CHANGCHAI COMPANY, LIMITED
SEMI-Financial Report 2016
I. Audit report
Has this semi-annual report been audited?
□ Yes √ No
The semi-annual 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 2016
Unit: RMB
Item Closing balance Opening balance
Current Assets:
Monetary funds 673,796,047.14 601,312,715.62
Settlement reserves
Intra-group lendings
Financial assets measured by fair
value with the changes be included in
the current gains and losses
Derivative financial assets
Notes receivable 278,520,898.26 498,502,274.42
Accounts receivable 567,606,221.86 308,596,920.50
Accounts paid in advance 10,141,930.24 12,882,271.70
Premiums receivable
Reinsurance premiums receivable
Receivable reinsurance contract
reserves
Interest receivable
Dividend receivable
Other accounts receivable 18,236,447.42 5,622,539.81
Financial assets purchased under
agreements to resell
Inventories 360,199,008.69 397,290,012.36
Assets divided available for sale
Non-current assets due within 1 year
Other current assets 22,645,221.04 60,304,691.41
Total current assets 1,931,145,774.65 1,884,511,425.82
Non-current assets:
Loans by mandate and advances
granted
Available-for-sale financial assets 444,437,000.00 502,980,000.00
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investment 21,590,568.88 20,769,304.76
Investing property 56,176,859.63 57,281,030.03
Fixed assets 571,960,644.43 554,601,893.23
Construction in progress 76,961,584.95 108,198,455.01
Engineering materials
Disposal of fixed assets
Production biological assets
Oil-gas assets
Intangible assets 101,181,825.53 103,101,462.47
R&D expense
Goodwill
Long-term deferred expenses
Deferred income tax assets 962,530.88 962,530.88
Other non-current assets
Total of non-current assets 1,273,271,014.30 1,347,894,676.38
Total assets 3,204,416,788.95 3,232,406,102.20
Current liabilities:
Short-term borrowings 10,000,000.00 17,000,000.00
Borrowings from Central Bank
Customer bank deposits and due to
banks and other financial institutions
Intra-group borrowings
Financial liabilities measured by fair
value with the changes be included in
the current gains and losses
Derivative financial liabilities
Notes payable 278,909,300.00 238,200,000.00
Accounts payable 509,018,960.25 535,978,470.07
Accounts received in advance 39,284,991.46 26,665,671.38
Financial assets sold for repurchase
Handling charges and commissions
payable
Employee’s compensation payable 33,470,816.93 60,309,349.29
Tax payable 2,549,274.24 10,798,062.93
Interest payable
Dividend payable 3,891,433.83 3,891,433.83
Other accounts payable 225,946,037.83 201,151,632.46
Reinsurance premiums payable
Insurance contract reserves
Payables for acting trading of
securities
Payables for acting underwriting of
securities
Liabilities divided available for sale
Non-current liabilities due within 1
year
Other current liabilities 1,921,013.87 2,403,287.06
Total current liabilities 1,104,991,828.41 1,096,397,907.02
Non-current liabilities:
Long-term borrowings
Bonds payable
Of which: preferred shares
Perpetual capital securities
Long-term payables
Long-term payroll payables
Specific payables
Estimated liabilities
Deferred income 52,589,418.89 53,121,605.70
Deferred income tax liabilities 53,604,375.00 62,385,825.00
Other non-current liabilities
Total non-current liabilities 106,193,793.89 115,507,430.70
Total liabilities 1,211,185,622.30 1,211,905,337.72
Owners’ equity
Share capital 561,374,326.00 561,374,326.00
Other equity instruments
Of which: preferred shares
Perpetual capital securities
Capital reserves 164,328,665.43 164,328,665.43
Less: Treasury stock
Other comprehensive income 303,758,125.00 353,519,675.00
Specific reserves 10,069,746.98 10,069,746.98
Surplus reserves 305,758,285.91 305,758,285.91
Provisions for general risks
Retained profits 629,966,144.55 607,859,611.69
Total equity attributable to owners of
1,975,255,293.87 2,002,910,311.01
the Company
Minority interests 17,975,872.78 17,590,453.47
Total owners’ equity 1,993,231,166.65 2,020,500,764.48
Total liabilities and owners’ equity 3,204,416,788.95 3,232,406,102.20
Legal representative: Xue Guojun Person-in-charge of the accounting
work: He Jianguang
Chief of the accounting division: Jiang He
2. Balance sheet of the Company
Unit: RMB
Item Closing balance Opening balance
Current Assets:
