has made contributions to social development with
practical actions.
40
Changchai Company, Limited Interim Report 2023
Part VI Significant Events
I Commitments of the Company’s De Facto Controller, Shareholders, Related Parties and
Acquirers, as well as the Company Itself and Other Entities Fulfilled in the Reporting Period
or Ongoing at the Period-End
√ Applicable □ Not applicable
Dat
e
of
Typ
co
e of Term Ful
m
co of fill
Commitment Promisor Details of commitment mit
mm comm me
me
itm itment nt
nt
ent
ma
kin
g
Ab
out
It will not transfer the shares it has
shar 5 5 July
obtained in the private placement of
e Jul 2021 On
Changzhou Investment Group Changchai within 36 months starting
trad y -5 goi
Co., Ltd. from the date when the private
ing 20 July ng
placement of A-shares is allowed for
rest 21 2024
public trading.
ricti
on
1. It undertakes not to interfere in the
Commitments Company's operation and management
made in IPO or activities beyond its authority and not to
refinancing encroach on the Company's interests;
11
2. It undertakes not to transfer benefits
11 April
to other entities or individuals free of
Ap 2020 On
Changzhou Investment Group Oth charge or on unfair terms, nor to impair
ril -31 goi
Co., Ltd. er the interests of the Company by any
20 Dece ng
other means;
20 mber
3. After the issuance of this Letter of
9999
Commitment and before the completion
of the Company's non-public offering of
shares, if the China Securities
Regulatory Commission (CSRC) makes
41
Changchai Company, Limited Interim Report 2023
other new regulatory provisions on the
return filling measures and
commitments, and the aforesaid
commitments cannot meet such
provisions of the CSRC, it undertakes to
issue supplementary commitments in
accordance with the latest provisions of
the CSRC;
4. It undertakes to effectively implement
the Company's measures to fill the
return and any commitments made
thereon. If the Company breaches such
commitments and causes losses to the
Company or the investors, the Company
is willing to compensate the Company
or the investors according to law.
Rewards Plan for Shareholders in Next
Three Years (2023-2025)
Under the premise of positive
distributive profit (remaining after-tax
profits after making up for the loss and
extracting for the common reserves) in
this year or half year and abundant
18
Ab money flow and no influence on the
Other Ma Year On
out
commitments made following-up going concern after cash
Changchai Company, Limited divi y 2023- goi
to minority bonus, the profits allocated by cash
den 20 2025 ng
shareholders
ds every year shouldn’t be lower than 10%
23
of the allocable profits from parent
company. Meanwhile, the accumulated
allocable profits by cash in the arbitrary
continuous three accounting years
should not be lower than 30% of the
annual average allocable profits in those
three years.
Fulfilled on time or
Yes
not
Specific reasons
for failing to fulfill
commitments on
N/A
time and plans for
next step (if
any)
42
Changchai Company, Limited Interim Report 2023
II Occupation of the Company’s Capital by the Controlling Shareholder or any of Its Related
Parties for Non-Operating Purposes
□ Applicable √ Not applicable
No such cases in the Reporting Period.
III Irregularities in the Provision of Guarantees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
IV Engagement and Disengagement of Independent Auditor
Are the interim financial statements audited?
□ Yes √ No
The interim financial statements are unaudited.
V Explanations Given by the Board of Directors and the Supervisory Committee Regarding
the Independent Auditor's “Modified Opinion” on the Financial Statements of the Reporting
Period
□ Applicable √ Not applicable
VI Explanations Given by the Board of Directors Regarding the Independent Auditor's
“Modified Opinion” on the Financial Statements of Last Year
□ Applicable √ Not applicable
VII Insolvency and Reorganization
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VIII Legal Matters
Significant lawsuits and arbitrations:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Other legal matters:
□ Applicable √ Not applicable
43
Changchai Company, Limited Interim Report 2023
IX Punishments and Rectifications
□ Applicable √ Not applicable
X Credit Quality of the Company as well as its Controlling Shareholder and De Facto
Controller
√ Applicable □ Not applicable
The de facto controller of the Company is SASAC of Changzhou People’s Government and the controlling
shareholder of it is Changzhou Investment Group Co., Ltd. There is no such case that the controlling shareholder
fails to perform any legally effective judgment of courts or to pay off matured debts with a large amount.
XI Major Related-Party Transactions
1. Continuing Related-Party Transactions
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Related-Party Transactions Regarding Purchase or Disposal of Assets or Equity Investments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Related-Party Transactions Regarding Joint Investments in Third Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Amounts Due to and from Related Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
5. Transactions with Related Finance Companies
□ Applicable √ Not applicable
The Company did not make deposits in, receive loans or credit from and was not involved in any other finance
business with any related finance company or any other related parties.
6. Transactions with Related Parties by Finance Companies Controlled by the Company
□ Applicable √ Not applicable
The finance company controlled by the Company did not make deposits, receive loans or credit from and was not
44
Changchai Company, Limited Interim Report 2023
involved in any other finance business with any related parties.
7. Other Major Related-Party Transactions
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XII Major Contracts and Execution thereof
1. Entrustment, Contracting and Leases
(1) Entrustment
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Contracting
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(3) Leases
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Major Guarantees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Cash Entrusted for Wealth Management
√ Applicable □ Not applicable
Unit: RMB’0,000
Impairment
Unrecovered allowance for
Type Funding source Amount Undue amount
overdue amount unrecovered
overdue amount
Bank financial
Raised funds 10,000.00 5,000.00 0.00 0.00
products
Broker financial
Self-funded 1,565.39 1,266.09 0.00 0.00
products
45
Changchai Company, Limited Interim Report 2023
Bank financial
Self-funded 33,500.00 20,070.00 0.00 0.00
products
Total 45,065.39 26,336.09 0.00 0.00
High-risk wealth management transactions with a significant single amount, or with low security, low liquidity:
□ Applicable √ Not applicable
Situation where the principal is expectedly irrecoverable or an impairment may be incurred:
□ Applicable √ Not applicable
4. Other Major Contracts
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XIII Other Significant Events
√ Applicable □ Not applicable
1. Expropriation of the Wuxing branch company’s properties on state-owned land and compensation
On 25 May 2023, the Proposal on the Intention to Sign the Agreement on the Expropriation of the Properties of
the Wuxing Branch Company on State-owned Land in Changzhou City and the Compensation was approved at
the 17th Meeting of the Ninth Board of Directors. Later, the said matter was approved at the First Extraordinary
General Meeting of Shareholders in 2023 dated 12 June 2023. As such, the Company was agreed to sign a
contract with Changzhou Zhonglou District Housing and Urban-Rural Development Bureau on the expropriation
of the Wuxing branch company’s properties on state-owned land and the compensation, with the contractual total
compensation amount being RMB117 million. On 14 June 2023, the Company signed the Agreement on the
Expropriation of the Properties of the Wuxing Branch Company on State-owned Land in Changzhou City and the
Compensation with Changzhou Zhonglou District Housing and Urban-Rural Development Bureau, and received
the first compensation payment of RMB70 million on 28 June 2023.
XIV Significant Events of Subsidiaries
□ Applicable √ Not applicable
46
Changchai Company, Limited Interim Report 2023
Part VII Share Changes and Shareholder Information
I Share Changes
1. Share Changes
Unit: share
Before Increase/decrease in the Reporting Period (+/-) After
Shares
Shares
as
as
dividend
Percenta New dividend Percenta
Number converte Other Subtotal Number
ge (%) issues converte ge (%)
d from
d from
capital
profit
reserves
1.
56,818,1 56,818,1
Restricte 8.05% 0 8.05%
81 81
d shares
1.1
Shares
held by 0 0.00% 0 0 0.00%
governm
ent
1.2
Shares
held by
56,818,1 56,818,1
state-ow 8.05% 0 8.05%
81.00 81.00
ned
legal
persons
1.3
Shares
held by
other
0 0.00% 0 0 0.00%
domesti
c
investor
s
Among
which: 0 0.00% 0 0 0.00%
Shares
47
Changchai Company, Limited Interim Report 2023
held by
domesti
c legal
persons
S
hares
held by
0 0.00% 0 0 0.00%
domesti
c natural
persons
1.4
Shares
held by
0 0.00% 0 0 0.00%
foreign
investor
s
Among
which:
Shares
held by 0 0.00% 0 0 0.00%
foreign
legal
persons
S
hares
held by
0 0.00% 0 0 0.00%
foreign
natural
persons
2.
Unrestri 648,874, 648,874,
91.95% 0 91.95%
cted 326 326
shares
2.1
RMB-de
nominat 498,874, 498,874,
70.69% 0 70.69%
ed 326 326
ordinary
shares
2.2
150,000, 150,000,
Domesti 21.26% 0 21.26%
000 000
cally
48
Changchai Company, Limited Interim Report 2023
listed
foreign
shares
2.3
Oversea
listed 0 0.00% 0 0 0.00%
foreign
shares
2.4
0 0.00% 0 0 0.00%
Other
3. Total 705,692, 100.00 705,692, 100.00
0
shares 507 % 507 %
Reasons for the share changes:
□ Applicable √ Not applicable
Approval of the share changes:
□ Applicable √ Not applicable
Transfer of share ownership:
□ Applicable √ Not applicable
Progress on any share repurchase:
□ Applicable √ Not applicable
Progress on reducing the repurchased shares by means of centralized bidding:
□ Applicable √ Not applicable
Effects of the share changes on the basic and diluted earnings per share, equity per share attributable to the
Company’s ordinary shareholders and other financial indicators of the prior year and the prior accounting period,
respectively:
□ Applicable √ Not applicable
Other information that the Company considers necessary or is required by the securities regulator to be disclosed:
□ Applicable √ Not applicable
2. Changes in Restricted Shares
□ Applicable √ Not applicable
II. Issuance and Listing of Securities
□ Applicable √ Not applicable
III Shareholders and Their Holdings
Unit: share
Number of ordinary 51,091 Number of preference shareholders 0
49
Changchai Company, Limited Interim Report 2023
shareholders with resumed voting rights (if any)
5% or greater ordinary shareholders or the top 10 ordinary shareholders
Increa Shares in
se/dec Unrestrict pledge or
Shareh
rease Restricted ed frozen
Name of Nature of olding Ordinary
in the ordinary ordinary
shareholder shareholder percent shares held Sh
Repor shares held shares
age Status are
ting held
s
Period
Changzhou
State-owned 227,663,41 170,845,2
Investment Group 32.26% 56,818,181
legal person 7 36
Co., Ltd
Domestic
Chen Jian natural 0.65% 4,580,300 4,580,300
person
KGI ASIA Foreign
0.44% 3,101,695 3,101,695
LIMITED legal person
Huatai Securities State-owned
0.38% 2,667,721 2,667,721
Co., Ltd. legal person
China Minsheng
Bank-Goldstate
Yuanqi Dynamic
Asset Allocation Other 0.27% 1,880,000 1,880,000
Mixed Type
Securities
Investment Fund
Domestic
Li Suinan natural 0.23% 1,591,300 1,591,300
person
Domestic
Huang Guoliang natural 0.22% 1,528,891 1,528,891
person
Domestic
Xue Hong natural 0.21% 1,516,900 1,516,900
person
Domestic
Xu Qingguo natural 0.21% 1,500,300 1,500,300
person
Bank of China
Co., Ltd.-GFund
Quantified
Other 0.21% 1,456,200 1,456,200
Multifactor
Equity Securities
Investment Fund
Strategic investor or general
legal person becoming a top-10
N/A
ordinary shareholder in a rights
issue (if any)
50
Changchai Company, Limited Interim Report 2023
It is unknown whether there is among the top 10 public shareholders and
Related or acting-in-concert
the top 10 unrestricted public shareholders any related parties or
parties among the shareholders
acting-in-concert parties as defined in the Administrative Measures for
above
Information Regarding Shareholding Alteration.
Explain if any of the
shareholders above was involved
in entrusting/being entrusted with N/A
voting rights or waiving voting
rights
Special account for share
repurchases (if any) among the N/A
top 10 shareholders
Top 10 unrestricted shareholders
Shares by class
Name of shareholder Unrestricted ordinary shares held
Class Shares
Changzhou Investment Group RMB-denominated
170,845,236 170,845,236
Co., Ltd ordinary share
RMB-denominated
Chen Jian 4,580,300 4,580,300
ordinary share
Domestically listed
KGI ASIA LIMITED 3,101,695 3,101,695
foreign share
RMB-denominated
Huatai Securities Co., Ltd. 2,667,721 2,667,721
ordinary share
China Minsheng Bank-Goldstate
Yuanqi Dynamic Asset RMB-denominated
1,880,000 1,880,000
Allocation Mixed Type ordinary share
Securities Investment Fund
Domestically listed
Li Suinan 1,591,300 1,591,300
foreign share
Domestically listed
Huang Guoliang 1,528,891 1,528,891
foreign share
Domestically listed
Xue Hong 1,516,900 1,516,900
foreign share
RMB-denominated
Xu Qingguo 1,500,300 1,500,300
ordinary share
Bank of China Co., Ltd.-GFund RMB-denominated
Quantified Multifactor Equity 1,456,200 1,456,200
Securities Investment Fund ordinary share
Related or acting-in-concert
It is unknown whether there is among the top 10 public shareholders and
parties among the top 10
the top 10 unrestricted public shareholders any related parties or
unrestricted ordinary
acting-in-concert parties as defined in the Administrative Measures for
shareholders, as well as between
Information Regarding Shareholding Alteration.
the top 10 unrestricted ordinary
51
Changchai Company, Limited Interim Report 2023
shareholders and the top 10
ordinary shareholders
Top 10 ordinary shareholders
Shareholder Chen Jian held 2,917,800 shares in the Company through his
involved in securities margin
margin account.
trading (if any)
Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary
shareholders of the Company conducted any promissory repo during the Reporting Period.
□ Yes √ No
No such cases in the Reporting Period.
IV Change in Shareholdings of Directors, Supervisors and Senior Management
□ Applicable √ Not applicable
No changes occurred to the shareholdings of the directors, supervisors and senior management in the Reporting
Period. See the 2022 Annual Report for more details.
V Change of the Controlling Shareholder or the De Facto Controller
Change of the controlling shareholder in the Reporting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Change of the de facto controller in the Reporting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.
52
Changchai Company, Limited Interim Report 2023
Part VIII Preference Shares
□ Applicable √ Not applicable
No preference shares in the Reporting Period.
53
Changchai Company, Limited Interim Report 2023
Part IX Bonds
□ Applicable √ Not applicable
54
Changchai Company, Limited Interim Report 2023
Part X Financial Statements
I Independent Auditor’s Report
Are these interim financial statements audited by an independent auditor?
□ Yes √ No
These interim financial statements have not been audited by an independent auditor.
II Financial Statements
Currency unit for the financial statements and the notes thereto: RMB
1. Consolidated Balance Sheet
Prepared by Changchai Company, Limited
30 June 2023
Unit: RMB
Item 30 June 2023 1 January 2023
Current assets:
Monetary assets 851,514,113.92 930,013,350.97
Settlement reserve
Interbank loans granted
Held-for-trading financial assets 361,470,809.32 370,103,602.57
Derivative financial assets
Notes receivable 303,323,811.21 297,125,872.54
Accounts receivable 934,790,431.84 370,322,179.77
Accounts receivable financing 73,649,132.14 242,813,392.79
Prepayments 13,987,786.33 6,330,202.69
Premiums receivable
Reinsurance receivables
Receivable reinsurance contract
reserve
Other receivables 86,055,608.38 32,938,305.16
Including: Interest receivable
Dividends
323,730.00
receivable
Financial assets purchased under
55
Changchai Company, Limited Interim Report 2023
resale agreements
Inventories 557,524,141.36 571,996,881.74
Contract assets
Assets held for sale
Current portion of non-current
assets
Other current assets 6,821,658.96 49,279,022.49
Total current assets 3,189,137,493.46 2,870,922,810.72
Non-current assets:
Loans and advances to
customers
Investments in debt obligations 40,015,268.70 39,309,587.93
Investments in other debt
obligations
Long-term receivables
Long-term equity investments
Investments in other equity
1,042,219,240.08 955,560,240.08
instruments
Other non-current financial
373,500,000.00 373,500,000.00
assets
Investment property 40,942,541.87 42,160,779.65
Fixed assets 683,448,533.29 720,061,387.76
Construction in progress 30,905,577.10 30,281,547.56
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets 149,758,450.45 157,392,217.54
Development costs
Goodwill
Long-term prepaid expense 3,145,658.61 3,279,970.32
Deferred income tax assets 4,617,363.32 26,220,575.93
Other non-current assets 1,393,241.19 670,735.93
Total non-current assets 2,369,945,874.61 2,348,437,042.70
Total assets 5,559,083,368.07 5,219,359,853.42
Current liabilities:
Short-term borrowings 110,447,699.49 115,437,700.65
56
Changchai Company, Limited Interim Report 2023
Borrowings from the central
bank
Interbank loans obtained
Held-for-trading financial
liabilities
Derivative financial liabilities
Notes payable 702,452,311.45 471,876,397.72
Accounts payable 647,261,475.07 747,010,098.88
Advances from customers 815,054.54 837,425.55
Contract liabilities 33,094,812.97 32,843,692.83
Financial assets sold under
repurchase agreements
Customer deposits and interbank
deposits
Payables for acting trading of
securities
Payables for underwriting of
securities
Employee benefits payable 13,799,549.93 49,351,022.47
Taxes payable 5,326,332.75 8,570,175.39
Other payables 162,180,812.51 160,046,882.93
Including: Interest payable
Dividends payable 3,891,433.83 3,891,433.83
Handling charges and
commissions payable
Reinsurance payables
Liabilities directly associated
with assets held for sale
Current portion of non-current
liabilities
Other current liabilities 108,306,935.42 78,645,741.16
Total current liabilities 1,783,684,984.13 1,664,619,137.58
Non-current liabilities:
Insurance contract reserve
Long-term borrowings
Bonds payable
Including: Preferred shares
57
Changchai Company, Limited Interim Report 2023
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits
payable
Provisions
Deferred income 34,500,761.21 36,205,625.94
Deferred income tax liabilities 178,842,024.98 161,360,251.33
Other non-current liabilities
Total non-current liabilities 213,342,786.19 197,565,877.27
Total liabilities 1,997,027,770.32 1,862,185,014.85
Owners’ equity:
Share capital 705,692,507.00 705,692,507.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 640,133,963.01 640,133,963.01
Less: Treasury stock
Other comprehensive income 729,001,854.07 655,341,704.07
Specific reserve 21,026,667.08 18,848,856.75
Surplus reserves 349,197,725.72 349,197,725.72
General reserve
Retained earnings 1,040,376,308.94 915,495,909.35
Total equity attributable to owners
3,485,429,025.82 3,284,710,665.90
of the Company as the parent
Non-controlling interests 76,626,571.93 72,464,172.67
Total owners’ equity 3,562,055,597.75 3,357,174,838.57
Total liabilities and owners’ equity 5,559,083,368.07 5,219,359,853.42
Legal representative: Xie Guozhong General Manager: Xie Guozhong
Head of the accounting department: Jiang He
58
Changchai Company, Limited Interim Report 2023
2. Balance Sheet of the Company as the Parent
Unit: RMB
Item 30 June 2023 1 January 2023
Current assets:
Monetary assets 691,752,491.28 792,744,709.77
Held-for-trading financial assets 250,354,111.11 280,354,111.11
Derivative financial assets
Notes receivable 271,518,313.78 282,556,327.54
Accounts receivable 881,319,079.38 329,060,940.50
Accounts receivable financing 127,421,331.00 291,837,385.00
Prepayments 11,595,756.22 3,097,586.07
Other receivables 360,599,343.16 179,596,495.57
Including: Interest receivable
Dividends
receivable
Inventories 365,868,555.83 397,626,837.43
Contract assets
Assets held for sale
Current portion of non-current
assets
Other current assets 3,899,274.38 15,594,949.05
Total current assets 2,964,328,256.14 2,572,469,342.04
Non-current assets:
Investments in debt obligations 40,015,268.70 39,309,587.93
Investments in other debt
obligations
Long-term receivables
Long-term equity investments 569,273,530.03 569,273,530.03
Investments in other equity
1,042,219,240.08 955,560,240.08
instruments
Other non-current financial
373,500,000.00 373,500,000.00
assets
Investment property 40,942,541.87 42,160,779.65
Fixed assets 227,448,700.45 249,558,305.21
Construction in progress 19,479,659.35 18,366,604.84
59
Changchai Company, Limited Interim Report 2023
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets 58,585,924.15 64,783,364.89
Development costs
Goodwill
Long-term prepaid expense
Deferred income tax assets 182,217.62 19,860,262.43
Other non-current assets
Total non-current assets 2,371,647,082.25 2,332,372,675.06
Total assets 5,335,975,338.39 4,904,842,017.10
Current liabilities:
Short-term borrowings 107,447,699.49 108,437,700.65
Held-for-trading financial
liabilities
Derivative financial liabilities
Notes payable 749,494,510.31 518,918,596.58
Accounts payable 529,683,922.85 541,911,517.64
Advances from customers 837,425.55
Contract liabilities 25,822,486.68 24,129,579.35
Employee benefits payable 4,814,304.67 41,558,489.86
Taxes payable 2,131,290.34 3,119,171.69
Other payables 150,757,906.83 151,206,684.89
Including: Interest payable
Dividends payable 3,243,179.97 3,243,179.97
Liabilities directly associated
with assets held for sale
Current portion of non-current
liabilities
Other current liabilities 107,037,385.15 67,810,395.33
Total current liabilities 1,677,189,506.32 1,457,929,561.54
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
60
Changchai Company, Limited Interim Report 2023
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits
payable
Provisions
Deferred income 34,500,761.21 36,205,625.94
Deferred income tax liabilities 161,790,514.83 149,039,152.68
Other non-current liabilities
Total non-current liabilities 196,291,276.04 185,244,778.62
Total liabilities 1,873,480,782.36 1,643,174,340.16
Owners’ equity:
Share capital 705,692,507.00 705,692,507.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 659,418,700.67 659,418,700.67
Less: Treasury stock
Other comprehensive income 729,001,854.07 655,341,704.07
Specific reserve 21,026,667.08 18,848,856.75
Surplus reserves 349,197,725.72 349,197,725.72
Retained earnings 998,157,101.49 873,168,182.73
Total owners’ equity 3,462,494,556.03 3,261,667,676.94
Total liabilities and owners’ equity 5,335,975,338.39 4,904,842,017.10
Legal representative: Xie Guozhong General Manager: Xie Guozhong
Head of the accounting department: Jiang He
61
Changchai Company, Limited Interim Report 2023
3. Consolidated Income Statement
Unit: RMB
Item H1 2023 H1 2022
1. Revenue 1,350,517,639.85 1,178,222,492.04
Including: Operating revenue 1,350,517,639.85 1,178,222,492.04
Interest income
Insurance premium income
Handling charge and commission income
2. Costs and expenses 1,322,596,281.11 1,175,890,460.94
Including: Cost of sales 1,168,898,203.83 1,051,395,232.42
Interest expense
Handling charge and commission expense
Surrenders
Net insurance claims paid
Net amount provided as insurance contract
reserve
Expenditure on policy dividends
Reinsurance premium expense
Taxes and surcharges 7,827,255.58 5,360,425.54
Selling expense 62,131,032.17 51,759,201.38
Administrative expense 52,877,371.06 40,216,534.11
R&D expense 35,839,071.42 40,159,787.47
Finance costs -4,976,652.95 -13,000,719.98
Including: Interest expense 3,343,884.90 3,276,786.93
Interest income 4,264,102.18 6,634,812.22
Add: Other income 3,299,056.52 1,602,830.77
Return on investment (“-” for loss) 3,226,921.70 11,744,282.88
Including: Share of profit or loss of joint ventures
and associates
Income from the derecognition of financial assets
at amortized cost (“-” for loss)
Exchange gain (“-” for loss)
Net gain on exposure hedges (“-” for loss)
Gain on changes in fair value (“-” for loss) 19,360,455.86 -30,488,388.88
Credit impairment loss (“-” for loss) -14,547,351.17 -11,932,826.66
Asset impairment loss (“-” for loss) -565,273.49 4,342,775.64
Asset disposal income (“-” for loss) 105,395,693.25 -361,395.36
3. Operating profit (“-” for loss) 144,090,861.41 -22,760,690.51
Add: Non-operating income 495,538.97 2,349,897.18
Less: Non-operating expense 1,297,348.13 392,257.24
4. Profit before tax (“-” for loss) 143,289,052.25 -20,803,050.57
62
Changchai Company, Limited Interim Report 2023
Less: Income tax expense 7,189,328.33 -6,206,048.88
5. Net profit (“-” for net loss) 136,099,723.92 -14,597,001.69
5.1 By operating continuity
5.1.1 Net profit from continuing operations (“-” for net
136,099,723.92 -14,597,001.69
loss)
5.1.2 Net profit from discontinued operations (“-” for net
loss)
5.2 By ownership
5.2.1 Net profit attributable to owners of the Company as
131,937,324.66 -14,595,269.61
the parent
5.2.1 Net profit attributable to non-controlling interests 4,162,399.26 -1,732.08
6. Other comprehensive income, net of tax 73,660,150.00 -49,265,150.00
Attributable to owners of the Company as the parent 73,660,150.00 -49,265,150.00
6.1 Items that will not be reclassified to profit or loss 73,660,150.00 -49,265,150.00
6.1.1 Changes caused by remeasurements on defined
benefit schemes
6.1.2 Other comprehensive income that will not be
reclassified to profit or loss under the equity method
6.1.3 Changes in the fair value of investments in other
73,660,150.00 -49,265,150.00
equity instruments
6.1.4 Changes in the fair value arising from changes in
own credit risk
6.1.5 Other
6.2 Items that will be reclassified to profit or loss
