Changchai Company, Limited Interim Report 2018
CHANGCHAI COMPANY, LIMITED
INTERIM REPORT 2018
August 2018
1
Changchai Company, Limited Interim Report 2018
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.
Shi Xinkun, the Company’s legal representative, Zhang Xin, the Company’s 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 and other forward-looking statements mentioned in this Report and its
summary shall NOT be considered as absolute promises of the Company to investors. Investors and
other stakeholders shall be sufficiently aware of the risk and shall differentiate between
plans/forecasts and promises.
The Company has no interim dividend plan, either in the form of cash or stock.
This Report and its summary have been prepared in both Chinese and English. Should there be
any discrepancies or misunderstandings between the two versions, the Chinese versions shall
prevail.
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Changchai Company, Limited Interim Report 2018
Table of Contents
Part I Important Notes, Table of Contents and Definitions..................................... 2
Part II Corporate Information and Key Financial Information............................. 5
Part III Business Summary..........................................................................................8
Part IV Operating Performance Discussion and Analysis......................................11
Part V Significant Events........................................................................................... 17
Part VI Share Changes and Shareholder Information........................................... 25
Part VII Preferred Shares.......................................................................................... 30
Part VIII Directors, Supervisors and Senior Management....................................31
Part IX Corporate Bonds........................................................................................... 32
Part X Financial Report............................................................................................. 33
Part XI Documents Available for Reference.......................................................... 135
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Changchai Company, Limited Interim Report 2018
Definitions
Term Definition
Changchai Company, Limited and its consolidated
“Changchai”, the “Company” or “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.
Housheng Investment Changzhou Housheng Investment Co., Ltd.
Changzhou Changchai Housheng Agricultural Equipment
Housheng Agricultural Equipment
Co., Ltd.
Changzhou Fuji Changchai Robin Gasoline Engine Co.,
Changchai Robin
Ltd.
Expressed in the Chinese currency of Renminbi, expressed
RMB, RMB’0,000
in ten thousand Renminbi
The “Reporting Period” or “Current
The period from 1 January 2018 to 30 June 2018
Period”
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Changchai Company, Limited Interim Report 2018
Part II Corporate Information and Key Financial Information
I Corporate Information
Stock name Changchai A, Changchai B Stock code 000570, 200570
Stock exchange for stock 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 any) CHANGCHAI COMPANY, LIMITED
Abbr. (if any) CHANGCHAI CO., LTD.
Legal representative Shi Xinkun
II Contact Information
Board Secretary Securities Representative
Name He Jianjiang
Address 123 Huaide Middle Road, 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 2017 Annual
Report.
2. Media for Information Disclosure and Place where this Report is Kept
Indicate by tick mark whether any change occurred to the information disclosure media and the place for keeping
the Company’s periodic reports in the Reporting Period.
□ Applicable √ Not applicable
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Changchai Company, Limited Interim Report 2018
The newspapers designated by the Company for information disclosure, the website designated by the CSRC for
disclosing the Company’s periodic reports and the place for keeping such reports did not change in the Reporting
Period. The said information can be found in the 2017 Annual Report.
IV Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √ No
Change
H1 2018 H1 2017
(%)
Operating revenue (RMB) 1,186,760,892.26 1,308,106,180.92 -9.28%
Net profit attributable to the listed company’s
18,638,557.66 39,679,158.13 -53.03%
shareholders (RMB)
Net profit attributable to the listed company’s
17,262,823.25 20,774,047.49 -16.90%
shareholders before exceptional items (RMB)
Net cash generated from/used in operating activities
-5,608,853.15 64,379,323.31 -
(RMB)
Basic earnings per share (RMB/share) 0.03 0.07 -57.14%
Diluted earnings per share (RMB/share) 0.03 0.07 -57.14%
Weighted average return on net assets (%) 0.86% 1.71% -0.85%
31 December Change
30 June 2018
2017 (%)
Total assets (RMB) 3,694,504,040.78 3,722,905,285.05 -0.76%
Net assets attributable to the listed company’s
2,122,495,960.74 2,246,896,857.86 -5.54%
shareholders (RMB)
V Accounting Data Differences under Chinese Accounting Standards (CAS) and
International Financial Reporting Standards (IFRS) and Foreign Accounting Standards
1. Net Profit and Net Asset Differences under CAS and IFRS
□ Applicable √ Not applicable
No such differences for the Reporting Period.
2. Net Profit and Net Asset Differences under CAS and Foreign Accounting Standards
□ Applicable √ Not applicable
No such differences for the Reporting Period.
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Changchai Company, Limited Interim Report 2018
XI Exceptional Gains and Losses
√ Applicable □ Not applicable
Unit: RMB
Item Reporting Period Note
Gain or loss on disposal of non-current assets (inclusive of impairment
-512,440.14
allowance write-offs)
Government subsidies charged to current profit or loss (exclusive of
government subsidies given in the Company’s ordinary course of
129,600.00
business at fixed quotas or amounts as per government’s uniform
standards)
Capital occupation charges on non-financial enterprises that are charged
573,182.00
to current profit or loss
Gain or loss on fair-value changes in trading financial assets and
liabilities & investment income from disposal of trading financial assets
and liabilities and available-for-sale financial assets (exclusive of 355,091.68
effective portion of hedges that arise in the Company’s ordinary course
of business)
Other gains and losses that meet definition of exceptional gain/loss 1,114,871.58
Less: Income tax effects 284,570.71
Total 1,375,734.41 --
Explanation of why the Company classifies a gain/loss item as exceptional according to the definition in the
Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the
Public—Exceptional Gain/Loss Items, or reclassifies any exceptional item listed in the said explanatory
announcement as recurrent:
□ Applicable √ Not applicable
No such cases for the Reporting Period.
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Changchai Company, Limited Interim Report 2018
Part III Business Summary
I Core Business Scope of the Company in Reporting Period
Is the Company subject to any disclosure requirements for special industries?
No.
As a manufacturer, we specialize in the manufacture and sale of diesel engines, diesel engine fittings and
castings, gasoline engines, gasoline engine fittings, rotovators, walking tractors, molds and jigs as well as the
assembly and sale of diesel engine and gasoline engine supporting sets.
We mainly manufacture and sell small and medium-sized single-cylinder and multi-cylinder diesel engines
under the brand of “Changchai”, which are often used in tractors, combine-harvesters, light commercial vehicles,
agriculture equipment, small-sized engineering machinery, generator sets, ship machines, etc.
II Material Changes in Major Assets
1. Material Changes in Major Assets
Major assets Reason for material changes
The ending amount stood at RMB809,459,781.25, up 106.49% from the
beginning amount, primarily driven by the Company’s move to properly
allow customers’ buying on credit in order for more markets, and by a
Accounts receivable
higher percentage of multi-cylinder diesel engines in total sales
(multi-cylinder diesel engine customers are usually given longer payment
days for they are mostly supporting manufacturers)
The ending amount stood at RMB19,703,915.37, up 240.02% from the
beginning amount, primarily driven by a rise in current receivables of
Other receivables
Housheng Investment to Xuzhou Huadong Foundry Factory Co., Ltd. in
the Reporting Period
The ending amount stood at RMB406,509,269.60, down 20.02% from the
beginning amount, primarily driven by the Company’s move to adjust its
Inventories
manufacturing plans in a timely manner according to market changes and
to reduce inventory funds
The ending amount stood at RMB19,718,137.84, down 53.65% from the
Other current assets beginning amount, primarily driven by a decline in overpaid VAT of the
Reporting Period
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Changchai Company, Limited Interim Report 2018
2. Major Assets Overseas
□ Applicable √ Not applicable
III Core Competitiveness Analysis
Is the Company subject to any disclosure requirements for special industries?
No.
1. Advantages in Brand
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 ISO9000 quality system,
ISO14001 environmental management system, ISO/TS16949 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”, “Jiangsu Independent Industries Brand Top 50”, “Quality
Management Excellence Award of Jiangsu Province”, “Mayor Quality Award of Changzhou City”, also our
company won as the 10 users most satisfied leading brands in “Jing Geng” competition in the last five years. In
2017, the Company’s 4G33 product won the Quality New Product Award at the China (Jiangsu) International
Agricultural Machinery Fair, and the Company won the third prize in the Changzhou Entrepreneurship &
Innovation Contest organized by the local government. Besides, the Company was titled a “Top 100 Innovative
Enterprises of Jiangsu Province” and won the China Quality Sincerity Enterprise Award. In 2018, the Company
won the “2017 China Agricultural Machinery—Top 50+ Excellent Component Supplier Award”. 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. Its 4G33TC diesel engine has been included in the provincial catalog of key new technologies
and products to be promoted. Its 4G33TC and 3M78 diesel engines have been recognized as “high-tech products”
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Changchai Company, Limited Interim Report 2018
at the provincial level. Its 4G33 multi-cylinder diesel engines have won the Annual Innovative Product Award in
the agricultural machinery industry. And its 3M78 light engine won the New Proprietary Product Golden Award
for Equipment Manufacturing Sector at the provincial level. Currently, the Company has a total of 136 patents
granted by authorities at home and abroad, including 13 invention patents.
3. Advantages in Marketing
Changchai has built up a sales service network covering the whole country, with 11 sales business units, 30
sales service centers, over 1,000 service stations and 600 designated maintenance stations. With a perfect diesel
sales service network system, the Company is able to provide high quality, efficient and timely services for
customers. In 2017, the Company passed the customs’ high-level enterprise certification, providing more
assurance and convenience for it to expand export sales.
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Changchai Company, Limited Interim Report 2018
Part IV Operating Performance Discussion and Analysis
I Overview
For the first half of 2018, the Company sold 315.5 thousand diesel engines and related generator sets, as well
as 68.6 thousand gasoline engines and related generator sets for RMB1,187 million, representing net profit of
RMB18.9079 million (a year-on-year decline of 52.79%). During the period, the Company’s operations was in
face of quite many difficulties caused by the continued deep change in the domestic agricultural machinery market,
including rising diesel engine manufacturing costs resulted from increasingly stringent emission regulations, as
well as effects of enhanced environment supervision on certain component suppliers. Nonetheless, despite all
these challenges, the Company still managed to achieve good operating results amid a sharp growth decline across
the industry, thanks to the management’s swift moves to change operational strategy along with the entire staff’s
hard work.
Firstly, the Company has become a larger supply source for its major domestic customers and the domestic
markets of three-wheelers, mid-and-large tractors and harvesters in spite of sharp weakening across these markets.
Meanwhile, its unit sales in overseas emerging markets saw a rise, generating revenue of US$27.77 million during
the Reporting Period.
Secondly, the Company has launched a 4G33V16 diesel engine for automotive use project under China’s
Motor Vehicle Emission Standards VI, and the technology roadmap has been determined, with the related project
design and theoretical computation well underway. Additionally, three technology roadmaps and the prototypes
based on two of these technology roadmaps have been completed for the Company’s 4G33V16 diesel engine for
non-road vehicles project under China’s Motor Vehicle Emission Standards IV, with the harvester carrying test in
progress.
In all, the first half of 2018 saw a bigger market share of the Company’s single-cylinder engines, as well as
major breakthroughs made by its competitive 4G33 Engine in market segments for mid-and-large tractors, crawler
rice harvester, etc. In the second half of the year, in order to fulfill its annual targets, the Company will continue to
benchmark itself against the best operations in the industry and try to narrow the gap with them on quality-related
loss control, production safety and environmental protection, cost and expense reduction, production capacity
utilization, talent development, etc.
II Analysis of Core Businesses
See “I Overview” above.
Year-on-year changes in key financial data:
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Changchai Company, Limited Interim Report 2018
Unit: RMB
H1 2018 H1 2017 Change (%) Main reason for change
Operating revenue 1,186,760,892.26 1,308,106,180.92 -9.28%
Cost of sales 1,034,354,908.99 1,141,392,321.88 -9.38%
Selling expense 52,228,075.86 55,815,356.13 -6.43%
Administrative
62,434,487.46 73,398,067.51 -14.94%
expense
Mainly because that exchange
Finance costs -132,337.12 333,451.36 - gains and losses rose in the
reporting period
Income tax expense 4,352,526.65 5,670,998.75 -23.25%
R&D expense 34,066,872.15 34,348,304.81 -0.82%
Net cash generated Mainly because that exchange
from/used in -5,608,853.15 64,379,323.31 -- gains and accounts receivables
operating activities rose in the reporting period
Net cash generated In case of the subsidiary
from/used in -29,078,866.20 -53,774,916.26 - acquisition in the same period
investing activities of last year.
Net cash generated In case that debt payments
from/used in -8,263,008.91 -4,410,070.41 - increased in the reporting
financing activities period.
Accounts receivable increased
Net increase in cash during the reporting period, and
and cash -42,950,728.26 6,194,336.64 - the net cash flow of operating
equivalents activities decreased
significantly
Material changes to the profit structure or sources of the Company in the Reporting Period:
□ Applicable √ Not applicable
No such changes in the Reporting Period.
Breakdown of core businesses:
Unit: RMB
YoY
YoY YoY
Gross change in
Operating change in change in
Cost of sales profit operating
revenue cost of gross profit
margin revenue
sales (%) margin (%)
(%)
By operating division
Internal combustion 1,170,216,312. 1,021,184,769. 12.74
-9.84% -10.01% 0.17%
engine 13 09 %
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Changchai Company, Limited Interim Report 2018
By product category
1,107,401,975. 965,220,321.4 12.84
Diesel engine -14.68% -14.94% 0.27%
48 1 %
10.90
Gasoline engine 62,814,336.65 55,964,447.68 - - -
%
By operating segment
848,431,676.0 14.54 -13.57% -14.20% 0.63%
Domestic 992,724,179.13
4 %
172,753,093.0 15.85% 15.50% 0.41%
Overseas 177,492,133.00 2.67%
5
III Analysis of Non-Core Businesses
□ Applicable √ Not applicable
IV Analysis of Assets and Liabilities
1. Material Changes in Asset Composition
Unit: RMB
30 June 2018 30 June 2017 Chang
e in
As % of As % of
percen Reason for material change
Amount total Amount total
tage
assets assets
(%)
The ending amount stood at
RMB445,858,926.17, a 37.09%
decline from a year ago, for in
order to expand the market,
Monetary
708,692,252.73 18.58% credit sales increased and
assets
capital withdrawal
decreased.Also, the operating
income decreased during the
reporting period.
Accounts
745,551,114.30 19.55%
receivable
Inventories 448,832,816.34 11.77%
Investment
53,968,518.83 1.41%
property
Long-term
0.00 0.00%
equity
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Changchai Company, Limited Interim Report 2018
investments
Fixed assets 587,331,046.88 15.40%
Construction
69,532,401.98 1.82%
in progress
Short-term
23,000,000.00 0.60%
borrowings
Long-term Rise in long-term borrowings
0.00 0.00%
borrowings of the Company as the parent
2. Assets and Liabilities at Fair Value
√ Applicable □ Not applicable
Unit: RMB
Gain/loss on Cumulative Impairment
Purchase Sold in
fair-value fair-value allowance
Beginning d in Reporti Ending
Item changes in changes for
amount Reportin ng amount
Reporting charged to Reporting
g Period Period
Period equity Period
Financial assets
Available-for-sa
685,837,50 -148,468,50 388,870,32 537,369,
le financial
0.00 0.00 5.00 000.00
assets
Subtotal of 685,837,50 -148,468,50 388,870,32 537,369,
financial assets 0.00 0.00 5.00 000.00
685,837,50 -148,468,50 388,870,32 537,369,
Total of above
0.00 0.00 5.00 000.00
Financial
0.00 0.00
liabilities
Significant changes in the measurement attributes of the main assets in the Reporting Period:
□ Yes √ No
3. Restricted Asset Rights as of End of Reporting Period
Item Ending carrying value Reasons
Monetary funds 163,546,000.00Cash deposits of bank acceptance bill
House constructions 12,255,901.93Pledge for bank loans
Land use right 18,676,590.92 Pledge for bank loans
Total 194,478,492.85
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Changchai Company, Limited Interim Report 2018
V Investments Made
1. Total Investments Made
□ Applicable √ Not applicable
2. Significant Equity Investments Made in Reporting Period
□ Applicable √ Not applicable
3. Significant Non-Equity Investments Ongoing in the Reporting Period
□ Applicable √ Not applicable
4. Financial Investments
(1) Securities Investments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Investments in Derivative Financial Instruments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VI Sale of Major Assets and Equity Interests
1. Sale of Major Assets
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Sale of Major Equity Interests
□ Applicable √ Not applicable
VII Main Controlled and Joint Stock Companies
√ Applicable □ Not applicable
Main subsidiaries and stock-participating companies that have an influence on the net profit of the Company over
10%
Unit: RMB
Company Compan Main Registered Total Net Operating Operatin Net
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Changchai Company, Limited Interim Report 2018
name y variety business capital assets assets revenues g profit profit
Production
Changchai Subsidia of diesel 55,063,00 173,090, 90,943,7 98,950,23 -530,385 -284,05
Benniu ry engine 0.00 757.34 30.98 9.52 .96 2.73
accessories
Diesel
Changchai Subsidia 85,000,00 138,885, 115,958, 27,436,18 709,812. 603,34
engine
Wanzhou ry 0.00 758.78 535.07 5.91 99 1.04
assembly
External
Housheng Subsidia investment 30,000,00 37,000,0 36,139,9 476,699.0 638,553. 460,54
Investment ry and 0.00 59.53 12.80 3 01 6.22
consulting
agricultura
l
Housheng machinery
Subsidia 10,000,00 35,143,0 7,970,76 11,787,88 560,296. 560,29
Agricultural product of
ry 0.00 62.92 2.43 9.35 88 6.88
Equipment rice
transplante
r etc.
Gasoline
Changchai Subsidia 37,250,00 90,136,0 73,149,8 62,814,33 4,027,82 3,091,8
engines
Robin ry 0.00 78.85 24.15 6.65 8.33 90.16
assembly
Subsidiaries obtained or disposed in the Reporting Period:
□ Applicable √ Not applicable
VIII Structured Bodies Controlled by the Company
□ Applicable √ Not applicable
IX Performance Forecast for January-September 2018
Warning of possible loss or considerable YoY change in the accumulative net profit made during the
period-beginning to the end of the next reporting period, as well as the reasons:
□ Applicable √ Not applicable
X Risks Facing the Company and Countermeasures
1. Market risk
The main business of the Company is single with the production and sales of the single-cylinder leading
products declining greatly, and the current agricultural machinery industry is in a period of deep adjustment,
which makes the market sales more difficult.
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Changchai Company, Limited Interim Report 2018
Countermeasures: In terms of main business, the Company shall focus on intelligence and the internet of
things while strengthening the existing competitive products. In terms of marketing, the Company shall further
strengthen the construction of sales team, improve the product technical knowledge and sales communication
skills of the marketing team, and speed up the marketing of new products.
2. Procurement risk
The severe pressure on safety and environmental protection has led to the higher costs of parts manufacturing,
more demands for price adjustment by suppliers, and the increased instability of suppliers. There are some risks in
the procurement and supply of parts.
Countermeasures: The Company shall highly pay attention to the operating risks of suppliers, the suppliers’
dynamic with relatively high supply of parts, and the suppliers’ dynamic with little enthusiasm for cooperation or
whose business is being adjusted, and formulate targeted disposal plans.
3. Quality risk
With the switch of State III electronic control models, the requirements on the quality index of the relevant
parts of electronic control diesel engines and the matching quality of the whole engine are increasingly high.