Monetary funds 655,641,987.55 572,530,396.20
Financial assets measured by fair
value with the changes be included in
the current gains and losses
Derivative financial assets
Notes receivable 277,874,656.26 490,777,874.42
Accounts receivable 515,840,137.69 263,878,166.23
Accounts paid in advance 4,544,702.50 6,512,574.55
Interest receivable
Dividend receivable
Other accounts receivable 6,587,098.07 4,885,363.01
Inventories 296,700,526.06 348,179,430.41
Assets divided available for sale
Non-current assets due within 1 year
Other current assets 2,579,928.34 41,403,182.61
Total current assets 1,759,769,036.47 1,728,166,987.43
Non-current assets:
Available-for-sale financial assets 437,237,000.00 495,780,000.00
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investment 206,057,068.88 205,235,804.76
Investing property 56,176,859.63 57,281,030.03
Fixed assets 466,608,080.79 445,343,167.61
Construction in progress 76,939,362.73 108,198,455.01
Engineering materials
Disposal of fixed assets
Production biological assets
Oil-gas assets
Intangible assets 79,532,775.58 81,159,855.82
R&D expense
Goodwill
Long-term deferred expenses
Deferred income tax assets 962,530.88 962,530.88
Other non-current assets
Total of non-current assets 1,323,513,678.49 1,393,960,844.11
Total assets 3,083,282,714.96 3,122,127,831.54
Current liabilities:
Short-term borrowings
Financial liabilities measured by fair
value with the changes be included in
the current gains and losses
Derivative financial liabilities
Notes payable 253,909,300.00 218,200,000.00
Accounts payable 490,856,873.65 527,416,373.82
Accounts received in advance 37,894,565.98 24,537,940.90
Employee’s compensation payable 28,818,140.01 55,068,743.12
Tax payable 113,640.60 8,521,233.87
Interest payable
Dividend payable 3,243,179.97 3,243,179.97
Other accounts payable 217,334,034.74 194,650,090.70
Liabilities divided available for sale
Non-current liabilities due within 1
year
Other current liabilities
Total current liabilities 1,032,169,734.95 1,031,637,562.38
Non-current liabilities:
Long-term borrowings
Bonds payable
Of which: preferred shares
Perpetual capital securities
Long-term payables
Long-term payroll payables
Specific payables
Estimated liabilities
Deferred income 52,589,418.89 53,121,605.70
Deferred income tax liabilities 53,604,375.00 62,385,825.00
Other non-current liabilities
Total non-current liabilities 106,193,793.89 115,507,430.70
Total liabilities 1,138,363,528.84 1,147,144,993.08
Owners’ equity:
Share capital 561,374,326.00 561,374,326.00
Other equity instruments
Of which: preferred shares
Perpetual capital securities
Capital reserves 183,071,147.70 183,071,147.70
Less: Treasury stock
Other comprehensive income 303,758,125.00 353,519,675.00
Specific reserves 10,069,746.98 10,069,746.98
Surplus reserves 305,758,285.91 305,758,285.91
Retained profits 580,887,554.53 561,189,656.87
Total owners’ equity 1,944,919,186.12 1,974,982,838.46
Total liabilities and owners’ equity 3,083,282,714.96 3,122,127,831.54
3. Consolidated income statement
Unit: RMB
Item Jan.-Jun. 2016 Jan.-Jun 2015
I. Total operating revenues 1,163,660,721.69 1,359,895,900.69
Including: Sales income 1,163,660,721.69 1,359,895,900.69
Interest income
Premium income
Handling charge and commission
income
II. Total operating cost 1,130,064,900.87 1,319,907,071.98
Including: Cost of sales 984,594,264.43 1,179,073,102.73
Interest expenses
Handling charge and commission
expenses
Surrenders
Net claims paid
Net amount withdrawn for the
insurance contract reserve
Expenditure on policy dividends
Reinsurance premium
Taxes and associate charges 2,017,527.41 2,280,012.43
Selling and distribution expenses 59,518,474.60 58,059,098.92
Administrative expenses 78,488,615.70 84,401,024.18
Financial expenses -4,811,135.29 -6,673,703.74
Asset impairment loss 10,257,154.02 2,767,537.46
Add: Gain/(loss) from change in fair
value (“-” means loss)
Gain/(loss) from investment (“-”
1,901,135.64 4,900,603.44
means loss)
Including: share of profits in associates
and joint ventures
Foreign exchange gains (“-” means loss)
III. Business profit (“-” means loss) 35,496,956.46 44,889,432.15
Add: non-operating income 10,636,194.05 3,664,111.90
Of which: gains from non-current
6,113,117.21 106,674.56
asset disposal
Less: non-operating expense 4,147,840.72 2,832,658.16