6.2.1 Other comprehensive income that will be
reclassified to profit or loss under the equity method
6.2.2 Changes in the fair value of investments in other
debt obligations
6.2.3 Other comprehensive income arising from the
reclassification of financial assets
6.2.4 Credit impairment allowance for investments in
other debt obligations
6.2.5 Reserve for cash flow hedges
6.2.6 Differences arising from the translation of
foreign currency-denominated financial statements
6.2.7 Other
Attributable to non-controlling interests
7. Total comprehensive income 209,759,873.92 -63,862,151.69
Attributable to owners of the Company as the parent 205,597,474.66 -63,860,419.61
Attributable to non-controlling interests 4,162,399.26 -1,732.08
8. Earnings per share
8.1 Basic earnings per share 0.1870 -0.0207
63
Changchai Company, Limited Interim Report 2023
8.2 Diluted earnings per share 0.1870 -0.0207
Legal representative: Xie Guozhong General Manager: Xie Guozhong
Head of the accounting department: Jiang He
64
Changchai Company, Limited Interim Report 2023
4. Income Statement of the Company as the Parent
Unit: RMB
Item H1 2023 H1 2022
1. Operating revenue 1,245,166,233.55 1,078,301,529.20
Less: Cost of sales 1,092,404,343.46 970,973,105.63
Taxes and surcharges 4,338,250.54 3,155,384.25
Selling expense 55,517,272.45 46,868,501.97
Administrative expense 37,544,625.71 30,805,739.43
R&D expense 31,151,256.18 38,111,512.10
Finance costs -8,436,313.24 -12,522,766.90
Including: Interest expense 1,562,299.35 2,512,056.83
Interest income 7,952,110.19 6,463,613.32
Add: Other income 3,200,820.43 1,591,699.00
Return on investment (“-” for loss) 2,732,242.23 11,181,384.11
Including: Share of profit or loss of joint
ventures and associates
Income from the derecognition of financial
assets at amortized cost (“-” for loss)
Net gain on exposure hedges (“-” for loss)
Gain on changes in fair value (“-” for loss) 354,111.11 677,397.27
Credit impairment loss (“-” for loss) -11,755,063.73 -18,418,259.44
Asset impairment loss (“-” for loss) -410,653.17 4,630,554.88
Asset disposal income (“-” for loss) 105,393,483.13 3,985,814.42
2. Operating profit (“-” for loss) 132,161,738.45 4,558,642.96
Add: Non-operating income 106,436.47
Less: Non-operating expense 363,382.47 551,906.60
3. Profit before tax (“-” for loss) 131,798,355.98 4,113,172.83
Less: Income tax expense -247,487.85 0.00
4. Net profit (“-” for net loss) 132,045,843.83 4,113,172.83
4.1 Net profit from continuing operations (“-” for net
132,045,843.83 4,113,172.83
loss)
4.2 Net profit from discontinued operations (“-” for
net loss)
5. Other comprehensive income, net of tax 73,660,150.00 -49,265,150.00
5.1 Items that will not be reclassified to profit or loss 73,660,150.00 -49,265,150.00
5.1.1 Changes caused by remeasurements on
defined benefit schemes
5.1.2 Other comprehensive income that will not be
reclassified to profit or loss under the equity method
5.1.3 Changes in the fair value of investments in
73,660,150.00 -49,265,150.00
other equity instruments
65
Changchai Company, Limited Interim Report 2023
5.1.4 Changes in the fair value arising from
changes in own credit risk
5.1.5 Other
5.2 Items that will be reclassified to profit or loss
5.2.1 Other comprehensive income that will be
reclassified to profit or loss under the equity method
5.2.2 Changes in the fair value of investments in
other debt obligations
5.2.3 Other comprehensive income arising from the
reclassification of financial assets
5.2.4 Credit impairment allowance for investments
in other debt obligations
5.2.5 Reserve for cash flow hedges
5.2.6 Differences arising from the translation of
foreign currency-denominated financial statements
5.2.7 Other
6. Total comprehensive income 205,705,993.83 -45,151,977.17
7. Earnings per share
7.1 Basic earnings per share
7.2 Diluted earnings per share
Legal representative: Xie Guozhong General Manager: Xie Guozhong
Head of the accounting department: Jiang He
66
Changchai Company, Limited Interim Report 2023
5. Consolidated Cash Flow Statement
Unit: RMB
Item H1 2023 H1 2022
1. Cash flows from operating activities:
Proceeds from sale of commodities and rendering of services 1,010,313,942.34 852,422,695.04
Net increase in customer deposits and interbank deposits
Net increase in borrowings from the central bank
Net increase in loans from other financial institutions
Premiums received on original insurance contracts
Net proceeds from reinsurance
Net increase in deposits and investments of policy holders
Interest, handling charges and commissions received
Net increase in interbank loans obtained
Net increase in proceeds from repurchase transactions
Net proceeds from acting trading of securities
Tax rebates 69,957,787.95 21,003,040.54
Cash generated from other operating activities 11,524,017.72 15,868,307.49
Subtotal of cash generated from operating activities 1,091,795,748.01 889,294,043.07
Payments for commodities and services 918,215,681.86 692,753,586.82
Net increase in loans and advances to customers
Net increase in deposits in the central bank and in interbank
loans granted
Payments for claims on original insurance contracts
Net increase in interbank loans granted
Interest, handling charges and commissions paid
Policy dividends paid
Cash paid to and for employees 174,060,228.57 171,587,076.85
Taxes paid 23,195,064.69 22,071,086.33
Cash used in other operating activities 81,121,589.64 77,182,794.19
Subtotal of cash used in operating activities 1,196,592,564.76 963,594,544.19
Net cash generated from/used in operating activities -104,796,816.75 -74,300,501.12
2. Cash flows from investing activities:
Proceeds from disinvestment 623,016,751.99 60,336,793.52
Return on investment 4,508,124.22 11,678,930.55
Net proceeds from the disposal of fixed assets, intangible assets
57,844,735.80 176.99
and other long-lived assets
Net proceeds from the disposal of subsidiaries and other
business units
Cash generated from other investing activities 169,856.31
Subtotal of cash generated from investing activities 685,369,612.01 72,185,757.37
Payments for the acquisition of fixed assets, intangible assets
135,352,075.57 32,486,960.27
and other long-lived assets
67
Changchai Company, Limited Interim Report 2023
Payments for investments 595,377,614.00 126,279,631.00
Net increase in pledged loans granted
Net payments for the acquisition of subsidiaries and other
business units
Cash used in other investing activities
Subtotal of cash used in investing activities 730,729,689.57 158,766,591.27
Net cash generated from/used in investing activities -45,360,077.56 -86,580,833.90
3. Cash flows from financing activities:
Capital contributions received
Including: Capital contributions by non-controlling interests
to subsidiaries
Borrowings raised
Cash generated from other financing activities 49,395,924.99
Subtotal of cash generated from financing activities 49,395,924.99
Repayment of borrowings
Interest and dividends paid 8,886,489.92 18,895,164.72
Including: Dividends paid by subsidiaries to non-controlling
interests
Cash used in other financing activities 2,604,075.01
Subtotal of cash used in financing activities 8,886,489.92 21,499,239.73
Net cash generated from/used in financing activities -8,886,489.92 27,896,685.26
4. Effect of foreign exchange rates changes on cash and cash
equivalents
5. Net increase in cash and cash equivalents -159,043,384.23 -132,984,649.76
Add: Cash and cash equivalents, beginning of the period 810,350,966.05 573,623,529.10
6. Cash and cash equivalents, end of the period 651,307,581.82 440,638,879.34
Legal representative: Xie Guozhong General Manager: Xie Guozhong
Head of the accounting department: Jiang He
68
Changchai Company, Limited Interim Report 2023
6. Cash Flow Statement of the Company as the Parent
Unit: RMB
Item H1 2023 H1 2022
1. Cash flows from operating activities:
Proceeds from sale of commodities and rendering of services 882,438,846.47 786,613,668.93
Tax rebates 20,491,423.94 15,030,607.99
Cash generated from other operating activities 9,587,042.20 11,394,587.24
Subtotal of cash generated from operating activities 912,517,312.61 813,038,864.16
Payments for commodities and services 774,101,281.20 656,683,755.72
Cash paid to and for employees 139,789,044.66 142,487,390.71
Taxes paid 7,394,673.54 17,126,241.78
Cash used in other operating activities 247,440,184.71 65,961,229.60
Subtotal of cash used in operating activities 1,168,725,184.11 882,258,617.81
Net cash generated from/used in operating activities -256,207,871.50 -69,219,753.65
2. Cash flows from investing activities:
Proceeds from disinvestment 610,000,000.00
Return on investment 4,337,174.74 11,181,384.11
Net proceeds from the disposal of fixed assets, intangible assets
57,813,485.80
and other long-lived assets
Net proceeds from the disposal of subsidiaries and other business
units
Cash generated from other investing activities
Subtotal of cash generated from investing activities 672,150,660.54 11,181,384.11
Payments for the acquisition of fixed assets, intangible assets and
8,705,239.80 3,984,411.73
other long-lived assets
Payments for investments 580,000,000.00 53,520,800.00
Net payments for the acquisition of subsidiaries and other
business units
Cash used in other investing activities
Subtotal of cash used in investing activities 588,705,239.80 57,505,211.73
Net cash generated from/used in investing activities 83,445,420.74 -46,323,827.62
3. Cash flows from financing activities:
Capital contributions received
Borrowings raised
Cash generated from other financing activities 49,395,924.99
Subtotal of cash generated from financing activities 49,395,924.99
Repayment of borrowings
Interest and dividends paid 8,773,914.91 18,348,005.18
Cash used in other financing activities 47,604,075.01
Subtotal of cash used in financing activities 8,773,914.91 65,952,080.19
Net cash generated from/used in financing activities -8,773,914.91 -16,556,155.20
4. Effect of foreign exchange rates changes on cash and cash
69
Changchai Company, Limited Interim Report 2023
equivalents
5. Net increase in cash and cash equivalents -181,536,365.67 -132,099,736.47
Add: Cash and cash equivalents, beginning of the period 704,659,776.14 476,410,739.41
6. Cash and cash equivalents, end of the period 523,123,410.47 344,311,002.94
Legal representative: Xie Guozhong General Manager: Xie Guozhong
Head of the accounting department: Jiang He
70
Changchai Company, Limited Interim Report 2023
7. Consolidated Statements of Changes in Owners’ Equity
H1 2023
Unit: RMB
H1 2023
Equity attributable to owners of the Company as the parent
Other L
equity e
instruments s
s:
T G
P r en
Pr Non-cont Total
Item er e Other er
ef rolling owners’
Share pe Capital a compreh Specific Surplus al Retained Ot
er Subtotal
capital tu Ot reserves s ensive reserve reserves re earnings her interests equity
re
al he u income se
d
b r r rv
sh
o y e
ar
n st
es
ds o
c
k
1. Balance as at the end of the 705,692,5 640,133, 655,341, 18,848,8 349,197, 915,495, 3,284,71 72,464,17 3,357,174
period of prior year 07.00 963.01 704.07 56.75 725.72 909.35 0,665.90 2.67 ,838.57
Add: Adjustment for change in
accounting policy
71
Changchai Company, Limited Interim Report 2023
Adjustment for correction of
previous error
Adjustment for business
combination under common
control
Other adjustments
2. Balance as at the beginning of 705,692,5 640,133, 655,341, 18,848,8 349,197, 915,495, 3,284,71 72,464,17 3,357,174
the Reporting Period 07.00 963.01 704.07 56.75 725.72 909.35 0,665.90 2.67 ,838.57
3. Increase/ decrease in the period 73,660,1 2,177,81 124,880, 200,718, 4,162,399 204,880,7
(“-” for decrease) 50.00 0.33 399.59 359.92 .26 59.18
3.1 Total comprehensive 73,660,1 131,937, 205,597, 4,162,399 209,759,8
income 50.00 324.66 474.66 .26 73.92
3.2 Capital increased and
reduced by owners
3.2.1 Ordinary shares
increased by owners
3.2.2 Capital increased by
holders of other equity
instruments
3.2.3 Share-based payments
included in owners’ equity
3.2.4 Other
-7,056,92 -7,056,9 -7,056,92
3.3 Profit distribution
5.07 25.07 5.07
3.3.1 Appropriation to
surplus reserves
3.3.2 Appropriation to
general reserve
72
Changchai Company, Limited Interim Report 2023
3.3.3 Appropriation to -7,056,92 -7,056,9 -7,056,92
owners (or shareholders) 5.07 25.07 5.07
3.3.4 Other
3.4 Transfers within owners’
equity
3.4.1 Increase in capital (or
share capital) from capital
reserves
3.4.2 Increase in capital (or
share capital) from surplus
reserves
3.4.3 Loss offset by surplus
reserves
3.4.4 Changes in defined
benefit schemes transferred to
retained earnings
3.4.5 Other comprehensive
income transferred to retained
earnings
3.4.6 Other
2,177,81 2,177,81 2,177,810
3.5 Specific reserve
0.33 0.33 .33
4,598,47 4,598,47 4,598,473
3.5.1 Increase in the period
3.04 3.04 .04
2,420,66 2,420,66 2,420,662
3.5.2 Used in the period
2.71 2.71 .71
3.6 Other
4. Balance as at the end of the 705,692,5 640,133, 729,001, 21,026,6 349,197, 1,040,37 3,485,42 76,626,57 3,562,055
Reporting Period 07.00 963.01 854.07 67.08 725.72 6,308.94 9,025.82 1.93 ,597.75
73
Changchai Company, Limited Interim Report 2023
H1 2022
Unit: RMB
H1 2022
Equity attributable to owners of the Company as the parent
Other L
equity e
instruments s
s:
P T G
er r en
Pr Non-cont Total
Item p e Other er
ef rolling owners’
Share et Capital a compreh Specific Surplus al Retained Ot
er Subtotal
capital u O reserves s ensive reserve reserves re earnings her interests equity
re
al th u income se
d
b er r rv
sh
o y e
ar
n st
es
d o
s c
k
1. Balance as at the end of the 705,692,5 640,676, 506,011, 18,812,9 334,144, 872,212, 3,077,55 19,424,23 3,096,974
period of prior year 07.00 218.40 499.55 50.04 488.46 354.88 0,018.33 0.98 ,249.31
Add: Adjustment for change in
accounting policy
Adjustment for correction of
previous error
74
Changchai Company, Limited Interim Report 2023
Adjustment for business
combination under common
control
Other adjustments
2. Balance as at the beginning of 705,692,5 640,676, 506,011, 18,812,9 334,144, 872,212, 3,077,55 19,424,23 3,096,974
the Reporting Period 07.00 218.40 499.55 50.04 488.46 354.88 0,018.33 0.98 ,249.31
3. Increase/ decrease in the period -542,25 -49,265, -32,943,2 -82,750, 50,331,82 -32,418,8
(“-” for decrease) 5.39 150.00 74.79 680.18 4.28 55.90
3.1 Total comprehensive -49,265, -14,595,2 -63,860, -63,862,1
-1,732.08
income 150.00 69.61 419.61 51.69
3.2 Capital increased and -542,25 -542,255 50,333,55 49,791,30
reduced by owners 5.39 .39 6.36 0.97
3.2.1 Ordinary shares
increased by owners
3.2.2 Capital increased by
holders of other equity
instruments
3.2.3 Share-based payments
included in owners’ equity
-542,25 -542,255 50,333,55 49,791,30
3.2.4 Other
5.39 .39 6.36 0.97
-18,348,0 -18,348, -18,348,0
3.3 Profit distribution
05.18 005.18 05.18
3.3.1 Appropriation to
surplus reserves
3.3.2 Appropriation to
general reserve
3.3.3 Appropriation to -18,348,0 -18,348, -18,348,0
owners (or shareholders) 05.18 005.18 05.18
75
Changchai Company, Limited Interim Report 2023
3.3.4 Other
3.4 Transfers within owners’
equity
3.4.1 Increase in capital (or
share capital) from capital
reserves
3.4.2 Increase in capital (or
share capital) from surplus
reserves
3.4.3 Loss offset by surplus
reserves
3.4.4 Changes in defined
benefit schemes transferred to
retained earnings
3.4.5 Other comprehensive
income transferred to retained
earnings
3.4.6 Other
3.5 Specific reserve
3.5.1 Increase in the period
3.5.2 Used in the period
3.6 Other
4. Balance as at the end of the 705,692,5 640,133, 456,746, 18,812,9 334,144, 839,269, 2,994,79 69,756,05 3,064,555
Reporting Period 07.00 963.01 349.55 50.04 488.46 080.09 9,338.15 5.26 ,393.41
Legal representative: Xie Guozhong General Manager: Xie Guozhong Head of the accounting department: Jiang He
76
Changchai Company, Limited Interim Report 2023
8. Statements of Changes in Owners’ Equity of the Company as the Parent
H1 2023
Unit: RMB
H1 2023
Other equity
instruments
Le
Pe
ss:
rp Other
Pre Tre Ot Total
Item et Capital comprehen Specific Surplus Retained
Share capital fer Ot asu he owners’
ua reserves sive reserve reserves earnings
red he ry r equity
l income
sha r sto
bo
res ck
nd
s
1. Balance as at the end of the 705,692,507.0 659,418,70 655,341,70 18,848,856. 349,197,725. 873,168,182. 3,261,667,6
period of prior year 0 0.67 4.07 75 72 73 76.94
Add: Adjustment for change in
accounting policy
Adjustment for correction of
previous error
Other adjustments
2. Balance as at the beginning of 705,692,507.0 659,418,70 655,341,70 18,848,856. 349,197,725. 873,168,182. 3,261,667,6
the Reporting Period 0 0.67 4.07 75 72 73 76.94
3. Increase/ decrease in the period 73,660,150 2,177,810.3 124,988,918. 200,826,879
(“-” for decrease) .00 3 76 .09
77
Changchai Company, Limited Interim Report 2023
3.1 Total comprehensive 73,660,150 132,045,843. 205,705,993
income .00 83 .83
3.2 Capital increased and
reduced by owners
3.2.1 Ordinary shares
increased by owners
3.2.2 Capital increased by
holders of other equity instruments
3.2.3 Share-based payments
included in owners’ equity
3.2.4 Other
-7,056,925.0
3.3 Profit distribution -7,056,925.07
7
3.3.1 Appropriation to
surplus reserves
3.3.2 Appropriation to -7,056,925.0
-7,056,925.07
owners (or shareholders) 7
3.3.3 Other
3.4 Transfers within owners’
equity
3.4.1 Increase in capital (or
share capital) from capital reserves
3.4.2 Increase in capital (or
share capital) from surplus
reserves
3.4.3 Loss offset by surplus
reserves
78
Changchai Company, Limited Interim Report 2023
3.4.4 Changes in defined
benefit schemes transferred to
retained earnings
3.4.5 Other comprehensive
income transferred to retained
earnings
3.4.6 Other
2,177,810.3 2,177,810.3
3.5 Specific reserve
3 3
4,598,473.0 4,598,473.0
3.5.1 Increase in the period
4 4
2,420,662.7 2,420,662.7
3.5.2 Used in the period
1 1
3.6 Other
4. Balance as at the end of the 705,692,507.0 659,418,70 729,001,85 21,026,667. 349,197,725. 998,157,101. 3,462,494,5
Reporting Period 0 0.67 4.07 08 72 49 56.03
H1 2022
Unit: RMB
H1 2022
Other equity
instruments
Le
Pe
ss:
rp Other
Pre Tr O Total
Item et Capital comprehen Specific Surplus Retained
Share capital fer Ot eas th owners’
ua reserves sive reserve reserves earnings
red he ury er equity
l income
sha r sto
bo
res ck
nd
s
79
Changchai Company, Limited Interim Report 2023
1. Balance as at the end of the 705,692,507.0 659,418,700 506,011,49 18,812,950. 334,144,488. 756,037,052. 2,980,117,19
period of prior year 0 .67 9.55 04 46 58 8.30
Add: Adjustment for change in
accounting policy
Adjustment for correction of
previous error
Other adjustments
2. Balance as at the beginning of 705,692,507.0 659,418,700 506,011,49 18,812,950. 334,144,488. 756,037,052. 2,980,117,19
the Reporting Period 0 .67 9.55 04 46 58 8.30
3. Increase/ decrease in the period -49,265,15 -14,234,832.3 -63,499,982.
(“-” for decrease) 0.00 5 35
-49,265,15 -45,151,977.
3.1 Total comprehensive income 4,113,172.83
0.00 17
3.2 Capital increased and
reduced by owners
3.2.1 Ordinary shares
increased by owners
3.2.2 Capital increased by
holders of other equity instruments
3.2.3 Share-based payments
included in owners’ equity
3.2.4 Other
-18,348,005.1 -18,348,005.
3.3 Profit distribution
8 18
3.3.1 Appropriation to surplus
reserves
3.3.2 Appropriation to owners -18,348,005.1 -18,348,005.
(or shareholders) 8 18
80
Changchai Company, Limited Interim Report 2023
3.3.3 Other
3.4 Transfers within owners’
equity
3.4.1 Increase in capital (or
share capital) from capital reserves
3.4.2 Increase in capital (or
share capital) from surplus
reserves
3.4.3 Loss offset by surplus
reserves
3.4.4 Changes in defined
benefit schemes transferred to
retained earnings
3.4.5 Other comprehensive
income transferred to retained
earnings
3.4.6 Other
3.5 Specific reserve
3.5.1 Increase in the period
3.5.2 Used in the period
3.6 Other
4. Balance as at the end of the 705,692,507.0 659,418,700 456,746,34 18,812,950. 334,144,488. 741,802,220. 2,916,617,2
Reporting Period 0 .67 9.55 04 46 23 15.95
Legal representative: Xie Guozhong General Manager: Xie Guozhong Head of the accounting department: Jiang He
81
Changchai Company, Limited Interim Report 2023
III. Company Profile
Changchai Company, Limited (hereinafter referred to as “the Company”) was founded on 5 May 1994, which is a
company limited by shares promoted solely by Changzhou Diesel Engine Plant through the approval by the State
Commission for Restructuring the Economic Systems with document TGS [1993] No. 9 on 15 January 1993 by
way of public offering of shares. With the approved of the People’s Government of Jiangsu Province SZF [1993]
No. 67, as well as reexamined and approved by China Securities Regulatory Commission (“CSRC”) through
document ZJFSZ (1994) No. 9, the Company initially issued A shares to the public from 15 March 1994 to 30
March 1994. As approved by the Shenzhen Stock Exchange through document SZSFZ (1994) No. 15, such
tradable shares of the public got listing on 1 July 1994 at Shenzhen Stock Exchange with “Su Changchai A” for
short of stock, as well as “0570” as stock code (present stock code is “000570”).
In 1996, with the recommendation of the Office of the People’s Government of Jiangsu Province SZBH [1996]
No. 13, as well as first review by Shenzhen Municipal Securities Administration Office through SZBZ [1996] No.
24, and approval of the State Council Securities Commission ZWF [1996] No. 27, the Company issued 100
million B shares to qualified investors on 27 August 1996 to 30 August 1996, getting listed on 13 September
1996.
On 9 June 2006, the Company held a shareholders’ general meeting related to A shares market to examine and
approve share merger reform plan, and performed the share merger reform on 19 June 2006.
As examined and approved at the 2nd Extraordinary General Meeting of 2009 in September 2009, based on the
total share capital of 374,249,551 shares as at 30 June 2009, the Company implemented the profit distribution plan,
i.e. to distribute 5 bonus shares and cash of RMB0.80 for every 10 shares, with registered capital increased by
RMB187,124,775.00, as well as registered capital of RMB561,374,326.00 after change, which verified by Jiangsu
Gongzheng Tianye Certified Public Accountants Company Limited with issuing Capital Verification Report SGC
[2010] No. B002.
A non-public offering of up to 168,412,297 new shares was deliberated on and approved as a resolution of the
2020 Annual General Meeting held on 7 May 2021 and approved by the Approval of the Non-public Offering of
Shares of Changchai Co., Ltd. (CSRC Permit [2020] No. 3374) issued by Changchai Company Limited the China
Securities Regulatory Commission. On 16 June 2021, the capital verification report "S.G. W [2021] B062" was
issued by Gongzheng Tianye Accounting Firm (Special General Partnership), confirming that the Company had
issued 144,318,181 RMB ordinary shares (A shares) in a non-public offering, with an additional paid-in capital
(share capital) of RMB144,318,181. The total amount raised was RMB634,999,996.40; the net amount raised was
RMB620,665,733.97, which increased the capital reserve (share capital premium) by RMB476,347,552.97. As of
31 December 2021, the total share capital of the Company was RMB705,692,507.
The unified social credit code of the enterprise business license of the Company is 91320400134792410W.
The Company’s registered address is situated at No. 123 Huaide Middle Road, Changzhou, Jiangsu, as well as its
head office located at No. 123 Huaide Middle Road, Changzhou, Jiangsu.
The Company belongs to manufacturing with business scope including manufacturing and sale of diesel engine,
diesel engines part and casting, grain harvesting machine, rotary cultivators, walking tractor, mould and fixtures,
assembling and sale of diesel generating set and pumping unit. The Company mainly engaged in the production
and sales of small and medium-sized single cylinders and multi-cylinder diesel engine with the label of Changchai
Brand. The diesel engine produced and sold by the Company were mainly used in tractors, combine harvest
models, light commercial vehicle, farm equipment, small-sized construction machinery, generating sets and
shipborne machinery and equipment, etc. The Company’s main business remained unchanged in the Reporting
82
Changchai Company, Limited Interim Report 2023
Period.
The Company established the Shareholders’ General Meeting, the Board of Directors and the Supervisory
Committee, Corporate office, Financial Department, Political Department, Investment and Development
Department, Audit Department, Human Recourses Department, Production Department, Procurement Department,
Sales Company, Chief Engineer Office, Technology Center, QA Department, Foundry Branch, Machine
Processing Branch, Single-cylinder Engine branch, Multi-cylinder Engine Branch and Overseas Business
Department in the Company.
The financial report has been approved to be issued by the Board of Directors on 22 August 2023.
The consolidated scope of the Company of the Reporting Period includes the Company as the parent and 8
subsidiaries. For the details of the consolidated scope of the Reporting Period and the changes situation, please
refer to the changes of the consolidated scope of the notes to the financial report and the notes to the equities
among other entities.
IV. Basis for Preparation of the Financial Report
1. Basis for Preparation
With the going-concern assumption as the basis and based on transactions and other events that actually occurred,
the Group prepared financial statements in accordance with The Accounting Standards for Business
Enterprises—Basic Standard issued by the Ministry of Finance with Decree No. 33 and revised with Decree No.
76, the various specific accounting standards, the Application Guidance of Accounting Standards for Business
Enterprises, the Interpretation of Accounting Standards for Business Enterprises and other regulations issued and
revised from 15 February 2006 onwards (hereinafter jointly referred to as “the Accounting Standards for Business
Enterprises”, “China Accounting Standards” or “CAS”), as well as the Rules for Preparation Convention of
Disclosure of Public Offering Companies No.15 – General Regulations for Financial Reporting (revised in 2014)
by China Securities Regulatory Commission.