Countermeasures: Taking the quality as the center, the Company shall, based on full participation, give full
play to the advantages of comparatively perfect quality management system and quality management team with
good quality. Closely focusing on the market demands and the existing problems, the Company shall further carry
out the responsibility and strengthen supervision, and strengthen comprehensively the quality management in the
respects of quality planning, quality control, quality assurance, and quality improvement, and etc.
Part V Significant Events
I Annual and Extraordinary General Meeting Convened during the Reporting Period
1. General Meeting Convened during the Reporting Period
Investor Index to
Meeting Type participation Convened date Disclosure date disclosed
ratio information
The 2017
Annual General
Annual General 31.18% 17 May 2018 18 May 2018 2018-014
Meeting
Meeting
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Changchai Company, Limited Interim Report 2018
2. Extraordinary General Meeting Convened at Request of Preference Shareholders with Resumed Voting
Rights
□ Applicable √ Not applicable
II Interim Dividend Plan for the Reporting Period
□ Applicable √ Not applicable
The Company has no interim dividend plan.
III Commitments of the Company’s Actual Controller, Shareholders, Connected Parties and
Acquirer, as well as the Company and Other Commitment Makers, Fulfilled in the Reporting
Period or still Ongoing at Period-End
√ Applicable □ Not applicable
Com Date of Period
Type of
mitme commit of Fulfill
Commitment commit Contents
nt ment commit ment
ment
maker making ment
Rewards Plan for Shareholders in
Next Three Years (2017-2019): 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
Imple
Chang money flow and no influence on the
Other chai menti
following-up going concern after Year
commitments Comp 11 May ng in
bonus cash bonus, the profits allocated by 2017-20
made to minority any, 2017 a
Limit cash every year shouldn’t be lower 19
shareholders norma
ed than 10% of the allocable profits
l way
from the Company as the parent.
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 Yes
Specific reasons
for failing to N/A
fulfill
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Changchai Company, Limited Interim Report 2018
commitments on
time and plans for
next step (if any)
IV Engagement and Disengagement of CPAs Firm
Has the interim financial report been audited?
□Yes √ No
This interim Report is unaudited.
V Explanations Given by Board of Directors and Supervisory Committee Regarding
“Modified Auditor’s Report” Issued by CPAs Firm for the Reporting Period
□ Applicable √ Not applicable
VI Explanations Given by Board of Directors Regarding “Modified Auditor’s Report” Issued
for Last Year
□ Applicable √ Not applicable
VII Bankruptcy and Restructuring
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VIII Legal Matters
Significant lawsuits or arbitrations:
√ Applicable □ Not applicable
Amount Forming Progres Trial result Enforcemen
Basic information of involved in the the s of the and t on the Disclo Discl
the lawsuit lawsuit estimated lawsuit influence of judgment of sure osure
(arbitration) (arbitration) liabilities (arbitra the lawsuit the lawsuit date index
(RMB’0,000) or not tion) (arbitration) (arbitration)
About the lawsuit Under the
case of Shandong compulsory
Hongli Group Co., Judged execution
Ltd., the accused for the by the court
1,436 No N/A
company owed second and in the
accumulatively trial process of
RMB14.36 million liquidation
to the Company. The and
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Changchai Company, Limited Interim Report 2018
Company sued to bankruptcy
Changzhou
Intermediate
People’s Court in
2001 and sued for
compulsory
execution in April
2002. Currently, the
defendant has
started the
bankruptcy
procedure.
Other legal matters:
□ Applicable √ Not applicable
IX Punishments and Rectifications
□ Applicable √ Not applicable
No such cases in the Reporting Period.
X Credit Conditions of the Company as well as its Controlling Shareholder and Actual
Controller
□ Applicable √ Not applicable
XI Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures for
Employees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XII Significant Connected Transactions
1. Connected Transactions Relevant to Routine Operations
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Connected Transactions Regarding Purchase or Sales of Assets or Equity Interests
□ Applicable √ Not applicable
No such cases in the Reporting Period.
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Changchai Company, Limited Interim Report 2018
3. Connected Transactions Regarding Joint Investments in Third Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Credits and Liabilities with Connected Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
5. Other Significant Connected Transactions
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XIII. Particulars about the Non-operating Occupation of Funds by the Controlling
Shareholder and Other Connected Parties of the Company
□ Applicable √ Not applicable
The Company was not involved in the non-operating occupation of funds by the controlling shareholder and other
connected parties during the Reporting Period.
XIV. Significant Contracts and Execution
1. Entrustment, Contracting and Leasing
(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) Leasing
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Significant Guarantees
√ Applicable □ Not applicable
21
Changchai Company, Limited Interim Report 2018
(1) Guarantees
Unit: RMB’0,000
Guarantees provided by the Company for external parties (excluding those for subsidiaries)
Disclos Guara
ure date Actual ntee
of the Line of occurrence Actual for a
Guaranteed Type of Term of Due or
guarant guarant date (date of guarantee conne
party guarantee guarantee not
ee line ee agreement amount cted
announc signing) party
ement or not
Guarantees provided by the Company for subsidiaries
Disclos Guara
ure date Actual ntee
of the Line of occurrence Actual for a
Guaranteed Type of Term of Due or
guarant guarant date (date of guarantee conne
party guarantee guarantee not
ee line ee agreement amount cted
announc signing) party
ement or not
Changzhou
Changchai 29
Housheng Novem Joint-liab
2,000 2,000 No No No
Agricultural ber ility
Equipment 2017
Co., Ltd.
Total guarantee line for Total actual guarantee
subsidiaries approved amount for subsidiaries
2,000 2,000
during the Reporting during the Reporting
Period (B1) Period (B2)
Total approved guarantee Total actual guarantee
line for subsidiaries at the balance for subsidiaries
2,000 2,000
end of the Reporting at the end of the
Period (B3) Reporting Period (B4)
Guarantees between subsidiaries
Disclos Guara
ure date Actual ntee
of the Line of occurrence Actual for a
Guaranteed Type of Term of Due or
guarant guarant date (date of guarantee conne
party guarantee guarantee not
ee line ee agreement amount cted
announc signing) party
ement or not
22
Changchai Company, Limited Interim Report 2018
Total guarantee amount (total of the above-mentioned three kinds of guarantees)
Total guarantee line Total actual guarantee
approved during the amount during the
2,000 2,000
Reporting Period Reporting Period
(A1+B1+C1) (A2+B2+C2)
Total approved guarantee Total actual guarantee
line at the end of the balance at the end of the
2,000 2,000
Reporting Period Reporting Period
(A3+B3+C3) (A4+B4+C4)
Proportion of the total actual guarantee amount
0.94%
(A4+B4+C4) in net assets of the Company
Of which:
Amount of guarantees provided for shareholders,
0
the actual controller and their connected parties (D)
Amount of debt guarantees provided directly or
indirectly for entities with a liability-to-asset ratio 0
over 70% (E)
Portion of the total guarantee amount in excess of
0
50% of net assets (F)
Total amount of the three kinds of guarantees above
0
(D+E+F)
Joint responsibilities possibly borne in the
N/A
Reporting Period for undue guarantees (if any)
Provision of external guarantees in breach of the
N/A
prescribed procedures (if any)
(2) Illegal Provision of Guarantees for External Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Other Significant Contracts
□ Applicable √ Not applicable
No such cases in the Reporting Period.
23
Changchai Company, Limited Interim Report 2018
XV. Social Responsibilities
1. Significant Environment Protection
Indicate by tick mark whether the Company or any of its subsidiaries is a heavily polluting business identified by
the environmental protection authorities of China
No
The Company and its subsidiaries are not the heavily polluting business identified by the environmental
protection authorities of China during the Reporting Period. The Company attaches great importance to the work
of environmental protection, and requires the subsidiaries to build corresponding environmental protection
facilities according to the actual situation of production and operation, strictly controlling the pollutants, like
“waste gas, waste water, and waste residue” generated from the production process.
2. Targeted Measures Taken to Help People Lift Themselves Out of Poverty
There were no such cases in the Reporting Period, and also no subsequent plans.
XVI. Other Significant Events
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XVII. Significant Events of Subsidiaries
□ Applicable √ Not applicable
24
Changchai Company, Limited Interim Report 2018
Part VI Share Changes and Shareholder Information
I. Changes in Shares
1. Changes in Shares
Unit: share
Before the change Increase/decrease (+/-) After the change
Capitaliz
Newly Ot Su
Amoun Proporti Bonus ed Amou Propor
issue he bto
t on shares Capital nt tion
share rs tal
reserves
I. Restricted shares 0 0.00% 0 0.00%
1.Shares held by the state 0 0.00% 0 0.00%
2. Shares held by
0 0.00% 0 0.00%
state-own Legal-person
3. Shares held by other
0 0.00% 0 0.00%
domestic investors
Among which: shares
held by domestic legal 0 0.00% 0 0.00%
person
Shares held by domestic
0 0.00% 0 0.00%
natural person
4.Oversea shareholdings 0 0.00% 0 0.00%
Among which: shares
held by oversea legal 0 0.00% 0 0.00%
person
Shares held by oversea
0 0.00% 0 0.00%
natural person
II. Shares not subject to 561,37 100.00 561,37 100.00
trading moratorium 4,326 % 4,326 %
411,37 411,37 73.28
1. RMB ordinary shares 73.28%
4,326 4,326 %
2. Domestically listed 150,00 150,00 26.72
26.72%
foreign shares 0,000 0,000 %
3. Oversea listed foreign
0 0.00% 0 0.00%
shares
25
Changchai Company, Limited Interim Report 2018
4. Other 0 0.00% 0 0.00%
561,37 100.00 561,37 100.00
III. Total shares
4,326 % 4,326 %
Reason for the change in shares
□ Applicable √ Not applicable
Approval of the change in shares
□ Applicable √ Not applicable
Transfer of share ownership
□ Applicable √ Not applicable
Effects of the change in shares on the basic EPS, diluted EPS, net assets per share attributable to ordinary
shareholders of the Company and other financial indexes over the last year and last period
□ Applicable √ Not applicable
Other contents that the Company considered necessary or were required by the securities regulatory authorities to
disclose
□ Applicable √ Not applicable
2. Changes in Restricted Shares
□ Applicable √ Not applicable
II. Issuance and Listing of Securities
□ Applicable √ Not applicable
III. Total Number of Shareholders and Their Shareholding
Unit: share
Total number of
Total number of preferred stockholder with
shareholders at the 50,159 0
vote right restored (if any) (see Note 8)
Reporting Period
Shareholding of ordinary shareholders holding more than 5% shares or the top 10 of ordinary shareholders
Number Increase Pledged or
Number of
Holdin of and Number of frozen shares
shares held
g shareholdi decrease shares held
Name of Nature of subject to
percen ng at the of shares subject to Status Am
shareholder shareholder trading
tage end of the during trading of oun
moratoriu
(%) Reporting Reporting moratorium shares t
m
Period Period
State-owned
Assets State-owned 30.43 170,845,2 170,845,23
Supervision and legal person % 36 6
Administration
26
Changchai Company, Limited Interim Report 2018
Commission of
Changzhou
Municipal
People’s
Government
KGI Asia Foreign legal
0.57% 3,189,845 3,189,845
Limited person
Domestic
Zhang Ruirong 0.32% 1,789,800 1,789,800
natural person
Domestic
Wan Peizhong 0.29% 1,645,800 1,645,800
natural person
Huang Domestic
0.27% 1,528,891 1,528,891
Guoliang natural person
Domestic
Hu Wenyong 0.27% 1,515,066 1,515,066
natural person
Domestic
Li Suinan 0.24% 1,356,000 1,356,000
natural person
Domestic
Liang Nianyou 0.24% 1,348,452 1,348,452
natural person
Vanguard Total
International Foreign legal
0.24% 1,344,607 1,344,607
Stock Index person
Fund
Domestic
Xiong Shunbao 0.23% 1,282,251 1,282,251
natural person
Strategic investors or the general
legal person due to the placement
Naught
of new shares become the top 10
shareholders (if any) (see Note 3)
It is unknown whether there is any connected party or acting-in-concert
Explanation on connected party as defined in the Measures for the Administration of Disclosure of
relationship or/and persons Shareholder Equity Changes of Listed Companies among the top 10
tradable share holders or the top 10 unrestricted tradable share holders.
Particulars about shares held by top 10 ordinary shareholders not subject to trading moratorium
Number of shares held Type of share
not subject to trading
Name of shareholder
moratorium at the end Type of share Amount
of the period
State-owned Assets Supervision
170,845,236 RMB ordinary shares
and Administration Commission
27
Changchai Company, Limited Interim Report 2018
of Changzhou Municipal
People’s Government
KGI Asia Limited 3,189,845 Domestically listed foreign shares
Zhang Ruirong 1,789,800 RMB ordinary shares
Wan Peizhong 1,645,800 RMB ordinary shares
Huang Guoliang 1,528,891 Domestically listed foreign shares
Hu Wenyong 1,515,066 Domestically listed foreign shares
Li Suinan 1,356,000 Domestically listed foreign shares
Liang Nianyou 1,348,452 RMB ordinary shares
Vanguard Total International
1,344,607 Domestically listed foreign shares
Stock Index Fund
Xiong Shunbao 1,282,251 RMB ordinary shares
Explanation on connected
relationship among the top ten
shareholders of tradable share
not subject to trading It is unknown whether there is any connected party or acting-in-concert
moratorium, as well as among party as defined in the Measures for the Administration of Disclosure of
the top ten shareholders of Shareholder Equity Changes of Listed Companies among the top 10
tradable share not subject to tradable share holders or the top 10 unrestricted tradable share holders.
trading moratorium and top ten
shareholders, or explanation on
acting-in-concert
Particular about shareholder
Shareholder Xiong Shunbao holds 1,282,251 shares of the Company
participate in the securities
through the client account of collateral securities in Guolian Securities
lending and borrowing business
Co., Ltd. for margin trading, accounting for a stake of 0.23%.
(if any) (see Note 4)
Did any of the Company’s top 10 ordinary shareholders or top 10 non-restricted ordinary shareholders conduct
any agreed buy-back in the Reporting Period?
□ Yes √ No
There was no shareholder of a company conduct the transaction of repurchase under the agreement during the
Reporting Period.
IV. Change of the Controlling Shareholder or the Actual Controller
Change of the controlling shareholder during the Reporting Period.
□ Applicable √ Not applicable
The controlling shareholder did not change during the Reporting Period.
Change of the actual controller during the Reporting Period
□ Applicable √ Not applicable
The actual controller did not change during the Reporting Period.
28
Changchai Company, Limited Interim Report 2018
V. Explanations for Free of Charge for Transferring Controlling Shareholders’ State-owned
Equities
State-owned Assets Supervision and Administration Commission of Changzhou Municipal People’s
Government, The Company’s controlling shareholder, signed the Agreement of Free of Charge for Transferring
Shares of Changchai Company, Limited with Changzhou Investment Group Co., Ltd on 16 August 2018.
State-owned Assets Supervision and Administration Commission of Changzhou Municipal People’s Government
planned to transfer the holding 170,845,236 shares of Changchai Company, Limited with no charge to Changzhou
Investment Group Co., Ltd, which was approved by Changzhou Municipal People’s Government. It still needs to
be approved by Jiangsu Provincial People’s Government State-owned Assets Supervision and Administration
Commission, and needs CSRC to agree to exempt Changzhou Investment Group Co., Ltd from the obligation to
purchase the holding shares of the Company by free transfer, which is uncertain. Please pay attention to the
investment risk. For details, see Reminder of Free of Charge for Transferring Controlling Shareholders’
State-owned Equities (No. 2018-015) and Announcement on the Progress of Free of Charge for Transferring
Controlling Shareholders’ State-owned Equities (No. 2018-020) disclosed on 1 June 2018 and 17 August 2018.
After this transfer, Changzhou Investment Group Co., Ltd will be the controlling shareholder of the Company
with no changes in the actual controller of the Company.
29
Changchai Company, Limited Interim Report 2018
Part VII Preferred Shares
□ Applicable √ Not applicable
No such cases in the Reporting Period.
30
Changchai Company, Limited Interim Report 2018
Part VIII Directors, Supervisors and Senior Management
I. Changes in Shareholding of Directors, Supervisors and Senior Management Staff
□ Applicable √ Not applicable
There was no change in shareholding of Directors, Supervisors, Senior Management Staffs and Employees, for
details, please refer to 2017 Annual Report
II. Particulars about Changes of Directors, Supervisors and Senior Executives
□ Applicable √ Not applicable
There was no change in Directors, Supervisors, Senior Management Staffs and Employees, for details, please refer
to 2017 Annual Report
31
Changchai Company, Limited Interim Report 2018
Part IX Corporate Bonds
Are there any corporate bonds publicly offered and listed on the stock exchange, which were undue before the
approval date of this Report or were due but could not be redeemed in full?
No
32
Changchai Company, Limited Interim Report 2018
Part X Financial Report
I. Audit Report
Has this interim report been audited?
□ Yes √ No
The interim financial report has not been audited.