Of which: losses from non-current
32,408.99 14,758.29
asset disposal
IV. Total profit (“-” means loss) 41,985,309.79 45,720,885.89
Less: Income tax expense 6,581,748.12 7,503,443.33
V. Net profit (“-” means loss) 35,403,561.67 38,217,442.56
Attributable to owners of the
35,018,142.36 37,563,399.18
Company
Minority shareholders’ income 385,419.31 654,043.38
VI. After-tax net amount of other
-49,761,550.00 157,931,275.00
comprehensive incomes
After-tax net amount of other
comprehensive incomes attributable to -49,761,550.00 157,931,275.00
owners of the Company
(I) Other comprehensive incomes
that will not be reclassified into gains and
losses
1. Changes in net liabilities or
assets with a defined benefit plan upon
re-measurement
2. Enjoyable shares in other
comprehensive incomes in investees that
cannot be reclassified into gains and
losses under the equity method
(II) Other comprehensive incomes
-49,761,550.00 157,931,275.00
that will be reclassified into gains and
losses
1. Enjoyable shares in other
comprehensive incomes in investees that
will be reclassified into gains and losses
under the equity method
2. Gains and losses on fair
value changes of available-for-sale -49,761,550.00 157,931,275.00
financial assets
3. Gains and losses on
reclassifying held-to-maturity
investments into available-for-sale
financial assets
4. Effective hedging gains and
losses on cash flows
5. Foreign-currency financial
statement translation difference
6. Other
After-tax net amount of other
comprehensive incomes attributable to
minority shareholders
VII. Total comprehensive incomes -14,357,988.33 196,148,717.56
Attributable to owners of the
-14,743,407.64 195,494,674.18
Company
Attributable to minority
385,419.31 654,043.38
shareholders
VIII. Earnings per share
(I) Basic earnings per share 0.06 0.07
(II) Diluted earnings per share 0.06 0.07
Where business mergers under the same control occurred in this reporting period, the net profit achieved by the
merged parties before the business mergers was RMB0.00, with the corresponding amount for the last period being
RMB0.00.
Legal representative: Xue Guojun Person-in-charge of the accounting
work: He Jianguang
Chief of the accounting division: Jiang He
4. Income statement of the Company
Unit: RMB
Item Jan.-Jun. 2016 Jan.-Jun 2015
I. Total sales 1,163,696,328.66 1,371,231,764.35
Less: cost of sales 1,000,185,315.06 1,200,341,035.82
Business taxes and surcharges 1,663,181.76 2,092,245.81
Distribution expenses 55,298,258.45 55,751,714.71
Administrative expenses 69,931,423.68 76,865,506.74
Financial costs -5,358,474.86 -7,439,596.01
Impairment loss 10,109,097.39 2,767,537.46
Add: gain/(loss) from change in
fair value (“-” means loss)
Gain/(loss) from investment (“-”
1,185,264.12 3,509,872.47
means loss)
Of which: income form investment
on associates and joint ventures
II. Business profit (“-” means loss) 33,052,791.30 44,363,192.29
Add: non-business income 9,904,289.56 3,052,280.67
Of which: gains from non-current
asset disposal
Less: non-business expense 4,047,840.72 2,800,072.37
Of which: losses from non-current
32,408.99 14,758.29
asset disposal
III. Total profit (“-” means loss) 38,909,240.14 44,615,400.59
Less: income tax expense 6,299,732.98 7,047,847.82
IV. Net profit (“-” means loss) 32,609,507.16 37,567,552.77
V. After-tax net amount of other
-49,761,550.00 157,931,275.00
comprehensive incomes
(I) Other comprehensive
incomes that will not be reclassified
into gains and losses
1. Changes in net liabilities or
assets with a defined benefit plan upon
re-measurement
2. Enjoyable shares in other
comprehensive incomes in investees
that cannot be reclassified into gains
and losses under the equity method
(II) Other comprehensive
incomes that will be reclassified into -49,761,550.00 157,931,275.00
gains and losses
1. Enjoyable shares in other
comprehensive incomes in investees
that will be reclassified into gains and
losses under the equity method
2. Gains and losses on fair
value changes of available-for-sale -49,761,550.00 157,931,275.00
financial assets
3. Gains and losses on
reclassifying held-to-maturity
investments into available-for-sale
financial assets
4. Effective hedging gains
and losses on cash flows
5. Foreign-currency financial
statement translation difference
6. Other