In accordance with relevant provisions of the Accounting Standards for Business Enterprises, the Group adopted
the accrual basis in accounting. Except for some financial instruments, where impairment occurred on an asset, an
impairment reserve was withdrawn accordingly pursuant to relevant requirements.
2. Continuation
The Company comprehensively evaluated the information acquired recently that there would be no such factors in
the 12 months from the end of the Reporting Period that would obviously influence the continuation capability of
the Company and predicted that the operating activities would continue in the future 12 months of the Company.
The financial statement compiled base on the continuous operation.
V. Important Accounting Policies and Estimations
Notification of specific accounting policies and accounting estimations:
The Company and each subsidiary according to the actual production and operation characteristics and in accord
with the regulations of the relevant ASBE, formulated certain specific accounting policies and accounting
estimations, which mainly reflected in the financial instruments, withdrawal method of the bad debt provision of
the accounts receivable, the measurement of the inventory and the depreciation of the fixed assets etc.
83
Changchai Company, Limited Interim Report 2023
1. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Group are in compliance with in compliance with the Accounting
Standards for Business Enterprises, which factually and completely present the Company’s and the Group’s
financial positions, business results and cash flows and other relevant information.
2. Fiscal Period
The fiscal periods are divided into fiscal year and metaphase, the fiscal year is from January 1 to December 31
and as the metaphase included monthly, quarterly and semi-yearly periods.
3. Operating Cycle
A normal operating cycle refers to a period from the Group purchasing assets for processing to realizing cash or
cash equivalents. An operating cycle for the Group is 12 months, which is also the classification criterion for the
liquidity of its assets and liabilities.
4. Currency Used in Bookkeeping
Renminbi is functional currency of the Company.
5. Accounting Methods for Business Combinations under the Same Control and Business Combinations not
under the Same Control
(1) Business combinations under the same control:
A business combination under the same control is a business combination in which all of the combining
enterprises are ultimately controlled by the same party or the same parties both before and after the business
combination and on which the control is not temporary.
For the merger of enterprises under the same control, if the consideration of the merging enterprise is that it makes
payment in cash, transfers non-cash assets or bear its debts, it shall, on the date of merger, regard the share of the
book value of the owner's equity of the merged enterprise as the initial cost of the long-term equity investment.
The difference between the initial cost of the long-term equity investment and the payment in cash, non-cash
assets transferred as well as the book value of the debts borne by the merging party shall offset against the capital
reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted.
If the consideration of the merging enterprise is that it issues equity securities, it shall, on the date of merger,
regard the share of the book value of the owner's equity of the merged enterprise as the initial cost of the
long-term equity investment. The total face value of the stocks issued shall be regarded as the capital stock, while
the difference between the initial cost of the long-term equity investment and total face value of the shares issued
shall offset against the capital reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be
adjusted.
All direct costs for the business combination, including expenses for audit, evaluating and legal services shall be
recorded into the profits and losses at the current period. The expenses such as the handling charges and
commission etc, premium income of deducting the equity securities, and as for the premium income was
insufficient to dilute, the retained earnings shall be written down.
Owning to the reasons such as the additional investment, for the equity investment held before acquiring the
84
Changchai Company, Limited Interim Report 2023
control right of the combined parties, the confirmed relevant gains and losses, other comprehensive income and
the changes of other net assets since the date of the earlier one between the date when acquiring the original equity
right and the date when the combine parties and combined ones were under the same control to the combination
date, should be respectively written down and compared with the beginning balance of retained earnings or the
current gains and losses during the statement period.
(2) Business combinations not under the same control
A business combination not under the same control is a business combination in which the combining enterprises
are not ultimately controlled by the same party or the same parties both before and after the business combination.
The combination costs of the acquirer and the identifiable net assets obtained by the acquirer in a business
combination shall be measured at the fair values. The acquirer shall recognize the positive balance between the
combination costs and the fair value of the identifiable net assets it obtains forms the acquiree as business
reputation. The direct relevant expenses occurred from the enterprise combination should be included in the
current gains and losses when occurred. The combination costs of the acquirer and the identifiable net assets
obtained by it in the combination shall be measured according to their fair values at the acquiring date. The
difference between the fair value of the assets paid out by the Company and its book value should be included in
the current gains and losses. The purchase date refers to the date that the purchaser acquires the control right of the
acquiree.
For the business combinations not under the same control realized through step by step multiple transaction, as for
the equity interests that the Group holds in the acquiree before the acquiring date, they shall be re-measured
according to their fair values at the acquiring date; the positive difference between their fair values and carrying
amounts shall be recorded into the investment gains for the period including the acquiring date. The equity holed
by the acquiree which involved with the other comprehensive income and the other owners’ equities changes
except for the net gains and losses, other comprehensive income and the profits distribution and other related
comprehensive gains and other owners’ equities which in relation to the equity interests that the Group holds in
the acquiree before the acquiring date should be transferred into the current investment income on the acquiring
date, except for the other comprehensive income occurred from the re-measurement of the net profits of the
defined benefit plans or the changes of the net assets of the investees.
6. Methods for Preparing Consolidated Financial Statements
The Company confirms the consolidated scope based on the control and includes the subsidiaries with actual
control right into the consolidated financial statement.
The consolidated financial statement of the Company is compiled according to the regulations of No. 33 of
ASBE-Consolidated Financial Statement and the relevant regulations and as for the whole significant
come-and-go balance, investment, transaction and the unrealized profits should be written off when compiling the
consolidated financial statement. The portion of a subsidiary’s shareholders’ equity and the portion of a
subsidiary’s net profits and losses for the period not held by the Group are recognized as minority interests and
minority shareholder profits and losses respectively and presented separately under shareholders’ equity and net
profits in the consolidation financial statements. The portion of a subsidiary’s net profits and losses for the period
that belong to minority interests is presented as the item of “minority shareholder profits and losses” under the
bigger item of net profits in the consolidated financial statements. Where the loss of a subsidiary shared by
minority shareholders exceeds the portion enjoyed by minority shareholders in the subsidiary’s opening owners’
equity, minority interests are offset.
The accounting policy or accounting period of each subsidiary is different from which of the Company, which
85
Changchai Company, Limited Interim Report 2023
shall be adjusted as the Company; or subsidiaries shall prepare financial statement again required by the Company
when preparing the consolidated financial statements.
As for the added subsidiary company not controlled by the same enterprise preparing the consolidated financial
statement, shall adjust individual financial statement based on the fair value of the identifiable net assets on the
acquisition date; as for the added subsidiary companies controlled by the same enterprise preparing the financial
statement, shall not adjust the financial statement of the subsidiaries, namely survived by integration as
participating in the consolidation when the final control party starts implementing control and should adjust the
period-begin amount of the consolidated balance sheet and at the same time adjust the relevant items of the
compared statement.
As for the disposed subsidiaries, the operation result and the cash flow should be included in the consolidated
income statement and the consolidated cash flow before the disposing date; the disposed subsidiaries of the
current period, should not be adjusted the period-begin amount of the consolidated balance sheet.
Where the Group losses control on its original subsidiaries due to disposal of some equity investments or other
reasons, the residual equity interests are re-measured according to the fair value on the date when such control
ceases. The summation of the consideration obtained from the disposal of equity interests and the fair value of the
residual equity interests, minus the portion in the original subsidiary’s net assets measured on a continuous basis
from the acquisition date that is enjoyable by the Group according to the original shareholding percentage in the
subsidiary, is recorded in investment gains for the period when the Group’s control on the subsidiary ceases. Other
comprehensive incomes in relation to the equity investment and the other owners’ equities changes except for the
net gains and losses, other comprehensive income and profits distribution in the original subsidiary are treated on
the same accounting basis as the acquiree directly disposes the relevant assets or liabilities (that is, except for the
changes in the net liabilities or assets with a defined benefit plan resulted from re-measurement of the original
subsidiary, the rest shall all be transferred into current investment gains) when such control ceases. And
subsequent measurement is conducted on the residual equity interests according to the No.2 Accounting Standard
for Business Enterprises-Long-term Equity Investments or the No.22 Accounting Standard for Business
Enterprises-Recognition and Measurement of Financial Instruments.
For the disposal of equity investment belongs to a package deal, should be considered as a transaction and conduct
accounting treatment. However, Before losing control, every disposal cost and corresponding net assets balance of
subsidiary of disposal investment are confirmed as other comprehensive income in consolidated financial
statements, which together transferred into the current profits and losses in the loss of control, when the Group
losing control on its subsidiary.
For the disposal of the equity investment not belongs to a package deal, should be executed accounting treatment
according to the relevant policies of partly disposing the equity investment of the subsidiaries under the situation
not lose the control right before losing the control right; when losing the control right, the former should be
executed accounting treatment according to the general disposing method of the disposal of the subsidiaries.
7. Classification of Joint Arrangements and Accounting Treatment of Joint Operations
The Group classifies joint arrangements into joint operations and joint ventures.
A joint operation refers to a joint arrangement where the Group is the joint operations party of the joint
arrangement and enjoys assets and has to bear liabilities related to the arrangement. The Company confirms the
following items related to the interests share among the joint operations and executes accounting treatment
according to the regulations of the relevant ASBE:
(1) Recognizes the assets that it holds and bears in the joint operation and recognizes the jointly-held assets
86
Changchai Company, Limited Interim Report 2023
according to the Group’s stake in the joint operation;
(2) Recognizes the liabilities that it holds and bears in the joint operation and recognizes the jointly-held liabilities
according to the Group’s stake in the joint operation;
(3) Recognizes the income from sale of the Group’s share in the output of the joint operation
(4) Recognizes the income from sale of the joint operation’s outputs according to the Group’s stake in it
(5) Recognizes the expense solely incurred to the Group and the expense incurred to the joint operation according
to the Group’s stake in it.
8. Recognition Standard for Cash and Cash Equivalents
In the Group’s understanding, cash and cash equivalents include cash on hand, any deposit that can be used for
cover, and short-term (usually due within 3 months since the day of purchase) and high circulating investments,
which are easily convertible into known amount of cash and whose risks in change of value are minimal.
9. Foreign Currency Businesses and Translation of Foreign Currency Financial Statements
(1) Foreign currency business
Concerning the foreign-currency transactions that occurred, the foreign currency shall be converted into the
recording currency according to the middle price of the market exchange rate disclosed by the People’s Bank of
China on the date of the transaction. Among the said transactions that occurred, those involving foreign exchanges
shall be converted according to the exchange rates adopted in the actual transactions.
On the balance sheet date, the foreign-currency monetary assets and the balance of the liability account shall be
converted into the recoding currency according to the middle price of the market exchange rates disclosed by the
People’s Bank of China on the Balance Sheet Date. The difference between the recording-currency amount
converted according to the exchange rate on the Balance Sheet Date and the original book recording-currency
amount shall be recognized as gains/losses from foreign exchange. And the exchange gain/loss caused by the
foreign-currency borrowings related to purchasing fixed assets shall be handled according to the principle of
capitalizing borrowing expenses; the exchange gain/loss incurred in the establishment period shall be recorded
into the establishment expense; others shall be recorded into the financial expenses for the current period.
On the balance sheet date, the foreign-currency non-monetary items measured by historical cost shall be converted
according to the middle price of the market exchange disclosed by the People’s Bank of China on the date of the
transaction, with no changes in the original recording-currency amount; while the foreign-currency non-monetary
items measured by fair value shall be converted according to the middle price of the market exchange disclosed by
the People’s Bank of China on the date when the fair value is recognized, and the exchange gain/loss caused
thereof shall be recognized as the gain/loss from fair value changes and recorded into the gain/loss of the current
period.
(2) Translation of foreign currency
The assets and liabilities items among the balance sheet of the foreign operation shall be translated at a spot
exchange rate on the balance sheet date. Among the owner’s equity items, except for the items as “undistributed
profits”, other items shall be translated at the spot exchange rate at the time when they are incurred. And the
revenues and expenses items among the balance sheet of the foreign operation shall be translated at the
approximate exchange rate of the transaction date. The difference caused from the above transaction of the foreign
currency statement should be listed in the other comprehensive income among the owners’ equities.
87
Changchai Company, Limited Interim Report 2023
10. Financial Instruments
(1) Classification of Financial Instruments
The Company classifies the financial assets when initially recognized into the following three categories based on
the business model for financial assets management and characteristics of contractual cash flow of financial assets:
financial assets measured at amortized cost, financial assets at fair value through other comprehensive income
(debt instruments) and financial assets at fair value through profit or loss
Financial liabilities were classifies when initially recognized into financial liabilities at fair value through profit or
loss and financial liabilities measured at amortized cost.
(2) Recognition Basis and Measurement Method for Financial Instruments
① Financial assets measured at amortized cost
Financial assets at amortized cost include notes receivable, accounts receivable, other receivables, long-term
receivables, and investment in debt obligations which are initially measured at fair value and related transaction
cost shall be recorded into the initial recognized amount. For accounts receivable excluding significant financing
and accounts receivable that the Company decides not to consider financing components less than one year, the
initial measurement shall be made at the contract transaction price. The interest calculated with actual rates for the
holding period shall be recorded into the current profit or loss. When recovered or disposed, the difference
between the price obtained and the carrying value of the financial assets shall be recorded into the current profit or
loss.
② Financial assets at fair value through other comprehensive income (debt instruments)
Financial assets at fair value through other comprehensive income (debt instruments) include accounts receivable
financing and investment in other debt obligations which are initially measured at fair value and related
transaction cost shall be recorded into the initial recognized amount. The subsequent measurement of the financial
assets shall be at fair value and changes of fair value except for interest calculated with actual rates, impairment
losses or gains and exchange gains or losses shall be recorded into other comprehensive income. When
derecognized, the accumulated gains or losses originally recorded into other comprehensive income shall be
transferred into the current profit or loss.
③ Financial assets at fair value through other comprehensive income (equity instruments)
Financial assets at fair value through other comprehensive income (equity instruments) include investment in
other equity instruments, etc. which are initially measured at fair value and related transaction cost shall be
recorded into the initial recognized amount. The subsequent measurement of the financial assets shall be at fair
value and changes of fair value shall be recorded into other comprehensive income. The dividends obtained shall
be recorded into the current profit or loss. When derecognized, the accumulated gains or losses originally recorded
into other comprehensive income shall be transferred into retained earnings.
④ Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include held-for-trading financial assets, derivative financial
assets and other non-current financial assets which are initially measured at fair value and the related transaction
cost shall be recorded into the current profit or loss. The subsequent measurement of the financial assets shall be
at fair value and the changes of fair value shall be recorded into the current profit or loss.
⑤ Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include held-for-trading financial liabilities and derivative
financial liabilities which are initially measured at fair value and the related transaction cost shall be recorded into
the current profit or loss. The subsequent measurement of the financial liabilities shall be at fair value and the
changes of fair value shall be recorded into the current profit or loss. When derecognized, the difference between
88
Changchai Company, Limited Interim Report 2023
the carrying value and the paid consideration shall be recorded into the current profit or loss.
⑥ Financial liabilities at amortized cost
Financial liabilities at amortized cost include short-term borrowings, notes payable, accounts payable, other
payables, long-term borrowings, bonds payable and long-term payables which are initially measured at fair value
and the related transaction cost shall be recorded into the initial recognized amount. The interest calculated with
actual rates for the holding period shall be recorded into the current profit or loss. When derecognized, the
difference between the paid consideration and the carrying value of the financial liabilities shall be recorded into
the current profit or loss.
(3) Recognition Basis and Measurement of Transfer of Financial Assets
Where the Company has transferred nearly all of the risks and rewards related to the ownership of the financial
asset to the transferee, it shall stop recognizing the financial asset and separately recognize the rights and
obligations generated retained from the transfer as assets or liabilities. If it retained nearly all of the risks and
rewards related to the ownership of the financial asset, it shall continue to recognize the transferred financial asset.
Where the Company does not transfer or retain nearly all of the risks and rewards related to the ownership of a
financial asset, it shall deal with it according to the circumstances as follows, respectively: (1) If it gives up its
control over the financial asset, it shall stop recognizing the financial asset and separately recognize the rights and
obligations generated retained from the transfer as assets or liabilities; (2) If it does not give up its control over the
financial asset, it shall, according to the extent of its continuous involvement in the transferred financial asset,
recognize the related financial asset and recognize the relevant liability accordingly.
If the transfer of an entire financial asset satisfies the conditions for stopping recognition, the difference between
the amounts of the following 2 items shall be recorded in the profits and losses of the current period: (1) The
carrying value of the transferred financial asset on the derecognition date; (2) The sum of consideration received
from the transfer of financial assets, and derecognition amount among the accumulative amount of the changes of
the fair value originally recorded in the other comprehensive income (the financial assets involve transfer are
investments in debt instruments at fair value through other comprehensive income. If the transfer of partial
financial asset satisfies the conditions to stop the recognition, the entire carrying value of the transferred financial
asset shall, between the portion whose recognition has been stopped and the portion whose recognition has not
been stopped, be apportioned according to their respective relative fair value on the transfer date, and the
difference between the amounts of the following two items shall be included into the profits and losses of the
current period: (1)The carrying value of the portion whose recognition has been stopped; (2)The sum of
consideration of the portion whose recognition has been stopped, and derecognition amount among the
accumulative amount of the changes of the fair value originally recorded in the other comprehensive income (the
financial assets involve transfer are investments in debt instruments at fair value through other comprehensive
income.
(4) Derecognition Basis of Financial Liabilities
A financial liability or part of it can be derecognized after its current obligation has been relieved in full or in part.
(5) Recognition of Fair Value of Financial Assets and Financial Liabilities
The fair value of financial instruments with an active market is determined by the quoted price in the active
market. For financial instruments without active market, the fair value is determined by valuation techniques. The
Company adopts the valuation techniques applicable to the current conditions which are supported by sufficient
data and other information for valuation, and selects the input values consistent with the characteristics of assets
or liabilities considered by market participants in asset or liability transactions, with priority to observable input
values. Unobservable input values are used only when relevant observable input values are not available or
practical.
89
Changchai Company, Limited Interim Report 2023
(6) Impairment of financial instrument
① Impairment measurement and accounting handling of financial instrument
Based on expected credit loss, the Company conducts impairment handling and confirms credit impairment loss
for financial assets which is measured by amortized cost, debt instrument investment which is measured by fair
value and whose change is calculated into other comprehensive profits, financial guarantee contract.
Expected credit loss refers to weighted average of credit loss of financial instrument which takes the risk of
contract breach occurrence as the weight. Credit loss refers to the difference between all contract cash flow which
is converted into cash according to actual interest rate and receivable according to contract and all cash flow
which to be charged as expected, i.e. current value of all cash shortage. Among it, as for financial asset purchased
or original which has had credit impairment, it should be converted into cash according actual interest rate of this
financial asset after credit adjustment.
Lifetime expected credit losses refer to those caused by possible defaults during the entire expected duration of a
financial instrument.
The expected credit losses in the next 12 months refers to those caused by the default events of the financial
instrument that may occur within 12 months (or the expected duration if the expected duration of the financial
instrument is less than 12 months) after the balance sheet date, and is part of the expected credit losses in the
entire duration.
On each balance sheet date, the Company respectively measured the expected credit losses of financial
instruments in different stages. If the credit risk of a financial instrument has had no significant increase since its
initial recognition, the instrument shall fall in the first stage, for which the Company would measure the loss
reserves according to the expected credit losses in the future 12 months. If the credit risk of a financial instrument
has had a significant increase since its initial recognition but no credit impairment has occurred, the instrument
shall fall in the second stage, for which the Company would measure the loss reserves according to the expected
credit losses in the entire duration of the instrument. If the credit impairment has occurred since its initial
recognition, the financial instrument shall fall in the third stage, for which the Company would measure the loss
reserves according to the expected credit losses in the entire duration of the instrument.
As for a financial instrument with low credit risks on the balance sheet date, the Company measured the loss
reserves according to the expected credit losses in the future 12 months, assuming that its credit risk has had no
significant increase since its initial recognition.
For financial instruments with low credit risks in stages 1 and 2, the Company calculated the interest income at the
effective interest rate and on the carrying amount of the instruments without deductions for provisions for asset
impairment. For financial instruments in stage 3, interest income was calculated at the effective interest rates and
on the amortized cost by reducing the provisions for asset impairment from the carrying amount.
For notes receivables, accounts receivables, and financing receivables, whether there was a significant financial
component or not, the Company measured the loss reserves based on the expected credit losses for the entire
duration.
A. Accounts receivable
For notes receivable, accounts receivable, other receivables and accounts receivable financing with objective
evidence indicating impairment and those suitable for individual evaluation, the Company carries out impairment
test separately to confirm expected credit loss and prepare provision for impairment of single items. For notes
receivable, accounts receivable, other receivables, accounts receivable financing, contract assets and long-term
receivables without objective evidence of impairment, or a single financial asset with expected credit loss
impossible to be assessed at a reasonable cost, the Company divides the notes receivable, accounts receivable,
other receivables and accounts receivable financing into groups according to the characteristics of credit risk, and
calculates the expected credit loss based on receivable groups. The basis for recognizing groups is as follows:
90
Changchai Company, Limited Interim Report 2023
Item Recognition basis Method of measuring expected credit losses
Group 1 of notes Consulting historical experience in credit losses,
All commercial bills
receivable combining current situation and prediction for future
Bank’s acceptance bills economic situation, the expected credit loss shall be
Group 2 of notes
with low credit rating accounted through exposure at default and the expected
receivable
credit loss rate over the entire life
Bank’s acceptance bills Consulting historical experience in credit losses,
with high credit rating combining current situation and prediction for future
Accounts receivable
economic situation, the expected credit loss shall be
financing
accounted through exposure at default and the expected
credit loss rate over the entire life
Prepare the comparative list between aging of accounts
receivable and expected credit loss rate over the entire
life and calculate the expected credit loss by consulting
Accounts Accounts receivable
historical experience in credit losses, combining current
receivable-credit risk portfolio with credit
situation and prediction for future economic situation.
characteristics group period
The Company takes aging as credit risk characteristics
groups and calculates the expected credit loss for
accounts receivable.
Accounts Consulting historical experience in credit losses,
receivable-intercourse combining current situation and prediction for future
Related party within the
funds among related economic situation, the expected credit loss shall be
consolidation scope
party group within the accounted through exposure at default and the expected
consolidation scope credit loss rate over the entire life
Basis for recognizing groups of other receivables is as follows:
Item Recognition basis Method of measuring expected credit losses
Consulting historical experience in credit losses,
Other receivables combining current situation and prediction for future
excluding those from economic situation, the expected credit loss shall be
Group 1 of other receivables
related parties-aging accounted through exposure at default and the expected
group credit loss rate within the next 12 months or over the
entire life
Consulting historical experience in credit losses,
combining current situation and prediction for future
Related party within
economic situation, the expected credit loss shall be
Group 2 of other receivables the consolidation
accounted through exposure at default and the expected
scope
credit loss rate within the next 12 months or over the
entire life
11. Accounts Receivable
See “10. Financial Instruments”.
91
Changchai Company, Limited Interim Report 2023
12. Accounts Receivable Financing
See “10. Financial Instruments”.
13. Other Receivables
See “10. Financial Instruments”.
14. Inventory
(1) Category of Inventory
Inventory refers to the held-for-sale finished products or commodities, goods in process, materials consumed in
the production process or the process providing the labor service etc. Inventory is mainly including the raw
materials, low priced and easily worn articles, unfinished products, inventories and work in process–outsourced
etc.
(2) Pricing method
Purchasing and storage of the various inventories should be valued according to the planed cost and the dispatch
be calculated according to the weighted average method; carried forward the cost of the finished products
according to the actual cost of the current period and the sales cost according to the weighted average method.
(3) Determination basis of the net realizable value of inventory and withdrawal method of the provision for falling
price of inventory
At the balance sheet date, inventories are measured at the lower of the costs and net realizable value. When all the
inventories are checked roundly, for those which were destroyed, outdated in all or in part, sold at a loss, etc, the
Company shall estimate the irrecoverable part of its cost and withdrawal the inventory falling price reserve at the
year-end. Where the cost of the single inventory item is higher than the net realizable value, the inventory falling
price reserve shall be withdrawn and recorded into profits and losses of the current period. Of which: in the
normal production and operating process, as for the commodities inventory directly for sales such as the finished
products, commodities and the materials for sales, should recognize the net realizable value according to the
amount of the estimated selling price of the inventory minuses the estimated selling expenses and the relevant
taxes; as for the materials inventory needs to be processed in the normal production and operating process, should
recognize its net realizable value according to the amount of the estimated selling price of the finished products
minuses the cost predicts to be occur when the production completes and the estimated selling expenses as well as
the relevant taxes; on the balance sheet date, for the same inventory with one part agreed by the contract price
and other parts not by the contract price, should be respectively recognized the net realizable value. For items of
inventories relating to a product line that are produced and marketed in the same geographical area, have the same
or similar end users or purposes, and cannot be practicably evaluated separately from other items in that product
line provision for decline in value is determined on an aggregate basis; for large quantity and low value items of
inventories, provision for decline in value is made based on categories of inventories.
(4) The perpetual inventory system is maintained for stock system.
(5) Amortization method of low-value consumables and packages
One time amortization method is adopted for low-value consumables and packages.
92
Changchai Company, Limited Interim Report 2023
15. Contract Assets
Contract Assets means that the Company is endowed with the right to charge the consideration through
transferring any commodity or service to the client, and such right depends on other factors except the passing of
time. The Company’s unconditional right (only depending on the passing of time) of charging the consideration
from the client shall be separately presented as receivables.
The recognition method and accounting treatment method of the estimated credit loss of contract assets are
consistent with that specified in Notes V.11.
16. Contract Costs
(1) Costs from Acquiring Contract
If the incremental cost resulting from the Company’s acquiring of contract (namely costs merely resulting from
the acquiring of contract) is predicted to be retrieved, it shall be recognized as an assets, amortized by adopting
the same basis with the recognition of commodities or service revenues related to the assets and included into the
current profit and loss. If the assets’ amortization period does not exceed one year, it shall be immediately
included into the current profit and loss. Other expenses resulting from the Company’s acquiring of contract shall
also be included into the current profit and loss unless it is explicitly borne by the client.