II. Financial Statements
Currency unit for the statements in the notes to these financial statements: RMB
1. Consolidated Balance Sheet
Prepared by Changchai Company, Limited
30 June 2018
Unit: RMB
Item 30 June 2018 31 December 2017
Current assets:
Monetary assets 445,858,926.17 430,305,367.71
Settlement reserve
Interbank loans granted
Financial assets at fair value through profit or loss
Derivative financial assets
Notes receivable 556,766,558.95 716,404,345.57
Accounts receivable 809,459,781.25 392,010,953.55
Prepayments 21,406,189.77 17,781,007.77
Premiums receivable
Reinsurance receivables
Receivable reinsurance contract reserve
Interest receivable
Dividends receivable
Other receivables 19,703,915.37 5,794,971.22
Financial assets purchased under resale agreements
Inventories 406,509,269.60 508,246,807.48
Assets classified as held for sale
33
Changchai Company, Limited Interim Report 2018
Current portion of non-current assets
Other current assets 19,718,137.84 42,540,184.05
Total current assets 2,279,422,778.95 2,113,083,637.35
Non-current assets:
Loans and advances to customers
Available-for-sale financial assets 645,256,487.16 793,522,639.04
Held-to-maturity investments
Long-term receivables
Long-term equity investments
Investment property 51,760,178.03 52,864,348.43
Fixed assets 525,895,299.42 560,049,970.50
Construction in progress 86,375,849.20 94,581,989.06
Engineering materials
Proceeds from disposal of fixed assets
Productive living assets
Oil and gas assets
Intangible assets 104,786,494.21 107,795,746.86
R&D expense
Goodwill
Long-term prepaid expense
Deferred income tax assets 1,006,953.81 1,006,953.81
Other non-current assets
Total non-current assets 1,415,081,261.83 1,609,821,647.70
Total assets 3,694,504,040.78 3,722,905,285.05
Current liabilities:
Short-term borrowings 28,700,000.00 24,900,000.00
Borrowings from central bank
Customer deposits and deposits from banks and other financial
institutions
Interbank loans obtained
Financial liabilities at fair value through profit or loss
Derivative financial liabilities
Notes payable 531,820,000.00 347,070,500.00
Accounts payable 550,059,148.32 616,228,500.18
Advances from customers 46,605,126.00 40,153,984.91
34
Changchai Company, Limited Interim Report 2018
Financial assets sold under repurchase agreements
Handling charges and commissions payable
Payroll payable 25,246,667.17 51,247,112.66
Taxes payable 2,603,909.98 4,017,920.78
Interest payable
Dividends payable 3,891,433.83 3,891,433.83
Other payables 207,820,806.39 192,094,243.08
Reinsurance payables
Insurance contract reserve
Payables for acting trading of securities
Payables for underwriting of securities
Liabilities directly associated with assets classified as held for
sale
Current portion of non-current liabilities
Other current liabilities 2,886,117.93 2,028,937.59
Total current liabilities 1,399,633,209.62 1,281,632,633.03
Non-current liabilities:
Long-term borrowings 21,500,000.00 21,500,000.00
Bonds payable
Including: Preferred shares
Perpetual bonds
Long-term payables
Long-term payroll payable
Specific payables
Provisions
Deferred income 60,992,858.46 60,992,858.46
Deferred income tax liabilities 70,139,504.39 92,409,779.39
Other non-current liabilities
Total non-current liabilities 152,632,362.85 174,902,637.85
Total liabilities 1,552,265,572.47 1,456,535,270.88
Owners’ equity:
Share capital 561,374,326.00 561,374,326.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
35
Changchai Company, Limited Interim Report 2018
Capital reserves 164,328,665.43 164,328,665.43
Less: Treasury shares
Other comprehensive income 388,870,325.00 515,068,550.00
Specific reserve 13,289,059.21 13,289,059.21
Surplus reserves 313,705,210.16 313,705,210.16
General reserve
Retained profits 680,928,374.94 679,131,047.06
Total equity attributable to owners of the Company as the parent 2,122,495,960.74 2,246,896,857.86
Non-controlling interests 19,742,507.57 19,473,156.31
Total owners’ equity 2,142,238,468.31 2,266,370,014.17
Total liabilities and owners’ equity 3,694,504,040.78 3,722,905,285.05
Legal representative: Shi Xinkun General Manager: Zhang Xin
Head of the accounting department: Jiang He
36
Changchai Company, Limited Interim Report 2018
2. Balance Sheet of the Company as the Parent
Unit: RMB
31 December
Item 30 June 2018
2017
Current assets:
Monetary assets 411,629,994.62 366,907,287.64
Financial assets at fair value through profit or loss
Derivative financial assets
Notes receivable 536,623,558.95 711,474,345.57
Accounts receivable 722,699,465.14 319,887,051.70
Prepayments 5,420,658.51 9,815,561.98
Interest receivable
Dividends receivable
Other receivables 8,853,702.55 11,798,211.40
Inventories 275,613,625.66 376,814,388.82
Assets classified as held for sale
Current portion of non-current assets
Other current assets 20,692,057.15
Total current assets 1,960,841,005.43 1,817,388,904.26
Non-current assets:
Available-for-sale financial assets 637,369,000.00 785,837,500.00
Held-to-maturity investments
Long-term receivables
Long-term equity investments 231,752,730.03 231,752,730.03
Investment property 51,760,178.03 52,864,348.43
Fixed assets 424,524,204.16 453,155,359.47
Construction in progress 86,029,057.82 93,681,793.26
Engineering materials
Proceeds from disposal of fixed assets
Productive living assets
Oil and gas assets
Intangible assets 73,665,189.30 75,623,219.49
R&D expense
37
Changchai Company, Limited Interim Report 2018
Goodwill
Long-term prepaid expense
Deferred income tax assets 934,554.06 934,554.06
Other non-current assets
Total non-current assets 1,506,034,913.40 1,693,849,504.74
Total assets 3,466,875,918.83 3,511,238,409.00
Current liabilities:
Short-term borrowings 10,000,000.00
Financial liabilities at fair value through profit or loss
Derivative financial liabilities
Notes payable 511,820,000.00 323,030,500.00
Accounts payable 471,350,041.11 560,214,489.22
Advances from customers 43,623,913.22 38,382,261.14
Payroll payable 20,877,039.64 41,401,495.39
Taxes payable 867,665.59 1,373,036.64
Interest payable
Dividends payable 3,243,179.97 3,243,179.97
Other payables 194,073,184.35 182,738,709.26
Liabilities directly associated with assets classified as held for sale
Current portion of non-current liabilities
Other current liabilities
Total current liabilities 1,255,855,023.88 1,150,383,671.62
Non-current liabilities:
Long-term borrowings 19,500,000.00 19,500,000.00
Bonds payable
Including: Preferred shares
Perpetual bonds
Long-term payables
Long-term payroll payable
Specific payables
Provisions
Deferred income 60,992,858.46 60,992,858.46
Deferred income tax liabilities 68,624,175.00 90,894,450.00
Other non-current liabilities
38
Changchai Company, Limited Interim Report 2018
Total non-current liabilities 149,117,033.46 171,387,308.46
Total liabilities 1,404,972,057.34 1,321,770,980.08
Owners’ equity:
Share capital 561,374,326.00 561,374,326.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 183,071,147.70 183,071,147.70
Less: Treasury shares
Other comprehensive income 388,870,325.00 515,068,550.00
Specific reserve 13,289,059.21 13,289,059.21
Surplus reserves 313,705,210.16 313,705,210.16
Retained profits 601,593,793.42 602,959,135.85
Total owners’ equity 2,061,903,861.49 2,189,467,428.92
Total liabilities and owners’ equity 3,466,875,918.83 3,511,238,409.00
Legal representative: Shi Xinkun General Manager: Zhang Xin
Head of the accounting department: Jiang He
39
Changchai Company, Limited Interim Report 2018
3. Consolidated Income Statement
Unit: RMB
Item H1 2018 H1 2017
1. Revenue 1,186,760,892.26 1,308,106,180.92
Including: Operating revenue 1,186,760,892.26 1,308,106,180.92
Interest income
Premium income
Handling charge and commission income
2. Operating costs and expenses 1,164,582,065.19 1,287,121,365.15
Including: Cost of sales 1,034,354,908.99 1,141,392,321.88
Interest expense
Handling charge and commission expense
Surrenders
Net claims paid
Net amount provided as insurance contract reserve
Expenditure on policy dividends
Reinsurance premium expense
Taxes and surtaxes 5,739,473.26 7,032,129.00
Selling expense 52,228,075.86 55,815,356.13
Administrative expense 62,434,487.46 73,398,067.51
Finance costs -132,337.12 333,451.36
Asset impairment loss 9,957,456.74 9,150,039.27
Add: Gain on changes in fair value (“-” for loss) 0.00 0.00
Investment income (“-” for loss) 376,091.68 9,358,126.62
Including: Share of profit or loss of joint ventures and
associates
Foreign exchange gain (“-” for loss)
Asset disposal income (“-” for loss)
Other income 129,600.00
3. Operating profit (“-” for loss) 22,684,518.75 30,342,942.39
Add: Non-operating income 2,103,083.03 21,773,323.41
Less: Non-operating expense 1,527,166.21 6,394,655.18
4. Profit before taxation (“-” for loss) 23,260,435.57 45,721,610.62
Less: Income tax expense 4,352,526.65 5,670,998.75
40
Changchai Company, Limited Interim Report 2018
5. Net profit (“-” for net loss) 18,907,908.92 40,050,611.87
5.1 Net profit from continuing operations (“-” for net loss) 18,907,908.92 40,050,611.87
5.2 Net profit from discontinued operations (“-” for net loss) 0.00 0.00
Net profit attributable to owners of the Company as the parent 18,638,557.66 39,679,158.13
Net profit attributable to non-controlling interests 269,351.26 371,453.74
6. Other comprehensive income, net of tax -126,198,225.00 -41,635,125.00
Attributable to owners of the Company as the parent -126,198,225.00 -41,635,125.00
6.1 Items that will not be reclassified to profit or loss
6.1.1 Changes in net liabilities or assets caused by
remeasurements on defined benefit pension schemes
6.1.2 Share of other comprehensive income of investees
that will not be reclassified to profit or loss under equity method
6.2 Items that may subsequently be reclassified to profit or
-126,198,225.00 -41,635,125.00
loss
6.2.1 Share of other comprehensive income of investees
that will be reclassified to profit or loss under equity method
6.2.2 Gain/Loss on changes in fair value of
-126,198,225.00 -41,635,125.00
available-for-sale financial assets
6.2.3 Gain/Loss arising from reclassification of
held-to-maturity investments to available-for-sale financial assets
6.2.4 Effective gain/loss on cash flow hedges
6.2.5 Differences arising from translation of foreign
currency-denominated financial statements
6.2.6 Other
Attributable to non-controlling interests
7. Total comprehensive income -107,290,316.08 -1,584,513.13
Attributable to owners of the Company as the parent -107,559,667.34 -1,955,966.87
Attributable to non-controlling interests 269,351.26 371,453.74
8. Earnings per share
8.1 Basic earnings per share 0.03 0.07
8.2 Diluted earnings per share 0.03 0.07
Legal representative: Shi Xinkun General Manager: Zhang Xin
Head of the accounting department: Jiang He
41
Changchai Company, Limited Interim Report 2018
4. Income Statement of the Company as the Parent
Unit: RMB
Item H1 2018 H1 2017
1,121,335,123.1 1,229,307,547.1
1. Operating revenue
5 2
1,086,749,833.9
Less: Cost of sales 991,077,844.49
6
Taxes and surtaxes 4,388,116.03 6,052,840.56
Selling expense 46,378,981.86 50,307,968.65
Administrative expense 53,358,362.23 64,535,374.12
Finance costs -1,920,963.99 -636,200.84
Asset impairment loss 9,924,969.03 9,150,039.27
Add: Gain on changes in fair value (“-” for loss) 0.00
Investment income (“-” for loss) 21,000.00 6,952,750.99
Including: Share of profit or loss of joint ventures and associates
Asset disposal income (“-” for loss)
Other income 129,600.00
2. Operating profit (“-” for loss) 18,278,413.50 20,100,442.39
Add: Non-operating income 1,760,229.91 567,356.20
Less: Non-operating expense 1,525,338.21 6,192,349.28
3. Profit before taxation (“-” for loss) 18,513,305.20 14,475,449.31
Less: Income tax expense 3,037,417.85 3,873,394.83
4. Net profit (“-” for net loss) 15,475,887.35 10,602,054.48
4.1 Net profit from continuing operations (“-” for net loss) 15,475,887.35 10,602,054.48
4.2 Net profit from discontinued operations (“-” for net loss) 0.00 0.00
5. Other comprehensive income, net of tax -126,198,225.00 -41,635,125.00
5.1 Items that will not be reclassified to profit or loss
5.1.1 Changes in net liabilities or assets caused by remeasurements
on defined benefit pension schemes
5.1.2 Share of other comprehensive income of investees that will
not be reclassified into profit or loss under equity method
5.2 Items that may subsequently be reclassified to profit or loss -126,198,225.00 -41,635,125.00
5.2.1 Share of other comprehensive income of investees that will
be reclassified into profit or loss under equity method
5.2.2 Gain/Loss on changes in fair value of available-for-sale
-126,198,225.00 -41,635,125.00
financial assets
42
Changchai Company, Limited Interim Report 2018
5.2.3 Gain/Loss arising from reclassification of held-to-maturity
investments to available-for-sale financial assets
5.2.4 Effective gain/loss on cash flow hedges
5.2.5 Differences arising from translation of foreign
currency-denominated financial statements
5.2.6 Other
6. Total comprehensive income -110,722,337.65 -31,033,070.52
7. Earnings per share
7.1 Basic earnings per share
7.2 Diluted earnings per share
Legal representative: Shi Xinkun General Manager: Zhang Xin
Head of the accounting department: Jiang He
43
Changchai Company, Limited Interim Report 2018
5. Consolidated Cash Flow Statement
Unit: RMB
Item H1 2018 H1 2017
1. Cash flows from operating activities:
Proceeds from sale of commodities and rendering of services 1,052,665,606.90 1,325,350,610.18
Net increase in customer deposits and deposits from banks and other
financial institutions
Net increase in loans from 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
Net increase in proceeds from disposal of financial assets at fair
value through profit or loss
Interest, handling charges and commissions received
Net increase in interbank loans obtained
Net increase in proceeds from repurchase transactions
Tax rebates 20,142,964.09 21,145,032.94
Cash generated from other operating activities 6,122,580.97 5,501,291.34
Subtotal of cash generated from operating activities 1,078,931,151.96 1,351,996,934.46
Payments for commodities and services 861,702,539.28 1,033,701,551.38
Net increase in loans and advances to customers
Net increase in deposits in central bank and in interbank loans
granted
Payments for claims on original insurance contracts
Interest, handling charges and commissions paid
Policy dividends paid
Cash paid to and for employees 171,524,903.87 185,470,230.57
Taxes paid 14,854,230.49 19,440,382.39
Cash used in other operating activities 36,458,331.47 49,005,446.81
Subtotal of cash used in operating activities 1,084,540,005.11 1,287,617,611.15
Net cash generated from/used in operating activities -5,608,853.15 64,379,323.31
2. Cash flows from investing activities:
Proceeds from disinvestments 13,534,013.89 9,000,000.00
44
Changchai Company, Limited Interim Report 2018
Investment income 376,091.68 7,143,077.40
Net proceeds from disposal of fixed assets, intangible assets and
125,474.80 501,236.14
other long-lived assets
Net proceeds from disposal of subsidiaries or other business units 0.00 0.00
Cash generated from other investing activities
Subtotal of cash generated from investing activities 14,035,580.37 16,644,313.54
Payments for acquisition of fixed assets, intangible assets and other
18,849,002.37 48,464,630.47
long-lived assets
Payments for investments 3,000,000.00
Net increase in pledged loans granted
Net payments for acquisition of subsidiaries and other business units 1,854,599.33
Cash used in other investing activities 24,265,444.20 17,100,000.00
Subtotal of cash used in investing activities 43,114,446.57 70,419,229.80
Net cash generated from/used in investing activities -29,078,866.20 -53,774,916.26
3. Cash flows from financing activities:
Capital contributions received
Including: Capital contributions by non-controlling interests to
subsidiaries
Increase in borrowings obtained 17,000,000.00 18,000,000.00
Net proceeds from issuance of bonds
Cash generated from other financing activities
Subtotal of cash generated from financing activities 17,000,000.00 18,000,000.00
Repayment of borrowings 7,000,000.00 5,000,000.00
Payments for interest and dividends 18,263,008.91 17,410,070.41
Including: Dividends paid by subsidiaries to non-controlling
interests
Cash used in other financing activities
Subtotal of cash used in financing activities 25,263,008.91 22,410,070.41
Net cash generated from/used in financing activities -8,263,008.91 -4,410,070.41
4. Effect of foreign exchange rate changes on cash and cash equivalents
5. Net increase in cash and cash equivalents -42,950,728.26 6,194,336.64
Add: Cash and cash equivalents, beginning of the period 325,263,654.43 583,278,129.09
6. Cash and cash equivalents, end of the period 282,312,926.17 589,472,465.73
Legal representative: Shi Xinkun General Manager: Zhang Xin
Head of the accounting department: Jiang He
45
Changchai Company, Limited Interim Report 2018
6. Cash Flow Statement of the Company as the Parent
Unit: RMB
Item H1 2018 H1 2017
1. Cash flows from operating activities:
Proceeds from sale of commodities and rendering of services 978,362,086.38 1,287,943,005.80
Tax rebates 14,838,384.91 21,145,032.94
Cash generated from other operating activities 5,251,560.76 4,003,051.69
Subtotal of cash generated from operating activities 998,452,032.05 1,313,091,090.43
Payments for commodities and services 801,461,497.18 1,012,243,538.73
Cash paid to and for employees 143,561,299.80 160,430,190.27
Taxes paid 10,023,890.64 17,376,389.94
Cash used in other operating activities 32,113,861.57 45,213,130.50
Subtotal of cash used in operating activities 987,160,549.19 1,235,263,249.44
Net cash generated from/used in operating activities 11,291,482.86 77,827,840.99
2. Cash flows from investing activities:
Proceeds from disinvestments
Investment income 21,000.00 6,952,750.09
Net proceeds from disposal of fixed assets, intangible assets and
102,774.58 83,115.01
other long-lived assets
Net proceeds from disposal of subsidiaries or other business units
Cash generated from other investing activities
Subtotal of cash generated from investing activities 123,774.58 7,035,865.10
Payments for acquisition of fixed assets, intangible assets and
17,662,045.01 48,311,909.08
other long-lived assets
Payments for investments 0.00 0.00
Net payments for acquisition of subsidiaries and other business
26,516,925.27
units
Cash used in other investing activities 0.00
Subtotal of cash used in investing activities 17,662,045.01 74,828,834.35
Net cash generated from/used in investing activities -17,538,270.43 -67,792,969.25
3. Cash flows from financing activities:
Capital contributions received
Increase in borrowings obtained 10,000,000.00
Net proceeds from issuance of bonds
Cash generated from other financing activities
46
Changchai Company, Limited Interim Report 2018
Subtotal of cash generated from financing activities 10,000,000.00
Repayment of borrowings
Payments for interest and dividends 17,733,682.52 16,841,229.78
Cash used in other financing activities 0.00 0.00
Sub-total of cash used in financing activities 17,733,682.52 16,841,229.78
Net cash generated from/used in financing activities -7,733,682.52 -16,841,229.78
4. Effect of foreign exchange rate changes on cash and cash
equivalents
5. Net increase in cash and cash equivalents -13,980,470.09 -6,806,358.04
Add: Cash and cash equivalents, beginning of the period 272,064,464.71 558,159,090.01
6. Cash and cash equivalents, end of the period 258,083,994.62 551,352,731.97
Legal representative: Shi Xinkun General Manager: Zhang Xin
Head of the accounting department: Jiang He
47
Changchai Company, Limited Interim Report 2018
7. Consolidated Statements of Changes in Owners’ Equity
H1 2018
Unit: RMB
H1 2018
Equity attributable to owners of the Company as the parent
Other equity instruments Non-con Total
Item
Less: Other trolling owners’
Share Perpet Capital Specific Surplus General Retained
Preferre Oth Treasur comprehensi interests equity
capital ual reserves reserve reserves reserve profits
d shares er y shares ve income
bonds
561,374, 164,328, 515,068,550. 13,289,05 313,705, 679,131, 19,473,1 2,266,37
1. Balances as of end of prior year
326.00 665.43 00 9.21 210.16 047.06 56.31 0,014.17
Add: Adjustments for changed
accounting policies
Adjustments for corrections of
previous errors
Adjustments for business
combinations involving enterprises
under common control
Other adjustments
2. Balances as of beginning of the 561,374, 164,328, 515,068,550. 13,289,05 313,705, 679,131, 19,473,1 2,266,37
year 326.00 665.43 00 9.21 210.16 047.06 56.31 0,014.17
3. Increase/ decrease in the period -126,198,225 1,797,32 269,351. -124,131,
(“-” for decrease) .00 7.88 26 545.86
-126,198,225 18,638,5 269,351. -107,290,
3.1 Total comprehensive income
.00 57.66 26 316.08
3.2 Capital increased and reduced
48
Changchai Company, Limited Interim Report 2018
by owners
3.2.1 Ordinary shares increased
by shareholders
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
-16,841, -16,841,2
3.3 Profit distribution
229.78 29.78
3.3.1 Appropriation to surplus
reserves
3.3.2 Appropriation to general
reserve
3.3.3 Appropriation to owners -16,841, -16,841,2
(or shareholders) 229.78 29.78
3.3.4 Other
3.4 Carryforwards 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 Surplus reserves used to
make up losses
3.4.4 Other
3.5 Specific reserve
3.5.1 Withdrawn for the period
49
Changchai Company, Limited Interim Report 2018
3.5.2 Used during the period
3.6 Other
561,374, 164,328, 388,870,325. 13,289,05 313,705, 680,928, 19,742,5 2,142,23
4. Balances as of end of the period
326.00 665.43 00 9.21 210.16 374.94 07.57 8,468.31
Legal representative: Shi Xinkun General Manager: Zhang Xin Head of the accounting department: Jiang He
50
Changchai Company, Limited Interim Report 2018
H1 2017
Unit: RMB
H1 2017
Equity attributable to owners of the Company as the parent
Other equity instruments Non-con Total
Item
Less: Other
Share Capital Specific Surplus General Retained trolling owners’
Perpet
Preferre Oth Treasur comprehens
capital reserves reserve reserves reserve profits interests equity
ual
d shares er y shares ive income
bonds
561,374, 164,328, 623,048,300 11,715,417 311,880, 651,365, 18,767,2 2,342,48
1. Balances as of end of prior year
326.00 665.43 .00 .22 248.88 935.39 26.57 0,119.49
Add: Adjustments for changed
accounting policies
Adjustments for corrections of
previous errors
Adjustments for business
combinations involving enterprises
under common control
Other adjustments
2. Balances as of beginning of the 561,374, 164,328, 623,048,300 11,715,417 311,880, 651,365, 18,767,2 2,342,48
year 326.00 665.43 .00 .22 248.88 935.39 26.57 0,119.49
3. Increase/ decrease in the period -107,979,75 1,573,641. 1,824,96 27,765,1 705,929. -76,110,1
(“-” for decrease) 0.00 99 1.28 11.67 74 05.32
-107,979,75 46,431,3 705,929. -60,842,5
3.1 Total comprehensive income
0.00 02.73 74 17.53
3.2 Capital increased and reduced
by owners
3.2.1 Ordinary shares increased
51
Changchai Company, Limited Interim Report 2018
by shareholders
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
1,824,96 -18,666,1 -16,841,2
3.3 Profit distribution
1.28 91.06 29.78
3.3.1 Appropriation to surplus 1,824,96 -1,824,96
reserves 1.28 1.28
3.3.2 Appropriation to general
reserve
3.3.3 Appropriation to owners -16,841,2 -16,841,2
(or shareholders) 29.78 29.78
3.3.4 Other
3.4 Carryforwards 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 Surplus reserves used to
make up losses
3.4.4 Other
1,573,641. 1,573,64
3.5 Specific reserve
99 1.99
3.5.1 Withdrawn for the period 4,161,424. 4,161,42
52
Changchai Company, Limited Interim Report 2018
06 4.06
2,587,782. 2,587,78
3.5.2 Used during the period
07 2.07
3.6 Other
561,374, 164,328, 515,068,550 13,289,059 313,705, 679,131, 19,473,1 2,266,37
4. Balances as of end of the period
326.00 665.43 .00 .21 210.16 047.06 56.31 0,014.17
Legal representative: Shi Xinkun General Manager: Zhang Xin Head of the accounting department: Jiang He
53
Changchai Company, Limited Interim Report 2018
8. Statements of Changes in Owners’ Equity of the Company as the Parent
H1 2018
Unit: RMB
H1 2018
Other equity instruments Less: Other Total
Item Share Capital Specific Surplus Retained
Preferred Perpetu Ot Treasury comprehensi owners’
capital reserves reserve reserves profits
shares al bonds her shares ve income equity
561,374,3 183,071,1 515,068,550. 13,289,059.2 313,705,210. 602,959,1 2,189,467,4
1. Balances as of end of prior year
26.00 47.70 00 1 16 35.85 28.92
Add: Adjustments for changed
accounting policies
Adjustments for corrections of
previous errors
Other adjustments
561,374,3 183,071,1 515,068,550. 13,289,059.2 313,705,210. 602,959,1 2,189,467,4
2. Balances as of beginning of the year
26.00 47.70 00 1 16 35.85 28.92
3. Increase/ decrease in the period (“-” -126,198,225 -1,365,342 -127,563,56
for decrease) .00 .43 7.43
-126,198,225 15,475,88 -110,722,33
3.1 Total comprehensive income
.00 7.35 7.65
3.2 Capital increased and reduced by
owners
3.2.1 Ordinary shares increased by
shareholders
3.2.2 Capital increased by holders
of other equity instruments
54
Changchai Company, Limited Interim Report 2018
3.2.3 Share-based payments
included in owners’ equity
3.2.4 Other
-16,841,22 -16,841,229.