VI. Total comprehensive incomes -17,152,042.84 195,498,827.77
VII. Earnings per share
(I) Basic earnings per share 0.06 0.07
(II) Diluted earnings per share 0.06 0.07
5. Consolidated cash flow statement
Unit: RMB
Item Jan.-Jun. 2016 Jan.-Jun 2015
I. Cash flows from operating activities:
Cash received from sale of
1,297,635,026.56 1,379,194,450.30
commodities and rendering of service
Net increase of deposits from
customers and dues from banks
Net increase of loans from the
central bank
Net increase of funds borrowed
from other financial institutions
Cash received from premium of
original insurance contracts
Net cash received from reinsurance
business
Net increase of deposits of policy
holders and investment fund
Net increase of dispose of the
financial assets measured by fair value
with the changes be included in the
current gains and losses
Cash received from interest,
handling charges and commissions
Net increase of intra-group
borrowings
Net increase of funds in repurchase
business
Tax refunds received 22,852,333.55 17,902,474.19
Other cash received relating to
7,978,801.83 11,362,233.37
operating activities
Subtotal of cash inflows from operating
1,328,466,161.94 1,408,459,157.86
activities
Cash paid for goods and services 956,379,929.94 1,117,905,635.90
Net increase of customer lendings
and advances
Net increase of funds deposited in
the central bank and amount due from
banks
Cash for paying claims of the
original insurance contracts
Cash for paying interest, handling
charges and commissions
Cash for paying policy dividends
Cash paid to and for employees 174,777,109.44 161,565,170.00
Various taxes paid 36,296,987.31 48,202,988.69
Other cash payment relating to
42,976,221.96 34,057,622.15
operating activities
Subtotal of cash outflows from
1,210,430,248.65 1,361,731,416.74
operating activities
Net cash flows from operating activities 118,035,913.29 46,727,741.12
II. Cash flows from investing activities:
Cash received from withdrawal of
32,000,000.00 2,109,642.19
investments
Cash received from return on 663,870.52 3,953,970.87
investments
Net cash received from disposal of
fixed assets, intangible assets and other 22,440.00 283,604.57
long-term assets
Net cash received from disposal of
subsidiaries or other business units
Other cash received relating to
investing activities
Subtotal of cash inflows from investing
32,686,310.52 6,347,217.63
activities
Cash paid to acquire fixed assets,
intangible assets and other long-term 39,123,133.24 31,633,966.65
assets
Cash paid for investment 20,000,000.00
Net increase of pledged loans
Net cash paid to acquire
subsidiaries and other business units
Other cash payments relating to
23,000,000.00 20,000,000.00
investing activities
Subtotal of cash outflows from
62,123,133.24 71,633,966.65
investing activities
Net cash flows from investing activities -29,436,822.72 -65,286,749.02
III. Cash Flows from Financing
Activities:
Cash received from capital
contributions
Including: Cash received from
minority shareholder investments by
subsidiaries
Cash received from borrowings 8,000,000.00 10,000,000.00
Cash received from issuance of
bonds
Other cash received relating to
5,431.58 4,046.87
financing activities
Subtotal of cash inflows from financing
8,005,431.58 10,004,046.87
activities
Repayment of borrowings 15,000,000.00 15,000,000.00
Cash paid for interest expenses and 13,386,397.00 12,083,442.33
distribution of dividends or profit
Including: dividends or profit paid
by subsidiaries to minority shareholders
Other cash payments relating to
financing activities
Sub-total of cash outflows from
28,386,397.00 27,083,442.33
financing activities
Net cash flows from financing activities -20,380,965.42 -17,079,395.46
IV. Effect of foreign exchange rate
changes on cash and cash equivalents
V. Net increase in cash and cash
68,218,125.15 -35,638,403.36
equivalents
Add: Opening balance of cash and
526,716,238.21 464,761,820.50
cash equivalents
VI. Closing balance of cash and cash
594,934,363.36 429,123,417.14
equivalents
6. Cash flow statement of the Company
Unit: RMB
Item Jan.-Jun. 2016 Jan.-Jun 2015
I. Cash flows from operating activities:
Cash received from sale of
1,307,793,947.42 1,382,174,877.12
commodities and rendering of service
Tax refunds received 22,852,333.55 17,902,474.19
Other cash received relating to