(2) Costs from Executing Contract
The Company’s costs from executing contract is not covered by other ASBE except for Revenue Standards, and
when the following situations are met, such costs can be recognized as an assets: ① the costs are directly related
to a current or predicted contract; ② the costs increase the Company’s resources applied to fulfill performance
obligations in the future; ③ the costs are predicted to be retrieved. The recognized assets shall be amortized by
adopting the same basis with the recognition of commodities or service revenues related to the assets and included
into the current profit and loss.
If the book value of contract costs is higher than the difference of the following two items, corresponding
depreciation reserves shall be counted and withdrawn and it shall be recognized as the assets depreciation loss: ①
the residual consideration predicted to be acquired by transferring commodities related to the assets; ② the costs
predicted to occur due to the transfer of related commodities.
If the difference between ① and ② is higher than the book value of contract costs due to any change in various
factors causing depreciation in previous periods, it shall be restituted to the withdrawn assets depreciation reserves
and included in the current profit and loss. However, the book value of restituted contract costs shall not exceed
the book value of the assets on the day of restitution based on the hypothesis that depreciation reserves are not
counted and withdrawn.
17. Assets Held for Sale
The Company recognizes the components (or the non-current assets) which meet with the following conditions as
assets held for sale:
(1) The components must be immediately sold only according to the usual terms of selling this kind of
components under the current conditions;
(2) The Company had made solutions on disposing the components (or the non-current assets), for example, the
Company should gain the approval from the shareholders according to the regulations and had acquired the
approved from the Annual General Meeting or the relevant authority institutions;
93
Changchai Company, Limited Interim Report 2023
(3) The Company had signed the irrevocable transformation agreement with the transferee;
(4) The transformation should be completed within 1 year.
18. Long-term Equity Investments
(1) Judgment standard of joint control and significant influences
Joint control, refers to the control jointly owned according to the relevant agreement on an arrangement by the
Company and the relevant activities of the arrangement should be decided only after the participants which share
the control right make consensus. Significant influence refers to the power of the Company which could anticipate
in the finance and the operation polices of the investees, but could not control or jointly control the formulation of
the policies with the other parties.
(2) Recognition for initial investment cost
The initial investment cost of the long-term equity investment shall be recognized by adopting the following ways
in accordance with different methods of acquisition:
1) As for those forms under the same control of the enterprise combine, if the combine party takes the cash
payment, non-cash assets transformation, liabilities assumption or equity securities issuance as the combination
consideration, should take the shares of the book value by the ultimate control party in the consolidate financial
statement of the owners’ equities of the combiners acquired on the merger date as the initial investment cost. The
difference between the initial investment cost and the book value of the paid combination consideration or the
total amount of the issued shares of the long-term equity investment should be adjusted the capital reserve; If the
capital reserve is insufficient to dilute, the retained earnings shall be adjusted. To include each direct relevant
expense occurred when executing the enterprise merger into the current gains and losses; while the handling
charges and commission occurs from the issuing the equity securities or the bonds for the enterprise merger
should be included in the initial measurement amount of the shareholders’ equities or the liabilities.
2) As for long-term equity investment acquired through the merger of enterprises not under the same control, its
initial investment cost shall regard as the combination cost calculated by the fair value of the assets, equity
instrument issued and liabilities incurred or undertaken on the purchase date adding the direct cost related with the
acquisition. The identifiable assets of the combined party and the liabilities (including contingent liability)
undertaken on the combining date shall be measured at the fair value without considering the amount of minority
interest. The acquirer shall recognize the positive balance between the combination costs and the fair value of the
identifiable net assets it obtains from the acquiree as business reputation. The acquirer shall record the negative
balance between the combination costs and the fair value of the identifiable net assets it obtains from the acquiree
into the consolidated income statement directly. The agent expense and other relevant management expenses such
as the audit, legal service and evaluation consultation occurs from the enterprise merger, should be included in the
current gains and losses when occur; while the handling charges and commission occurs from the issuing the
equity securities or the bonds for the enterprise merger should be included in the initial measurement amount of
the shareholders’ equities or the liabilities.
3) Long-term equity investment obtained by other means
The initial cost of a long-term equity investment obtained by making payment in cash shall be the purchase cost
which is actually paid.
The initial cost of a long-term equity investment obtained on the basis of issuing equity securities shall be the fair
value of the equity securities issued.
The initial cost of a long-term equity investment of an investor shall be the value stipulated in the investment
contract or agreement, the unfair value stipulated in the contract or agreement shall be measured at fair value.
As for long-term investment obtained by the exchange of non-monetary assets, where it is commercial in nature,
94
Changchai Company, Limited Interim Report 2023
the fair value of the assets surrendered shall be recognized as the initial cost of the long-term equity investment
received; where it is not commercial in nature, the book value of the assets surrendered shall be recognized as the
initial cost of the long-term equity investment received.
The initial cost of a long-term equity investment obtained by recombination of liabilities shall be recognized at
fair value of long-term equity investment.
(3) Subsequent measurement and recognition of profits and losses
1) An investment in the subsidiary company shall be measured by employing the cost method
Where the Company hold, and is able to do equity investment with control over an invested entity, the invested
entity shall be its subsidiary company. Where the Company holds the shares of an entity over 50%, or, while the
Company holds the shares of an entity below 50%, but has a real control to the said entity, then the said entity
shall be its subsidiary company.
2) An investment in the joint enterprise or associated enterprise shall be measured by employing the equity
method
Where the Company hold, and is able to do equity investment with joint control with other parties over an
invested entity, the invested entity shall be its joint enterprise. Where the Company hold, and is able to have
equity investment with significant influences on an invested entity, the invested entity shall be its associated
entity.
After the Company acquired the long-term equity investment, should respectively recognize investment income
and other comprehensive income according to the net gains and losses as well as the portion of other
comprehensive income which should be enjoyed or be shared, and at the same time adjust the book value of the
long-term equity investment; corresponding reduce the book value of the long-term equity investment according
to profits which be declared to distribute by the investees or the portion of the calculation of cash dividends which
should be enjoyed; for the other changes except for the net gains and losses, other comprehensive income and the
owners’ equity except for the profits distribution of the investees, should adjust the book value of the long-term
equity investment as well as include in the owners’ equity .
The investing enterprise shall, on the ground of the fair value of all identifiable assets of the invested entity when
it obtains the investment, recognize the attributable share of the net profits and losses of the invested entity after it
adjusts the net profits of the invested entity.
If the accounting policy adopted by the investees is not accord with that of the Company, should be adjusted
according to the accounting policies of the Company and the financial statement of the investees during the
accounting period and according which to recognize the investment income as well as other comprehensive
income.
For the transaction happened between the Company and associated enterprises as well as joint ventures, if the
assets launched or sold not form into business, the portion of the unrealized gains and losses of the internal
transaction, which belongs to the Company according to the calculation of the enjoyed proportion, should
recognize the investment gains and losses on the basis. But the losses of the unrealized internal transaction
happened between the Company and the investees which belongs to the impairment losses of the transferred assets,
should not be neutralized.
The Company shall recognize the net losses of the invested enterprise according to the following sequence: first of
all, to write down the book value of the long-term equity investment. Secondly, if the book value of the long-term
equity investment is insufficient for written down, should be continued to recognized the investment losses limited
to the book value of other long-term equity which forms of the net investment of the investees and to written
down the book value of the long-term accounts receivable etc. Lastly, through the above handling, for those
should still undertake the additional obligations according to the investment contracts or the agreements, it shall
95
Changchai Company, Limited Interim Report 2023
be recognized as the estimated liabilities in accordance with the estimated duties and then recorded into
investment losses at current period. If the invested entity realizes any net profits later, the Company shall, after the
amount of its attributable share of profits offsets against its attributable share of the un-recognized losses, resume
recognizing its attributable share of profits.
In the preparation for the financial statements, the balance existed between the long-term equity investment
increased by acquiring shares of minority interest and the attributable net assets on the subsidiary calculated by
the increased shares held since the purchase date (or combination date), the capital reserves shall be adjusted, if
the capital reserves are not sufficient to offset, the retained profits shall be adjusted; the Company disposed part of
the long-term equity investment on subsidiaries without losing its controlling right on them, the balance between
the disposed price and attributable net assets of subsidiaries by disposing the long-term equity investment shall be
recorded into owners’ equity.
For other ways on disposal of long-term equity investment, the balance between the book value of the disposed
equity and its actual payment gained shall be recorded into current profits and losses.
For the long-term equity investment measured by adopting equity method, if the remained equity after disposal
still adopts the equity method for measurement, the other comprehensive income originally recorded into owners’
equity should adopt the same basis of the accounting disposal of the relevant assets or liabilities directly disposed
by the investees according to the corresponding proportion. The owners’ equity recognized owning to the changes
of the other owners’ equity except for the net gains and losses, other comprehensive income and the profits
distribution of the investees, should be transferred into the current gains and losses according to the proportion.
For the long-term equity investment which adopts the cost method of measurement, if the remained equity still
adopt the cost method, the other comprehensive income recognized owning to adopting the equity method for
measurement or the recognition and measurement standards of financial instrument before acquiring the control of
the investees, should adopt the same basis of the accounting disposal of the relevant assets or liabilities directly
disposed by the investees and should be carried forward into the current gains and losses according to the
proportion; the changes of the other owners’ equity except for the net gains and losses, other comprehensive
income and the profits distribution among the net assets of the investees which recognized by adopting the equity
method for measurement, should be carried forward into the current gains and losses according to the proportion.
For those the Company lost the control of the investees by disposing part of the equity investment as well as the
remained equity after disposal could execute joint control or significant influences on the investees, should change
to measure by equity method when compiling the individual financial statement and should adjust the
measurement of the remained equity to equity method as adopted since the time acquired; if the remained equity
after disposal could not execute joint control or significant influences on the investees, should change the
accounting disposal according to the relevant regulations of the recognition and measurement standards of
financial instrument, and its difference between the fair value and book value on the date lose the control right
should be included in the current gains and losses. For the other comprehensive income recognized by adopting
equity method for measurement or the recognition and measurement standards of financial instrument before the
Company acquired the control of the investees, should execute the accounting disposal by adopting the same basis
of the accounting disposal of the relevant assets or liabilities directly disposed by the investees when lose the
control of them, while the changes of the other owners’ equity except for the net gains and losses, other
comprehensive income and the profits distribution among the net assets of the investees which recognized by
adopting the equity method for measurement, should be carried forward into the current gains and losses
according to the proportion. Of which, for the disposed remained equity which adopted the equity method for
measurement, the other comprehensive income and the other owners’ equity should be carried forward according
to the proportion; for the disposed remained equity which changed to execute the accounting disposal according to
96
Changchai Company, Limited Interim Report 2023
the recognition and measurement standards of financial instrument, the other comprehensive income and the other
owners’ equity should be carried forward in full amount.
For those the Company lost the control of the investees by disposing part of the equity investment, the disposed
remained equity should change to calculate according to the recognition and measurement standards of financial
instrument, and difference between the fair value and book value on the date lose the control right should be
included in the current gains and losses. For the other comprehensive income recognized from the original equity
investment by adopting the equity method, should execute the accounting disposal by adopting the same basis of
the accounting disposal of the relevant assets or liabilities directly disposed by the investees when terminate the
equity method for measurement, while for the owners’ equity recognized owning to the changes of the other
owner’s equity except for the net gains and losses, other comprehensive income and the profits distribution of the
investees, should be transferred into the current investment income with full amount when terminate adopting the
equity method.
19. Investment Real Estate
Measurement mode of investment real estate:
Measurement of cost method
Depreciation or amortization method
The investment real estate shall be measured at its cost. Of which, the cost of an investment real estate by
acquisition consists of the acquisition price, relevant taxes, and other expense directly relegated to the asset; the
cost of a self-built investment real estate composes of the necessary expenses for building the asset to the hoped
condition for use. The investment real estate invested by investors shall be recorded at the value stipulated in the
investment contracts or agreements, but the unfair value appointed in the contract or agreement shall be entered
into the account book at the fair value.
As for withdrawal basis of provision for impairment of investment real estates, please refer to withdrawal method
for provision for impairment of fixed assets.
20. Fixed Assets
(1) Recognition Conditions
Fixed assets refers to the tangible assets that simultaneously possess the features as follows: (a) they are held for
the sake of producing commodities, rendering labor service, renting or business management; and (b) their useful
life is in excess of one fiscal year. The fixed assets are only recognized when the relevant economic benefits
probably flow in the Company and its cost could be reliable measured.
(2) Depreciation Method
Category of fixed assets Method Useful life Annual deprecation
Housing and building Average method of
20-40 years 2.50%-5%
useful life
Machinery equipment Average method of
6-15 years 6.67%-16.67%
useful life
Transportation Average method of
5-10 years 10%-20%
equipment useful life
Average method of
Other equipment 5-10 years 10%-20%
useful life
(3) Recognition Basis, Pricing and Depreciation Method of Fixed Assets by Finance Lease
97
Changchai Company, Limited Interim Report 2023
The Company recognizes those meet with the following one or certain standards as the fixed assets by finance
lease:
1) The leasing contract had agreed that (or made the reasonable judgment according to the relevant conditions on
the lease starting date) when the lease term expires, the ownership of leasing the fixed assets could be transferred
to the Company;
2) The Company owns the choosing right for purchasing and leasing the fixed assets, with the set purchase price
which is estimated far lower than the fair value of the fixed assets by finance lease when executing the choosing
right, so the Company could execute the choosing right reasonably on the lease starting date;
3) Even if the ownership of the fixed assets not be transferred, the lease period is of 75% or above of the useful
life of the lease fixed assets;
4) The current value of the minimum lease payment on the lease starting date of the Company is equal to 90% or
above of the fair value of the lease fixed assets on the lease starting date; the current value of the minimum lease
receipts on the lease starting date of the leaser is equal to 90% or above of the fair value of the lease fixed assets
on the lease starting date;
5) The nature of the lease assets is special that only the Company could use it if not execute large transformation.
The fixed assets by finance lease should take the lower one between the fair value of the leasing assets and the
current value of the minimum lease payment on the lease starting date as the entry value. As for the minimum
lease payment which be regarded as the entry value of the long-term accounts payable, its difference should be
regarded as the unrecognized financing expense. For the initial direct expenses occur in the lease negotiations and
the signing process of the lease contracts that attribute to the handling expenses, counsel fees, travel expenses and
stamp taxes of the lease items, should be included in the charter-in assets value. The unrecognized financing
expenses should be amortized by adopting the actual interest rate during the period of the lease term.
The fixed assets by finance lease shall adopt the same depreciation policy for self-owned fixed assets. If it is
reasonable to be certain that the lessee will obtain the ownership of the leased asset when the lease term expires,
the leased asset shall be fully depreciated over its useful life. If it is not reasonable to be certain that the lessee will
obtain the ownership of the leased asset at the expiry of the lease term, the leased asset shall be fully depreciated
over the shorter one of the lease term or its useful life
21. Construction in Progress
(1) Valuation of the progress in construction
Construction in progress shall be measured at actual cost. Self-operating projects shall be measured at direct
materials, direct wages and direct construction fees; construction contract shall be measured at project price
payable; project cost for plant engineering shall be recognized at value of equipments installed, cost of installation,
trail run of projects. Costs of construction in process also include borrowing costs and exchange gains and losses,
which should be capitalized.
(2) Standardization on construction in process transferred into fixed assets and time point
The construction in process, of which the fixed assets reach to the predicted condition for use, shall carry forward
fixed assets on schedule. The one that has not audited the final accounting shall recognize the cost and make
depreciation in line with valuation value. The construction in process shall adjust the original valuation value at its
historical cost but not adjust the depreciation that has been made after auditing the final accounting.
22. Borrowing Costs
(1) Recognition principle of capitalization of borrowing costs
The borrowing costs shall include the interest on borrowings, amortization of discounts or premiums on
98
Changchai Company, Limited Interim Report 2023
borrowings, ancillary expenses, and exchange balance on foreign currency borrowings. Where the borrowing
costs occurred belong to specifically borrowed loan or general borrowing used for the acquisition and construction
of investment real estates and inventories over one year (including one year) shall be capitalized, and record into
relevant assets cost. Other borrowing costs shall be recognized as expenses on the basis of the actual amount
incurred, and shall be recorded into the current profits and losses. The borrowing costs shall not be capitalized
unless they simultaneously meet the following three requirements: (1) The asset disbursements have already
incurred; (2) The borrowing costs have already incurred; and (3) The acquisition and construction or production
activities which are necessary to prepare the asset for its intended use or sale have already started.
(2) The period of capitalization of borrowing costs
The borrowing costs arising from acquisition and construction of fixed assets, investment real estates and
inventories, if they meet the above-mentioned capitalization conditions, the capitalization of the borrowing costs
shall be measured into asset cost before such assets reach to the intended use or sale, Where acquisition and
construction of fixed assets, investment real estates and inventories is interrupted abnormally and the interruption
period lasts for more than 3 months, the capitalization of the borrowing costs shall be suspended, and recorded
into the current expense, till the acquisition and construction of the assets restarts. When the qualified asset is
ready for the intended use or sale, the capitalization of the borrowing costs shall be ceased, the borrowing costs
occurred later shall be included into the financial expense directly at the current period.
(3) Measurement method of capitalization amount of borrowing costs
As for specifically borrowed loans for the acquisition and construction or production of assets eligible for
capitalization, the to-be-capitalized amount of interests shall be determined in light of the actual cost incurred of
the specially borrowed loan at the present period minus the income of interests earned on the unused borrowing
loans as a deposit in the bank or as a temporary investment.
Where a general borrowing is used for the acquisition and construction or production of assets eligible for
capitalization, the enterprise shall calculate and determine the to-be-capitalized amount of interests on the general
borrowing by multiplying the weighted average asset disbursement of the part of the accumulative asset
disbursements minus the general borrowing by the capitalization rate of the general borrowing used. The
capitalization rate shall be calculated and determined in light of the weighted average interest rate of the general
borrowing.
23. Intangible Assets
(1) Pricing Method, Service Life, and Impairment Test
(1) Pricing method of intangible assets
Intangible assets purchased should take the actual payment and the relevant other expenses as the actual cost.
For the intangible assets invested by the investors should be recognized the actual cost according to the value of
the investment contracts or agreements, however, for the value of the contracts or agreements is not fair, the actual
cost should be recognized according to the fair value.
For the intangible assets acquires from the exchange of the non-currency assets, if own the commercial nature,
should be recorded according to the fair value of the swap-out assets; for those not own the commercial nature,
should be recorded according to the book value of the swap-out assets.
For the intangible assets acquires from the debts reorganization should be recognized by the fair value.
(2) Amortization method and term of intangible assets
As for the intangible assets with limited service life, which are amortized by straight-line method when it is
available for use within the service period, shall be recorded into the current profits and losses. The Company
shall, at least at the end of each year, check the service life and the amortization method of intangible assets with
99
Changchai Company, Limited Interim Report 2023
limited service life. When the service life and the amortization method of intangible assets are different from those
before, the years and method of the amortization shall be changed.
Intangible assets with uncertain service life may not be amortized. However, the Company shall check the service
life of intangible assets with uncertain service life during each accounting period. Where there are evidences to
prove the intangible assets have limited service life, it shall be estimated of its service life, and be amortized
according to the above method mentioned.
The rights to use land of the Company shall be amortized according to the rest service life.
(2) Accounting Polices of Internal R & D Costs
The internal research and development projects of an enterprise shall be classified into research phase and
development phase: the term “research” refers to the creative and planned investigation to acquire and understand
new scientific or technological knowledge; the term “development” refers to the application of research
achievements and other knowledge to a certain plan or design, prior to the commercial production or use, so as to
produce any new material, device or product, or substantially improved material, device and product.
The Company collects the costs of the corresponding phases according to the above standard of classifying the
research phase and the development phase. The research expenditures for its internal research and development
projects of an enterprise shall be recorded into the profit or loss for the current period. The development costs for
its internal research and development projects of an enterprise may be capitalized when they satisfy the following
conditions simultaneously: it is feasible technically to finish intangible assets for use or sale; it is intended to
finish and use or sell the intangible assets; the usefulness of methods for intangible assets to generate economic
benefits shall be proved, including being able to prove that there is a potential market for the products
manufactured by applying the intangible assets or there is a potential market for the intangible assets itself or the
intangible assets will be used internally; it is able to finish the development of the intangible assets, and able to
use or sell the intangible assets, with the support of sufficient technologies, financial resources and other resources;
the development costs of the intangible assets can be reliably measured.
24. Impairment of Long-term Assets
For non-current financial Assets of fixed Assets, projects under construction, intangible Assets with limited
service life, investing real estate with cost model, long-term equity investment of subsidiaries, cooperative
enterprises and joint ventures, the Company should judge whether decrease in value exists on the date of balance
sheet. Recoverable amounts should be tested for decrease in value if it exists. Other intangible Assets of reputation
and uncertain service life and other non-accessible intangible assets should be tested for decrease in value no
matter whether it exists.
If the recoverable amount is less than book value in impairment test results, the provision for impairment of
differences should include in impairment loss. Recoverable amounts would be the higher of net value of asset fair
value deducting disposal charges or present value of predicted cash flow. Asset fair value should be determined
according to negotiated sales price of fair trade. If no sales agreement exists but with asset active market, fair
value should be determined according to the Buyer’s price of the asset. If no sales agreement or asset active
market exists, asset fair value could be acquired on the basis of best information available. Disposal expenses
include legal fees, taxes, cartage or other direct expenses of merchantable Assets related to asset disposal. Present
value of predicted asset cash flow should be determined by the proper discount rate according to Assets in service
and predicted cash flow of final disposal. Asset depreciation reserves should be calculated on the basis of single
Assets. If it is difficult to predict the recoverable amounts for single Assets, recoverable amounts should be
determined according to the belonging asset group. Asset group is the minimum asset combination producing cash
100
Changchai Company, Limited Interim Report 2023
flow independently.
In impairment test, book value of the business reputation in financial report should be shared to beneficial asset
group and asset group combination in collaboration of business merger. It is shown in the test that if recoverable
amounts of shared business reputation asset group or asset group combination are lower than book value, it should
determine the impairment loss. Impairment loss amount should firstly be deducted and shared to the book value of
business reputation of asset group or asset group combination, then deduct book value of all assets according to
proportions of other book value of above assets in asset group or asset group combination except business
reputation.
After the asset impairment loss is determined, recoverable value amounts would not be returned in future.
25. Long-term Deferred Expenses
Long-term deferred expanses of the Company shall be recorded in light of the actual expenditure, and amortized
averagely within benefit period. In case of no benefit in the future accounting period, the amortized value of such
project that fails to be amortized shall be transferred into the profits and losses of the current period.
26. Contract Liabilities
Contract liabilities refer to the Company’s obligations in transferring commodities or services to the client for the
received or predicted consideration. Contract assets and contract liabilities under the same contract shall be
presented based on the net amount.
27. Employee Benefits
(1) Accounting Treatment of Short-term Compensation
Short-term compensation mainly including salary, bonus, allowances and subsidies, employee services and
benefits, medical insurance premiums, birth insurance premium, industrial injury insurance premium, housing
fund, labor union expenditure and personnel education fund, non-monetary benefits etc. The short-term
compensation actually happened during the accounting period when the active staff offering the service for the
Company should be recognized as liabilities and is included in the current gains and losses or relevant assets cost.
Of which the non-monetary benefits should be measured according to the fair value.
(2) Accounting Treatment of the Welfare after Demission
The Company classifies the welfare plans after demission into defined contribution plans and defined benefit
plans. Welfare plans after demission refers to the agreement on the welfare after demission reaches between the
Company and the employees, or the regulations or methods formulated by the Company for providing the welfare
after demission for the employees. Of which, defined contribution plans refers to the welfare plans after demission
that the Company no more undertake the further payment obligations after the payment of the fixed expenses for
the independent funds; defined benefit plans, refers to the welfare plans after demission except for the defined
contribution plans.
Defined contribution plans
During the accounting period that the Company providing the service for the employees, the Company should
recognize the liabilities according to the deposited amount calculated by defined contribution plans, and should be
included in the current gains and losses or the relevant assets cost.
101
Changchai Company, Limited Interim Report 2023
(3) Accounting Treatment of the Demission Welfare
The Company should recognize the payroll payment liabilities occur from the demission welfare according to the
earlier date between the following two conditions and include which in the current gains and losses when
providing the demission welfare for the employees: the Company could not unilaterally withdraw the demission
welfare owning to the relieve plans of the labor relationship or reduction; when the Company recognizing the
costs or expenses related to the reorganization involves with the demission welfare payments.
28. Lease Liabilities
On the commencement date of the lease term, the Company recognizes the present value of unpaid lease payments
as lease liabilities. Lease payments include: fixed payment and substantial fixed payment, and the relevant amount
after the lease incentive (if any) is deducted; variable lease payments that depend on indexation or ratio, which are
determined according to the indexation or ratio on the commencement date of the lease term in the initial
measurement; exercise price of the purchased option, provided that the lessee reasonably determines that the
option will be exercised; the amount to be paid for the exercise of the lease termination options, provided that the
lease term reflects that the lessee will exercise the options to terminate the lease; and estimated payments due to
the guaranteed residual value provided by the lessee.
The Company uses the interest rate implicit in lease as the rate of discount when calculating the present value of
the lease payments. The incremental lending rate of the lessee will be used as the rate of discount, if the interest
rate implicit in lease cannot be determined. The Company calculates the interest charge of the lease liabilities in
each period of the lease term at a fixed periodic interest rate and includes it in the profit or loss of the current
period, unless such interest charge is stipulated to be included in the underlying asset costs. Variable lease
payments that are not included in the measurement of the lease liabilities should be included in the profit or loss of
the current period when they are actually incurred, unless such payments are stipulated to be included in the
underlying asset costs. The Company will re-calculate the lease liabilities using the present value of the changed
lease payments, if the substantial fixed payment, the estimated payments due to the guaranteed residual value, the
index or rate used to determine the lease payments, or the assessment result of the call option, the renewal option,
or the termination option, or the actual exercise changes, after the commencement date of the lease term.
29. Provisions
(1) Criteria of provisions
Only if the obligation pertinent to a contingencies shall be recognized as an estimated debts when the following
conditions are satisfied simultaneously:
1) That obligation is a current obligation of the Company;
2) It is likely to cause any economic benefit to flow out of the Company as a result of performance of the
obligation;
3) The amount of the obligation can be measured in a reliable way.