3.3 Profit distribution
9.78 78
3.3.1 Appropriation to surplus
reserves
3.3.2 Appropriation to owners (or -16,841,22 -16,841,229.
shareholders) 9.78 78
3.3.3 Other
3.4 Carryforwards 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 Surplus reserves used to
make up losses
3.4.4 Other
3.5 Specific reserve
3.5.1 Withdrawn for the period
3.5.2 Used during the period
3.6 Other
561,374,3 183,071,1 388,870,325. 13,289,059.2 313,705,210. 601,593,7 2,061,903,8
4. Balances as of end of the period
26.00 47.70 00 1 16 93.42 61.49
Legal representative: Shi Xinkun General Manager: Zhang Xin Head of the accounting department: Jiang H
55
Changchai Company, Limited Interim Report 2018
H1 2017
Unit: RMB
H1 2017
Other equity instruments
Less: Other Total
Item Share Ot Capital Specific Surplus Retained
Preferred Perpetua Treasury comprehensi owners’
capital he reserves reserve reserves profits
shares l bonds shares ve income equity
r
561,374,3 183,071,14 623,048,300. 11,715,417.2 311,880,248. 603,375,7 2,294,465,1
1. Balances as of end of prior year
26.00 7.70 00 2 88 14.13 53.93
Add: Adjustments for changed
accounting policies
Adjustments for corrections of
previous errors
Other adjustments
561,374,3 183,071,14 623,048,300. 11,715,417.2 311,880,248. 603,375,7 2,294,465,1
2. Balances as of beginning of the year
26.00 7.70 00 2 88 14.13 53.93
3. Increase/ decrease in the period (“-” -107,979,750 -416,578.2 -104,997,72
1,573,641.99 1,824,961.28
for decrease) .00 8 5.01
-107,979,750 18,249,61 -89,730,137.
3.1 Total comprehensive income
.00 2.78 22
3.2 Capital increased and reduced by
owners
3.2.1 Ordinary shares increased by
shareholders
3.2.2 Capital increased by holders
of other equity instruments
3.2.3 Share-based payments
56
Changchai Company, Limited Interim Report 2018
included in owners’ equity
3.2.4 Other
-18,666,19 -16,841,229.
3.3 Profit distribution 1,824,961.28
1.06 78
3.3.1 Appropriation to surplus -1,824,961
1,824,961.28
reserves .28
3.3.2 Appropriation to owners (or -16,841,22 -16,841,229.
shareholders) 9.78 78
3.3.3 Other
3.4 Carryforwards 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 Surplus reserves used to
make up losses
3.4.4 Other
1,573,641.9
3.5 Specific reserve 1,573,641.99
9
4,161,424.0
3.5.1 Withdrawn for the period 4,161,424.06
6
2,587,782.0
3.5.2 Used during the period 2,587,782.07
7
3.6 Other
561,374,3 183,071,14 515,068,550. 13,289,059.2 313,705,210. 602,959,1 2,189,467,4
4. Balances as of end of the period
26.00 7.70 00 1 16 35.85 28.92
57
Changchai Company, Limited Interim Report 2018
Legal representative: Shi Xinkun General Manager: Zhang Xin Head of the accounting department: Jiang He
58
Changchai Company, Limited Interim Report 2018
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. As at 31 December
2015, the total share capital of the Company is 561,374,326.00 shares, as well as registered capital of
RMB561,374,326.00, which verified by Jiangsu Gongzheng Tianye Certified Public Accountants Company
Limited with issuing Capital Verification Report SGC [2010] No. B002. And 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
59
Changchai Company, Limited Interim Report 2018
and shipborne machinery and equipment, etc. The Company’s main business remained unchanged in the
Reporting 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, Enterprise Management Department, Human Recourses Department, Production Department,
Procurement Department, Sales Company, Market Department, 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 2018.
The consolidated scope of the Company of the Reporting Period includes the Company as the parent and 5
subsidiaries with no changes compared with last period. 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 42 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
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Changchai Company, Limited Interim Report 2018
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 withdrawal method of the bad debt provision of the accounts receivable
(Notes III, 11), the measurement of the inventory (Notes III, 12) and the depreciation of the fixed assets (Notes III,
16) etc. As for the details of the significant accounting judgment and the estimations made by the management
layer, please refer to Notes III, 30 “Important accounting judgment and estimations”.
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.
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Changchai Company, Limited Interim Report 2018
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
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
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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 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
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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
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
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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.
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10. Financial Instruments
(1) Category of financial instruments
The Company classifies the financial assets into four kinds such as trading financial assets, available-for-sale
financial assets, accounts receivable and held-to-maturity investment according to the investment purpose and the
economy nature.
The Company classifies the financial liabilities into two kinds such as the financial liabilities measured by
fair value with the changes included in the current gains and losses and the other financial liabilities measured by
amortized cost according to the economy nature.
(2) Recognition basis and measurement methods of financial instruments
The trading financial assets should be measured by fair value with the changes of fair value included in the
current gains and losses; the available-for-sale financial assets should be measured by fair value with the changes
of fair value included in the owners’ equities; and the accounts receivable and the held-to-maturity investment
should be measured by amortized cost.
(3) Recognition basis and measurement methods of financial instruments transformation
The Company transfers or delivers a financial asset to a party other than the issuer of the financial asset and
the transformation of the financial assets could be whole of the financial assets or a part of it, which including two
methods:
The enterprise transfers the right to another party for receiving the cash flow of the financial asset;
The enterprise transfers the financial asset to another party, but maintains the right to receive the cash flow of
the financial asset and undertakes the obligation to pay the cash flow it receives to the final recipient.
Where the Company has transferred a part or 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 the difference between the
consideration received and the book value of the transferred financial assets should be recognized as gains and
losses and at the same time transfers the accumulative gains or losses from the recognized financial assets among
the original owners’ equities in the gains and losses; if it retained nearly all of the risks and rewards related to the
ownership of the financial asset, it shall continue to recognize the whole or part of the financial assets and the
consideration received be recognized as financial liabilities.
Where the Company neither transfers nor retains nearly all of the risks and rewards related to the ownership
of a financial asset, and it does not cease its control on the said financial asset, it recognizes the relevant financial
asset and liability accordingly according to the extent of its continuous involvement in the transferred financial
asset.
(4) De-recognition conditions of financial liabilities
Only when the prevailing obligations of a financial liability are relieved in all or in part may the recognition
of the financial liability be terminated in all or partly.
(5) Recognition methods of the fair value of main financial assets and financial liabilities
As for the financial assets held by the Company or the financial liabilities plans to undertake, if there exists
active market, should adopt the current offering price in the active market, and as for the financial assets plans to
be purchased by the Company or the financial liabilities undertook, should adopt the current offering in the active
market, and if there is no current offering price or asking price, should adopt the market quotation of the recent
transactions or the adjusted market quotation of the recent transactions, except for there is definite evidence
indicate the market quotation is not the fair value.
Where there is no active market for a financial instrument, the enterprise concerned shall adopt value
appraisal techniques, including the prices adopted by the parties, who are familiar with the condition, in the latest
market transaction upon their own free will, the current fair value obtained by referring to other financial
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instruments of the same essential nature etc.
(6) Impairment test method and withdrawal methods of impairment provision of financial assets (excluding
accounts receivable)
The Company shall carry out an inspection, on the balance sheet day, on the carrying amount of the financial
assets other than those measured at their fair values and of which the variation is recorded into the profits and
losses of the current period. Where there is any objective evidence proving that such financial asset has been
impaired, an impairment provision shall be made. For the financial assets with significant single amount, if there
is objective evidence indicates the occurred impairment, should recognize the impairment losses and should
include which in the current gains and losses. As for the financial assets with insignificant single amount but not
occur impairment, the Company should execute the impairment test by credit groups according to the credit
degree of the customers and the actual situation of the happen of the bad debts over the years for recognizing the
impairment losses.
The expression “objective evidence proving that the financial asset has been impaired” refers to the actually
incurred events which, after the financial asset is initially recognized, have an impact on the predicted future cash
flow of the said financial asset that can be reliably measured by the enterprise.
The objective evidences that can prove the impairment of a financial asset shall include:
A serious financial difficulty occurs to the issuer or debtor;
The debtor breaches any of the contractual stipulations, for example, fails to pay or delays the payment of
interests or the principal, etc.;
The creditor makes any concession to the debtor who is in financial difficulties due to economic or legal
factors, etc.;
The debtor will probably become bankrupt or carry out other financial reorganizations;
The financial asset can no longer continue to be traded in the active market due to serious financial
difficulties of the issuer;
It is impossible to identify whether the cash flow of a certain asset within a certain combination of financial
assets has decreased or not. But after making an overall appraisal according to the public data available, it is found
that the predicted future cash flow of the said combination of financial assets has indeed decreased since it was
initially recognized and such decrease can be measured, for example, the ability of the debtor of the said
combination of financial assets worsens gradually, the unemployment rate of the country or region where the
debtor is situated increases, the prices of the region where the guaranty is situated are obviously dropping, or the
industrial sector concerned is in slump, etc.;
Any seriously disadvantageous change has occurred to technical, market, economic or legal environment, etc.
wherein the debtor operates its business, which makes the investor of an equity instrument unable to take back its
investment;
Where the fair value of the equity instrument investment drops significantly or not contemporarily;
Other objective evidences showing the impairment of the financial asset.
Where a financial asset measured on the basis of post-amortization costs is impaired, the carrying amount of
the said financial asset shall be calculated by the difference between the book value and the current value of the
predicted future cash flow of the impairment losses.
Where any financial asset measured on the basis of post-amortization costs is recognized as having suffered
from any impairment loss, if there is any objective evidence proving that the value of the said financial asset has
been restored, and it is objectively related to the events that occur after such loss is recognized, the
impairment-related losses as originally recognized shall be reversed and be recorded into the profits and losses of
the current period.
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Where a sellable financial asset is impaired, even if the recognition of the financial asset has not been
terminated, the accumulative losses arising from the decrease of the fair value of the owner’s equity which is
directly included shall be transferred out and recorded into the profits and losses of the current period.. The
accumulative losses are the initial cost after deducting the principal, the amortization amount, fair value of current
period and balance after originally recorded into impairment loss of profits or losses. After the recognition of
impairment losses, if there is any objective evidence indicated that the value of financial assets is resumed and
objectively related to the events after the recognition of impairment losses, transfer the impairment losses
originally recognized, transfer the impairment losses of available for sale equity instrument investment and
recognized as other comprehensive income, and transfer the impairment losses of available for sale liability
instruments and record into current profits or losses.
11. Receivables
(1) Accounts Receivable with Significant Single Amount for which the Bad Debt Provision is Made
Individually
Recognition criteria of accounts Significant single amounts refers to the accounts receivable of the single
receivable with individual and amount more than RMB 1 million (RMB 1 million include) (including
significant amount accounts receivable and other accounts receivable)
The Company makes an independent impairment test on the accounts
receivable with significant single amount, and provision for bad debts
Withdrawal method of the bad
shall withdrawn on the basis of the balance between the current values of
debt provision of the accounts
the predicted future cash flow lower than book value. Upon independent
receivable with significant single
impairment test, the accounts receivable with significant single amounts
amounts
has not been impaired, it shall be withdrawn bad debt provision based on
ending balance by adopting aging analysis method.
(2) Accounts Receivable which the Bad Debt Provision is withdrawn by Credit Risk Characteristics
Group name Withdrawal method of bad debt provision
the age of the accounts receivable is divided by the
aging analysis method
groups of credit risk
In the groups, those adopting aging analysis method to withdraw bad debt provision:
√ Applicable □ Not applicable
Withdrawal proportion of account Withdrawal proportion of other
Aging
receivables account receivables
Within 1 year (including 1 year) 2.00% 2.00%
1 to 2 years 5.00% 5.00%
2 to 3 years 15.00% 15.00%
3 to 4 years 30.00% 30.00%
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4 to 5 years 60.00% 60.00%
Over 5 years 100.00% 100.00%
In the groups, those adopting balance percentage method to withdraw bad debt provision
□ Applicable √ Not applicable
In the groups, those adopting other methods to withdraw bad debt provision:
□ Applicable √ Not applicable
(3) Accounts Receivable with an Insignificant Single Amount but for which the Bad Debt Provision is Made
Independently
Insignificant single amounts refers to the accounts receivable of the single
Reason of individually
amount lower than RMB 1 million (RMB1 million not include) (including
withdrawing bad debt provision
accounts receivable and other accounts receivable).
As for an account receivable with an insignificant single amount and which
can not show its risk feature when withdrawing a bad-bet provision for it on
the group basis, the bad-debt provision for the account receivable shall be
withdrawn based on the difference of the expected present value of the
Withdrawal method for bad
future cash flows of the account receivable that less than its carrying
debt provision
amount. The Company shall withdraw the bad-debt provision for such an
account receivable by combining the aging method and individual judgment
based on the debtor entity’s actual financial position, cash flows and other
relevant information.
12. Inventory
Is the Company subject to any disclosure requirements for special industries?
No
(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
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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.
13. 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;
(3) The Company had signed the irrevocable transformation agreement with the transferee;
(4) The transformation should be completed within 1 year.
14. 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 Group 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
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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 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, the fair value of the assets surrendered shall be recognized as the initial cost of the long-term equity
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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 Group, should be adjusted
according to the accounting policies of the Group 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 Group according to the calculation of the enjoyed proportion, should recognize
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Changchai Company, Limited Interim Report 2018
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 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 Group 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
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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
Group 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 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.
15. Investment Real Estate
Measurement mode of investment real estate:
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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.
16. 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 Expected net
Method Useful life Annual deprecation
assets salvage value
Housing and Average method of
20-40 2.50-5
building useful life
Machinery Average method of
6-15 6.67-16.67
equipment useful life
Transportation Average method of
5-10 10-20
equipment useful life
Electronic Average method of
useful life
equipment
Average method of
Other equipment 5-10 10-20
useful life
(3) Recognition Basis, Pricing and Depreciation Method of Fixed Assets by Finance Lease
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
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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.
17. 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.
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18. 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
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.
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19. 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
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 Expenses
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 expenses 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 expenditures 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
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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 expenditures of the intangible assets can be reliably measured.
20. 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 Group 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
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.
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21. Amortization Method of 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.
22. Payroll
(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
Group 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.
(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.
(4) Accounting Treatment of the Welfare of Other Long-term Staffs
The Company providing employees with demission welfare shall confirm employee benefits liabilities in the
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earlier one of the following times, and recorded as the current profit or loss: the time when the Company cannot
unilaterally withdraw layoff proposal termination benefits provided due to termination of employment; the time
when the Company ensures the costs related to the payment for termination benefits related to the restructuring.
23. Estimated Liabilities
(1) Criteria of estimated liabilities
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 estimated liabilities
The Company shall measure the estimated debts in accordance with the best estimate of the necessary
expenses for the performance of the current obligation.
The Company shall check the book value of the estimated debts 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.