5,921,206.26 9,780,837.80
operating activities
Subtotal of cash inflows from operating
1,336,567,487.23 1,409,858,189.11
activities
Cash paid for goods and services 1,003,396,703.92 1,148,582,635.11
Cash paid to and for employees 157,612,290.63 145,784,170.00
Various taxes paid 31,818,121.46 45,452,896.38
Other cash payment relating to
41,036,165.12 32,169,844.52
operating activities
Subtotal of cash outflows from
1,233,863,281.13 1,371,989,546.01
operating activities
Net cash flows from operating activities 102,704,206.10 37,868,643.10
II. Cash flows from investing activities:
Cash received from retraction of
20,000,000.00
investments
Cash received from return on
364,000.00 3,112,240.00
investments
Net cash received from disposal of
fixed assets, intangible assets and other 22,440.00 106,674.57
long-term assets
Net cash received from disposal of
subsidiaries or other business units
Other cash received relating to
investing activities
Subtotal of cash inflows from investing
20,386,440.00 3,218,914.57
activities
Cash paid to acquire fixed assets,
intangible assets and other long-term 37,368,413.24 29,560,366.65
assets
Cash paid for investment 20,000,000.00
Net cash paid to acquire
subsidiaries and other business units
Other cash payments relating to
investing activities
Subtotal of cash outflows from
37,368,413.24 49,560,366.65
investing activities
Net cash flows from investing activities -16,981,973.24 -46,341,452.08
III. Cash Flows from Financing
Activities:
Cash received from capital
contributions
Cash received from borrowings
Cash received from issuance of
bonds
Other cash received relating to
35,761.62
financing activities
Subtotal of cash inflows from financing
35,761.62
activities
Repayment of borrowings
Cash paid for interest expenses
12,911,609.50 11,227,486.52
and distribution of dividends or profit
Other cash payments relating to
financing activities
Sub-total of cash outflows from
12,911,609.50 11,227,486.52
financing activities
Net cash flows from financing activities -12,875,847.88 -11,227,486.52
IV. Effect of foreign exchange rate
changes on cash and cash equivalents
V. Net increase in cash and cash
72,846,384.98 -19,700,295.50
equivalents
Add: Opening balance of cash and
503,933,918.79 430,758,675.98
cash equivalents
VI. Closing balance of cash and cash
576,780,303.77 411,058,380.48
equivalents
7. Consolidated Statement of Changes in Owners’ Equity
Jan.-Jun. 2016
Unit: RMB
Jan.-Jun. 2016
Equity attributable to owners of the Company
Other equity
instruments
Other Minorit Total
Item Perpet
Less: General
Share Capital compre Specific Surplus Retaine y owners’
ual
Prefer treasury risk
capital capita reserve hensive reserve reserve d profit interests equity
red Other stock reserve
l income
shares
securi
ties
I. Balance at the 561,37 2,020,5
164,328 353,519 10,069, 305,758 607,859 17,590,
end of the 4,326. 00,764.
,665.43 ,675.00 746.98 ,285.91 ,611.69 453.47
previous year 00 48
Add: change of
accounting policy
Correction of
errors in previous
periods
Business
combination under
the same control
Other
561,37 2,020,5
II. Balance at the 164,328 353,519 10,069, 305,758 607,859 17,590,
4,326. 00,764.
period-begin ,665.43 ,675.00 746.98 ,285.91 ,611.69 453.47
00 48
III. Increase/
decrease in the -49,761, 22,106, 385,419 -27,269,
period (“-” means 550.00 532.86 .31 597.83
decrease)
(I) Total amount
of the -49,761, 35,018, 385,419 -14,357,
comprehensive 550.00 142.36 .31 988.33
income
(II) Capital paid
in and reduced by
owners
1. Common shares
invested by the
shareholders
2. Capital invested
by the owners of
other equity
instruments
3. Amounts of
share-based
payments
recognized in
owners’ equity
4. Others
(III) Profit -12,911, -12,911,
distribution 609.50 609.50
1. Appropriations
to surplus reserves
2. Appropriations
to general risk
provisions
3. Appropriations
-12,911, -12,911,
to owners (or
609.50 609.50
shareholders)
4. Other
(IV) Internal
carry-forward of
owners’ equity
1. New increase of
capital (or share
capital) from
capital public
reserves
2. New increase of
capital (or share
capital) from
surplus reserves
3. Surplus reserves
for making up
losses
4. Other
(V) Specific
reserve
1. Withdrawn for
the period
2. Used in the
period
(VI) Other
561,37 1,993,2
IV. Closing 164,328 303,758 10,069, 305,758 629,966 17,975,
4,326. 31,166.