(2) Measurement of provisions
The Company shall measure the provisions in accordance with the best estimate of the necessary expenses for the
performance of the current obligation.
102
Changchai Company, Limited Interim Report 2023
The Company shall check the book value of the provisions on the Balance Sheet Date. If there is any conclusive
evidence proving that the said book value can’t truly reflect the current best estimate, the Company shall, subject
to change, make adjustment to carrying value to reflect the current best estimate.
30. Revenue
Accounting policies for recognition and measurement of revenue:
When the Company fulfills its due performance obligations (namely when the client obtains the control over
related commodities or services), revenues shall be recognized based on the obligation’s amortized transaction
price. Performance Obligation refers to the Company’s promise of transferring commodities or services that can
be clearly defined to the client. Transaction Price refers to the consideration amount duly charged by the Company
for transferring commodities or services to the client, excluding any amount charged by the third party and any
amount predicted to be returned to the client. Control Over Relevant Commodities means that the use of
commodities can be controlled and almost all economic interests can be obtained.
On the contract commencement day, the Company shall evaluate the contract, recognize individual performance
obligation and confirm that individual performance obligation is fulfilled in a certain period. When one of the
following conditions is met, such performance obligation shall be deemed as fulfilled in a certain period, and the
Company shall recognize it as revenue within a certain period according to the performance schedule: (1) the
client obtains and consumes the economic interests resulting from the Company’s performance of contract while
performing the contract; (2) the client is able to control the commodities under construction during the
performance; (3) commodities produced by the Company during the performance possess the irreplaceable
purpose, and the Company has the right to charge all finished parts during the contract period; otherwise, the
Company shall recognize the revenue when the client obtains the control over relevant commodities or services.
The Company shall adopt the Input Method to determine the Performance Schedule. Namely, the Performance
Schedule shall be determined according to the Company’s input for fulfilling performance obligations. When the
Performance Schedule cannot be reasonably determined and all resulting costs are predicted to be compensated,
the Company shall recognize the revenue based on the resulting cost amount till the Performance Schedule can be
reasonably determined.
When the contract involves two or more than two performance obligations, the transaction price shall be
amortized to each single performance obligation on the contract commencement day according to the relative
proportion of the independent selling price of commodities or services under each single performance obligation.
If any solid evidence proves that the contract discount or variable consideration only relates to one or more than
one (not all) performance obligation under the contract, the Company shall amortize the contract discount or
variable consideration to one or more than one related performance obligations. Independent selling price refers to
the price adopted by the Company to independently sell commodities or services to the client. However,
independent selling price cannot be directly observed. The Company shall estimate the independent selling price
by comprehensively considering all related information that can be reasonably obtained and maximally adopting
the observable input value.
Variable Consideration
If any variable consideration exists in the contract, the Company shall determine the optimal estimation of the
variable consideration based on the expected values or the most possible amount. The variable consideration’s
transaction price shall be included without exceeding the total revenue amount recognized without the risk of
significant restitution when all uncertainties are eliminated. On each balance sheet day, the Company shall
re-estimate the variable consideration amount to be included in the transaction price.
103
Changchai Company, Limited Interim Report 2023
Consideration Payable to the Client
If any consideration payable to the client exists in the contract, the Company shall use such consideration to offset
the transaction price unless such consideration is paid for acquiring other clearly-defined commodities or services
from the client, and write down the current revenue at the later time between the time of recognizing relevant
revenues and the time of paying (or promising the payment) the consideration to the client.
Sales with the Quality Assurance
For sales with the Quality Assurance, if the Quality Assurance involves another separate service except for the
guarantee of all sold commodities or services meeting all established standards, the Quality Assurance shall
constitute a single Performance Obligation; otherwise, the Company shall make corresponding accounting
treatment to the Quality Assurance according to ASBE No.13--Contingency.
Main Responsibility Person/Agent
According to whether the control over commodities or services is obtained before they are transferred to the client,
the Company can judge whether it is Main Responsibility Person or Agent based on its status during the
transaction. If the Company can control commodities or services before they are transferred to the client, the
Company shall be Main Responsibility Person, and revenues shall be recognized according to the total
consideration amount received or to be received; otherwise, the Company shall be Agent, and revenues shall be
recognized according to the commission or service fees predicted to be duly charged. However, such amount shall
be determined based on the net amount after deducting other amounts payable to other related parties from the
total consideration received or to be duly received or the fixed commission amount or proportion.
Specific methods
The specific methods of the Company's revenue recognition are as follows:
The sale contract between the Company and its customers usually contains only the performance obligation for
the transfer of goods, which is satisfied at a point in time.
The following requirements must be met to confirm the revenue of domestic products: The Company has
delivered the goods to the customer in accordance with the contract and the customer has accepted the goods. The
payment has been recovered or the receipt voucher has been obtained, and the relevant economic benefits are
likely to flow in. The customer has obtained control of the relevant goods. The main risks and rewards of product
ownership have been transferred. The legal ownership of the goods has been transferred.
The following requirements must be met to confirm the revenue of export products: The Company has declared
the products in accordance with the contract, obtained the bills of lading, and received the payment or obtained the
receipt voucher and the related economic benefits are likely to flow in. The main risks and rewards of product
ownership have been transferred. The legal ownership of the goods has been transferred.
Interest Revenue
Interest Revenue shall be determined according to the time of the Company’s use of monetary capital and the
actual interest rate.
31. Government Grants
(1) Type
A government grant means the monetary or non-monetary assets obtained free by an enterprise from the
government. Government grants consist of the government grants pertinent to assets and government grants
pertinent to income according to the relevant government documents.
For those the government documents not definite stipulate the assistance object, the judgment basis of the
104
Changchai Company, Limited Interim Report 2023
Company classifies the government grants pertinent to assets and government subsidies pertinent to income is:
whether are used for purchasing or constructing or for forming the long-term assets by other methods.
(2) Recognition of Government Subsidies
The government subsidies should be recognized only when meet with the attached conditions of the government
grants as well as could be acquired.
If the government grants are the monetary assets, should be measured according to the received or receivable
amount; and for the government grants are the non-monetary assets, should be measured by fair value.
(3) Accounting Treatment
The government grants pertinent to assets shall be recognized as deferred income, and included in the current
gains and losses or offset the book value of related assets within the useful lives of the relevant assets with a
reasonable and systematic method. Government grants pertinent to income used to compensate the relevant costs,
expenses or losses of the Company in the subsequent period shall be recognized as deferred income, and shall be
included in the current profit and loss during the period of confirming the relevant costs, expenses or losses; those
used to compensate the relevant costs, expenses or losses of the Company already happened shall be included in
the current gains and losses or used to offset relevant costs directly.
For government grants that include both assets-related and income-related parts, they should be distinguished
separately for accounting treatment; for government subsidies that are difficult to be distinguished, they should be
classified as income-related.
Government grants related to the daily activities of the Company shall be included into other income or used to
offset relevant costs by the nature of economic business; those unrelated shall be included into non-operating
income.
The government grants recognized with relevant deferred income balance but need to return shall be used to offset
the book balance of relevant deferred income, the excessive part shall be included in the current gains and losses
or adjusting the book value of assets for the government grants assets-related that offset the book value of relevant
assets when they are initially recognized; those belong to other cases shall be directly included in the current gains
and losses.
32. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Basis of recognizing the deferred income tax assets
According to the difference between the book value of the assets and liabilities and their tax basis, a deferred tax
asset shall be measured in accord with the tax rates that are expected to apply to the period when the asset is
realized or the liability is settled.
The recognition of the deferred income tax assets is limited by the income tax payable that the Company probably
gains for deducting the deductible temporary differences. At the balance sheet date, where there is strong evidence
showing that sufficient taxable profit will be available against which the deductible temporary difference can be
utilized, the deferred tax asset unrecognized in prior period shall be recognized.
The Company assesses the carrying amount of deferred tax asset at the balance sheet date. If it’s probable that
sufficient taxable profit will not be available against which the deductible temporary difference can be utilized, the
Company shall write down the carrying amount of deferred tax asset, or reverse the amount written down later
when it’s probable that sufficient taxable profit will be available.
(2) Basis of recognizing the deferred income tax liabilities
105
Changchai Company, Limited Interim Report 2023
According to the difference between the book value of the assets and liabilities and their tax basis, A deferred tax
liability shall be measured in accord with the tax rates that are expected to apply to the period when the asset is
realized or the liability is settled.
33. Lease
The term "lease" refers to a contract whereby the lessor transfers the right of use regarding the leased asset(s) to
the lessee within a specified time in exchange for consideration. From the effective date of a contract, the
Company assesses whether the contract is a lease or includes any lease. If a party to the contract transferred the
right allowing the control over the use of one or more assets that have been identified within a certain period, in
exchange for a consideration, such contract is a lease or includes a lease. If a contract contains multiple single
leases at the same time, the Company will split the contract, and conduct accounting treatment of each single lease
respectively. If a contract contains both lease and non-lease parts at the same time, the lessee and lessor will split
the lease and non-lease parts.
(1) The Company as the lessee
See Note 28 (lease liabilities) for the general accounting treatment of the Company as the lessee.
For short-term leases with a lease term not exceeding 12 months and leases of low-value assets when single leased
assets are brand new assets, the Company chooses not to recognize right-of-use assets and lease liabilities, and
records relevant rental expenses into the profit or loss of the current period or the underlying asset costs on a
straight-line basis in each period within the lease term.
If a lease changes and meets the following conditions at the same time, the Company will account for the lease
change as a separate lease: the lease change expands the lease scope by increasing the right to use one or more
leased assets; the increased consideration is equivalent to the separate price of the expanded lease scope adjusted
according to the contract. Where the lease change is not accounted for as a separate lease, on the effective date of
the lease change, the Company will allocate the consideration of the changed contract and re-determine the
changed lease term. The present value determined based on the changed lease payments and the revised rate of
discount are used to remeasure the lease liabilities.
(2) The Company as the lessor
On the commencement date of the lease term, the Company classifies the leases that substantially transfer almost
all risks and rewards related to the ownership of the leased assets as finance leases, and leases other than finance
leases as operating leases.
1) Operating lease
The Company recognizes the lease payments receivable as rentals in each period within the lease term on a
straight-line basis. The Company capitalizes the initial direct costs related to operating leases upon incurrence
thereof and apportions and includes such costs in the profit or loss of the current period on the basis same as the
recognition of rentals. The received variable lease payments related to operating leases that are not included in the
lease payments receivable are included in profit or loss of the current period when they are actually incurred.
2) Financial lease
On the commencement date of the lease term, the Company recognizes the finance lease receivables on the basis
of net investment in the lease (the sum of the unguaranteed residual value and the present value of the lease
payments receivable not yet received on the commencement date of the lease term discounted at the interest rate
implicit in lease) and derecognizes the leased asset of the finance lease. The Company calculates and recognizes
interest income based on the interest rate implicit in lease in each period within the lease term. The received
106
Changchai Company, Limited Interim Report 2023
variable lease payments that are not covered in the measurement of the net investment in the lease are included in
the profit or loss of the current period when actually incurred.
(3) Sale and leaseback
The Company assesses whether the asset transfer in a sale and leaseback transaction is a sale in accordance with
relevant provisions of the Accounting Standards for Business Enterprises No. 14 - Income.
1) The Company as the lessee
If the asset transfer in a sale and leaseback transaction is a sale, the Company measures the right-of-use assets
formed by the sale and leaseback based on the portion of the original asset's carrying value that is related to the
use right acquired by the leaseback, and recognizes related gains or losses only for the right transferred to the
lessor.
If the asset transfer in a sale and leaseback transaction is not a sale, the Company continues to recognize the
transferred asset and at the same time recognizes a financial liability equivalent to the transfer income, and
conducts corresponding accounting treatment for the financial liability in accordance with the Accounting
Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments.
2) The Company as the lessor
If the asset transfer in a sale and leaseback transaction is a sale, the Company applies other accounting standards
for business enterprises to the accounting treatment for asset purchase, and conducts corresponding accounting
treatment for asset lease in accordance with the Accounting Standard for Business Enterprises No. 21 - Leases.
If the asset transfer in a sale and leaseback transaction is not a sale, the Company does not recognize the
transferred asset, but recognizes a financial asset equivalent to the transfer income, and conducts corresponding
accounting treatment for the financial asset in accordance with the Accounting Standards for Business Enterprises
No. 22 - Recognition and Measurement of Financial Instruments.
34. Other Significant Accounting Policies and Accounting Estimates
The Company evaluates the important accounting estimates and key assumptions adopted on an ongoing basis,
based on historical experience and other factors, including reasonable expectations of future events. Important
accounting estimates and critical assumptions that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next fiscal year are listed as follows:
(1) Classification of financial assets
The significant judgments involved when the Company determines the classification of financial assets include
analysis of business models and contractual cash flow characteristics. The Company determines the business
model for managing financial assets at the level of the financial asset portfolio, taking into account factors such as
the approach of evaluating and reporting the performance of financial assets to key management personnel, the
risks affecting the performance of financial assets and the manner in which they are managed, and way in which
the relevant business management personnel are compensated.
The following main judgments exist in assessing whether the contractual cash flows of financial assets are
consistent with the basic lending arrangements:
Whether the time distribution or amount of the principal amount during the duration may change due to early
repayment or for other reasons; whether the interest includes only the time value of money, credit risk, other basic
lending risks and consideration against costs and profits. For example, whether the amount of early repayment
reflects only the outstanding principal and interest based on the outstanding principal, as well as reasonable
compensation paid for early termination of the contract.
107
Changchai Company, Limited Interim Report 2023
(2) Measurement of expected credit losses of accounts receivable
The Company calculates the expected credit loss of accounts receivable using the exposure to default risk of
accounts receivable and the expected credit loss ratio, and determines the expected credit loss ratio based on the
probability of default and the default loss ratio. When determining the expected credit loss ratio, the Company
uses data such as internal historical credit loss experience and adjusts historical data to take into account current
conditions and forward-looking information. When considering forward-looking information, the Company uses
indicators such as the risk of economic downturn and changes in the external market environment, technological
environment and customer profile. The Company regularly monitors and reviews the assumptions related to the
calculation of expected credit losses.
(3) Inventory falling price reserves
The Company follows the inventory accounting policy and carries out measurement based on which is smaller
between the cost and the net realizable value. If the cost of inventories is higher than its net realizable value, then
the inventory falling prices reserves were implemented. The impairment of inventories to net realizable value is
based on an assessment of the marketability of the inventories and their net realizable value. The management
shall determine the impairment of inventories after obtaining reliable evidence while taking into account the
purpose of holding inventories, the effect of items after the balance sheet date, and other factors. Differences
between actual results and original estimates will affect the carrying value of inventories and the provision or
reversal of reverses for falling prices of inventories in the period in which the estimates are changed.
(4) Determination of fair value of unlisted equity investment
The fair value of unlisted equity investment is the expected future cash flows discounted at the current discount
rate for items with similar terms and risk characteristics. Such valuation requires the Company to estimate
expected future cash flows and discount rates and is therefore subject to uncertainty. Under limited circumstances,
if the information used to determine fair value is insufficient, or if the range of possible estimates of fair value is
wide and the cost represents the best estimate of fair value within that range, the cost may represent its appropriate
estimate of fair value within that range of distribution.
(5) Reserves for long-term assets impairment
The Company determines at the balance sheet date whether there is any indication that a non-current asset, other
than a financial asset, may be impaired. For intangible assets with an uncertain useful life, impairment tests shall
be conducted when there is an indication of impairment besides the annual impairment test. Other non-current
assets other than financial assets shall be tested for impairment when there is an indication that the carrying
amount is irrecoverable.
An impairment is indicated when the carrying amount of an asset or asset group is greater than the recoverable
amount, which is the higher of the fair value minus disposal expenses and the present value of estimated future
cash flows.
The net value of the fair value minus disposal expenses is determined by referring to the negotiable sale price or
observable market price of similar assets in a fair transaction and deducting incremental costs directly attributable
to the disposal of the asset.
Estimating the present value of future cash flows requires significant judgments with respect to the production
volume of the asset (or asset group), the selling price, the related operating costs and the discount rate used in
calculating the present value. The Company uses all available relevant information in estimating recoverable
amounts, including projections of volumes, selling prices and related operating costs based on reasonable and
supportable assumptions.
(6) Depreciation and amortization
108
Changchai Company, Limited Interim Report 2023
The Company depreciates and amortizes investment properties, fixed assets and intangible assets on a straight-line
basis within their service lives after taking into account their residual values. The Company regularly reviews
service lives to determine the amount of depreciation and amortization expenses to be included in each reporting
period. The service life is determined by the Company based on past experience with similar assets and expected
technological updates. Depreciation and amortization expenses will be adjusted in the future period if there is a
significant change in previous estimates.
(7) Deferred income tax assets
To the extent that it is probable that sufficient taxable profit will be available to offset the losses, the Company
recognizes deferred income tax assets for all unused tax losses. This requires the Company's management to use
many judgments to estimate the timing and amount of future taxable profits, taking into account tax planning
strategies, so as to determine the amount of deferred income tax assets to be recognized.
(8) Income tax
In the normal operating activities of the Company, the ultimate tax treatment and calculation of certain
transactions are subject to certain uncertainties. Whether some items can be disbursed before tax requires the
approval of the tax authorities. If the final determination of these tax matters differs from the amounts initially
estimated, the difference will have an impact on current and deferred income taxes in the period in which they are
finally determined.
35. Changes in Main Accounting Policies and Estimates
(1) Change of Accounting Policies
□ Applicable √ Not applicable
(2) Changes in Accounting Estimates
□ Applicable √ Not applicable
(3) Adjustments to Financial Statement Items at the Beginning of the Year of the First Implementation of
the New Accounting Standards Implemented since 2023
□ Applicable √ Not applicable
VI. Taxation
1. Main Taxes and Tax Rate
Category of taxes Tax basis Tax rate
VAT Payable to sales revenue 13%, 9%, 6%, 5%
Urban maintenance and Tax paid in accordance with the tax
Taxable turnover amount
construction tax regulations of tax units location
Enterprise income tax Taxable income 25%、15%、5%
Education surcharge Taxable turnover amount 5%
Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate
Name Income tax rate
109
Changchai Company, Limited Interim Report 2023
Changchai Company, Limited 15%
Changchai Wanzhou Diesel Engine Co., Ltd. 15%
Changzhou Changchai Benniu Diesel Engine Fittings
25%
Co., Ltd.
Changzhou Horizon Investment Co., Ltd. 25%
Changzhou Changchai Horizon Agricultural
25%
Equipment Co., Ltd.
Changzhou Fuji Changchai Robin Gasoline Engine
15%
Co., Ltd.
Jiangsu Changchai Machinery Co., Ltd. 25%
Changzhou Xingsheng Real Estate Management Co.,
5%
Ltd.
Zhenjiang Siyang Diesel Engine Manufacturing Co.,
15%
Ltd.
2. Tax Preference
On 30 November 2021, the Company obtained the Certificates for High-tech Enterprises again, and it still enjoys
15-percent preferential rate for corporate income tax during the Reporting Period; the Company’s controlling
subsidiary-Changchai Wanzhou Diesel Engine Co., Ltd., the controlling subsidiary company, shall pay the
corporate income tax at tax rate 15% from 1 January 2011 to 31 December 2030 in accordance with the Notice of
the Ministry of Finance, the General Administration of Customs of PRC and the National Administration of
Taxation about the Preferential Tax Policies for the Western Development and Ministry of Finance Announcement
No. 23 [2020] Announcement of the Ministry of Finance, the State Administration of Taxation and the National
Development and Reform Commission on Continuing the Enterprise Income Tax Policy for the Great Western
Development. On 2 December 2020, the wholly-owned subsidiary Changzhou Fuji Changchai Robin Gasoline
Engine Co., Ltd. obtained the "High-tech Enterprise Certificate" and enjoyed a 15% preferential corporate income
tax rate during the Reporting Period; The wholly-owned subsidiary Changzhou Xingsheng Real Estate
Management Co., Ltd. is eligible small enterprise with low profits and shall pay the corporate income tax at tax
rate 5% for small enterprises with low profits during the Reporting Period; the subsidiary Zhenjiang Siyang Diesel
Engine Manufacturing Co., Ltd. obtained the "High-tech Enterprise Certificate" and enjoyed a 15% preferential
corporate income tax rate during the Reporting Period.
VII. Notes to Major Items in the Consolidated Financial Statements of the Company
1. Monetary Assets
Unit: RMB
Item Ending balance Beginning balance
Cash on hand 230,083.56 251,965.06
Bank deposits 675,401,119.95 830,914,999.19
Other monetary assets 175,882,910.41 98,846,386.72
110
Changchai Company, Limited Interim Report 2023
Total 851,514,113.92 930,013,350.97
Total amount of
restriction in use by mortgage, 173,206,532.10 95,662,384.92
pledge or freeze
At the period-end, the restricted monetary assets of the Company was RMB173,206,532.10, of which
RMB168,629,080.81 was the cash deposit for bank acceptance bills, RMB2,993,220.00 was cash deposit for L/G,
RMB871,348.35 was cash deposit for environment and RMB712,882.94 was cash deposit for L/C.
2. Trading Financial Assets
Unit: RMB
Item Ending balance Beginning balance
Financial assets at fair value
361,470,809.32 370,103,602.57
through profit or loss
Of which:
Stocks 111,116,698.21 78,739,311.00
Financial products 250,354,111.11 291,364,291.57
Of which:
Total 361,470,809.32 370,103,602.57
3. Notes Receivable
(1) Notes Receivable Listed by Category
Unit: RMB
Item Ending balance Beginning balance
Bank acceptance bill 303,323,811.21 297,125,872.54
Total 303,323,811.21 297,125,872.54
If the bad debt provision for notes receivable was withdrawn in accordance with the general model of expected
credit losses, information related to bad debt provision shall be disclosed by reference to the disclosure method of
other receivables:
□ Applicable √ Not applicable
(2) There Were No Notes Receivable Pledged by the Company at the Period-end
(3) Notes Receivable which Had Endorsed by the Company or had Discounted but had not Due on the
Balance Sheet Date at the Period-end
Unit: RMB
Amount of recognition termination Amount of not terminated
Item
at the period-end recognition at the period-end
111
Changchai Company, Limited Interim Report 2023
Bank acceptance bill 213,721,703.95
Total 213,721,703.95
(4) There Were No Notes Transferred to Accounts Receivable because Drawer of the Notes Failed to
Execute the Contract or Agreement at the Period-end
4. Accounts Receivable
(1) Accounts Receivable Classified by Category
Unit: RMB
Ending balance Beginning balance
Carrying Bad debt Carrying Bad debt
amount provision amount provision
Carryi
Category Withd Withd Carryin
ng
Amou Propo Amou rawal Amou Propor Amou rawal g value
value
nt rtion nt propo nt tion nt propor
rtion tion
Accounts
receivable for
which bad debt 51,75 34,51 17,23 51,75 34,367
66.69 66.40 17,389,
7,257. 4.71% 8,555. 8,702. 7,257. 9.91% ,361.8
provision % % 896.16
99 59 40 99 3
separately
accrued
Accounts
receivable for
which bad debt 1,047, 130,1 917,5 470,4 117,47
95.29 12.42 90.09 24.97 352,932
675,9 24,17 51,72 11,04 8,758.
provision % % % % ,283.61
00.30 0.86 9.44 2.15 54
accrued by
group
Of which:
Accounts
receivable for
which bad debt 1,047, 130,1 917,5 470,4 117,47
95.29 12.42 90.09 24.97 352,932
provision 675,9 24,17 51,72 11,04 8,758.
% % % % ,283.61
accrued by 00.30 0.86 9.44 2.15 54
credit risk
features group
1,099, 164,6 934,7 522,1 151,84
100.0 14.98 100.00 29.08 370,322
Total 433,1 42,72 90,43 68,30 6,120.
0% % % % ,179.77
58.29 6.45 1.84 0.14 37
Account receivables withdrawn bad debt provision separately with significant amount at the period end:
112
Changchai Company, Limited Interim Report 2023
Unit: RMB
Ending balance
Name Withdrawal
Carrying amount Bad debt provision Reason of withdrawal
proportion
Customer1 1,470,110.64 1,470,110.64 100.00% Difficult to recover
Customer2 1,902,326.58 1,902,326.58 100.00% Difficult to recover
Customer3 6,215,662.64 6,215,662.64 100.00% Difficult to recover
Customer4 2,797,123.26 2,194,980.28 78.47% Expected to difficultly recover
Customer5 3,633,081.23 2,122,165.73 58.41% Expected to difficultly recover
Customer6 2,584,805.83 2,584,805.83 100.00% Difficult to recover
Customer7 1,731,493.71 1,731,493.71 100.00% Difficult to recover
Customer8 1,511,937.64 755,968.82 50.00% Expected to difficultly recover
Customer9 3,329,074.84 720,031.71 21.63% Expected to difficultly recover
Customer10 2,025,880.18 2,025,880.18 100.00% Difficult to recover
Customer11 5,972,101.90 5,972,101.90 100.00% Difficult to recover
Customer12 4,592,679.05 4,592,679.05 100.00% Difficult to recover
Total 37,766,277.50 32,288,207.07 -- --
Accounts receivable for which bad debt provision accrued by credit risk features group:
Unit: RMB
Ending balance
Aging
Carrying amount Bad debt provision Withdrawal proportion
Within 1 year 898,214,835.94 17,964,296.72 2.00%
1 to 2 years 28,644,358.99 1,432,217.95 5.00%
2 to 3 years 9,017,979.76 1,352,696.96 15.00%
3 to 4 years 2,403,195.36 720,958.61 30.00%
4 to 5 years 1,853,824.07 1,112,294.44 60.00%
Over 5 years 107,541,706.18 107,541,706.18 100.00%
Total 1,047,675,900.30 130,124,170.86 --
Notes of the basis of determining the group:
The accounts receivable was adopted the aging analysis based on the months when the accounts incurred actually,
among which the accounts incurred earlier will be priority to be settled in terms of the capital turnover.
Explanation of the input value and assumption adopted to determine the withdrawal amount of bad debt provision
on the Current Period: With reference to the experience of the historical credit loss, combining with the prediction
of the present status and future financial situation, the comparison table was prepared between the aging of the
accounts receivable and estimated credit loss rate in the duration and to calculate the estimated credit loss.