24. Revenue
Is the Company subject to any disclosure requirements for special industries?
No
(1) Recognition of revenue from sale of goods: the revenue from selling shall be recognized by the following
conditions: The significant risks and rewards of ownership of the goods have been transferred to the buyer by the
Company; the Company retains neither continuous management right that usually keeps relation with the
ownership nor effective control over the sold goods; the relevant amount of revenue can be measured in a reliable
way; the relevant revenue and costs of selling goods can be measured in a reliable way. The amount of the revenue
from selling shall ascertain the revenue incurred by selling goods in accordance with the received or receivable
price stipulated in the contract or agreement signed between the enterprise and the buyer, unless the received or
receivable amount as stipulated in the contract or agreement is unfair.
(2) Recognition of revenue from providing labor services: When the total revenue and costs from providing
labor can be measured in a reliable way; the relevant economic benefits are likely to flow into the enterprise; the
schedule of completion under the transaction can be measured in a reliable way, the revenue from providing labor
shall be recognized. If the Company can reliably estimate the outcome of a transaction concerning the labor
services it provides, it shall recognize the revenue from providing services employing the
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percentage-of-completion method on the date of the balance sheet, otherwise the revenue from the providing of
labor services shall be recognized in accordance with the amount of the cost of labor services incurred and
expected to be compensated. The Company recognized the completion process of the transaction concerning the
labor services according to the proportion of the occurred cost of the estimated total cost. The total amount of the
revenue from providing services should be recognized according to the contract price received or receivable from
the accepting of the labor services or the agreement price except for those unfair prices.
(3) Recognition of the revenue from transferring use rights of assets: When the relevant economic benefits
are likely to flow into the enterprises and the amount of revenues can be measured in a reliable way, the revenue
from abalienating the right to use assets shall be recognized. The amount of interest revenue should be measured
and confirmed in accordance with the length of time for which the enterprise's cash is used by others and the
actual interest rate ； the amount of royalty revenue should be measured and confirmed in accordance with the
period and method of charging as stipulated in the relevant contract or agreement；as for the rental revenue: the
amount of the rental revenue from the operation lease should be recognized according to the straight-line method
during each period of the lease term or accrued into the current gains and losses if rental actual occurred.
25. Government Subsidies
(1) Judgment Basis and Accounting Treatment of Government Subsidies Related to Assets
A government subsidy means the monetary or non-monetary assets obtained free by an enterprise from the
government. Government subsidies consist of the government subsidies pertinent to assets and government
subsidies 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
Company classifies the government subsidies 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.
The government subsidies should be recognized only when meet with the attached conditions of the
government subsidies as well as could be acquired.
If the government subsidies are the monetary assets, should be measured according to the received or
receivable amount; and for the government subsidies are the non-monetary assets, should be measured by fair
value.
The government subsidies 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.
(2) Judgment Basis and Accounting Treatment of Government Subsidies Pertinent to Incomes
Government subsidies 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
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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 subsidies 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 subsidies 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 subsidies 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 subsidies 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.
26. Deferred Income Tax Assets and 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 assets 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
According to the difference between the book value of the assets and liabilities and their tax basis, A deferred
tax liabilities 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.
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27. Lease
(1) Accounting Treatment of Operating Lease
Lessee in an operating lease shall treat the lease payment under an operating lease as a relevant asset cost or
the current profit or loss on a straight-line basis over the lease term. The initial direct costs incurred shall be
recognized as the current profit or loss; Contingent rents shall be charged as expenses in the periods in which they
are incurred.
Lessors in an operating lease shall be recognized as the current profit or loss on a straight-line basis over the
lease term; Initial direct costs incurred by lessors shall be recognized as the current profit or loss; the initial direct
expenses occur should be directly included in the current gains and losses except for those with larger amount and
be capitalized as well as be included in the gains and losses by stages. Contingent rents shall be charged as
expenses in the periods in which they are incurred.
(2) Accounting Treatments of Financial Lease
When the Company as the lessee, On the lease beginning date, the Company shall record the lower one of the
fair value of the leased asset and the present value of the minimum lease payments on the lease beginning date as
the entering value in an account, recognize the amount of the minimum lease payments as the entering value in an
account of long-term account payable, and treat the balance between the recorded amount of the leased asset and
the long-term account payable as unrecognized financing charges and the occurred initial direct expenses, should
be recorded in the lease assets value. During each lease period, should recognize the current financing expenses
by adopting the actual interest rate.
When the Company as the leasor and on the beginning date of the lease term, the Company shall recognize
the sum of the minimum lease receipts on the lease beginning date and the initial direct costs as the entering value
in an account of the financing lease values receivable, and record the unguaranteed residual value at the same time.
The balance between the sum of the minimum lease receipts, the initial direct costs and the unguaranteed residual
value and the sum of their present values shall be recognized as unrealized financing income. During each lease
period, should recognize the current financing revenues adopting the actual interest rate.
28. Other Significant Accounting Policies and Estimates
(1) Operation termination
Operation termination refers to the compose part that meet with one of the following conditions which had
been disposed by the Group or be classified to held-to-sold as well as could be individually distinguished in
operating and compiling the financial statement:
① The compose part represents an individual main business or a main operation area;
② The compose part is a part intends to dispose and plan an individual main business or a main operation
area;
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③ The compose part is a subsidiary which be acquired only for resold.
(2) Hedging accounting
The term “hedging” refers to one or more hedging instruments which are designated by an enterprise for
avoiding the risks of foreign exchange, interest rate, commodity price, stock price, credit and etc., and which is
expected to make the changes in fair value or cash flow of hedging instrument(s) to offset all or part of the
changes in the fair value or cash flow of the hedged item.
The term “hedging instrument” shall refer to a derivative instrument which is designated by an enterprise for
hedging and by which it is expected that changes in its fair value or cash flow can offset the changes in fair value
or cash flow of the hedged item. For a hedging of foreign exchange risk, a non-derivative financial asset or
non-derivative financial liability may be used as a hedging instrument.
The “hedged item” shall refer to the following items which make an enterprise faced to changes in fair value
or cash flow and are designated as the hedged objectives.
The hedging should be executed by the hedging accounting methods when satisfying the following
conditions at the same time:
① At the commencement of the hedging, the enterprise shall specify the hedging relationship formally
(namely the relationship between the hedging instrument and the hedged item) and prepare a formal written
document on the hedging relationship, risk management objectives and the strategies of hedging.
② The hedging expectation is highly efficient and meets the risk management strategy, which is confirmed
for the hedging relationship by enterprise at the very beginning.
③ For a cash flow hedging of forecast transaction, the forecast transaction shall be likely to occur and shall
make the enterprise faced to the risk of changes in cash flow, which will ultimately affect the profits and losses.
④ The effectiveness of hedging can be reliably measured.
⑤ The hedging is highly effective in accounting period in which the hedging relationship is specified.
29. Changes in Main Accounting Policies and Estimates
(1) Change in Accounting Policies
□ Applicable √ Not applicable
(2) Changes in Accounting Estimates
□ Applicable √ Not applicable
30. Other
Critical accounting judgments and estimates
Due to the inside uncertainty of operating activity, the Group needed to make judgments, estimates and
assumption on the book value of the accounts without accurate measurement during the employment of
accounting policies. And these judgments, estimates and assumption were made basing on the prior experience of
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the senior executives of the Group, as well as in consideration of other factors. These judgments, estimates and
assumption would also affect the report amount of income, costs, assets and liabilities, as well as the disclosure of
contingent liabilities on balance sheet date. However, the uncertainty of these estimates was likely to cause
significant adjustment on the book value of the affected assets and liabilities.
The Group would check periodically the above judgments, estimates and assumption on the basis of
continuing operation. For the changes in accounting estimates only affected on the current period, the influence
should be recognized at the period of change occurred; for the changes in accounting estimates affected the
current period and also the future period, the influence should be recognized at the period of change occurred and
future period.
On the balance sheet date, the Group needed to make judgments, estimates and assumption on the accounts
in the following important items:
(1) Provision for bad debts
In accordance with the accounting policies of accounts receivable, the Group measured the losses for bad
debts by adopting allowance method. The impairment of accounts receivable was based on the appraisal of the
recoverability of accounts receivable. The impairment of accounts receivable was dependent on the judgment and
estimates. The actual amount and the difference of previous estimates would affect the book value of accounts
receivable and the withdrawal and reversal on provision for bad debts of accounts receivable during the period of
estimates being changed.
(2) Provision for falling price of inventories
In accordance with the accounting policies of inventories, for the inventories that the costs were more than
the net realizable value as well as out-of-date and dull-sale inventories, the Group withdrawn the provision for
falling price of inventories on the lower one between costs and net realizable value. Evaluating the falling price of
inventories needed the management level gain the valid evidence and take full consideration of the purpose of
inventories, influence of events after balance sheet date and other factors, and then made relevant judgments and
estimates. The actual amount and the difference of previous estimates would affect the book value of inventories
and the withdrawal and reversal on provision for bad debts of inventories during the period of estimates being
changed.
(3) Held-to-maturity investment
The Company classifies the non-derivative financial assets which meet with conditions with fixed or
confirmable repayment amount and fixed maturity date as well as the Company owns definite intention and ability
to hold until mature as the held-to-maturity investment. To execute the classification needs large judgment. In the
process of executing the judgment, the Company would assess the intention and ability of the investment which
hold until the due date. Except for the particular situation (for example, selling the investment with insignificant
amount when approaching the due date), if the Company fails to hold the investment until the due date, should
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re-classify the investment to the available-for-sale financial assets and would no more be classified as the
held-to-maturity investment in the current fiscal year as well as the afterward two complete fiscal years. If there
exits such situation, that would probably cause significant influences on the value of the relevant financial assets
presented on the financial statement and may influence the risks management strategies of the financial
instruments of the Company.
(4) Held-to-maturity investment impairment
The Company confirms whether the held-to-maturity investment has impairment depends on the judgment
from the management layer to a large extent. The objective evidences of the impairments including the issuers
which occur serious financial difficulties that lead the financial assets could not continue to trade in the active
market and to execute the contracts regulations (for example, to return the interests or the principal violates a
treaty) etc. In the process of executing judgment, the Company needs to evaluate the influences of the objective
evidences of the impairment on the estimated future cash flow.
(5) The impairment of financial assets available for sale
The Group judged whether the financial assets available for sale were impaired relying heavily on the
judgment and assumption of the management team, so as to decide whether recognized the impairment losses in
the income statement. During the process of making the judgment and assumption, the Group needed to appraise
the balance of the cost of the investment exceeding its fair value and the continuous period, the financial status
and business forecast in a short period, including the industrial situation, technical reform, credit level, default rate
and risk of counterparty.
(6) Provision for impairment of non-financial non-current assets
The Group made a judgment on the non-current assets other than financial assets whether they had any
indication of impairment on the balance sheet date. For the intangible assets without finite service life, other than
the annual impairment test, they should be subject to the impairment test when there was any indication of
impairment. For other non-current non-financial assets, which should be subjected to impairment test when there
was indication of impairment indicated that the book value can’t be recoverable.
When the book value of the assets or assets portfolio was more than the recoverable amount, which was the
higher one between the net amount of fair value after deducting the disposal expenses and the discounted amount
of the estimated future cash flow, it means impairment incurred.
The net amount of fair value after deducting the disposal expenses should be fixed the price in the sale
agreement for similar assets in the fair transaction minus the increased costs directly attributable to the assets
disposal.
When estimated the discounted value of future cash flow, the Group needed to make important judgment on
the output, selling price, relevant costs and the discount rate for calculating the discounted amount, etc. When
estimated the recoverable amount, the Group would adopt all the available documents, including the prediction for
87
Changchai Company, Limited Interim Report 2018
relevant output, selling price and relevant operating costs arising from reasonable and supportive assumptions.
The Group made the impairment test on goodwill at least one time per year, which required to predict the
discounted amount of the future cash flow of the assets or assets portfolio with the distributed good will, for which,
the Group needed to predict the future cash flow of the assets or assets portfolio, and adopt the property
discounted rate to decide the discounted amount of future cash flow.
(7) Depreciation and amortization
For the investment real estate, fixed assets and intangible assets, the Group withdrew the depreciation and
amortization by adopting the straight-line method during the service life after full consideration of the salvage
value. The Group checked the service life periodically so as to decide the amount of depreciation and amortization
at each Reporting Period. The service life was fixed by the Group in accordance with the previous experience of
the similar assets and the expected technical update. If there was any significant change on the previous estimates,
the depreciation and amortization expenses should be adjusted.
(8) Income tax
During the routine operating activities, there were some uncertainty in the ultimate tax treatment and
calculation for parts of transactions. Some accounts of such transaction could be listed as pre-tax expenditures
only after the approval of taxation authorities. If there were any differences between the ultimate result of
recognition for these taxation maters and their initial estimates, the differences would affect the current income tax
and deferred income tax at the period of ultimate recognition.
VI Taxes
1. Main Taxes and Tax Rates
Type of tax Taxation basis Tax rates
VAT Payable to sales revenue 10% and 16% etc
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% or 15%
Educational surtax Taxable turnover amount 5%
Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate
Taxpayer Income tax rate
Changchai Co., Ltd. 15%
Changchai Wanzhou Diesel Engine Co., Ltd. 15%
Changzhou Changchai Benniu Diesel Engine Fittings Co., Ltd. 25%
Changzhou Housheng Investment Co., Ltd. 25%
Changzhou Changchai Housheng Agricultural Equipment Co., Ltd. 25%
Changzhou Fuji Changchai Robin Gasoline Engine Co., Ltd. 25%
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Changchai Company, Limited Interim Report 2018
2. Tax Preference
In 2015, the Company has been identified as High-tech Enterprises, therefore, it enjoys 15-percent
preferential rate for corporate income tax; 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 2020 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.
3. Others
VII. Notes to Main Items of Consolidated Financial Statements
1. Monetary Funds
Unit: RMB
Item Ending balance Beginning balance
Cash on hand 444,203.08 466,356.31
Bank deposits 281,868,723.09 324,781,747.27
Other monetary funds 163,546,000.00 105,057,264.13
Total 445,858,926.17 430,305,367.71
Other notes:
At the end of Reporting Period, the monetary fund of the Company used restrictedly was
RMB163,546,000.00, among which cash deposit of bank acceptance bill was RMB163,546,000.00.
2. Notes Receivable
(1) Notes Receivable Disclosed by Category
Unit: RMB
Item Ending balance Beginning balance
Bank’s acceptance bill 556,766,558.95 716,404,345.57
Total 556,766,558.95 716,404,345.57
(2) There Were No Notes Receivable Pledged at the Period-end
(3) Notes Receivable which Had Endorsed by the Company or Had Discounted and not Due on the Balance
Sheet Date at the Period-end
Unit: RMB
89
Changchai Company, Limited Interim Report 2018
Amount of recognition termination Amount of not terminated
Item
at the period-end recognition at the period-end
Bank’s acceptance bill 403,700,000.00
Total 403,700,000.00
(4) There Were No Notes of the Company Transferred to Accounts Receivable owning to the Failure of
Performance by the Drawer at the Period-end
3. Accounts Receivable
(1) Accounts Receivable Disclosed by Category
Unit: RMB
Ending balance Beginning balance
Carrying Bad debt Carrying Bad debt
amount provision amount provision
Carryi
Category Withd Withdra Carryin
ng
Amou Propo Amou rawal Amo Propo Amou wal g value
value
nt rtion nt propo unt rtion nt proporti
rtion on
Accounts
receivable with
significant 26,4
26,46 25,76 25,729
single amount 97.36 698,7 82,9 753,511
3,686. 2.50% 4,923. 4.19% ,422.0 97.15%
for which bad % 62.74 33.5 .42
66 92 9
debt provision 1
separately
accrued
Accounts
receivable
604,
withdrawn bad 1,031, 222,4 808,7 212,95
97.41 21.57 209, 95.65 391,257
debt provision 236,0 74,98 61,01 2,068. 35.24%
% % 510. % ,442.13
according to 06.08 7.57 8.51 34
47
credit risks
characteristics
Accounts
receivable with
insignificant 974,
974,9 974,9 100.0 974,98 100.00
single amount 0.09% 0.00 986. 0.16%
86.14 86.14 0% 6.14 %
for which bad 14
debt provision
separately
90
Changchai Company, Limited Interim Report 2018
accrued
Total 631,
1,058, 249,2 809,4 239,65
100.0 23.54 667, 100.0 392,010
674,6 14,89 59,78 6,476. 37.94%
0% % 430. 0% ,953.55
78.88 7.63 1.25 57
12
Accounts receivable with significant single amount for which bad debt provision separately accrued at the
period-end
√ Applicable □Not applicable
Unit: RMB
Accounts Ending balance
receivable Accounts Withdrawal
Bad debt provision Withdrawal reason
(classified by units) receivable proportion
Customer 1 1,902,326.58 1,902,326.58 100.00% Difficult to recover
Customer 2 6,215,662.64 6,215,662.64 100.00% Difficult to recover
Expected to
Customer 3 2,293,090.49 2,175,177.75 94.86%
difficultly recover
Expected to
Customer 4 3,279,100.00 3,279,100.00 100.00%
difficultly recover
Expected to
Customer 5 2,068,377.01 2,068,377.01 100.00%
difficultly recover
Customer 6 5,359,381.00 5,359,381.00 100.00% Difficult to recover
Customer 7 2,584,805.83 2,584,805.83 100.00% Difficult to recover
Customer 8 1,599,243.11 1,599,243.11 100.00% Difficult to recover
Expected to
Customer 9 1,161,700.00 580,850.00 50.00%
difficultly recover
Total 26,463,686.66 25,764,923.92 -- --
In the groups, accounts receivable adopted aging analysis methods to accrue bad debt provision:
√ Applicable □ Not applicable
Unit: RMB
Ending balance
Aging
Accounts receivable Bad debt provision Withdrawal proportion
Sub-item within 1 year
Subtotal of within 1 year 809,368,741.65 16,187,374.83 2.00%
1 to 2 years 14,239,832.88 711,991.64 5.00%
2 to 3 years 1,643,225.81 246,483.87 15.00%
3 to 4 years 875,560.19 262,668.06 30.00%
4 to 5 years 105,440.97 63,264.58 60.00%
91
Changchai Company, Limited Interim Report 2018
Over 5 years 205,003,204.58 205,003,204.58 100.00%
Total 1,031,236,006.08 222,474,987.57
Notes of the basis of recognizing the group:
In the groups, accounts receivable adopted balance percentage method to withdraw bad debt provision
□ Applicable √ Not applicable
In the groups, accounts receivable adopted other method to withdraw bad debt provision
(2) Bad Debt Provision Withdrawn, Reversed or Recovered during the Reporting Period
The withdrawal amount of the bad debt provision during the reporting period was of RMB10,137,747.23；the
amount of the reversed or recovered part during the Reporting Period was of RMB579,326.17.
(3) Top 5 Accounts Receivable in Ending Balance Collected according to the Arrears Party
The total Top 5 accounts receivable in ending balance collected according to the arrears party was
RMB484,809,565.40, accounting for 45.79% of the total ending balance of accounts receivable. The ending
balance of bad debt provision withdrawn was RMB18,672,083.07.