balance ,665.43 ,125.00 746.98 ,285.91 ,144.55 872.78
00 65
Jan.-Jun. 2015
Unit: RMB
Jan.-Jun. 2015
Equity attributable to owners of the Company
Other equity
instruments
Minorit
Other Total
Item Perpet y
Less: General
Share Capital compre Specific Surplus Retaine owners’
ual interest
Prefer treasury risk
capital capita reserve hensive reserve reserve d profit equity
red Other stock reserve s
l income
shares
securi
ties
I. Balance at the 561,37 1,953,1
164,328 349,159 8,332,0 298,151 555,590 16,208,
end of the 4,326. 45,745.
,665.43 ,175.00 77.21 ,696.96 ,894.67 910.07
previous year 00 34
Add: change of
accounting policy
Correction of
errors in previous
periods
Business
combination under
the same control
Other
561,37 1,953,1
II. Balance at the 164,328 349,159 8,332,0 298,151 555,590 16,208,
4,326. 45,745.
period-begin ,665.43 ,175.00 77.21 ,696.96 ,894.67 910.07
00 34
III. Increase/
decrease in the 157,931 26,335, 654,043 184,921
period (“-” means ,275.00 912.66 .38 ,231.04
decrease)
(I) Total amount
of the 157,931 37,563, 654,043 196,148
comprehensive ,275.00 399.18 .38 ,717.56
income
(II) Capital paid
in and reduced by
owners
1. Common shares
invested by the
shareholders
2. Capital invested
by the owners of
other equity
instruments
3. Amounts of
share-based
payments
recognized in
owners’ equity
4. Others
(III) Profit -11,227, -11,227,
distribution 486.52 486.52
1. Appropriations
to surplus reserves
2. Appropriations
to general risk
provisions
3. Appropriations
-11,227, -11,227,
to owners (or
486.52 486.52
shareholders)
4. Other
(IV) Internal
carry-forward of
owners’ equity
1. New increase of
capital (or share
capital) from
capital public
reserves
2. New increase of
capital (or share
capital) from
surplus reserves
3. Surplus reserves
for making up
losses
4. Other
(V) Specific
reserve
1. Withdrawn for
the period
2. Used in the
period
(VI) Other
561,37 2,138,0
IV. Closing 164,328 507,090 8,332,0 298,151 581,926 16,862,
4,326. 66,976.
balance ,665.43 ,450.00 77.21 ,696.96 ,807.33 953.45
00 38
8. Statement of changes in owners’ equity of the Company
Jan.-Jun. 2016
Unit: RMB
Jan.-Jun. 2016
Item
Share Other equity instruments Capital Less: Other Specific Surplus Retaine Total
capital Perpetu reserve treasury comprehe reserve reserve d profit owners’
al stock nsive equity
Preferre
capital Other income
d shares
securiti
es
I. Balance at the
561,374, 183,071,1 353,519,6 10,069,74 305,758,2 561,189 1,974,982
end of the previous
326.00 47.70 75.00 6.98 85.91 ,656.87 ,838.46
year
Add: change of
accounting policy
Correction of
errors in previous
periods
Other
II. Balance at the 561,374, 183,071,1 353,519,6 10,069,74 305,758,2 561,189 1,974,982
period-begin 326.00 47.70 75.00 6.98 85.91 ,656.87 ,838.46
III. Increase/
decrease in the -49,761,5 19,697, -30,063,6
period (“-” means 50.00 897.66 52.34
decrease)
(I) Total amount
of the -49,761,5 32,609, -17,152,0
comprehensive 50.00 507.16 42.84
income
(II) Capital paid
in and reduced by
owners
1. Common shares
invested by the
shareholders
2. Capital invested
by the owners of
other equity
instruments
3. Amounts of
share-based
payments
recognized in
owners’ equity
4. Others
(III) Profit -12,911, -12,911,6
distribution 609.50 09.50
1. Appropriations
to surplus reserves
2. Appropriations
-12,911, -12,911,6
to owners (or
609.50 09.50
shareholders)
3. Other
(IV) Internal
carry-forward of
owners’ equity
1. New increase of
capital (or share
capital) from
capital public
reserves
2. New increase of
capital (or share
capital) from
surplus reserves
3. Surplus reserves
for making up
losses
4. Other
(V) Specific
reserve
1. Withdrawn for
the period
2. Used in the
period
(VI) Other
IV. Closing 561,374, 183,071,1 303,758,1 10,069,74 305,758,2 580,887 1,944,919
balance 326.00 47.70 25.00 6.98 85.91 ,554.53 ,186.12
Jan.-Jun. 2015
Unit: RMB
Jan.-Jun. 2015
Other equity instruments Less: Other Total
Item Share Capital Specific Surplus Retaine
Preferre Perpetu treasury comprehe owners’
capital Other reserve reserve reserve d profit
d shares al stock nsive equity
capital income
securiti
es
I. Balance at the
561,374, 183,071,1 349,159,1 8,332,077 298,151,6 503,957 1,904,046
end of the previous
326.00 47.70 75.00 .21 96.96 ,842.86 ,265.73
year
Add: change of