Please refer to the relevant information of disclosure of bad debt provision of other accounts receivable if
113
Changchai Company, Limited Interim Report 2023
adopting the general mode of expected credit loss to withdraw bad debt provision of accounts receivable.
□ Applicable √ Not applicable
Disclosure by aging
Unit: RMB
Aging Carrying amount
Within 1 year (including 1 year) 913,387,657.93
1 to 2 years 29,153,815.65
2 to 3 years 9,171,200.96
Over 3 years 147,720,483.75
3 to 4 years 4,491,084.45
4 to 5 years 3,803,573.63
Over 5 years 139,425,825.67
Total 1,099,433,158.29
(2) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
Information of bad debt provision withdrawn:
Unit: RMB
Changes in the Reporting Period
Beginning
Category Reversal or Ending balance
balance Withdrawal Write-off
recovery
Bad debt
provision
34,367,361.83 151,193.76 34,518,555.59
withdrawn
separately
Bad debt
provision
117,478,758.54 12,645,412.32 130,124,170.86
withdrawn by
group
Total 151,846,120.37 12,796,606.08 164,642,726.45
Of which bad debt provision reversed or recovered with significant amount in the Reporting Period: No.
(3) There Were No Accounts Receivable with Actual Verification during the Reporting Period.
(4) Top 5 of the Ending Balance of the Accounts Receivable Collected according to the Arrears Party
Unit: RMB
Name of the Ending balance of Proportion to total ending balance Ending balance of bad
entity accounts receivable of accounts receivable debt provision
114
Changchai Company, Limited Interim Report 2023
Customer1 552,639,182.57 50.27% 12,458,137.94
Customer2 84,694,433.47 7.70% 1,693,888.67
Customer3 41,213,013.00 3.75% 824,260.26
Customer4 40,039,625.72 3.64% 800,792.51
Customer5 33,964,600.00 3.09% 679,292.00
Total 752,550,854.76 68.45%
5. Accounts Receivable Financing
Unit: RMB
Item Ending balance Beginning balance
Bank acceptance bills 73,649,132.14 242,813,392.79
Total 73,649,132.14 242,813,392.79
Changes of accounts receivable financing and fair value thereof in the Reporting Period
√ Applicable □ Not applicable
Please refer to the relevant information of disclosure of bad debt provision of other accounts receivable if
adopting the general mode of expected credit loss to withdraw bad debt provision of accounts receivable
financing.
□ Applicable √ Not applicable
Other notes:
The Company discounts and endorses a portion of its bank acceptances based on its routine fund management
needs, and the conditions for derecognition are met, so the bank acceptances are classified as financial assets
measured at fair value whose change is included in other comprehensive income.
On 30 June 2023, there was no bank acceptance for which bad debt provision accrued separately in the Company.
The Company measures the provision of bad debt provision on the basis of expected credit losses throughout the
duration. The Company believes that the credit risk characteristics of the bank acceptances it holds are similar,
and there was no bank acceptance for which bad debt provision accrued separately. In addition, there was no
significant credit risk in the bank acceptance, and no significant loss would be caused by bank defaults.
(1) Accounts receivable financing which had endorsed by the Company or had discounted but had not due at the
period-end
Amount of recognition Amount of not terminated
Item
termination at the period-end recognition at the period-end
Bank acceptance bill 263,573,165.89
Total 263,573,165.89
115
Changchai Company, Limited Interim Report 2023
6. Prepayments
(1) List by Aging Analysis
Unit: RMB
Ending balance Beginning balance
Aging
Amount Proportion Amount Proportion
Within 1 year 13,483,398.14 96.39% 5,941,708.21 93.86%
1 to 2 years 379,608.96 2.71% 289,373.60 4.57%
2 to 3 years 87,058.21 0.62% 71,654.18 1.13%
Over 3 years 37,721.02 0.27% 27,466.70 0.43%
Total 13,987,786.33 6,330,202.69
There was no prepayment with significant amount aging over one year as of the period-end.
(2) Top 5 of the Ending Balance of the Prepayments Collected according to the Prepayment Target
At the period-end, the total top 5 of the ending balance of the prepayments collected according to the prepayment
target was RMB10,960,900 accounting for 78.36% of the total ending balance of prepayments.
7. Other Receivables
Unit: RMB
Item Ending balance Beginning balance
Dividends receivable 323,730.00
Other receivables 85,731,878.38 32,938,305.16
Total 86,055,608.38 32,938,305.16
(1) Dividends Receivable
1) Classification of Dividends Receivable
Unit: RMB
Item (investee) Ending balance Beginning balance
Jiangsu Liance Electromechanical
276,480.00
Technology Co., Ltd.
Guilin Stars Science and
47,250.00
Technology Co., Ltd.
Total 323,730.00
116
Changchai Company, Limited Interim Report 2023
(2) Other Receivables
1) Other Receivables Classified by Accounts Nature
Unit: RMB
Nature Ending carrying value Beginning carrying value
Collections on behalf of land
47,000,000.00
acquisition
Margin and cash pledge 1,761,816.87 2,028,096.87
Intercourse funds 56,724,157.74 48,701,034.90
Petty cash and borrowings by
734,875.76 742,075.76
employees
Other 13,754,273.07 13,635,867.60
Total 119,975,123.44 65,107,075.13
2) Withdrawal of Bad Debt Provision
Unit: RMB
First stage Second stage Third stage
Expected loss in the Expected loss in the
Expected credit loss
Bad debt provision duration (credit duration (credit Total
of the next 12
impairment not impairment
months
occurred) occurred)
Balance of 1
373,682.65 2,908,755.15 28,886,332.17 32,168,769.97
January 2023
Balance of 1
January 2023 in the
Current Period
Withdrawal of the
1,750,745.09 1,750,745.09
Current Period
Balance of 30 June
2,124,427.74 2,908,755.15 28,886,332.17 33,919,515.06
2023
Changes of carrying amount with significant amount changed of loss provision in the current period
□ Applicable √ Not applicable
Disclosure by aging
Unit: RMB
Aging Ending balance
Within 1 year (including 1 year) 70,413,701.12
1 to 2 years 15,987,431.24
117
Changchai Company, Limited Interim Report 2023
2 to 3 years 1,267,129.65
Over 3 years 32,306,861.43
3 to 4 years 501,252.53
4 to 5 years 403,661.17
Over 5 years 31,401,947.73
Total 119,975,123.44
3) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
Information of withdrawal of bad debt provision:
Unit: RMB
Changes in the Reporting Period
Beginning Ending
Category Reversal or Write-o
balance Withdrawal Other balance
recovery ff
Bad debt
provision for
5,536,285.44 5,536,285.44
which accrued
separately
Bad debt
provision for
26,632,484.53 1,750,745.09 28,383,229.62
which accrued by
group
Total 32,168,769.97 1,750,745.09 33,919,515.06
4) There Was No Particulars of the Actual Verification of Other Receivables during the Reporting Period
5) Top 5 of the Ending Balance of Other Receivables Collected according to the Arrears Party
Unit: RMB
Proportion to
Ending
ending balance
Name of the entity Nature Ending balance Aging balance of bad
of other
debt provision
receivables%
Changzhou Zhonglou
District Housing and Intercourse
47,000,000.00 Within 1 year 41.19% 940,000.00
Urban Rural funds
Development Bureau
Changzhou Compressor Intercourse
2,940,000.00 Over 5 years 2.58% 2,940,000.00
Factory funds
Changchai Group Imp. & Intercourse
2,853,188.02 Over 5 years 2.50% 2,853,188.02
Exp. Co., Ltd. funds
118
Changchai Company, Limited Interim Report 2023
Changzhou New District Intercourse
1,626,483.25 Over 5 years 1.43% 1,626,483.25
Accounting Center funds
Changchai Group Intercourse
1,140,722.16 Over 5 years 1.00% 1,140,722.16
Settlement Center funds
Total 55,560,393.43 48.70% 9,500,393.43
8. Inventory
Whether the Company needs to comply with the requirements of real estate industry
No
(1) Category of Inventory
Unit: RMB
Ending balance Beginning balance
Item Carrying Falling price Carrying Carrying Falling price Carrying
amount reserves value amount reserves value
Raw 148,767,935. 142,741,201. 163,954,131. 157,971,844.
6,026,733.56 5,982,286.51
materials 41 85 27 76
Goods in 104,634,477. 10,497,724.7 94,136,752.9 110,883,778. 10,725,860.4 100,157,918.
process 66 4 2 58 3 15
Finished 330,258,089. 22,773,098.7 307,484,990. 322,959,181. 22,755,460.8 300,203,720.
goods 18 2 46 08 0 28
Materials
11,824,951.2 11,824,951.2 12,299,968.9 12,299,968.9
processed on
5 5 8 8
commission
Low priced
and easily 1,336,244.88 1,336,244.88 1,363,429.57 1,363,429.57
worn articles
596,821,698. 39,297,557.0 557,524,141. 611,460,489. 39,463,607.7 571,996,881.
Total
38 2 36 48 4 74
(2) Falling Price Reserves and impairment provision for contract performance costs
Unit: RMB
Increase Decrease
Beginning
Item Reversal or Ending balance
balance Withdrawal Other Other
write-off
Raw materials 5,982,286.51 95,068.40 50,621.35 6,026,733.56
Goods in
10,725,860.43 228,135.69 10,497,724.74
process
Finished goods 22,755,460.80 470,205.09 452,567.17 22,773,098.72
119
Changchai Company, Limited Interim Report 2023
Total 39,463,607.74 565,273.49 731,324.21 39,297,557.02
(3) There Was No Capitalized Borrowing Expense in the Ending Balance of Inventories
9. Other Current Assets
Unit: RMB
Item Ending balance Beginning balance
The VAT tax credits 6,734,450.62 47,682,930.23
Prepaid corporate income tax 1,505,424.80
Prepaid expense 87,208.34 90,667.46
Total 6,821,658.96 49,279,022.49
10. Investments in Debt Obligations
Unit: RMB
Ending balance Beginning balance
Item Carrying Falling price Carrying Carrying Falling price Carrying
amount reserves value amount reserves value
Three-year
40,015,268.7 40,015,268.7 39,309,587.9 39,309,587.9
fixed term
0 0 3 3
deposit
40,015,268.7 40,015,268.7 39,309,587.9 39,309,587.9
Total
0 0 3 3
Significant investments in debt obligations
Unit: RMB
Ending balance Beginning balance
Actual Actual
Item Par Coupon Maturity Par Coupon Maturity
interest interest
value rate date value rate date
rate rate
Three-year fixed 37,000,0 26 April 37,000,0 26 April
3.80% 3.72% 3.80% 3.72%
term deposit 00.00 2024 00.00 2024
37,000,0 37,000,0
Total
00.00 00.00
Changes of carrying amount with significant amount changed of loss provision in the reporting period
□ Applicable √ Not applicable
11. Long-term Equity Investment
Unit: RMB
Invest Begin Increase/decrease Endin Endin
120
Changchai Company, Limited Interim Report 2023
ees ning Gain Adjust g g
Cash
balanc or loss ment Withd balanc balanc
bonus
e recogn of rawal e e of
Additi Reduc Chang or
(carryi ized other of (carryi deprec
onal ed es in profit
ng under compr deprec Other ng iation
invest invest other annou
value) the ehensi iation value) reserv
ment ment equity nced
equity ve reserv es
to
metho incom es
issue
d e
II. Associated enterprises
Beijin
g
Tsingh
ua
Indust
rial 44,182
0.00 0.00
Invest .50
ment
Mana
gemen
t Co.,
Ltd.
Subtot 44,182
0.00 0.00
al .50
44,182
Total 0.00 0.00
.50
12. Other Equity Instrument Investment
Unit: RMB
Item Ending balance Beginning balance
Changzhou Synergetic Innovation Private Equity Fund
378,929,240.08 378,929,240.08
(Limited Partnership)
Other equity instrument investment measured by fair value 663,290,000.00 576,631,000.00
Total 1,042,219,240.08 955,560,240.08
Non-trading equity instrument investment disclosed by category
Unit: RMB
121
Changchai Company, Limited Interim Report 2023
Reason for
Amount of Reason for assigning
other
Accu other to measure by fair
Dividend comprehensi
Accumulative mulat comprehensiv value of which
Item income ve income
gains ive e transferred changes be included to
recognized transferred to
losses to retained other comprehensive
retained
earnings income
earnings
Foton Motor Co., Non-trading equity
449,516,000.00
Ltd. investment
Non-trading equity
Bank of Jiangsu 129,204,000.00
investment
Changzhou
Synergetic
Innovation Non-trading equity
278,929,240.08
Private Equity investment
Fund (Limited
Partnership)
Other notes:
The corporate securities of accommodation business still on lending at the period-end: 350,000 shares of Foton
Motor Co., Ltd.
13. Other Non-current Financial Assets
Unit: RMB
Item Ending balance Beginning balance
Jiangsu Horizon New Energy
373,500,000.00 373,500,000.00
Technology Co., Ltd.
Total 373,500,000.00 373,500,000.00
14. Investment Property
(1) Investment Property Adopting the Cost Measurement Mode
√ Applicable □ Not applicable
Unit: RMB
Item Houses and buildings Total
I. Original carrying value
1. Beginning balance 93,077,479.52 93,077,479.52
2. Increased amount of the period
(1) Outsourcing
122
Changchai Company, Limited Interim Report 2023
(2) Transfer from inventories/fixed
assets/construction in progress
(3) Enterprise combination increase
3. Decreased amount of the period
(1) Disposal
(2) Other transfer
4. Ending balance 93,077,479.52 93,077,479.52
II. Accumulative depreciation and
accumulative amortization
1. Beginning balance 50,916,699.87 50,916,699.87
2. Increased amount of the period 1,218,237.78 1,218,237.78
(1) Withdrawal or amortization 1,218,237.78 1,218,237.78
3. Decreased amount of the period
(1) Disposal
(2) Other transfer
4. Ending balance 52,134,937.65 52,134,937.65
III. Depreciation reserves
1. Beginning balance
2. Increased amount of the period
(1) Withdrawal
3. Decreased amount of the period
(1) Disposal
(2) Other transfer
4. Ending balance
IV. Carrying value
1. Ending carrying value 40,942,541.87 40,942,541.87
2. Beginning carrying value 42,160,779.65 42,160,779.65
15. Fixed Assets
Unit: RMB
Item Ending balance Beginning balance
Fixed assets 683,448,533.29 720,061,387.76
Total 683,448,533.29 720,061,387.76
123
Changchai Company, Limited Interim Report 2023
(1) List of Fixed Assets
Unit: RMB
Houses and Machinery Transportation Other
Item Total
buildings equipment equipment equipment
I. Original carrying
value
1. Beginning
710,604,039.88 1,118,697,686.65 19,132,190.47 57,025,921.99 1,905,459,838.99
balance
2. Increased amount
12,197,407.65 3,875,068.13 16,072,475.78
of the period
(1) Purchase 7,896,305.10 125,548.65 8,021,853.75
(2) Transfer from
construction in 4,301,102.55 3,749,519.48 8,050,622.03
progress
(3) Enterprise
combination
increase
3. Decreased
amount of the 28,447,991.38 18,974,531.40 47,422,522.78
period
(1) Disposal or
28,447,991.38 18,974,531.40 47,422,522.78
scrap
4. Ending balance 682,156,048.50 1,111,920,562.90 19,132,190.47 60,900,990.12 1,874,109,791.99
II. Accumulative
depreciation
1. Beginning
330,845,140.13 803,945,702.56 13,446,223.77 36,738,140.74 1,184,975,207.20
balance
2. Increased amount
9,520,203.78 32,324,865.35 564,507.28 2,514,239.64 44,923,816.05
of the period
(1) Withdrawal 9,520,203.78 32,324,865.35 564,507.28 2,514,239.64 44,923,816.05
3. Decreased
amount of the 21,071,383.95 18,589,624.63 39,661,008.58
period
(1) Disposal or
21,071,383.95 18,589,624.63 39,661,008.58
scrap
4. Ending balance 319,293,959.96 817,680,943.28 14,010,731.05 39,252,380.38 1,190,238,014.67
III.Depreciation
reserves
124
Changchai Company, Limited Interim Report 2023
1. Beginning
423,244.03 423,244.03
balance
2. Increased amount
of the period
(1) Withdrawal
3. Decreased
amount of the
period
(1) Disposal or
scrap
4. Ending balance 423,244.03 423,244.03
IV. Carrying value
1. Ending carrying
362,862,088.54 293,816,375.59 5,121,459.42 21,648,609.74 683,448,533.29
value
2. Beginning
379,758,899.75 314,328,740.06 5,685,966.70 20,287,781.25 720,061,387.76
carrying value
(2) List of Temporarily Idle Fixed Assets
Unit: RMB
Original Accumulative Depreciation
Item Carrying value Note
carrying value depreciation reserves
Machinery
476,507.50 53,263.47 423,244.03
equipment
16. Construction in Progress
Unit: RMB
Item Ending balance Beginning balance
Construction in progress 30,883,676.70 30,259,647.16
Engineering materials 21,900.40 21,900.40
Total 30,905,577.10 30,281,547.56
(1) List of Construction in Progress
Unit: RMB
Ending balance Beginning balance
Item Carrying Depreciatio Carrying Carrying Depreciati Carrying
amount n reserves value amount on reserves value
125
Changchai Company, Limited Interim Report 2023
Innovation
capacity
construction
6,573,635.34 6,573,635.34 5,443,764.33 5,443,764.33
of
technology
center
Relocation
project of
10,666,094.73 10,666,094.73 11,155,119.70 11,155,119.70
light engine
and casting
Equipment to
be installed
13,643,946.63 13,643,946.63 13,660,763.13 13,660,763.13
and payment
for projects
Total 30,883,676.70 30,883,676.70 30,259,647.16 30,259,647.16
(2) Changes in Significant Construction in Progress during the Reporting Period
Unit: RMB
Propo Of
rtion which Capit
of Accu : alizati
accu mulat Amo on
mulat ed unt of rate
Trans Other
Begin Incre Endin ed amou capita of Capit
ferred decre Job
Budg ning ased g invest nt of lized intere al
Item in ased sched
et balan amou balan ment intere intere sts for resou
fixed amou ule
ce nt ce in st sts for the rces
assets nt
constr capita the Repor
uctio lizati Repor ting
ns to on ting Perio
budge Perio d
t d
Innov
ation
capac
Self-r
ity 96,06 5,443 1,458 6,573 Unco aised
328,1 7.42
constr 6,200 ,764. ,004. ,635. mplet and
33.05 %
uctio .00 33 06 34 ed raised
funds
n of
techn
ology
126
Changchai Company, Limited Interim Report 2023
center
Reloc
ation
proje
Self-r
ct of 474,7 11,15 5,879 6,596 10,43 Unco aised
80.35
light 06,00 5,119. ,876. ,305. 8,690 mplet and
%
engin 0.00 70 03 10 .63 ed raised
funds
e and
castin
g
570,7 16,59 7,337 6,924 17,01
Total 72,20 8,884 ,880. ,438. 2,325
0.00 .03 09 15 .97
(3) Engineering Materials
Unit: RMB
Ending balance Beginning balance
Depreciati
Item Carrying Carrying Carrying Depreciation Carrying
on
amount value amount reserves value
reserves
Engineerin
21,900.40 21,900.40 21,900.40 21,900.40
g materials
Total 21,900.40 21,900.40 21,900.40 21,900.40
17. Intangible Assets
(1) List of Intangible Assets
Unit: RMB
Trademark use
Item Land use right Software License fee Total
right
I. Original carrying
value
1. Beginning balance 214,187,775.71 17,847,202.14 5,538,000.00 1,650,973.47 239,223,951.32
2. Increased amount of
the period
(1) Purchase
(2) Internal R&D
127
Changchai Company, Limited Interim Report 2023
(3) Business
combination increase
3. Decreased amount of
9,000,000.00 9,000,000.00
the period
(1) Disposal 9,000,000.00 9,000,000.00
4. Ending balance 205,187,775.71 17,847,202.14 5,538,000.00 1,650,973.47 230,223,951.32
II. Accumulated
amortization
1. Beginning balance 63,832,525.74 14,396,059.28 3,246,750.17 356,398.60 81,831,733.79
2. Increased amount of
2,149,063.08 700,324.52 275,858.52 83,520.96 3,208,767.08
the period
(1) Withdrawal 2,149,063.08 700,324.52 275,858.52 83,520.96 3,208,767.08
3. Decreased amount of
4,575,000.00 4,575,000.00
the period
(1) Disposal 4,575,000.00 4,575,000.00
4. Ending balance 61,406,588.82 15,096,383.80 3,522,608.69 439,919.56 80,465,500.87
III. Depreciation
reserves
1. Beginning balance
2. Increased amount of
the period
(1) Withdrawal
3. Decreased amount of
the period
(1) Disposal
4. Ending balance
IV. Carrying value
1. Ending carrying
143,781,186.89 2,750,818.34 2,015,391.31 1,211,053.91 149,758,450.45
value
2. Beginning carrying
150,355,249.97 3,451,142.87 2,291,249.83 1,294,574.87 157,392,217.54
value
18. Long-term Prepaid Expenses
Unit: RMB
Beginning Amortized
Item Increase Decrease Ending balance
balance amount
Trademark 201,970.32 38,985.00 11,296.71 229,658.61
128
Changchai Company, Limited Interim Report 2023
renewal fee
Electricity
Outside Line 3,078,000.00 162,000.00 2,916,000.00
Access Project
Total 3,279,970.32 38,985.00 173,296.71 3,145,658.61
19. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Deferred Income Tax Assets that Had not Been Off-set
Unit: RMB
Ending balance Beginning balance
Deductible Deductible
Item Deferred income Deferred income
temporary temporary
tax assets tax assets
difference difference
Deductible loss 18,390,162.07 3,045,579.73 149,230,051.55 24,713,867.00
Bad debt provision 7,005,141.95 1,070,844.10 6,853,948.19 1,048,165.04
Inventory falling
2,916,352.63 437,452.89 2,633,715.26 395,057.29
price reserves
Impairment of fixed
423,244.03 63,486.60 423,244.03 63,486.60
assets
Total 28,734,900.68 4,617,363.32 159,140,959.03 26,220,575.93
(2) Deferred Income Tax Liabilities Had Not Been Off-set
Unit: RMB
Ending balance Beginning balance
Item Taxable temporary Deferred income Taxable temporary Deferred income
difference tax liabilities difference tax liabilities
Assets evaluation
appreciation for
business
5,677,718.36 851,657.75 5,677,718.36 851,657.75
combination not
under the same
control
Changes in fair
1,156,017,272.47 177,990,367.23 1,039,472,114.80 160,508,593.58
value
Total 1,161,694,990.83 178,842,024.98 1,045,149,833.16 161,360,251.33
(3) List of Unrecognized Deferred Income Tax Assets
Unit: RMB
Item Ending balance Beginning balance
129
Changchai Company, Limited Interim Report 2023
Deductible loss 22,257,409.96 22,257,409.96
Bad debt provision 191,557,099.56 177,160,942.15
Falling price reserves of
37,395,165.97 36,829,892.48
inventories
Total 251,209,675.49 236,248,244.59
(4) Deductible Losses of Unrecognized Deferred Income Tax Assets will Due in the Following Years
Unit: RMB
Years Ending amount Beginning amount Note
2023 1,146,746.13 1,146,746.13
2024 3,605,384.25 3,605,384.25
2025 5,250,820.81 5,250,820.81
2026 7,372,277.94 7,372,277.94
2027 4,882,180.83 4,882,180.83
Total 22,257,409.96 22,257,409.96
20. Other Non-current Assets
Unit: RMB
Ending balance Beginning balance
Depreciati Depreciati
Item Carrying Carrying
on Carrying value on Carrying value
amount amount
reserves reserves
Advances
payment of 1,393,241.19 1,393,241.19 670,735.93 670,735.93
equipments
Total 1,393,241.19 1,393,241.19 670,735.93 670,735.93
21. Short-term Borrowings
(1) Category of Short-term Borrowings
Unit: RMB
Item Ending balance Beginning balance
Mortgage loans 3,000,000.00 7,000,000.00
Obligation to pay bills discounted
107,447,699.49 108,437,700.65
before maturity
Total 110,447,699.49 115,437,700.65
130
Changchai Company, Limited Interim Report 2023
(2) There Was No Short-term Borrowings Overdue but Unpaid.
22. Notes Payable
Unit: RMB
Category Ending balance Beginning balance
Bank acceptance bill 702,452,311.45 471,876,397.72
Total 702,452,311.45 471,876,397.72
At the end of the current period, there were no notes payable due and not paid.
23. Accounts Payable
(1) List of Accounts Payable
Unit: RMB
Item Ending balance Beginning balance
Payment for goods 647,261,475.07 747,010,098.88
Total 647,261,475.07 747,010,098.88
(2) Significant Accounts Payable Aging over One Year
Unit: RMB
Item Ending balance Unpaid/ Un-carry-over reason
Supplier terminates cooperation,
Payment for goods 52,642,097.90
pending payment
Payment for equipment 6,202,576.90 Equipment warranty
Total 58,844,674.80
24. Advances from Customers
Unit: RMB
Item Ending balance Beginning balance
House rent collected in advance 815,054.54 837,425.55
Total 815,054.54 837,425.55
There were no significant advances from customers aging over one year at the end of the period.
25. Contract Liabilities
Unit: RMB
Item Ending balance Beginning balance
131
Changchai Company, Limited Interim Report 2023
Contract liabilities 33,094,812.97 32,843,692.83
Total 33,094,812.97 32,843,692.83
There were no significant contract liabilities aging over one year at the end of the period.