4. Prepayment
(1) List by Aging
Unit: RMB
Ending balance Beginning balance
Aging
Amount Proportion Amount Proportion
Within 1 year 19,905,484.12 92.99% 16,300,217.23 91.67%
1 to 2 years 98,245.17 0.46% 110,270.90 0.62%
2 to 3 years 401,279.30 1.87% 384,622.72 2.16%
Over 3 years 1,001,181.18 4.68% 985,896.92 5.55%
Total 21,406,189.77 -- 17,781,007.77 --
(2) Top 5 Prepayments in Ending Balance Collected according to the Prepayment Target
The total top 5 prepayments in ending balance collected according to the prepayment target was
RMB8,333,140.18, accounting for 38.93% of total ending balance of prepayment.
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Changchai Company, Limited Interim Report 2018
5. Other Accounts Receivable
(1) Other Accounts Receivable Disclosed by Category
Unit: RMB
Ending balance Beginning balance
Carrying Bad debt Carrying Bad debt
amount provision amount provision
Carryi
Category Withd Withdra Carryin
ng
Amou Propo Amou rawal Amo Propo Amou wal g value
value
nt rtion nt propo unt rtion nt proporti
rtion on
Other accounts
receivable with
significant
2,853, 2,853, 2,85
single amount 100.0 2,853, 100.00
188.0 5.43% 188.0 3,18 7.45%
for which bad 0% 188.02 %
2 2 8.02
debt provision
separately
accrued
Other accounts
receivable
33,3
withdrawn bad 47,56 27,85 19,70 27,572
90.57 58.57 67,4 87.08 5,794,9
debt provision 1,220. 7,305. 3,915. ,489.7 82.63%
% % 60.9 % 71.22
according to 62 25 37 6
8
credit risks
characteristics
Other accounts
receivable with
insignificant
2,099, 2,099, 2,09
single amount 100.0 2,099, 100.00
382.0 4.00% 382.0 9,38 5.47%
for which bad 0% 382.02 %
2 2 2.02
debt provision
separately
accrued
38,3
52,51 32,80 19,70 32,525
100.0 62.48 20,0 100.0 5,794,9
Total 3,790. 9,875. 3,915. ,059.8 84.88%
0% % 31.0 0% 71.22
66 29 37 0
2
Other accounts receivable with significant single amount for which bad debt provision separately accrued:
√ Applicable □ Not applicable
Unit: RMB
93
Changchai Company, Limited Interim Report 2018
Other accounts Ending balance
receivable Other accounts Withdrawal
Bad debt provision Withdrawal reason
(classified by units) receivable proportion
Changchai Group
Import & Export 2,853,188.02 2,853,188.02 100.00% Difficult to recover
Company
Total 2,853,188.02 2,853,188.02 -- --
In the groups, other accounts receivable adopted aging analysis method to accrue bad debt provision:
√ Applicable □ Not applicable
Unit: RMB
Ending balance
Aging Other accounts
Bad debt provision Withdrawal proportion
receivable
Sub-item within 1 year
Subtotal of within 1 year 19,255,197.17 385,103.94 2.00%
1-2 years 484,560.67 24,228.03 5.00%
2-3 years 115,247.00 17,287.05 15.00%
3-4 years 78,455.39 23,536.62 30.00%
4-5 years 551,526.97 330,916.18 60.00%
Over 5 years 27,076,233.42 27,076,233.42 100.00%
Total 47,561,220.62 27,857,305.25
In the groups, other accounts receivable adopted balance percentage method to withdraw bad debt provision
□ Applicable √ Not applicable
In the groups, other accounts receivable adopted other methods to withdraw bad debt provision:
□ Applicable √ Not applicable
(2) Bad Debt Withdrawn, Reversed or Recovered during the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB284,815.49；the
amount of the reversed or recovered part during the Reporting Period was of RMB0.00.
(3) Other Accounts Receivable Classified by the Nature of Accounts
Unit: RMB
Nature Ending carrying amount Beginning carrying amount
Margin &cash pledge 280,014.00 4,200.00
Intercourse funds 31,019,309.05 21,072,102.14
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Changchai Company, Limited Interim Report 2018
Petty cash and borrowings by
1,658,255.31 1,854,174.11
employees
Other 19,556,212.30 15,389,554.77
Total 52,513,790.66 38,320,031.02
(4) Top 5 Other Accounts Receivable in Ending Balance Collected according to the Arrears Party
Unit: RMB
Proportion to
Ending
total ending
balance of
Name of units Nature Ending balance Aging balance of
bad debt
other accounts
provision
receivable
Changzhou Changjiang Casting Intercourse 100,000.0
5,000,000.00 1 年以内 9.52%
Materials Co., Ltd. funds 0
Xuzhou Huadong Foundry Intercourse
3,000,000.00 1 年以内 5.71% 60,000.00
Factory Co., Ltd. funds
Changzhou Compressors Intercourse 2,940,000.
2,940,000.00 5 年以上 5.60%
Factory funds 00
Changchai Group Imp. & Exp. Intercourse 2,853,188.
2,853,188.02 5 年以上 5.43%
Co., Ltd. funds 02
Changzhou New District Intercourse 1,626,483.
1,626,483.25 5 年以上 3.10%
Accounting Centre funds 25
7,579,671.
Total -- 15,419,671.27 -- 29.36%
27
6. Inventory
(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 116,430,194. 112,837,638. 137,637,917. 131,991,142.
3,592,556.38 5,646,775.16
materials 48 10 36 20
Materials
12,407,471.1 12,180,619.5 17,692,442.7 17,509,331.4
processed on 226,851.60 183,111.28
2 2 1 3
commission
Goods in 121,436,739. 17,963,201.7 103,473,537. 142,366,956. 18,705,451.9 123,661,504.
95
Changchai Company, Limited Interim Report 2018
progress 40 1 69 08 2 16
Finished 191,108,103. 15,091,298.8 176,016,804. 247,668,232. 15,020,818.9 232,647,413.
goods 70 0 90 73 3 80
Low priced
and easily 3,582,671.06 1,582,001.67 2,000,669.39 4,212,709.15 1,775,293.26 2,437,415.89
worn articles
444,965,179. 38,455,910.1 406,509,269. 549,578,258. 41,331,450.5 508,246,807.
Total
76 6 60 03 5 48
Is it necessary for the Company to observe the disclosure requirements of Guidelines of Shenzhen Stock Exchange
for Industry Information Disclosure No.4-Listed Companies Engaging in Seed Industry and Planting Business
No
(2) Falling Price Reserves of Inventory
Unit: RMB
Increased amount Decreased amount
Beginning Ending
Item Reverse or
balance Withdrawal Other Other balance
write-off
Raw materials 5,646,775.16 2,054,218.78 3,592,556.38
Materials processed on
183,111.28 43,740.32 0.00 226,851.60
commission
Goods in progress 18,705,451.92 742,250.21 17,963,201.71
Finished goods 15,020,818.93 70,479.87 0.00 15,091,298.80
Low priced and easily
1,775,293.26 193,291.59 1,582,001.67
worn articles
Total 41,331,450.55 114,220.19 2,989,760.58 38,455,910.16
(3) Inventory which Ending Balance didn’t include Capitalized Borrowing Amount
(4) There Were No Completed but Unsettled Assets Caused by Construction Contracts at the Period-end
7. Other Current Assets
Unit: RMB
Item Ending balance Beginning balance
The VAT tax credits 3,372,534.38 28,078,565.33
Export rebates receivable 825,933.00
Prepaid expense 345,603.46 135,685.72
Financial products from securities 16,000,000.00 13,500,000.00
96
Changchai Company, Limited Interim Report 2018
companies
Total 19,718,137.84 42,540,184.05
8. Available-for-sale Financial Assets
(1) List of Available-for-sale Financial Assets
Unit: RMB
Ending balance Beginning balance
Item Carrying Depreciatio Carrying Carrying Depreciation Carrying
amount n reserves value amount reserves value
Available-for-sale 646,466,48 1,210,000. 645,256,48 794,732,63 793,522,639.
1,210,000.00
equity instruments 7.16 00 7.16 9.04 04
Measured at fair 537,369,00 537,369,00 685,837,50 685,837,500.
value 0.00 0.00 0.00 00
109,097,48 1,210,000. 107,887,48 108,895,13 107,685,139.
Measured at cost 1,210,000.00
7.16 00 7.16 9.04 04
646,466,48 1,210,000. 645,256,48 794,732,63 793,522,639.
Total 1,210,000.00
7.16 00 7.16 9.04 04
(2) Available-for-sale Financial Assets at Fair Value at the Period-end
Unit: RMB
Available-for-sale equity Available-for-sale
Category Total
instruments debt instruments
Cost of equity instruments /amortized
79,874,500.00 79,874,500.00
cost of debt instruments
Fair value 537,369,000.00 537,369,000.00
Accumulated changes in fair value
recorded into other comprehensive 388,870,325.00 388,870,325.00
income
(3) Available-for-sale Financial Assets Measured by Cost at the Period-end
Unit: RMB
Carrying amount Depreciation reserve Sharehold Cash
ing bonus
Perio Dec Peri
Investee Period-be Increas Decr Period- Incre proportio of the
d-begi reas od-e
ginning e ease end ase n among Reporti
nning e nd
the ng
97
Changchai Company, Limited Interim Report 2018
investees Period
7,200,000. 7,200,0
Liance Tech 3.20%
00 00.00
Changzhou
Xietong
Private 100,000,0 100,000
99.01%
Equity Fund 00.00 ,000.00
(Limited
Partnership)
Guizhou
Warmen 200,104.8 200,104
Pharmaceutic 0 .80
al Co., Ltd.
Guizhou
Anda Energy 195,297.4 195,297
Technology 9 .49
Co., Ltd.
FUNIK
63,0
Ultrahard
63,096.08 96.0
Material Co.,
8
Ltd.
Epitop
26,640.
Optoelectroni 26,640.67
67
c Co., Ltd.
Hebei Songhe
Recycling 104,69 104,699
Resources 9.44 .44
Co., Ltd.
Henan
160,74 160,744
Lantian Gas
4.76 .76
Co., Ltd.
1,210, 1,21
1,210,000. 1,210,0
Others 000.0 0,00
00 00.00
0 0.00
63,0 1,210, 1,21
108,895,1 265,44 109,097
Total 96.0 000.0 0,00 --
39.04 4.20 ,487.16
8 0 0.00
(4) Changes in the Impairment of the Available-for-sale Assets during the Reporting Period
Unit: RMB
98
Changchai Company, Limited Interim Report 2018
Category of the available-for-sale Available-for-sale Available-for-sale debt
Total
financial assets equity instruments instruments
Beginning balance withdrawn
1,210,000.00 1,210,000.00
impairment
Ending balance withdrawn impairment 1,210,000.00 1,210,000.00
9. Long-term Equity Investment
Unit: RMB
Increase/decrease
Adjust Endin
Profit
ment Cha Cash g
or loss Withdr
Begi Redu of nge bonus Endin balanc
Addit recogni awal of
nning ced other s in or g e of
Investee ional zed depreci Ot
balan inves compr othe profits balanc deprec
invest under ation her
ce tmen ehensi r announ e iation
ment the reserve
t ve equi ced to reserv
equity s
incom ty issue es
method
e
I. Joint ventures
II. Associated enterprises
Beijing
Tsinghua
Industrial 44,18 44,182 44,182
Investment 2.50 .50 .50
Management
Co., Ltd.
44,18 44,182 44,182
Subtotal
2.50 .50 .50
44,18 44,182 44,182
Total
2.50 .50 .50
10. Investment Property
(1) Investment Property Adopted the Cost Measurement Mode
√ Applicable □ Not applicable
Unit: RMB
Item Houses and Land use Construction Total
99
Changchai Company, Limited Interim Report 2018
buildings right in progress
I. Original carrying value
1. Beginning balance 87,632,571.14 87,632,571.14
2. Increased amount of the period
(1) Outsourcing
(2) Transfer from inventory\fixed
assets\construction in progress
(3) Enterprise combination increase
3. Decreased amount of the period
(1) Disposal
(2) Other transfer
4. Ending balance 87,632,571.14 87,632,571.14
II. Accumulative depreciation and
accumulative amortization
1. Beginning balance 34,768,222.71 34,768,222.71
2. Increased amount of the period 1,104,170.40 1,104,170.40
(1) Withdrawal or amortization 1,104,170.40 1,104,170.40
3. Decreased amount of the period
(1) Disposal
(2) Other transfer
4. Ending balance 35,872,393.11 35,872,393.11
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 51,760,178.03 51,760,178.03
2. Beginning carrying value 52,864,348.43 52,864,348.43
(2) Investment Property Adopted the Fair Value Measurement Code
□ Applicable √ not applicable
100
Changchai Company, Limited Interim Report 2018
11. Fixed Assets
(1) List of Fixed Assets
Unit: RMB
Transportati
Houses and Machinery Other
Item on Total
buildings equipment equipment
equipment
I. Original carrying value
23,363,510.0 44,350,166. 1,423,630,06
1. Beginning balance 445,235,823.37 910,680,568.87
0 61 8.85
2. Increased amount of
1,018,882.19 4,804,054.41 0.00 263,361.79 6,086,298.39
the period
(1) Purchase 561,488.20 819,633.56 152,360.28 1,533,482.04
(2) Transfer from
457,393.99 3,984,420.85 111,001.51 4,552,816.35
construction in progress
(3) Enterprise
combination increase
3. Decreased amount of
670,367.80 523,352.00 117,702.62 1,311,422.42
the period
(1) Disposal or Scrap 670,367.80 523,352.00 117,702.62 1,311,422.42
22,840,158.0 44,495,825. 1,428,404,94
4. Ending balance 446,254,705.56 914,814,255.48
0 78 4.82
II. Accumulative
depreciation
17,903,567.4 33,355,224. 862,085,983.
1. Beginning balance 249,203,618.96 561,623,572.09
6 84 35
2. Increased amount of 1,945,545.8 45,126,800.5
8,520,481.30 33,605,803.64 1,054,969.70
the period 6 0
1,945,545.8 45,126,800.5
(1) Withdrawal 8,520,481.30 33,605,803.64 1,054,969.70
6 0
3. Decreased amount of
0.00 5,314,955.96 362,140.74 520,156.75 6,197,253.45
the period
(1) Disposal or Scrap 5,314,955.96 362,140.74 520,156.75 6,197,253.45
18,596,396.4 34,780,613. 901,015,530.
4. Ending balance 257,724,100.26 589,914,419.77
2 95 40
III. Depreciation reserves
1. Beginning balance 1,494,115.00 1,494,115.00
101
Changchai Company, Limited Interim Report 2018
2. Increased amount of
the period
(1) Withdrawal
3. Decreased amount of
the period
(1) Disposal or Scrap
4. Ending balance 1,494,115.00 1,494,115.00
IV. Carrying value
9,715,211.8 525,895,299.
1. Ending carrying value 188,530,605.30 323,405,720.71 4,243,761.58
3 42
2. Beginning carrying 10,994,941. 560,049,970.
196,032,204.41 347,562,881.78 5,459,942.54
value 77 50
12. Construction in Progress
(1) List of Construction in Progress
Unit: RMB
Ending balance Beginning balance
Depreciati
Item Carrying Depreciatio Carrying Carrying Carrying
on
amount n reserves value amount value
reserves
Trial production workshop 16,504,456. 16,504,4 14,349,46 14,349,4
project technology center 07 56.07 1.80 61.80
715,097. 396,000.0 396,000.
Casting renovation project 715,097.59
59 0 00
Expansion capacity of
11,858,106. 11,858,1 11,217,70 11,217,7
multi-cylinder (The 2nd
49 06.49 6.49 06.49
Period)
Diesel Engine Cylinder Body 22,239,955. 22,239,9 20,125,95 20,125,9
Flexible Manufacturing Line 51 55.51 5.51 55.51
35KV Substation 1,675,876.3 1,675,87 1,218,587. 1,218,58
3 6.33 83 7.83
Equipment to be installed and 33,382,357. 33,382,3 47,274,27 47,274,2
payment for projects 21 57.21 7.43 77.43
102
Changchai Company, Limited Interim Report 2018
86,375,849. 86,375,8 94,581,98 94,581,9
Total
20 49.20 9.06 89.06
(2) Changes in Significant Construction in Progress during the Reporting Period
Unit: RMB
Propo Of
rtion which Capit
of Accu : alizati
accu mulat amou on
mulat ed nt 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
Trial
produ
ction
works
22,89 14,34 2,154 16,50
hop 72.08 unfini
6,300 9,461 ,994. 4,456 others
proje % shed
.00 .80 27 .07
ct
techn
ology
center
Expa
nsion
capac
70,19 11,21 11,85
ity of 640,4 92.61 unfini
0,000 7,706 8,106 others
00.00 % shed
multi- .00 .49 .49
cylin
der
(The
103
Changchai Company, Limited Interim Report 2018
2nd
Perio
d)
Diese
l
Engin
e
Cylin
der 116,0 20,12 2,114, 22,23
36.05 unfini
Body 40,00 5,955 000.0 9,955 others
% shed
0.00 .51 0 .51
Flexi
ble
Manu
factur
ing
Line
35KV 1,218 1,675
457,2 unfini
Subst ,587. ,876. others
88.50 shed
83 33
ation
Total 209,1 46,91 5,366 52,27
26,30 1,711. ,682. 8,394 -- -- --
0.00 63 77 .40
13. Intangible Assets
(1) List of Intangible Assets
Unit: RMB
Item Land use right Software License fee Total
I. Original carrying value
1. Beginning balance 144,770,507.85 10,972,366.81 5,488,000.00 161,230,874.66
2. Increased amount of the period
(1) Purchase
(2) Internal R&D
(3) Business combination
increase
104
Changchai Company, Limited Interim Report 2018
3. Decreased amount of the period
(1) Disposal
4. Ending balance 144,770,507.85 10,972,366.81 5,488,000.00 161,230,874.66
II. Accumulated amortization
1. Beginning balance 45,156,044.23 7,821,750.27 457,333.30 53,435,127.80
2. Increased amount of the period 1,486,425.13 1,158,166.61 364,660.91 3,009,252.65
(1) Withdrawal 1,486,425.13 1,158,166.61 364,660.91 3,009,252.65
3. Decreased amount of the period
(1) Disposal
4. Ending balance 46,642,469.36 8,979,916.88 821,994.21 56,444,380.45
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 value 98,128,038.49 1,992,449.93 4,666,005.79 104,786,494.21
2. Beginning carrying value 99,614,463.62 3,150,616.54 5,030,666.70 107,795,746.86
Proportion of intangible assets generated from internal R&D to the balance of intangible at the period-end:
14. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Deferred Income Tax Assets Had Not Been Off-set
Unit: RMB
Ending balance Beginning balance
Deductible Deferred Deductible Deferred
Item
temporary income tax temporary income tax
difference assets difference assets
Provision for impairment of assets 6,519,959.41 1,006,953.81 6,519,959.41 1,006,953.81
Total 6,519,959.41 1,006,953.81 6,519,959.41 1,006,953.81
(2) Deferred Income Tax Liabilities Had Not Been Off-set
Unit: RMB
105
Changchai Company, Limited Interim Report 2018
Ending balance Beginning balance
Deductible Deferred Deductible Deferred
Item
temporary income tax temporary income tax
difference liabilities difference liabilities
Changes in fair value of
457,494,500.00 68,624,175.00 605,963,000.00 90,894,450.00
available-for-sale financial assets
Consolidated assets evaluation
appreciation not under the same 6,061,317.56 1,515,329.39 6,061,317.56 1,515,329.39
controller
Total 463,555,817.56 70,139,504.39 612,024,317.56 92,409,779.39
(3) List of Unrecognized Deferred Income Tax Assets
Unit: RMB
Item Ending balance Beginning balance
Bad debt provision 275,504,813.51 265,661,576.96
Inventory falling price reserves 38,455,910.16 41,331,450.55
Total 313,960,723.67 306,993,027.51
15. Other Non-current Assets
Unit: RMB
Item Ending balance Ending depreciation Beginning balance Beginning
reserve depreciation reserve
Entrusted loans 14,000,000.00 14,000,000.00 14,000,000.00 14,000,000.00
Total 14,000,000.00 14,000,000.00 14,000,000.00 14,000,000.00
16. Short-term Borrowings
(1) Short-term Borrowings Disclosed by Category
Unit: RMB
Item Ending balance Beginning balance
Mortgage loans 8,700,000.00 10,000,000.00
Guaranteed loans 10,000,000.00 14,900,000.00
Credit loans 10,000,000.00
Total 28,700,000.00 24,900,000.00
106
Changchai Company, Limited Interim Report 2018
(2) There Were No Short-term Borrowings Overdue and Unpaid
17. Notes Payable
Unit: RMB
Category Ending balance Beginning balance
Bank’s acceptance bill 531,820,000.00 347,070,500.00
Total 531,820,000.00 347,070,500.00
Total notes payable overdue but not paid at the end of the Reporting Period was RMB0.00.