accounting policy
Correction of
errors in previous
periods
Other
II. Balance at the 561,374, 183,071,1 349,159,1 8,332,077 298,151,6 503,957 1,904,046
period-begin 326.00 47.70 75.00 .21 96.96 ,842.86 ,265.73
III. Increase/
decrease in the 157,931,2 26,340, 184,271,3
period (“-” means 75.00 066.25 41.25
decrease)
(I) Total amount
of the 157,931,2 37,567, 195,498,8
comprehensive 75.00 552.77 27.77
income
(II) Capital paid
in and reduced by
owners
1. Common shares
invested by the
shareholders
2. Capital invested
by the owners of
other equity
instruments
3. Amounts of
share-based
payments
recognized in
owners’ equity
4. Others
(III) Profit -11,227, -11,227,4
distribution 486.52 86.52
1. Appropriations
to surplus reserves
2. Appropriations
-11,227, -11,227,4
to owners (or
486.52 86.52
shareholders)
3. Other
(IV) Internal
carry-forward of
owners’ equity
1. New increase of
capital (or share
capital) from
capital public
reserves
2. New increase of
capital (or share
capital) from
surplus reserves
3. Surplus reserves
for making up
losses
4. Other
(V) Specific
reserve
1. Withdrawn for
the period
2. Used in the
period
(VI) Other
IV. Closing 561,374, 183,071,1 507,090,4 8,332,077 298,151,6 530,297 2,088,317
balance 326.00 47.70 50.00 .21 96.96 ,909.11 ,606.98
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 Mar. 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 2009 2nd Extraordinary Shareholders’ General Meeting 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
RMB 0.8 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 2014, the total share
capital of the Company is 561,374,326 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. The Company
had registered the change with the administrative authorities for industry and commerce, and
obtained the renewed business license as legal person with No. 320400000004012.
The Company’s registered address is situated at No. 123 Huaide Middle Road, Changzhou,
Jiangsu, as well as its head office located at No. 123 Huaide Middle Road, Changzhou, Jiangsu.
The Company belongs to manufacturing with business scope including manufacturing and sale of
diesel engine, diesel engines part and casting, grain harvesting machine, rotary cultivators,
walking tractor, mould and fixtures, assembling and sale of diesel generating set and pumping unit.
The Company mainly engaged in the production and sales of small and medium-sized single
cylinders and multi-cylinder diesel engine with the label of Changchai Brand. The diesel engine
produced and sold by the Company were mainly used in tractors, combine harvest models, light
commercial vehicle, farm equipment, small-sized construction machinery, generating sets and
shipborne machinery and equipment, etc. The Company’s main business remained unchanged in
the reporting period.
The Company established the Shareholders’ General Meeting, the Board of Directors and the
Board of Supervisors, 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 16 August 2016.
The consolidated scope of the Company of the Reporting Period included the parent company and
4 subsidiaries, which remained the same as the last period. As for the details of the consolidated
scope of the financial statements as well as the changes, please refer to the notes to the changes of
the consolidated scope and the equities among other entities of the annotation of the financial
statements.
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 issued by the Ministry of Finance with
Decree No. 33 and revised with Decree No. 76, the 41 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
Feb. 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
Note to accounting policies and 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
polices 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 Jan. 1 to Dec.
31 and as the metaphase included monthly, quarterly and semi-yearly periods.
3. Operating cycle
A normal operating cycle refers to a period from the Group purchasing assets for processing to
realizing cash or cash equivalents. An operating cycle for the Group is 12 months, which is also
the classification criterion for the liquidity of its assets and liabilities.
4. Currency used in bookkeeping
Renminbi is functional currency of the Company.