26. Payroll Payable
(1) List of Payroll Payable
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
I. Short-term salary 49,151,022.47 152,421,301.25 187,972,773.79 13,599,549.93
II.Post-employment
benefit-defined 17,540,182.64 17,540,182.64
contribution plans
III. Termination
200,000.00 200,000.00
benefits
Total 49,351,022.47 169,961,483.89 205,512,956.43 13,799,549.93
(2) List of Short-term Salary
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
1. Salary, bonus,
40,883,518.77 128,018,061.42 162,906,190.95 5,995,389.24
allowance, subsidy
2.Employee welfare 1,592.74 1,188,689.39 1,188,689.39 1,592.74
3. Social insurance 9,284,245.62 9,284,245.62
Of which: Medical
insurance 7,545,525.15 7,545,525.15
premiums
Work-related injury
968,016.73 968,016.73
insurance
Maternity insurance 770,703.74 770,703.74
4. Housing fund 10,716,609.27 10,716,609.27
5.Labor union
budget and
8,265,910.96 3,213,695.55 3,877,038.56 7,602,567.95
employee education
budget
Total 49,151,022.47 152,421,301.25 187,972,773.79 13,599,549.93
132
Changchai Company, Limited Interim Report 2023
(3) List of Defined Contribution Plans
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
1. Basic pension
17,019,510.11 17,019,510.11
benefits
2. Unemployment
520,672.53 520,672.53
insurance
Total 17,540,182.64 17,540,182.64
27. Taxes Payable
Unit: RMB
Item Ending balance Beginning balance
VAT 1,651,730.27 2,240,512.82
Corporate income tax 490,046.14 1,272,876.86
Personal income tax 109,664.93 68,629.73
Urban maintenance and
115,621.12 1,151,395.75
construction tax
Property tax 1,593,082.93 1,172,973.71
Land use tax 926,082.50 1,041,594.39
Stamp duty 280,664.27 286,018.61
Education Surcharge 49,551.90 229,345.14
Comprehensive fees 109,664.93 1,075,134.76
Environmental protection tax 223.76 31,693.62
Total 5,326,332.75 8,570,175.39
28. Other Payables
Unit: RMB
Item Ending balance Beginning balance
Dividends payable 3,891,433.83 3,891,433.83
Other payables 158,289,378.68 156,155,449.10
Total 162,180,812.51 160,046,882.93
(1) Dividends Payable
Unit: RMB
133
Changchai Company, Limited Interim Report 2023
Item Ending balance Beginning balance
Ordinary share dividends 3,243,179.97 3,243,179.97
Dividends for non-controlling
648,253.86 648,253.86
shareholders
Total 3,891,433.83 3,891,433.83
The reason for non-payment for over one year: Not gotten by shareholders yet.
(2) Other Payables
1) Other Payables Listed by Nature of Account
Unit: RMB
Item Ending balance Beginning balance
Margin & cash pledged 4,678,536.54 4,293,474.88
Intercourse funds among units 8,163,215.36 7,831,477.01
Intercourse funds among
385,683.04 397,761.04
individuals
Sales discount and three
128,905,093.55 126,787,544.75
guarantees
Other 16,156,850.19 16,845,191.42
Total 158,289,378.68 156,155,449.10
2) Significant Other Payables Aging over One Year
The significant other payables aging over one year at the period-end mainly referred to the unsettled temporary
credits and charges owned.
29. Other Current Liabilities
Unit: RMB
Item Ending balance Beginning balance
Sale service fee 412,356.65 806,555.29
Transportation storage fee 698,545.06 597,090.12
Electric charge 1,372,210.26 1,467,332.18
Tax to be transferred 2,513,659.65 2,821,340.54
Estimated share value added tax 1,910,806.37 1,909,715.09
Obligation to pay bills transferred
96,724,142.81 66,395,231.83
before maturity
134
Changchai Company, Limited Interim Report 2023
Other withholding expenses 4,675,214.62 4,648,476.11
Total 108,306,935.42 78,645,741.16
30. Deferred Income
Unit: RMB
Beginning Reason for
Item Increase Decrease Ending balance
balance formation
Government Government
36,205,625.94 1,704,864.73 34,500,761.21
grants appropriation
Total 36,205,625.94 1,704,864.73 34,500,761.21 --
Item involving government grants:
Unit: RMB
Amount
recorded Amount
Amou into recorded Amount Related
Beginni nt of non-oper into other offset Other Ending to
Item ng new ating income in cost in the chan balanc assets/re
balance subsid income in the Reporting ges e lated
y the Reporting Period income
Reporting Period
Period
National major
project special
10,761 Related
allocations- Flexible 11,521,1 759,633.0
,468.0
processing production 01.00 0 to assets
0
line for cylinders of
diesel engines
Remove 17,514 Related
17,847, 332,986.8
,803.5
compensation 790.36 1 to assets
5
Research and
development and
industrialization
allocations of national 6,836,7 612,244.9 6,224, Related
III/IV standard 34.58 2 489.66 to assets
high-powered
efficient diesel engine
for agricultural use
31. Share Capital
Unit: RMB
135
Changchai Company, Limited Interim Report 2023
Increase/decrease (+/-)
Beginning Bonus Ending
New shares Bonus
balance issue from Other Subtotal balance
issued shares
profit
The sum of 705,692,50 705,692,50
shares 7.00 7.00
32. Capital Reserves
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Capital premium
620,338,243.21 620,338,243.21
(premium on stock)
Other capital reserves 19,795,719.80 19,795,719.80
Total 640,133,963.01 640,133,963.01
33. Other Comprehensive Income
Unit: RMB
Reporting Period
Less:
Record
Less: ed in
Recorded other
in other compre
comprehe hensiv Attribu
nsive e table to Attribu
Income
income in income owners table to
before Less: Endin
Beginni prior in prior of the non-co
taxatio Income g
Item ng period period Compa ntrollin
n in the tax balan
balance and and ny as g
Curren expens ce
transferre transfe the interest
t e
d in rred in parent s after
Period
profit or retaine after tax
loss in d tax
the earning
Current s in the
Period Curren
t
Period
655,341, 86,659, 12,998, 73,660, 729,0
I. Other comprehensive 704.07 000.00 850.00 150.00 01,85
136
Changchai Company, Limited Interim Report 2023
income that will not be 4.07
reclassified to profit or loss
Changes in fair value of 729,0
655,341, 86,659, 12,998, 73,660,
other equity instrument 01,85
704.07 000.00 850.00 150.00
investment 4.07
Total of other 729,0
655,341, 86,659, 12,998, 73,660,
01,85
comprehensive income 704.07 000.00 850.00 150.00
4.07
34. Specific Reserve
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Safety production
18,848,856.75 4,598,473.04 2,420,662.71 21,026,667.08
cost
Total 18,848,856.75 4,598,473.04 2,420,662.71 21,026,667.08
35. Surplus Reserves
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Statutory surplus
336,040,867.82 336,040,867.82
reserves
Discretional surplus
13,156,857.90 13,156,857.90
reserves
Total 349,197,725.72 349,197,725.72
36. Retained Earnings
Unit: RMB
Item Reporting Period Same period of last year
Beginning balance of retained
915,495,909.35 872,212,354.88
earnings before adjustments
Beginning balance of retained
915,495,909.35 872,212,354.88
earnings after adjustments
Add: Net profit attributable to
owners of the Company as the 131,937,324.66 -14,592,094.77
parent
Dividends of ordinary shares
7,056,925.07 18,348,005.18
payable
Ending retained earnings 1,040,376,308.94 839,272,254.93
List of adjustment of beginning retained earnings:
137
Changchai Company, Limited Interim Report 2023
(1) RMB0.00 beginning retained earnings was affected by retrospective adjustment conducted according to the
Accounting Standards for Business Enterprises and relevant new regulations.
(2) RMB0.00 beginning retained earnings was affected by changes in accounting policies.
(3) RMB0.00 beginning retained earnings was affected by correction of significant accounting errors.
(4) RMB0.00 beginning retained earnings was affected by changes in combination scope arising from same
control.
(5) RMB0.00 beginning retained earnings was affected totally by other adjustments.
37. Operating Revenue and Cost of Sales
Unit: RMB
Reporting Period Same period of last year
Item
Operating revenue Cost of sales Operating revenue Cost of sales
Main operations 1,333,099,509.22 1,156,456,220.22 1,161,021,786.32 1,038,738,676.27
Other operations 17,418,130.63 12,441,983.61 17,200,705.72 12,656,556.15
Total 1,350,517,639.85 1,168,898,203.83 1,178,222,492.04 1,051,395,232.42
Relevant information of revenue:
Unit: RMB
Category of contracts Segment 1
Product Types
Of which:
Single-cylinder diesel engines 607,361,121.44
Multi-cylinder diesel engines 584,029,144.61
Other products 82,791,314.55
Fittings 20,819,616.14
Classified by business area
Of which:
Sales in domestic market 1,097,487,924.55
Export sales 235,611,584.67
Total 1,333,099,509.22
Information related to performance obligations: none
38. Taxes and Surtaxes
Unit: RMB
Item Reporting Period Same period of last year
Urban maintenance and
1,006,348.45 812,411.02
construction tax
138
Changchai Company, Limited Interim Report 2023
Education surcharge 718,820.35 579,085.68
Property tax 3,169,527.35 1,817,465.17
Land use tax 2,197,586.41 1,586,101.00
Vehicle and vessel use tax 403.52 201,437.50
Stamp duty 628,716.88 207,601.82
Environment tax 100,381.82 102,066.70
Other 5,470.80 54,256.65
Total 7,827,255.58 5,360,425.54
39. Selling Expense
Unit: RMB
Item Reporting Period Same period of last year
Employee benefits 17,034,869.46 16,943,256.62
Office expenses 3,936,262.82 3,724,135.21
Sales promotional expense 3,274,025.90
Three guarantees 35,094,246.66 20,297,149.84
Other 6,065,653.23 7,520,633.81
Total 62,131,032.17 51,759,201.38
40. Administrative Expense
Unit: RMB
Item Reporting Period Same period of last year
Employee benefits 28,128,076.17 23,311,653.61
Office expenses 5,597,629.95 4,566,775.20
Depreciation and amortization 9,181,948.43 4,952,365.26
Safety expenses 1,768,064.08
Repair charge 589,852.63 428,378.02
Inventory obsolescence and
-651,231.55
inventory shortage (overage)
Other 8,263,031.35 6,957,362.02
Total 52,877,371.06 40,216,534.11
41. Development Costs
Unit: RMB
139
Changchai Company, Limited Interim Report 2023
Item Reporting Period Same period of last year
Direct input expense 20,419,421.63 24,257,520.75
Employee benefits 11,534,165.94 11,798,332.91
Depreciation and amortization 3,284,892.82 2,981,055.64
Other 600,591.03 1,122,878.17
Total 35,839,071.42 40,159,787.47
42. Finance Costs
Unit: RMB
Item Reporting Period Same period of last year
Interest expense 3,343,884.90 3,276,786.93
Less: Interest income 4,264,102.18 6,634,812.22
Net foreign exchange gains or
-4,784,425.33 -7,111,099.45
losses
Other 727,989.66 -2,531,595.24
Total -4,976,652.95 -13,000,719.98
43. Other Income
Unit: RMB
Sources Reporting Period Same period of last year
Government grants directly
recorded into the current profit or 1,594,191.79 1,602,830.77
loss
Government grants related to
1,704,864.73
deferred income
44. Investment Income
Unit: RMB
Item Reporting Period Same period of last year
Investment income from holding of trading financial
343,730.00
assets
Investment income from disposal of trading financial
2,430.18 364,131.30
assets
Dividend income from holding of other equity
9,360,000.00
instrument investment
Interest from holding of investments in debt
705,680.77
obligations
Income from refinancing operations 14,396.97 60,799.49
140
Changchai Company, Limited Interim Report 2023
Investment income from financial products 4,471,297.06 4,297,768.75
Accounts receivable financing-discount interest of
-2,310,613.28 -2,338,416.66
bank acceptance bills
Total 3,226,921.70 11,744,282.88
45. Gain on Changes in Fair Value
Unit: RMB
Sources Reporting Period Same period of last year
Held-for-trading financial assets 19,360,455.86 -30,488,388.88
Total 19,360,455.86 -30,488,388.88
46. Credit Impairment Loss
Unit: RMB
Item Reporting Period Same period of last year
Bad debt loss of other receivables -1,750,745.09 236,946.29
Bad debt loss of accounts
-12,796,606.08 -12,169,772.95
receivable
Total -14,547,351.17 -11,932,826.66
47. Asset Impairment Loss
Unit: RMB
Item Reporting Period Same period of last year
Loss on inventory valuation and
-565,273.49 4,342,775.64
contract performance cost
Total -565,273.49 4,342,775.64
48. Asset Disposal Income
Unit: RMB
Sources Reporting Period Same period of last year
Disposal income of fixed assets 105,395,693.25 -361,395.36
49. Non-operating Income
Unit: RMB
Amount recorded in the
Item Reporting Period Same period of last year
current non-recurring
141
Changchai Company, Limited Interim Report 2023
profit or loss
Negative goodwill from
combination not under 1,798,981.78
the same control
Other 495,538.97 550,915.40 495,538.97
Total 495,538.97 2,349,897.18 495,538.97
50. Non-operating Expense
Unit: RMB
Amount recorded in the
Item Reporting Period Same period of last year current non-recurring
profit or loss
Quality compensation 144,428.82 144,428.82
Compensation matters 731,752.92 731,752.92
Other 421,166.39 392,257.24 421,166.39
Total 1,297,348.13 392,257.24 1,297,348.13
51. Income Tax Expense
(1) List of Income Tax Expense
Unit: RMB
Item Reporting Period Same period of last year
Current income tax expense 2,460,114.33 1,599,680.00
Deferred income tax expense 4,729,214.00 -7,805,728.88
Total 7,189,328.33 -6,206,048.88
(2) Adjustment Process of Accounting Profit and Income Tax Expense
Unit: RMB
Item Reporting Period
Profit before taxation 143,289,052.25
Income tax expenses calculated based on
21,493,357.84
statutory/applicable tax rates
The impact of deductible losses on deferred income
-21,668,287.27
tax assets recognized in the prior period of use
Influence of applying different tax rates by
7,364,257.76
subsidiaries
Income tax expense 7,189,328.33
142
Changchai Company, Limited Interim Report 2023
52. Other Comprehensive Income
See Note 33 for details.
53. Cash Flow Statement
(1) Cash Generated from Other Operating Activities
Unit: RMB
Item Reporting Period Same period of last year
Subsidy and appropriation 1,594,191.79 1,602,830.77
Other intercourses in cash 5,293,371.43 6,000,698.61
Interest income 4,264,102.18 7,872,212.72
Other 372,352.32 392,565.39
Total 11,524,017.72 15,868,307.49
(2) Cash Used in Other Operating Activities
Unit: RMB
Item Reporting Period Same period of last year
Selling and administrative expense
79,187,465.71 75,307,038.72
paid in cash
Handling charges 1,125,365.36 1,058,635.32
Other 658,923.36 749,863.50
Other transactions 149,835.21 67,256.65
Total 81,121,589.64 77,182,794.19
(3) Cash Generated from Other Investing Activities
Unit: RMB
Item Reporting Period Same period of last year
Deposit of construction unit 169,856.31
Total 169,856.31
(4) Cash Generated from Other Financial Activities
Unit: RMB
Item Reporting Period Same period of last year
Discount of undue bank acceptance
49,395,924.99
bills with low credit rating
143
Changchai Company, Limited Interim Report 2023
Total 49,395,924.99
(5) Cash Used in Other Financial Activities
Unit: RMB
Item Reporting Period Same period of last year
Discount interest from bank
2,604,075.01
acceptance bills
Total 2,604,075.01
54. Supplemental Information for Cash Flow Statement
(1) Supplemental Information for Cash Flow Statement
Unit: RMB
Same period of last
Supplemental information Reporting Period
year
1. Reconciliation of net profit to net cash flows generated from
operating activities
Net profit 136,099,723.92 -14,597,001.69
Add: Provision for impairment of assets 15,112,624.66 -8,871,223.50
Depreciation of fixed assets, of oil and gas assets, of productive
44,923,816.05 40,934,595.60
living assets
Depreciation of right-of-use assets
Amortization of intangible assets 3,208,767.08 3,076,523.63
Amortization of long-term deferred expenses 168,946.50 1,956.06
Losses on disposal of fixed assets, intangible assets and other
-105,395,693.25 361,395.36
long-term assets (gains by “-”)
Losses on the scrapping of fixed assets (gains by “-”)
Losses on the changes in fair value (gains by “-”) -19,360,455.86 30,488,388.88
Financial expenses (gains by “-”) -4,976,652.95 -13,000,719.98
Investment losses (gains by “-”) -3,226,921.70 -11,744,282.88
Decrease in deferred income tax assets (increase by “-”) 21,603,212.61 -11,774.06
Increase in deferred income tax liabilities (decrease by “-”) -17,481,773.65 -15,920,828.48
Decrease in inventory (increase by “-”) 14,472,740.38 117,904,290.23
Decrease in accounts receivable from operating activities
-269,061,905.84 -241,738,053.67
(increase by “-”)
Increase in payables from operating activities (decrease by “-”) 79,116,755.30 55,684,539.07
144
Changchai Company, Limited Interim Report 2023
Other -16,868,305.69
Net cash flows generated from operating activities -104,796,816.75 -74,300,501.12
2. Investing and financing activities that do not involving cash
receipts and payment:
Debt transferred as capital
Convertible corporate bond due within one year
Fixed assets from financing lease
3. Net increase in cash and cash equivalents
Ending balance of cash 651,307,581.82 440,638,879.34
Less: Beginning balance of cash 810,350,966.05 573,623,529.10
Add: Ending balance of cash equivalents
Less: Beginning balance of cash equivalents
Net increase in cash and cash equivalents -159,043,384.23 -132,984,649.76
(2) Cash and Cash Equivalents
Unit: RMB
Item Ending balance Beginning balance
I. Cash 651,307,581.82 810,350,966.05
Including: Cash on hand 230,083.56 251,965.06
Bank deposit on demand 648,401,119.95 806,914,999.19
Other monetary assets on demand 2,676,378.31 3,184,001.80
III. Ending balance of cash and cash
651,307,581.82 810,350,966.05
equivalents
55. Assets with Restricted Ownership or Right to Use
Unit: RMB
Item Ending carrying value Reason for restriction
As cash deposit for bank acceptance
Monetary assets 173,206,532.10
bill and for environment
Houses and buildings 1,422,559.69 Mortgaged for borrowings from banks
Land use right 863,218.81 Mortgaged for borrowings from banks
Machinery equipment 25,771,609.33 Mortgaged for borrowings from banks
Obligation to pay bills discounted
110,000,000.00
before maturity
Obligation to pay bills transferred
103,721,703.95
before maturity
145
Changchai Company, Limited Interim Report 2023
Total 414,985,623.88
56. Foreign Currency Monetary Items
(1) Foreign Currency Monetary Items
Unit: RMB
Ending foreign currency Ending balance converted
Item Exchange rate
balance to RMB
Monetary assets 73,299,699.59
Of which: USD 10,103,155.25 7.2258 73,003,379.21
HKD 321,388.70 0.9220 296,320.38
Accounts receivable 78,604,894.44
Of which: USD 10,878,365.64 7.2258 78,604,894.44
Accounts payable 2,186.53
Of which: USD 302.60 7.2258 2,186.53
Contract liabilities 5,646,020.60
Of which: USD 781,369.62 7.2258 5,646,020.60
(2) Notes to Overseas Entities Including: for Significant Oversea Entities, Main Operating Place, Recording
Currency and Selection Basis Shall Be Disclosed; if there Are Changes in Recording Currency, Relevant
Reasons Shall Be Disclosed.
□ Applicable √ Not applicable
57. Government Grants
(1) Basic Information on Government Grants
Unit: RMB
Amount recorded in the
Category Amount Listed items
current profit or loss
Subsidies for stabilizing and increasing job
162,791.79 Other income 162,791.79
positions and retaining workers
Subsidies for industry-university-research
30,000.00 Other income 30,000.00
cooperation
Incentive for municipal technology transfer in
400,000.00 Other income 400,000.00
Changzhou
Special funds for innovative development in
333,000.00 Other income 333,000.00
Changzhou
Incentives and subsidies for earlier phase-out
and scrapping of high-emission old cars in 19,500.00 Other income 19,500.00
Changzhou
146
Changchai Company, Limited Interim Report 2023
Subsidies for export 628,900.00 Other income 628,900.00
Job skills subsidies 20,000.00 Other income 20,000.00
Demolition compensation (replacing Zou Deferred
13,344,397.90 133,666.74
Village with Hehai Road) income
Demolition compensation - main workshops in Deferred
11,864,289.02 199,320.07
the base in Hehai Road income
The national major special project - the
Deferred
flexible processing production line for diesel 13,800,000.00 759,633.00
income
engine cylinder blocks
National III/IV Appropriation for the research
and development and industrialization of Deferred
10,000,000.00 612,244.92
standard high-horsepower high-efficiency income
agricultural diesel engine
(2) Return of Government Grants
□ Applicable √ Not applicable
VIII. Equity in Other Entities
1. Equity in Subsidiary
(1) Subsidiaries
Natur Holding percentage
Main Registrat
e of (%) Way of
Name operatin ion
busin Indirectl gaining
g place place Directly
ess y
Changchai Wanzhou Diesel Engine Chongq Chongqi Indus
60.00% Set-up
Co., Ltd. ing ng try
Changzhou Changchai Benniu Diesel Changz Changzh Indus
99.00% 1.00% Set-up
Engine Fittings Co., Ltd. hou ou try
Changzhou Horizon Investment Co., Changz Changzh Servi
100.00% Set-up
Ltd. hou ou ce
Changzhou Changchai Horizon Changz Changzh Indus
75.00% 25.00% Set-up
Agricultural Equipment Co., Ltd. hou ou try
Combination
Changzhou Fuji Changchai Robin Changz Changzh Indus
100.00% not under the
Gasoline Engine Co., Ltd. hou ou try
same control
Jiangsu Changchai Machinery Co., Changz Changzh Indus
100.00% Set-up
Ltd. hou ou try
Changzhou Xingsheng Property Changz Changzh Servi
100.00% Set-up
Management Co., Ltd. hou ou ce
147
Changchai Company, Limited Interim Report 2023
Combination
Zhenjiang Siyang Diesel Engine Zhenjia Zhenjian Indus
41.50% not under the
Manufacturing Co., Ltd. ng g try
same control
Note: The Company holds 41.5% shares of Zhenjiang Siyang Diesel Engine Manufacturing Co., Ltd. as the
largest shareholder of it. Other shares are employee shares and non-employee shares, relatively dispersed. No
other shareholder has a higher shareholding ratio that is close to that of the actual controller. The Board of
Directors of Zhenjiang Siyang Diesel Engine Manufacturing Co., Ltd. consists of seven members, of which five
members including the Chairman of the Board are sent by the Company. Thus, the Company is the actual
controller of Zhenjiang Siyang Diesel Engine Manufacturing Co., Ltd., which forms the merge conditions.
(2) Significant Non-wholly-owned Subsidiary
Unit: RMB
Declaring
Shareholding The profit or loss Balance of
dividends
proportion of attributable to the non-controlling
Name distributed to
non-controlling non-controlling interests at the
non-controlling
interests interests period-end
interests
Changchai
Wanzhou Diesel 40.00% 85,187.53 19,790,830.78
Engine Co., Ltd.
Zhenjiang Siyang
Diesel Engine
58.50% 4,077,211.73 56,835,741.15
Manufacturing Co.,
Ltd.
Holding proportion of non-controlling interests in subsidiary different from voting proportion: Not applicable
(3) The Main Financial Information of Significant Not Wholly-owned Subsidiary
Unit: RMB
Ending balance Beginning balance
Non- Non-
Non- Curre Non- Curre
Curre curre Total Curre curre Total
Name curre Total nt curre Total nt
nt nt liabili nt nt liabili
nt assets liabili nt assets liabili
assets liabili ties assets liabili ties
assets ties assets ties
ty ty
Chan
gchai
Wanz
hou 48,07 22,77 70,85 21,37 21,37 47,13 23,22 70,36 21,09 21,09
Diese 4,711. 5,552 0,263 3,187 3,187 3,617 8,110. 1,727 7,619 7,619
l 77 .20 .97 .02 .02 .16 09 .25 .13 .13
Engin
e Co.,
Ltd.
148
Changchai Company, Limited Interim Report 2023
Zhenj
iang
Siyan
g
Diese
l 88,12 27,20 115,3 17,83 18,16 82,69 28,04 110,7 20,23 20,55
333,5 322,7
Engin 4,204 0,773 24,97 6,297 9,864 7,983 5,494 43,47 5,256 7,957
67.42 01.42
e .01 .86 7.87 .37 .79 .58 .39 7.97 .17 .59
Manu
factur
ing
Co.,
Ltd.
Unit: RMB
Reporting Period Same period of last year
Cash Cash
Total Total
flows flows
Name Operating comprehe Operating comprehe
Net profit from Net profit from
revenue nsive revenue nsive
operating operating
income income
activities activities
Changcha
i
Wanzhou 26,190,04 212,968.8 212,968.8 -8,525,64 17,154,26 -306,598. -306,598. -3,005,98
Diesel 3.15 3 3 6.36 9.32 18 18 1.47
Engine
Co., Ltd.
Zhenjian
g Siyang
Diesel
38,098,31 6,969,592 6,969,592 7,732,566 4,813,008 206,678.9 206,678.9 6,994,726
Engine
2.48 .70 .70 .01 .16 6 6 .52
Manufact
uring
Co., Ltd.
2. Equity in the Structured Entity Excluded in the Scope of Consolidated Financial Statements
Notes to the structured entity excluded in the scope of consolidated financial statements:
In 2017, the Company set up Changzhou Xietong Private Equity Fund (Limited Partnership) together with
Synergetic Innovation Fund Management Co., Ltd. through joint investment. On 18 October 2018 and 3
December 2020, new partners were respectively added. On 29 December 2022, the Company transferred the
partnership shares. In line with the revised Partnership Agreement, the general partner is Synergetic Innovation
Fund Management Co., Ltd., and the limited partners are Changchai Company, Limited, Changzhou Zhongyou
Petroleum Sales Co., Ltd., Changzhou Fuel Co., Ltd., Tong Yinzhu, Tong Yinxin, Anhui Haiyunzhou Equity
Investment Partnership Enterprise (Limited), Shenzhen Jiaxin No. 1 Venture Capital Partnership (Limited
Partnership) and Zhong Wende. In accordance with the Partnership Agreement, the limited partner does not
execute the partnership affairs. Thus, the Company does not control Changzhou Xietong Private Equity Fund
(Limited Partnership) and did not include it into the scope of consolidated financial statements.
149
Changchai Company, Limited Interim Report 2023
IX. The Risk Related to Financial Instruments
The goal of the Company’s risk management was gaining the balance between the risk and income, and reduced
the negative impact to the operation performance of the Company in the lowest level and maximized the interests
of shareholders and other equity investors. Base on the risk management goal, the basis strategy of the Company’s
risk management was to recognized and analyze all kinds of risk that the Company faced, set up suitable risk
bottom line and conduct risk management, and supervised the risks timely and reliably and control the risk within
the limited scope.