18. Accounts Payable
(1) List of Accounts Payable
Unit: RMB
Item Ending balance Beginning balance
Payment for goods 550,059,148.32 616,228,500.18
Total 550,059,148.32 616,228,500.18
(2) There Were No Significant Accounts Payable Aging over One Year at the Period-end
19. Advances from Customers
(1) List of Advances from Customers
Unit: RMB
Item Ending balance Beginning balance
Payment for goods 46,605,126.00 40,153,984.91
Total 46,605,126.00 40,153,984.91
(2) There Were No Significant Advances from Customers Aging over One Year at the Period-end
20. Payroll Payable
(1) List of Payroll Payable
Unit: RMB
Beginning Ending
Item Increase Decrease
balance balance
I. Short-term salary 51,247,112.66 136,192,006.05 162,192,451.54 25,246,667.17
107
Changchai Company, Limited Interim Report 2018
II. Post-employment
20,101,194.15 20,101,194.15
benefit-defined contribution plans
Total 51,247,112.66 156,293,200.20 182,293,645.69 25,246,667.17
(2) List of Short-term salary
Unit: RMB
Beginning Ending
Item Increase Decrease
balance balance
1. Salary, bonus, allowance, subsidy 42,781,111.59 112,245,515.00 137,600,268.16 17,426,358.43
2. Employee welfare 177,592.74 2,331,722.69 2,509,315.43
3. Social insurance 10,314,452.06 10,314,452.06
Of which: Medical insurance
8,441,666.87 8,441,666.87
premiums
Work-related injury
1,130,351.92 1,130,351.92
insurance
Maternity insurance 742,433.27 742,433.27
4. Housing fund 9,255,406.00 9,255,406.00
5. Labor union budget and employee
8,288,408.33 2,044,910.30 2,513,009.89 7,820,308.74
education budget
Total 51,247,112.66 136,192,006.05 162,192,451.54 25,246,667.17
(3) List of Defined Contribution Plans
Unit: RMB
Ending
Item Beginning balance Increase Decrease
balance
1. Basic pension benefits 19,636,879.11 19,636,879.11
2. Unemployment insurance 464,315.04 464,315.04
Total 20,101,194.15 20,101,194.15
21. Taxes Payable
Unit: RMB
Item Ending balance Beginning balance
VAT 1,809,889.26 257,634.15
Corporate income tax 372,350.60 1,220,803.03
108
Changchai Company, Limited Interim Report 2018
Personal income tax 186,651.65 397,114.88
Urban maintenance and
850,853.05
construction tax
Education Surcharge 14,671.54
Comprehensive fees 235,018.47 1,075,134.76
Property tax 173,200.76
Land use tax 21,000.00
Stamp duty 7,508.61
Total 2,603,909.98 4,017,920.78
22. Dividends Payable
Unit: RMB
Item Ending balance Beginning balance
Ordinary share dividends 3,243,179.97 3,243,179.97
Dividends for non-controlling shareholders 648,253.86 648,253.86
Total 3,891,433.83 3,891,433.83
23. Other Accounts Payable
(1) Other Accounts Payable Listed by Nature of Account
Unit: RMB
Item Ending balance Beginning balance
Margin & cash pledged 4,342,793.03 3,266,453.59
Unit current amount 9,924,455.03 10,838,311.11
Personal amount payable 2,220,578.42 457,465.63
Sales discount and three guarantees 150,114,192.08 142,449,844.40
Other 41,218,787.83 35,082,168.35
Total 207,820,806.39 192,094,243.08
(2) Significant Other Accounts Payable Aging over One Year
The significant other accounts payable aging over one year were mainly unsettled temporary credit and
accounts unpaid.
109
Changchai Company, Limited Interim Report 2018
24. Other Current Liabilities
Unit: RMB
Item Ending balance Beginning balance
Sewage charge 54,000.00
Electric charge 2,886,117.93 1,974,937.59
Total 2,886,117.93 2,028,937.59
25. Long-term Borrowings
(1) Category of Long-term Borrowings
Unit: RMB
Item Ending balance Beginning balance
Mortgage loan 2,000,000.00 2,000,000.00
Loan on credit 19,500,000.00 19,500,000.00
Total 21,500,000.00 21,500,000.00
Notes to the category of long-term borrowings:
The loan on credit at the period-end was RMB19,500,000.00, which was the loan for the technical innovation
project by the Company as the parent from Changzhou Branch of CMBC with the duration from 20 September
2017 to 19 September 2019.
The mortgage loan at the period-end was RMB2,000,000.00, which was the loan by the
subsidiary-Changchai Wanzhou from Gaosuntang Branch of Chongqing Three Gorges Bank with the duration
from 4 December 2017 to 6 November 2020.
Other notes including interest rate range:
The credit loan at the period-end was RMB19,500,000.00 with the interest rate of 4.75%.
The mortgage loan at the period-end was RMB2,000,000.00 with the interest rate of 6.15%.
26. Deferred Income
Unit: RMB
Beginning Ending
Item Increase Decrease Formation reasons
balance balance
Government subsidies Government
60,992,858.46 60,992,858.46
appropriation
Total 60,992,858.46 60,992,858.46 --
110
Changchai Company, Limited Interim Report 2018
Items involved in government subsidies:
Unit: RMB
Amount
accrued Amount Amount Related
Amount o
Beginnin in accrued set off Other Ending to the
Item f newly
g balance non-oper in other cost changes balance assets/
subsidy
ating income expenses income
income
Electric
control of
diesel
engine
research
and 1,045,200 1,045,200 Related t
developm .00 .00 o assets
ent and
industrial
ization
allocation
s
National
major
project 28,770,00 28,770,00 Related
special 0.00 0.00 to assets
allocation
s
Remove
21,177,65 21,177,65 Related
compensa
8.46 8.46 to assets
tion
Research
and
developm 10,000,00 10,000,00 Related
0.00 0.00 to assets
ent and
industrial
ization
111
Changchai Company, Limited Interim Report 2018
allocation
s of
national
III/IV
standard
high-pow
ered
efficient
diesel
engine
for
agricultur
al use
60,992,85 60,992,85
Total --
8.46 8.46
27. Share Capital
Unit: RMB
Increase/decrease (+/-)
Beginning Ending
New shares Bonus Bonus issue from
balance Other Subtotal balance
issued shares profit
The sum of 561,374,32 561,374,32
shares 6.00 6.00
28. Capital Reserves
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Capital premium
143,990,690.24 143,990,690.24
(premium on stock)
Other capital
20,337,975.19 20,337,975.19
reserves
Total 164,328,665.43 164,328,665.43
29. Other Comprehensive Income
Unit: RMB
112
Changchai Company, Limited Interim Report 2018
Reporting Period
Less: recorded in
Attribut Attribut
other
Income able to able to
comprehensive Less:
Beginni before owners non-co
income in prior Incom Ending
Item ng taxation of the ntrollin
period and e tax balance
balance in the Compan g
transferred in expens
Current y as the interest
profit or loss in e
Period parent s after
the Current
after tax tax
Period
Other comprehensive
-22,27 -126,19
income that may 515,068, -148,468 388,870,
0,275. 8,225.0
subsequently reclassified 550.00 ,500.00 325.00
00 0
into profit or loss
Gain/Loss on changes in
-22,27 -126,19
fair value of 515,068, -148,468 388,870,
0,275. 8,225.0
available-for-sale 550.00 ,500.00 325.00
00 0
financial assets
-22,27 -126,19
Total of other 515,068, -148,468 388,870,
0,275. 8,225.0
comprehensive income 550.00 ,500.00 325.00
00 0
30. Specific Reserve
Unit: RMB
Beginning Ending
Item Increase Decrease
balance balance
Safety production cost 13,289,059.21 13,289,059.21
Total 13,289,059.21 13,289,059.21
31. Surplus Reserves
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Statutory surplus reserves 300,548,352.26 300,548,352.26
Discretional surplus reserves 13,156,857.90 13,156,857.90
Total 313,705,210.16 313,705,210.16
113
Changchai Company, Limited Interim Report 2018
32. Retained Profits
Unit: RMB
Item Reporting Period Same period of last year
Beginning balance of retained profits
679,131,047.06 651,365,935.39
before adjustments
Beginning balance of retained profits
679,131,047.06 651,365,935.39
after adjustments
Add: Net profit attributable to owners of
18,638,557.66 39,679,158.13
the Company as the parent
dividend of ordinary shares payable 16,841,229.78 16,841,229.78
Ending retained profits 680,928,374.94 674,203,863.74
33. 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 1,170,216,312.13 1,021,184,769.09 1,297,931,638.97 1,134,816,954.26
Other operations 16,544,580.13 13,170,139.90 10,174,541.95 6,575,367.62
Total 1,186,760,892.26 1,034,354,908.99 1,308,106,180.92 1,141,392,321.88
34. Taxes and Surtaxes
Unit: RMB
Item Reporting Period Same Period of last year
Urban maintenance and
845,650.36 1,420,461.39
construction tax
Education surcharge 642,651.03 1,010,250.20
Property tax 2,069,927.39 2,185,072.01
Land use tax 1,586,101.00 1,632,123.85
Stamp duty 513,699.80 553,859.70
Vehicle and vessels usage tax 3,495.54
Other taxes 81,443.68 226,866.31
Total 5,739,473.26 7,032,129.00
114
Changchai Company, Limited Interim Report 2018
35. Selling Expense
Unit: RMB
Item Reporting Period Same Period of last year
Office expenses 3,386,449.10 6,982,458.17
Employee’s remuneration 13,325,262.47 11,332,610.95
Sales promotional expense 4,262,413.37 5,898,980.00
Three guarantees 23,686,879.68 25,519,985.07
Transport fees 2,858,745.16 2,928,996.14
Other 4,708,326.08 3,152,325.80
Total 52,228,075.86 55,815,356.13
36. Administrative Expense
Unit: RMB
Item Reporting Period Same Period of last year
Office expenses 5,654,457.09 8,272,173.27
Employee’s remuneration 23,558,572.26 30,067,256.77
Depreciation and amortization 6,697,101.23 7,874,255.36
Research and development expense 20,545,742.67 20,745,380.97
Transport fees 1,056,769.14 1,748,122.94
Repair charge 1,032,605.25 2,150,881.75
Safety expenses 414,850.19 584,333.18
Other 3,474,389.63 1,955,663.27
Total 62,434,487.46 73,398,067.51
37. Finance Costs
Unit: RMB
Item Reporting Period Same Period of last year
Interest expense 1,805,097.10 2,466,943.16
Less: interest income 891,663.17 1,995,814.22
Net gains or losses of foreign exchange -1,336,510.72 2,245,667.55
Other 290,739.67 -2,383,345.13
Total -132,337.12 333,451.36
115
Changchai Company, Limited Interim Report 2018
38. Asset Impairment Loss
Unit: RMB
Item Reporting Period Same Period of last year
I. Bad debt loss 9,843,236.55 9,120,720.94
II. Inventory falling price loss 114,220.19 29,318.33
Total 9,957,456.74 9,150,039.27
39. Investment Income
Unit: RMB
Reporting Same Period of
Item
Period last year
Investment income received from the holding of available-for-sale
21,000.00 6,952,750.99
financial assets
Investment income received from the disposal of securities companies’
355,091.68 190,326.41
financial products
Difference of equity arising from the measurement of fair value 2,215,049.22
Total 376,091.68 9,358,126.62
40. Other Income
Unit: RMB
Resource Reporting Period Same Period of last year
Government subsidies 129,600.00
Total 129,600.00
41. Non-operating Income
Unit: RMB
Amount recorded in
Item Reporting Period Same Period of last year current non-recurring
gains and losses
Total income generated
from disposal of 220,802.18 94,440.43 220,802.18
non-current assets
Of which: income
generated from fixed 220,802.18 94,440.43 220,802.18
assets
116
Changchai Company, Limited Interim Report 2018
Insurance indemnity 353,600.00
Income from penalty 6,021.73 6,021.73
Government subsidies 532,186.81
Income generated from
913,253.12 251,402.73 913,253.12
disposal of current assets
Other 963,006.00 20,541,693.44 963,006.00
Total 2,103,083.03 21,773,323.41 2,103,083.03
Government subsidies recorded into the current gains and losses:
Unit: RMB
Whether
Related
subsidies Repor
Distrib Special Same to
Distribution Nat influence the ting
Item ution subsidy period of assets/rel
reason ure current Perio
entity or not last year ated
profits and d
income
losses or not
Relocation Related
0.00 332,986.81
compensation to income
R & D and
industrializatio
n of off-road Related
0.00 199,200.00
diesel engine to income
controlled by
electricity
Total -- -- -- -- -- 0.00 532,186.81 --
42. Non-operating Expense
Unit: RMB
Amount recorded in
Reporting Same Period
Item current non-recurring
Period of last year
gains and losses
Total losses caused by disposal of non-current assets 759,756.94 18,709.80 759,756.94
Losses caused by disposal of fixed assets 759,756.94 18,709.80 759,756.94
Donations
Losses caused by disposal of current assets 585,214.30 6,124,349.29 585,214.30
Other 182,194.97 251,596.09 182,194.97
Total 1,527,166.21 6,394,655.18 1,527,166.21
117
Changchai Company, Limited Interim Report 2018
43. Income Tax Expense
(1) List of Income Tax Expense
Unit: RMB
Item Reporting Period Same Period of last year
Current income tax expense 4,352,526.65 5,670,998.75
Total 4,352,526.65 5,670,998.75
(2) Adjustment Process of Accounting Profit and Income Tax Expense
Unit: RMB
Item Reporting Period
Profit before taxation 23,260,435.57
Current income tax expense accounted at statutory/applicable tax rate 3,489,065.34
Influence of applying different tax rates by subsidiaries 376,107.32
Influence of not deductable costs, expenses and losses 1,012,585.21
Other -525,231.22
Income tax expense 4,352,526.65
44. Cash Flow Statement
(1) Cash Generated from Other Operating Activities
Unit: RMB
Item Reporting Period Same Period of last year
Subsidy and appropriation 129,600.00
Cash received from other current
5,101,317.80 3,505,477.12
account
Interest income 891,663.17 1,995,814.22
Total 6,122,580.97 5,501,291.34
(2) Cash Used in Other Operating Activities
Unit: RMB
Item Reporting Period Same Period of last year
Selling expense paid in cash 21,006,830.47 25,339,487.40
Administrative expense paid in
14,557,302.97 23,145,470.19
cash
118
Changchai Company, Limited Interim Report 2018
Handling charge 282,442.51 190,445.34
Other 611,755.52 330,043.88
Total 36,458,331.47 49,005,446.81
45. Supplemental Information for Cash Flow Statement
(1) Supplemental Information for Cash Flow Statement
Unit: RMB
Same period of
Supplemental information Reporting Period
last year
1. Reconciliation of net profit to net cash flows generated from
-- --
operating activities
Net profit 18,907,908.92 40,050,611.87
Add: Provision for impairment of assets 9,957,456.74 9,150,039.27
Depreciation of fixed assets, oil-gas assets, and productive living
45,126,800.50 46,215,003.48
assets
Amortization of intangible assets 3,009,252.65 2,951,641.28
Losses on disposal of fixed assets, intangible assets and other
521,857.30 -65,821.39
long-lived assets (gains: negative)
Finance costs (gains: negative) 668,251.41 568,840.63
Investment loss (gains: negative) -376,091.68 -7,143,077.40
Decrease in inventory (gains: negative) 84,613,078.27 45,213,642.10
Decrease in accounts receivable generated from operating activities
-250,092,116.94 -97,396,929.18
(gains: negative)
Increase in accounts payable used in operating activities (decrease:
84,973,677.86 30,817,483.85
negative)
Others -2,918,928.18 -5,982,111.20
Net cash generated from/used in operating activities -5,608,853.15 64,379,323.31
2. Significant investing and financing activities without
-- --
involvement of cash receipts and payments
3. Net increase/decrease of cash and cash equivalent: -- --
Ending balance of cash 282,312,926.17 589,472,465.73
Less: beginning balance of cash 325,263,654.43 583,278,129.09
Add: ending balance of cash equivalents 0.00
Less: beginning balance of cash equivalents 0.00 0.00
Net increase in cash and cash equivalents -42,950,728.26 6,194,336.64
119
Changchai Company, Limited Interim Report 2018
(2) Cash and Cash Equivalent
Unit: RMB
Item Ending balance Beginning balance
I. Cash 282,312,926.17 325,263,654.43
Of which: cash on hand 444,203.08 466,356.31
Bank deposits on demand 281,868,723.09 324,781,747.27
Other monetary fund on demand 15,550.85
II. Cash equivalents 0.00
III. Ending balance of cash and cash equivalents 282,312,926.17 325,263,654.43
46. The Assets with the Ownership or Use Right Restricted
Unit: RMB
Item Ending carrying value Reason for restriction
Cash deposits for bank’s
Monetary capital 163,546,000.00
acceptance bill
Houses and buildings 12,255,901.93 As pledge for bank’s borrowings
Land use right 18,676,590.92 As pledge for bank’s borrowings
Total 194,478,492.85 --
47. Foreign Currency Monetary Items
(1) Foreign Currency Monetary Items
Unit: RMB
Ending foreign currency Ending balance
Item Exchange rate
balance converted to RMB
Monetary capital
Including: USD 2,586,982.64 6.6166 17,117,029.34
HKD 251,970.08 0.8431 212,435.97
SGD 54,427.95 4.8386 263,355.08
Accounts receivable
Including: USD 9,138,031.84 6.6166 60,462,701.47
VIII. Changes of Consolidation Scope
No such case in Reporting Period.
120
Changchai Company, Limited Interim Report 2018
IX. Equity in Other Entities
1. Equity in Subsidiary
(1) Subsidiaries
Main Holding percentage (%)
Registration Nature of Way of
Name operating
place business Directly Indirectly gaining
place
Changchai Wanzhou
Chongqing Chongqing Industry 60.00% Set-up
Diesel Engine Co., Ltd.
Changzhou Changchai
Changzhou Changzhou
Benniu Diesel Engine Industry 99.00% 1.00% Set-up
City City
Fittings Co., Ltd.