The main risks of the Company due to financial instruments were credit risk, liquidity risk and market risk. The
management level had reviewed and approved the policies to manage the risks, which summarized as follows:
(I) Credit Risk
Credit risk was one party of the contract failed to fulfill the obligations and causes loss of financial assets of the
other party.
The credit of risk of the Company mainly was related to account receivable, in order to control the risk, the
Company conduct the following methods.
The Company only conducts related transaction with approved and reputable third party, in line with the policy of
the Company, the Company need to conduct credit-check for the clients adopting way of credit to conduct
transaction. In addition, the Company continuously monitors the balance of account receivable to ensure the
Company would not face the significant bad debt risk.
(II) Liquidity Risk
Liquidity risk is referred to the risk of incurring capital shortage when performing settlement obligation in the way
of cash payment or other financial assets. The policies of the Company are to ensure that there was sufficient cash
to pay the due liabilities.
The liquidity risk was centralized controlled by the financial department of the Company. The financial
departments through supervising the balance of the cash and securities can be convert to cash at any time and the
rolling prediction of cash flow in future 12 months to ensure the Company has sufficient cash to pay the liabilities
under the case of all reasonable prediction.
(III) Market Risk
Market risk is refer to risk of the fair value or future cash flow of financial instrument changed due to the change
of market price, including foreign exchange rate risk, interest rate risk.
1. Interest Rate Risk
Interest rate risk is refers to fluctuation risk of the fair value or future cash flow of financial instrument change due
to the change of market price.
2. Foreign Exchange Risk
Foreign exchange rate risk is referred to the risk incurred form the change of exchange rate. As for the Company’s
export business, customers will be given a certain credit term, if the RMB appreciates against the dollar, the
company's accounts receivable will incur foreign currency exchange loss.
X. The Disclosure of Fair Value
1. Ending Fair Value of Assets and Liabilities at Fair Value
Unit: RMB
150
Changchai Company, Limited Interim Report 2023
Ending fair value
Fair value Fair value Fair value
Item
measurement items measurement items measurement items Total
at level 1 at level 2 at level 3
I. Consistent fair
-- -- -- --
value measurement
(I) Trading financial
111,116,698.21 250,354,111.11 361,470,809.32
assets
1. Financial assets
at fair value through 111,116,698.21 250,354,111.11 361,470,809.32
profit or loss
(1) Debt instrument
investment
(2) Equity
instrument 111,116,698.21 111,116,698.21
investment
(3) Derivative
financial assets
Wealth
management 250,354,111.11 250,354,111.11
investments
2. Financial assets
designated to be
measured at fair
value and the
changes included
into the current
profit or loss
(1) Debt instrument
investment
(2) Equity
instrument
investment
(II) Other
investments in debt
obligations
(III)Other equity
instrument 663,290,000.00 378,929,240.08 1,042,219,240.08
investment
(IV) Investment
property
151
Changchai Company, Limited Interim Report 2023
1. Land use right
for lease
2. Buildings leased
out
3. Land use right
held and planned to
be transferred once
appreciating
(V) Living assets
1. Consumptive
living assets
2. Productive living
assets
Accounts receivable
73,649,132.14 73,649,132.14
financing
Other non-current
373,500,000.00 373,500,000.00
financial assets
Total assets
consistently
774,406,698.21 250,354,111.11 826,078,372.22 1,850,839,181.54
measured by fair
value
(VI) Trading
financial liabilities
Of which: Issued
trading bonds
Derivative financial
liabilities
Other
(VII) Financial
liabilities
designated to be
measured at fair
value and the
changes recorded
into the current
profit or loss
Total liabilities
consistently
measured by fair
value
152
Changchai Company, Limited Interim Report 2023
II. Inconsistent fair
-- -- -- --
value measurement
(1) Assets held for
sale
Total assets
inconsistently
measured by fair
value
Total liabilities
inconsistently
measured by fair
value
2. Market Price Recognition Basis for Consistent and Inconsistent Fair Value Measurement Items at Level
1
For the listed company stocks held by the company in the held-for-trading financial assets measured at fair value,
the closing market price on the balance sheet date was the basis for the measurement of fair value.
3. Valuation Technique Adopted and Nature and Amount Determination of Important Parameters for
Consistent and Inconsistent Fair Value Measurement Items at Level 2
Wealth management and investment: The underlying assets of investment in wealth management products include
bond assets, deposit assets, fund assets, etc. The portfolio of investment assets should be dynamically managed.
The fair value of wealth management products should be adjusted according to the yield of similar products
provided by the counterparty.
4. Valuation Technique Adopted and Nature and Amount Determination of Important Parameters for
Consistent and Inconsistent Fair Value Measurement Items at Level 3
(1) Accounts receivable financing: Accounts receivable financing is a bank acceptance with high credit rating,
short maturity and low risk. The par amount is close to the fair value and is used as the fair value.
(2) Among the other non-current financial assets: for the investments in equity instrument of Jiangsu Horizon New
Energy Technology Co., Ltd., Jiangsu Horizon New Energy Technology Co., Ltd. entrusted an appraisal agency to
evaluate the value of all its shareholders’ equity due to the need for capital increase and share expansion in 2022,
and confirmed the premium rate of capital increase based on the appreciation rate of the equity value. The
company’s new investors signed the investment agreements respectively 29 August 2022. Therefore, the fair value
of the equity investment had been adjusted and confirmed accordingly based on the premium rate of the latest
financing.
(3) Among other equity investment instruments, the total investment in Chengdu Changwan Diesel Engine
Distribution Co., Ltd., Chongqing Wanzhou Changwan Diesel Engine Parts Co., Ltd., Changzhou Economic and
Technological Development Company, Changzhou Tractor Company, Changzhou Economic Commission
Industrial Capital Mutual Aid Association, Beijing Engineering Machinery Agricultural Machinery Company was
153
Changchai Company, Limited Interim Report 2023
RMB 1.21 million, and the fair value was RMB 0.00 due to the difficulty in recovering the investment.
Since its establishment in October 2017, Changzhou Synergetic Innovation Private Equity Fund (Limited
Partnership) has increased the equity of partners at the end of the year due to the change in fair value of the equity
held by it. In addition, the company's business environment, operating conditions, and financial status had not
undergone major changes. Therefore, the company determined its fair value on the basis of the net book assets of
the partnership at the end of the period.
5. Sensitiveness Analysis on Unobservable Parameters and Adjustment Information between Beginning and
Ending Carrying Value of Consistent Fair Value Measurement Items at Level 3
Not applicable
6. Explain the Reason for Conversion and the Governing Policy when the Conversion Happens if
Conversion Happens among Consistent Fair Value Measurement Items at Different Levels
Not applicable
7. Changes in the Valuation Technique in the Current Period and the Reason for Such Changes
Not applicable
8. Fair Value of Financial Assets and Liabilities Not Measured at Fair Value
The financial assets and liabilities measured at amortization cost mainly include notes receivable, accounts
receivable, other receivables, short-term borrowings, accounts payable, other payables, etc. The difference
between the carrying value and fair value for financial assets and liabilities not measured at fair value is small.
9. Other
During the Reporting Period, there was no conversion between Level 1 and Level 2, nor was there any transfer to
or from Level 3 for the fair value measurement of the Company's financial assets and financial liabilities.
XI. Related Party and Related-party Transactions
1. Information Related to the Company as the Parent of the Company
Proportion of Proportion of
share held by voting rights
Registration Nature of Registered the Company as owned by the
Name
place business capital the parent Company as the
against the parent against
Company the Company
154
Changchai Company, Limited Interim Report 2023
Investment and
operations of
state-owned
assets, assets
management
(excluding
Changzhou financial
Investment Changzhou business), RMB1.2 billion 32.26% 32.26%
Group Co., Ltd. investment
consulting
(excluding
consulting on
investment in
securities and
options), etc.
Notes: Information on the Company as the parent
The parent company of the Company is Changzhou Investment Group Co., Ltd. According to the guiding
principle of the Notice of Provincial Government on Issuing the Implementation Plan for Transferring Part of
State-owned Capital to Boost Social Security Fund in Jiangsu Province (SZF [2020] No. 27), the Notice on
Transferring Part of State-owned Capital to Cities and Counties to Boost Social Security Fund (SCGM [2020] No.
139) from the Department of Finance of Jiangsu Province and other five departments and the Notice on
Transferring Part of State-owned Capital at Urban (District) Level to Boost Social Security Fund (CCGM [2020]
No. 4) from Changzhou Finance Bureau and other four departments, the 10% state-owned equity of the
Investment Group held by Changzhou Municipal People's Government is transferred to the Department of Finance
of Jiangsu Province free of charge. After the share transfer, Changzhou People’s Government holds 90%
state-owned equity of the Investment Group and the Department of Finance of Jiangsu Province holds 10%
state-owned equity of the Investment Group. In accordance with Changzhou People’s Government Document
(CZF [2006] No. 62), Changzhou Investment Group Co., Ltd. is an enterprise which Changzhou People’s
Government authorizes Changzhou Government State-owned Assets Supervision and Administration Commission
to perform duties of investors. Thus, Changzhou Investment Group Co., Ltd. is the controlling shareholder of the
Company and Changzhou Government State-owned Assets Supervision and Administration Commission is still
the actual controller of the Company. The final controller of the Company is Changzhou Government State-owned
Assets Supervision and Administration Commission.
2. Subsidiaries of the Company
Refer to Note VIII for details.
3. Information on Other Related Parties
Name Relationship with the Company
Changzhou Synergetic Innovation Private Equity Participated in establishing the industrial investment
Fund (Limited Partnership) fund
155
Changchai Company, Limited Interim Report 2023
Jiangsu Horizon New Energy Technology Co., Ltd. Shareholding enterprise of the Company
XII. Commitments and Contingency
1. Significant Commitments
Significant commitments on balance sheet date
As of 30 June 2023, there was no significant commitment for the Company to disclose.
2. Contingency
(1) Significant Contingency on Balance Sheet Date
None
(2) In Despite of no Significant Contingency to Disclose, the Company Shall Also Make Relevant Statements
There was no significant contingency in the Company.
XIII. Events after Balance Sheet Date
1. Notes to Other Events after Balance Sheet Date
There was no other event after balance sheet date.
XIV. Other Significant Events
1. Segment Information
(1) Determination Basis and Accounting Policies of Reportable Segment
Due to the operation scope of the Company and subsidiaries were similar, the Company conducts common
management, and did not divide business unit, so the Company only made single branch report.
2. Other Significant Transactions and Events with Influence on Investors’ Decision-making
None
XV. Notes of Main Items in the Financial Statements of the Company as the Parent
1. Accounts Receivable
(1) Accounts Receivable Classified by Category
Unit: RMB
156
Changchai Company, Limited Interim Report 2023
Ending balance Beginning balance
Carrying Bad debt Carrying Bad debt
amount provision amount provision
Carryi
Category Withd Withd Carryin
ng
Amou Propo Amou rawal Amou Propor Amou rawal g value
value
nt rtion nt propo nt tion nt propor
rtion tion
Accounts
receivable for
which bad debt 27,36 21,75 5,605, 27,36 21,607
79.52 78.96 5,756,6
4,067. 2.72% 8,623. 444.0 4,067. 6.22% ,429.5
provision % % 37.84
34 26 8 34 0
separately
accrued
Of which:
Accounts
receivable for
which bad debt 977,5 101,7 875,7 412,7 89,464
97.28 10.41 93.78 21.67 323,304
09,25 95,62 13,63 69,15 ,855.7
provision % % % % ,302.66
5.46 0.16 5.30 8.39 3
accrued by
group
Of which:
Accounts
receivable for
which bad debt 977,5 101,7 875,7 412,7 89,464
97.28 10.41 93.78 21.67 323,304
provision 09,25 95,62 13,63 69,15 ,855.7
% % % % ,302.66
accrued by 5.46 0.16 5.30 8.39 3
credit risk
features group
1,004, 123,5 881,3 440,1 111,07
100.0 12.30 100.00 25.24 329,060
Total 873,3 54,24 19,07 33,22 2,285.
0% % % % ,940.50
22.80 3.42 9.38 5.73 23
Accounts receivable with significant single amount for which bad debt provision separately accrued at the end of
the period:
Unit: RMB
Ending balance
Name Carrying Bad debt Withdrawal
Withdrawal reason
amount provision proportion
Customer1 1,470,110.64 1,470,110.64 100.00% Difficult to recover
Customer2 1,902,326.58 1,902,326.58 100.00% Difficult to recover
Customer3 6,215,662.64 6,215,662.64 100.00% Difficult to recover
157
Changchai Company, Limited Interim Report 2023
Customer4 2,797,123.26 2,194,980.28 78.47% Expected to difficultly recover
Customer5 3,633,081.23 2,122,165.73 58.41% Expected to difficultly recover
Customer6 2,584,805.83 2,584,805.83 100.00% Difficult to recover
Customer7 1,731,493.71 1,731,493.71 100.00% Difficult to recover
Customer8 1,511,937.64 755,968.82 50.00% Expected to difficultly recover
Customer9 3,329,074.84 720,031.71 21.63% Expected to difficultly recover
Total 25,175,616.37 19,697,545.94
Accounts receivable for which bad debt provision accrued by credit risk features group
Unit: RMB
Ending balance
Name
Carrying amount Bad debt provision Withdrawal proportion
Within 1 year 859,890,514.81 17,197,810.30 2.00%
1 to 2 years 26,758,256.03 1,337,912.80 5.00%
2 to 3 years 7,082,680.52 1,062,402.08 15.00%
3 to 4 years 1,750,847.90 525,254.38 30.00%
4 to 5 years 886,788.94 532,073.36 60.00%
Over 5 years 81,140,167.20 81,140,167.24 100.00%
Total 977,509,255.46 101,795,620.16
Notes to the basis for the determination of the groups:
The accounts receivable was adopted the aging analysis based on the months when the accounts occurred actually,
among which the accounts occurred earlier will be priority to be settled in terms of the capital turnover.
Explanation of the input value and assumption adopted to determine the withdrawal amount of bad debt provision
on the Current Period: With reference to the experience of the historical credit loss, combining with the prediction
of the present status and future financial situation, the comparison table was prepared between the aging of the
accounts receivable and estimated credit loss rate in the duration and to calculate the estimated credit loss.
Please refer to the relevant information of disclosure of bad debt provision of other accounts receivable if
adopting the general mode of expected credit loss to withdraw bad debt provision of accounts receivable.
□ Applicable √ Not applicable
Disclosure by aging
Unit: RMB
Aging Carrying amount
Within 1 year (including 1 year) 863,346,963.30
1 to 2 years 27,300,968.69
2 to 3 years 7,082,680.52
Over 3 years 107,142,710.29
3 to 4 years 3,838,737.01
158
Changchai Company, Limited Interim Report 2023
4 to 5 years 2,836,538.50
Over 5 years 100,467,434.78
Total 1,004,873,322.80
(2) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
Unit: RMB
Changes in the Reporting Period
Beginning
Category Reversal or Ending balance
balance Withdrawal Write-off Other
recovery
Bad debt
provision
21,607,429.50 151,193.76 21,758,623.26
withdrawn
separately
Bad debt
provision
89,464,855.73 12,330,764.43 101,795,620.16
withdrawn
by group
Total 111,072,285.23 12,481,958.19 123,554,243.42
Of which bad debt provision reversed or recovered with significant amount in the Reporting Period: No.
(3) There were no accounts receivable with actual verification during the Reporting Period.
(4) Top 5 of the Ending Balance of Accounts Receivable Collected according to the Arrears Party
Unit: RMB
Name of the Ending balance of accounts Proportion to total ending Ending balance of bad
entity receivable balance of accounts receivable debt provision
Customer1 552,639,182.57 55.00% 12,458,137.94
Customer2 84,694,433.47 8.43% 1,693,888.67
Customer3 41,213,013.00 4.10% 824,260.26
Customer4 40,039,625.72 3.98% 800,792.51
Customer5 33,964,600.00 3.38% 679,292.00
Total 752,550,854.76 74.89%
2. Other Receivables
Unit: RMB
Item Ending balance Beginning balance
159
Changchai Company, Limited Interim Report 2023
Other receivables 360,599,343.16 179,596,495.57
Total 360,599,343.16 179,596,495.57
(1) Other Receivable
1) Other Receivables Classified by Account Nature
Unit: RMB
Nature Ending carrying amount Beginning carrying amount
Collecting land collection and
47,000,000.00
storage funds on behalf
Cash deposit and Margin 1,300.00 1,300.00
Intercourse funds among units 347,191,045.14 214,624,107.53
Petty cash and borrowings by
642,563.68 671,817.84
employees
Other 13,593,526.32 13,635,256.64
Total 408,428,435.14 228,932,482.01
2) Withdrawal of Bad Debt Provision
Unit: RMB
First stage Second stage Third stage
Expected loss in the Expected loss in the
Expected credit loss
Bad debt provision duration (credit duration (credit Total
of the next 12
impairment not impairment
months
occurred) occurred)
Balance of 1
26,186.99 209,876.70 49,099,922.75 49,335,986.44
January 2023
Balance of 1
January 2023 in the
Current Period
Withdrawal of the
986,089.16 986,089.16
Current Period
Reversal of the
2,492,983.62 2,492,983.62
Current Period
Balance of 30 June
1,012,276.15 209,876.70 46,606,939.13 47,829,091.98
2023
Changes of carrying amount with significant amount changed of loss provision in the Current Period
□ Applicable √ Not applicable
160
Changchai Company, Limited Interim Report 2023
Disclosure by aging
Unit: RMB
Aging Carrying amount
Within 1 year (including 1 year) 361,587,084.62
1 to 2 years 17,302,125.74
2 to 3 years 161,608.32
Over 3 years 29,377,616.46
3 to 4 years 440,952.49
4 to 5 years 389,176.36
Over 5 years 28,547,487.61
Total 408,428,435.14
3) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
Information of bad debt provision withdrawn:
Unit: RMB
Changes in the Reporting Period
Beginning
Category Reversal or Write-of Ending balance
balance Withdrawal Other
recovery f
Bad debt
provision
25,757,409.37 2,492,983.62 23,264,425.75
withdrawn
separately
Bad debt
provision
23,578,577.07 986,089.16 24,564,666.23
withdrawn by
group
Total 49,335,986.44 986,089.16 2,492,983.62 47,829,091.98
4) Particulars of the Actual Verification of Other Receivables during the Reporting Period: None.
5) Top 5 of the Ending Balance of Other Receivables Collected according to the Arrears Party
Unit: RMB
Proportion to
total ending Ending balance
Name of the entity Nature Ending balance Aging balance of of bad debt
other provision
receivables
161
Changchai Company, Limited Interim Report 2023
Jiangsu Changchai Interco
Machinery urse 270,624,584.71 1-2 years 65.82% ——
Manufacturing Co., Ltd. funds
Changzhou Zhonglou
Interco
District Housing and
urse 47,000,000.00 Within 1 year 11.43% 940,000.00
Urban Rural
funds
Development Bureau
Changzhou Changchai Interco
Horizon Agricultural urse 17,728,140.31 Within 1 year 4.31% 17,728,140.31
Equipment Co., Ltd. funds
Interco
Changzhou Changniu
urse 9,000,000.00 1-2 years 2.19% ——
Machinery Co., Ltd.
funds
Interco
Changzhou Compressors
urse 2,940,000.00 Over 5 years 0.72% 2,940,000.00
Factory
funds
Total 347,292,725.02 84.47% 21,608,140.31
6) Derecognition of Other Receivables due to the Transfer of Financial Assets: none
7) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvement of
Other Receivables: none
3. Long-term Equity Investment
Unit: RMB
Ending balance Beginning balance
Item Carrying Depreciation Carrying Carrying Depreciation Carrying
amount reserves value amount reserves value
Investment to 576,273,530. 569,273,530. 576,273,530. 569,273,530.
7,000,000.00 7,000,000.00
subsidiaries 03 03 03 03
Investment to
joint ventures
and 44,182.50 44,182.50 44,182.50 44,182.50
associated
enterprises
576,317,712. 569,273,530. 576,317,712. 569,273,530.
Total 7,044,182.50 7,044,182.50
53 03 53 03
(1) Investment to Subsidiaries
Unit: RMB
Beginning Increase/decrease Ending Ending
Investee balance balance balance of
Additional Reduced Withdrawa Other
(carrying (carrying depreciatio
162
Changchai Company, Limited Interim Report 2023
value) investment investment l of value) n reserve
depreciatio
n reserve
Changchai
Wanzhou
51,000,000 51,000,000
Diesel
.00 .00
Engine Co.,
Ltd.
Changzhou
Changchai
Benniu
96,466,500 96,466,500
Diesel
.00 .00
Engine
Fittings Co.,
Ltd.
Changzhou
Horizon 40,000,000 40,000,000
Investment .00 .00
Co., Ltd.
Changzhou
Changchai
Horizon 7,000,000.
0.00 0.00
Agricultural 00
Equipment
Co., Ltd.
Changzhou
Fuji
Changchai
47,286,230 47,286,230
Robin
.03 .03
Gasoline
Engine Co.,
Ltd.
Jiangsu
Changchai 300,000,00 300,000,00
Machinery 0.00 0.00
Co., Ltd.
Changzhou
Xingsheng
1,000,000. 1,000,000.
Property
00 00
Managemen
t Co., Ltd.
Zhenjiang 33,520,800 33,520,800
163
Changchai Company, Limited Interim Report 2023
Siyang .00 .00
Diesel
Engine
Manufacturi
ng Co., Ltd.
569,273,53 569,273,53 7,000,000.
Total
0.03 0.03 00
(2) Investment to Joint Ventures and Associated Enterprises
Unit: RMB
Increase/decrease
Gains
Adjust Endin
Begin and Cash Endin
ment Withd g
ning losses bonus g
of rawal balanc
balanc Additi Reduc recogn Chang or balanc
Invest other of e of
e onal ed ized es of profits e
ee compr impair Other deprec
(carryi invest invest under other annou (carryi
ehensi ment iation
ng ment ment the equity nced ng
ve provis reserv
value) equity to value)
incom ion e
metho issue
e
d
II. Associated enterprises
Beijin
g
Tsingh
ua
Xingy
e
Indust 44,182
0.00 0.00
rial .50
Invest
ment
Mana
gemen
t Co.,
Ltd.
Subtot 44,182
0.00 0.00
al .50
44,182
Total 0.00 0.00
.50
164
Changchai Company, Limited Interim Report 2023
4. Operating Revenue and Cost of Sales
Unit: RMB
Reporting Period Same period of last year
Item
Operating revenue Cost of sales Operating revenue Cost of sales
Main operations 1,229,806,219.61 1,080,327,550.17 1,063,899,643.27 960,873,534.45
Other operations 15,360,013.94 12,076,793.29 14,401,885.93 10,099,571.18
Total 1,245,166,233.55 1,092,404,343.46 1,078,301,529.20 970,973,105.63
Information on revenue:
Unit: RMB
Category of contracts Segment 1
Product Types
Of which:
Single-cylinder diesel engines 607,361,121.44
Multi-cylinder diesel engines 584,029,144.61
Other products 21,859,902.74
Fittings 16,556,050.82
Classified by business area
Of which:
Sales in domestic market 1,046,596,379.76
Export sales 183,209,839.85
Total 1,229,806,219.61
Information related to performance obligations: none
5. Investment Income
Unit: RMB
Same period of last
Item Reporting Period
year
Investment income from disposal of held-for-trading
4,322,777.77 4,099,001.28
financial assets
Dividend income from holding of other equity
9,360,000.00
instrument investment
Interest from holding of investments in debt
705,680.77
obligations
Income from refinancing operations 14,396.97 60,799.49
Accounts receivable financing-discount interest of
-2,310,613.28 -2,338,416.66
bank acceptance bills
Total 2,732,242.23 11,181,384.11
165
Changchai Company, Limited Interim Report 2023
XVI. Supplementary Materials
1. Items and Amounts of Non-recurring Profit or Loss
√ Applicable □ Not applicable
Unit: RMB
Item Amount Note
Due to the expropriation of houses on
the state-owned land of Changzhou
Gain or loss on disposal of non-current assets 105,395,693.25
Wuxing Branch during the Reporting
Period
Government subsidies charged to current profit or
loss (exclusive of government subsidies given in
the Company’s ordinary course of business at 3,299,056.52
fixed quotas or amounts as per the government’s
uniform standards)
Gain/loss from change of fair value of trading Increase in the fair value of the stocks
financial assets and liabilities, and investment of Jiangsu Liance Electromechanical
Technology Co., Ltd., Kailong High
gains from disposal of trading financial assets and Technology Co., Ltd., Guilin Stars
liabilities, and derivative financial assets and 22,587,377.56 Science and Technology Co., Ltd. and
liabilities, and available-for-sale financial assets, Henan Lantian Gas Co., Ltd. held by
the Company’s wholly-owned
other than valid hedging related to the Company’s subsidiary Horizon Investment during
common businesses the Reporting Period
Other non-operating income and expenses other
-801,809.16
than the above
Less: Income tax effects 4,621,569.20
Non-controlling interests effects -253,031.71
Total 126,111,780.68 --
Others that meets the definition of non-recurring gain/loss:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Explain the reasons if the Company classifies any extraordinary gain/loss item mentioned in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the
Public—Non-recurring Gains and Losses as a recurrent gain/loss item
□ Applicable √ Not applicable
2. Return on Equity and Earnings Per Share
Weighted average ROE EPS (Yuan/share)
Profit as of Reporting Period
(%) EPS-basic EPS-diluted
Net profit attributable to ordinary
3.93% 0.1870 0.1870
shareholders of the Company
166
Changchai Company, Limited Interim Report 2023
Net profit attributable to ordinary
shareholders of the Company after
0.17% 0.0083 0.0083
deduction of non-recurring profit
or loss
3. Differences between Accounting Data under Domestic and Overseas Accounting Standards
(1) Differences of Net Profit and Net Assets Disclosed in Financial Reports Prepared under International
and Chinese Accounting Standards
□ Applicable Not applicable
(2) Differences of Net profit and Net assets Disclosed in Financial Reports Prepared under Overseas and
Chinese Accounting Standards
□ Applicable Not applicable
The Board of Directors
Changchai Company, Limited
22 August 2023
167