Changzhou Housheng Changzhou Changzhou
Service 100.00% Set-up
Investment Co., Ltd. City City
Changzhou Changchai
Changzhou Changzhou
Housheng Agricultural Industry 70.00% 25.00% Set-up
City City
Equipment Co., Ltd.
Changzhou Fuji
Changchai Robin Changzhou Changzhou Investmen
Industry 100.00%
Gasoline Engine Co., City City t
Ltd.
(2) Significant Not Wholly-owned Subsidiary
Unit: RMB
Declaring
Shareholding The profit or loss Ending
dividends
proportion of attributable to balance of
Name distributed to
non-controlling non-controlling non-controllin
non-controlling
interests interests g interests
interests
Changchai Wanzhou Diesel
40.00% 241,336.42 19,343,969.45
Engine Co., Ltd.
Changzhou Changchai
Housheng Agricultural 5.00% 28,014.84 398,538.12
Equipment Co., Ltd.
(3) The Main Financial Information of Significant Not Wholly-owned Subsidiary
Unit: RMB
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Changchai Company, Limited Interim Report 2018
Ending balance Beginning balance
Non- Non-
Curr Non- Tota Curre Tota Curre
curre Total Curre Non-c curre Total
Name ent curre l nt l nt
nt liabili nt urrent nt liabili
asse nt asset liabili asset liabili
liabili ties assets assets liabili ties
ts assets s ties s ties
ty ty
Changch
ai 50,2 77,4 79,3
27,19 27,10 2,000 29,10 51,97 27,420 29,63 2,000 31,63
Wanzho 63,4 60,7 95,3
7,323 0,872 ,000. 0,872 4,844 ,469.3 8,731 ,000. 8,731
u Diesel 72.2 95.8 14.0
.56 .20 00 .20 .72 6 .50 00 .50
Engine 6 2 8
Co., Ltd.
Changzh
ou
Changch
ai
35,4 36,1 38,9
Houshen 28,18 28,18 38,59 31,53 31,53
96,9 659,8 56,8 346,52 43,9
g 6,044 6,044 7,424 3,485 3,485
36.2 70.33 06.6 6.83 51.0
Agricult .17 .17 .23 .51 .51
7 0 6
ural
Equipme
nt Co.,
Ltd.
Unit: RMB
Reporting Period Same period of last year
Cash
Total Cash flows Total
Operati Operatin flows
Name Net compre from Net comprehe
ng g from
profit hensive operating profit nsive
revenue revenue operating
income activities income
activities
Changchai
Wanzhou 27,534, 603,34 603,341 32,078,1 867,85 867,855.8 1,475,032
-817,231.49
Diesel Engine 782.67 1.04 .04 03.46 5.82 2 .87
Co., Ltd.
Changzhou
Changchai
Housheng 11,788, 560,29 560,296 8,689,29 486,22 486,228.3 -10,269,0
-6,844,681.85
Agricultural 194.43 6.88 .88 1.61 8.32 2 03.10
Equipment Co.,
Ltd.
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Changchai Company, Limited Interim Report 2018
2. Equity in the Structured Entity not Included in the Scope of Consolidated Financial Statements
Related notes to structured entity not included in the scope of consolidated financial statements:
On 18 October 2017, the Company set up Changzhou Xietong Private Equity Fund (Limited Partnership)
together with Synergetic Innovation Fund Management Co., Ltd. through joint investment, of which, RMB1
million was invested by the general partner- Synergetic Innovation Fund Management Co., Ltd., and RMB100
million was invested by the limited partner-Changchai Co., Ltd. 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.
X. 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
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Changchai Company, Limited Interim Report 2018
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 have 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.
XI. The Disclosure of Fair Value
1. Ending Fair Value of Assets and Liabilities at Fair Value
Unit: RMB
Ending fair value
Fair value Fair value Fair value
Item
measurement measurement measurement Total
items at level 1 items at level 2 items at level 3
I. Consistent fair value
-- -- -- --
measurement
Including： Available-for-sale 537,369,000
537,369,000.00
financial assets .00
537,369,000
Equity instrument investment 537,369,000.00
.00
Total assets consistently measured 537,369,000
537,369,000.00
by fair value .00
II. Inconsistent fair value
-- -- -- --
measurement
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Changchai Company, Limited Interim Report 2018
2. Market Price Recognition Basis for Consistent and Inconsistent Fair Value Measurement Items at Level
1
XII. Connected Party and Connected Transaction
1. Information Related to the Company as the Parent of the Company
Proportion of
Proportion of
voting rights
share held by
Registe owned by the
Registration Nature of the Company as
Name red Company as the
place business the parent
capital parent against
against the
the Company
Company (%)
(%)
Changzhou Government
State-owned Assets Supervision Changzhou 30.43% 30.43%
and Administration Commission
Notes
The actual controller of the Company is Changzhou Government State-owned Assets Supervision and
Administration Commission. As of 30 June 2018, it held 30.43% shares of the Company (state owned shares).
The final controller of the Company is Changzhou Government State-owned Assets Supervision and
Administration Commission.
2. Subsidiaries of the Company
Refer to Note IX Equity in Other Entities for details.
3. Information on Other Connected Parties
Name Relationship
The director of the Company serves as the senior
Synergetic Innovation Fund Management Co., Ltd.
executive of that company
XIII. Commitments and Contingency
1. Significant Commitments
Significant commitments on balance sheet date
As of 30 June 2018, there were no significant commitments to be disclosed.
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Changchai Company, Limited Interim Report 2018
2. Contingency
(1) Significant Contingency on Balance Sheet Date
Litigation and arbitration in the Reporting Period:
Name of the entity Date of Name of the litigation or Amount Notes
accepted arbitration institutions involved
(RMB’0,000)
Shandong Hongli Group Co., 27 June 2001 Changzhou Intermediate 1,436.00 Under the bankruptcy
Ltd. People's Court and liquidation
Total 1,436.00
Notes:
About the lawsuit case of Shandong Hongli Group Co., Ltd., the accused company owed accumulatively
RMB 14.36 million to the Company. The Company sued to Changzhou Intermediate People’s Court in 2001 and
sued for compulsory execution in April 2002. Currently, the defendant has started the bankruptcy procedure. The
aforesaid payment has arranged for the full provision for bad debts.
XIV. Other Significant Events
1. Segment Information
(1) Basis for Determination of Segments and Governing Accounting Policies
Due to the operation scope of the Company and subsidiaries were similar, the Company conduct common
management, did not divide business unit, so the Company only made single branch report.
(2) Reasons Should Be Given when the Company Has no Segment, or the Total Assets and Total Liabilities
of Various Segments Could Not Be Disclosed
Due to the operation scope of the Company and subsidiaries were similar, the Company conduct common
management, did not divide business unit, so the Company only made single branch report.
XV. Notes of Main Items in the Financial Statements of the Company as the Parent
1. Accounts Receivable
(1) Accounts Receivable Disclosed by Category
Unit: RMB
Category Ending balance Beginning balance
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Changchai Company, Limited Interim Report 2018
Carrying Bad debt Carrying Bad debt
amount provision amount provision
Carryi
Withd Withdra Carryin
ng
Amou Propo Amou rawal Amo Propo Amou wal g value
value
nt rtion nt propo unt rtion nt proporti
rtion on
Accounts
receivable with
significant 35,2
35,03 30,43 4,599, 30,401
single amount 86.87 74,6 4,873,6
5,845. 3.68% 6,502. 342.8 6.52% ,000.8 86.18%
for which bad % 03.6 02.82
53 68 5 5
debt provision 7
separately
accrued
Accounts
receivable
505,
withdrawal of 915,6 197,5 718,1 190,12
96.22 21.57 142, 93.30 315,013
bad debt 39,11 38,99 00,12 9,532. 37.64%
% % 981. % ,448.88
provision of by 6.61 4.32 2.29 72
60
credit risks
characteristics:
Accounts
receivable with
insignificant
974,
single amount 974,9 974,9 100.0 974,98 100.00
0.10% 986. 0.18%
for which bad 86.14 86.14 0% 6.14 %
14
debt provision
separately
accrued
541,
951,6 228,9 722,6 221,50
100.0 24.06 392, 100.0 319,887
Total 49,94 50,48 99,46 5,519. 40.91%
0% % 571. 0% ,051.70
8.28 3.14 5.14 71
41
Accounts receivable with single significant amount for which bad debt provision separately accrued at the end of
the period
√ Applicable □ not applicable
Unit: RMB
Accounts Ending balance
receivable (by Accounts Bad debt Withdrawal
Withdrawal reason
units) receivable provision proportion
Customer 1 1,902,326.58 1,902,326.58 100.00% Difficult to recover
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Changchai Company, Limited Interim Report 2018
Customer 2 6,215,662.64 6,215,662.64 100.00% Difficult to recover
Customer 3 2,293,090.49 2,175,177.75 94.86% Expected to difficultly recover
Customer 4 3,279,100.00 3,279,100.00 100.00% Expected to difficultly recover
Customer 5 2,068,377.01 2,068,377.01 100.00% Expected to difficultly recover
Customer 6 5,359,381.00 5,359,381.00 100.00% Difficult to recover
Customer 7 2,584,805.83 2,584,805.83 100.00% Difficult to recover
Customer 8 1,599,243.11 1,599,243.11 100.00% Difficult to recover
Customer 9 1,161,700.00 580,850.00 50.00% Expected to difficultly recover
Customer 10 8,572,158.87 4,671,578.76 54.50% Expected to difficultly recover
Total 35,035,845.53 30,436,502.68 -- --
In the groups, accounts receivable adopted aging analysis method to withdraw bad debt provision:
√ Applicable □ not applicable
Unit: RMB
Ending balance
Aging
Accounts receivable Bad debt provision Withdrawal proportion
Subentry within 1 year
Subtotal of within 1 year 721,605,061.45 14,432,101.23 2.00%
1 to 2 years 9,503,940.54 475,197.03 5.00%
2 to 3 years 1,485,730.74 222,859.61 15.00%
3 to 4 years 850,024.71 255,007.41 30.00%
4 to 5 years 101,325.32 60,795.19 60.00%
Over 5 years 182,093,033.85 182,093,033.85 100.00%
Total 915,639,116.61 197,538,994.32
Notes to the basis for the determination of the groups:
In the groups, accounts receivable adopted balance percentage method to withdraw bad debt provision:
□ Applicable √ Not applicable
(2) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB10,137,747.23;
the amount of the reversed or recovered part during the Reporting Period was of RMB579,326.17.
(3) Top 5 Accounts Receivable in Ending Balance Collected according to the Arrears Party
The total top 5 accounts receivable in ending balance collected according to the arrears party was
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Changchai Company, Limited Interim Report 2018
RMB484,809,565.40, accounting for 50.94% of the total ending balance of accounts receivable. The
corresponding ending balance of bad debt provision withdrawn was RMB18,672,083.07.
2. Other Accounts Receivable
(1) Other Accounts Receivable Disclosed by Category
Unit: RMB
Ending balance Beginning balance
Carrying Bad debt Carrying Bad debt
amount provision amount provision
Carryi
Category Withd Withdra Carryin
ng
Amou Propo Amou rawal Amo Propo Amou wal g value
value
nt rtion nt propo unt rtion nt proporti
rtion on
Other accounts
receivable with
significant
2,853, 2,853, 2,85
single amount 100.0 2,853, 100.00
188.0 7.32% 188.0 3,18 6.83%
for which bad 0% 188.02 %
2 2 8.02
debt provision
separately
accrued
Other accounts
receivable
36,8
withdrawn bad 34,02 25,17 8,853, 25,017
87.29 73.98 15,6 88.14 11,798,
debt provision 6,192. 2,489. 702.5 ,453.1 67.95%
% % 64.5 % 211.40
according to 31 76 5 9
9
credit risks
characteristics
Other accounts
receivable with
insignificant
2,099, 2,099, 2,09
single amount 100.0 2,099, 100.00
382.0 5.39% 382.0 9,38 5.03%
for which bad 0% 382.02 %
2 2 2.02
debt provision
separately
accrued
41,7
38,97 30,12 8,853, 29,970
100.0 77.29 68,2 100.0 11,798,
Total 8,762. 5,059. 702.5 ,023.2 71.75%
0% % 34.6 0% 211.40
35 80 5 3
3
129
Changchai Company, Limited Interim Report 2018
Other receivable with single significant amount for which bad debt provision separately accrued at the end of the
period：
√ Applicable □ not applicable
Unit: RMB
Ending balance
Other accounts
Other accounts Withdrawal
receivable (unit) Bad debt provision Withdrawal reason
receivable proportion
Changchai Group Imp.
2,853,188.02 2,853,188.02 100.00% Difficult to recover
& Exp. Co., Ltd.
Total 2,853,188.02 2,853,188.02 -- --
In the groups, other accounts receivable adopted aging analysis method to withdraw bad debt provision:
√Applicable not applicable
Unit: RMB
Ending balance
Aging Other accounts
Bad debt provision Withdrawal proportion
receivable
Subentry within 1 year
Subtotal of within 1 year 8,235,668.29 164,713.37 2.00%
1 to 2 years 440,089.30 22,004.47 5.00%
2 to 3 years 114,223.10 17,133.47 15.00%
3 to 4 years 72,458.31 21,737.49 30.00%
4 to 5 years 542,130.85 325,278.51 60.00%
Over 5 years 24,621,622.46 24,621,622.46 100.00%
Total 34,026,192.31 25,172,489.76
Notes:
In the groups, other accounts receivable adopted balance percentage method to withdraw bad debt provision:
□ Applicable √ Not applicable
In the groups, other accounts receivable adopted other methods to withdraw bad debt provision:
□ Applicable √ Not applicable
(2) There Were No Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
(3) Other Account Receivable Classified by Account Nature
Unit: RMB
Nature Ending carrying amount Beginning carrying amount
Cash deposit & Margin 280,014.00 4,200.00
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Changchai Company, Limited Interim Report 2018
Intercourse funds among units 17,329,166.58 25,497,534.34
Petty cash and borrowings by
8,955,031.25 912,133.46
employees
Other 12,414,550.52 15,354,366.83
Total 38,978,762.35 41,768,234.63
(4) Top 5 Other Accounts Receivable in Ending Balance Collected according to the Arrears Party
Unit: RMB
Proportion to
total ending Ending balance
Name of the entity Nature Ending balance Aging balance of other of bad debt
accounts provision
receivable
Changzhou Changchai
Intercourse Within 1
Housheng Agricultural 7,156,197.71 18.36% 143,123.95
funds year
Equipment Co., Ltd.
Changzhou Intercourse Over 5
2,940,000.00 7.54% 2,940,000.00
Compressors Factory funds years
Changchai Group Imp. Intercourse Over 5
2,853,188.02 7.32% 2,853,188.02
& Exp. Co., Ltd. funds years
Changzhou New
Intercourse Over 5
District Accounting 1,626,483.25 4.17% 1,626,483.25
funds years
Centre
Changchai Group Intercourse Over 5
1,140,722.16 2.93% 1,140,722.16
Settlement Centre funds years
Total -- 15,716,591.14 -- 40.32%
3. Long-term Equity Investment
Unit: RMB
Ending balance Beginning balance
Item Carrying Depreciation Carrying Carrying Depreciation Carrying
amount reserve value amount reserve value
Investment to 231,752,730. 231,752,730. 231,752,730. 231,752,730.
subsidiaries 03 03 03 03
Investment to
joint ventures
44,182.50 44,182.50 44,182.50 44,182.50
or associated
enterprises
131
Changchai Company, Limited Interim Report 2018
231,796,912. 231,752,730. 231,796,912. 231,752,730.
Total 44,182.50 44,182.50
53 03 53 03
(1) Investment to Subsidiaries
Unit: RMB
Ending
Depreciati
Beginning Ending balance of
Investee Increase Decrease on reserve
balance balance depreciation
withdrawn
reserve
Changchai Wanzhou 51,000,
51,000,000.00
Diesel Engine Co., Ltd. 000.00
Changzhou Changchai
96,466,
Benniu Diesel Engine 96,466,500.00
500.00
Fittings Co., Ltd.
Changzhou Housheng 30,000,
30,000,000.00
Investment Co., Ltd. 000.00
Changzhou Changchai
7,000,0
Housheng Agricultural 7,000,000.00
00.00
Equipment Co., Ltd.
Changzhou Fuji
47,286,
Changchai Robin 47,286,230.03
230.03
Gasoline Engine Co., Ltd.
231,752
Total 231,752,730.03 0.00
,730.03
(2) Investment to Joint Ventures or Associated Enterprises
Unit: RMB
Increase/decrease
Gains Ending
Re Cha Cash Withd
Addi and Adjust balance
Begin duc nges bonus rawal Closi
tiona losses ment of of
ning ed in or of ng
Investee l recogniz other Oth impair
balan inv othe profits impair balan
inves ed under compre er ment
ce est r announ ment ce
tmen the hensive provisi
me equit ced to provis
t equity income on
nt y issue ion
method
I. Joint ventures
II. Associated enterprises
132
Changchai Company, Limited Interim Report 2018
Beijing
Tsinghua
Xingye
44,18 44,18 44,182.
Industrial
2.50 2.50 50
Investment
Manageme
nt Co., Ltd.
44,18 44,18 44,182.
Subtotal
2.50 2.50 50
44,18 44,18 44,182.
Total
2.50 2.50 50
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 1,105,442,892.03 978,595,283.86 1,219,777,917.09 1,080,764,388.78
Other operations 15,892,231.12 12,482,560.63 9,529,630.03 5,985,445.18
Total 1,121,335,123.15 991,077,844.49 1,229,307,547.12 1,086,749,833.96
5. Investment Income
Unit: RMB
Item Reporting Period Same period of last year
Investment income generated from the holding of
21,000.00 6,952,750.99
available-for-sale financial assets
Total 21,000.00 6,952,750.99
XVI. Supplementary Materials
1. Items and Amounts of Non-recurring Profit or Loss
√ Applicable □ Not applicable
Unit: RMB
Item Amount Note
Gains/losses on the disposal of non-current assets -512,440.14
Government grants recognized in the current period, except for those
129,600.00
acquired in the ordinary course of business or granted at certain quotas
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Changchai Company, Limited Interim Report 2018
or amounts according to the government’s unified standards
Capital occupation charges on non-financial enterprises that are
573,182.00
recorded into current gains and losses
Gain/loss from change of fair value of transactional assets and
liabilities, and investment gains from disposal of transactional financial
355,091.68
assets and liabilities and available-for-sale financial assets, other than
valid hedging related to the Company’s common businesses
Other non-operating income and expense other than the above 1,114,871.58
Less: Income tax effects 284,570.71
Total 1,375,734.41 --
Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition in
the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the
Public—Extraordinary Gains and Losses, or classifies any extraordinary gain/loss item mentioned in the said
explanatory announcement as a recurrent gain/loss item
□ Applicable √ Not applicable
2. Return on Equity and Earnings Per Share
Weighted EPS (Yuan/share)
Profit as of Reporting Period
average ROE (%) EPS-basic EPS-diluted
Net profit attributable to ordinary shareholders of the
0.86% 0.03 0.03
Company
Net profit attributable to ordinary shareholders of the
0.78% 0.03 0.03
Company after deduction of non-recurring profit and 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
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Changchai Company, Limited Interim Report 2018
Part XI 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 and the Shenzhen Stock Exchange.
This Interim 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.
The Board of Directors
Changchai Company, Limited
24 August 2018
135