5. Accounting methods for business combinations under the same control and business
combinations not under the same control
(1) Business combinations under the same control:
A business combination under the same control is a business combination in which all of the
combining enterprises are ultimately controlled by the same party or the same parties both before
and after the business combination and on which the control is not temporary.
For the merger of enterprises under the same control, if the consideration of the merging enterprise
is that it makes payment in cash, transfers non-cash assets or bear its debts, it shall, on the date of
merger, regard the share of the book value of the owner's equity of the merged enterprise as the
initial cost of the long-term equity investment. The difference between the initial cost of the
long-term equity investment and the payment in cash, non-cash assets transferred as well as the
book value of the debts borne by the merging party shall offset against the capital reserve. If the
capital reserve is insufficient to dilute, the retained earnings shall be adjusted.
If the consideration of the merging enterprise is that it issues equity securities, it shall, on the date
of merger, regard the share of the book value of the owner's equity of the merged enterprise as the
initial cost of the long-term equity investment. The total face value of the stocks issued shall be
regarded as the capital stock, while the difference between the initial cost of the long-term equity
investment and total face value of the shares issued shall offset against the capital reserve. If the
capital reserve is insufficient to dilute, the retained earnings shall be adjusted.
All direct costs for the business combination, including expenses for audit, evaluating and legal
services shall be recorded into the profits and losses at the current period. The expenses such as
the handling charges and commission etc, premium income of deducting the equity securities, and
as for the premium income was insufficient to dilute, the retained earnings shall be written down.
Owning to the reasons such as the additional investment, for the equity investment held before
acquiring the control right of the combined parties, the confirmed relevant gains and losses, other
comprehensive income and the changes of other net assets since the date of the earlier one
between the date when acquiring the original equity right and the date when the combine parties
and combined ones were under the same control to the combination date, should be respectively
written down and compared with the beginning balance of retained earnings or the current gains
and losses during the statement period.
(2) Business combinations not under the same control
A business combination not under the same control is a business combination in which the
combining enterprises are not ultimately controlled by the same party or the same parties both
before and after the business combination.
The combination costs of the acquirer and the identifiable net assets obtained by the acquirer in a
business combination shall be measured at the fair values. The acquirer shall recognize the
positive balance between the combination costs and the fair value of the identifiable net assets it
obtains forms the acquiree as business reputation. The direct relevant expenses occurred from the
enterprise combination should be included in the current gains and losses when occurred. The
combination costs of the acquirer and the identifiable net assets obtained by it in the combination
shall be measured according to their fair values at the acquiring date. The difference between the
fair value of the assets paid out by the Company and its book value should be included in the
current gains and losses. The purchase date refers to the date that the purchaser acquires the
control right of the acquiree.
For the business combinations not under the same control realized through step by step multiple
transaction, as for the equity interests that the Group holds in the acquiree before the acquiring
date, they shall be re-measured according to their fair values at the acquiring date; the positive
difference between their fair values and carrying amounts shall be recorded into the investment
gains for the period including the acquiring date. The equity holed by the acquiree which involved
with the other comprehensive income and the other owners’ equities changes except for the net
gains and losses, other comprehensive income and the profits distribution and other related
comprehensive gains and other owners’ equities which in relation to the equity interests that the
Group holds in the acquiree before the acquiring date should be transferred into the current
investment income on the acquiring date, except for the other comprehensive income occurred
from the re-measurement of the net profits of the defined benefit plans or the changes of the net
assets of the investees.
6. Methods for preparing consolidated financial statements
The Company confirms the consolidated scope based on the control and includes the subsidiaries
with actual control right into the consolidated financial statement.
The consolidated financial statement of the Company is compiled according to the regulations of
No. 33 of ASBE-Consolidated Financial Statement and the relevant regulations and as for the
whole significant come-and-go balance, investment, transaction and the unrealized profits should
be written off when compiling the consolidated financial statement. The portion of a subsidiary’s
shareholders’ equity and the portion of a subsidiary’s net profits and losses for the period not held
by the Group are recognized as minority interests and minority shareholder profits and losses
respectively and presented separately under shareholders’ equity and net profits in the
consolidation financial statements. The portion of a subsidiary’s net profits and losses for the
period that belong to minority interests is presented as the item of “minority shareholder profits
and losses” under the bigger item of net profits in the consolidated financial statements. Where the
loss of a subsidiary shared by minority shareholders exceeds the portion enjoyed by minority
shareholders in the subsidiary’s opening owners’ equity, minority interests are offset.
The accounting policy or accounting period of each subsidiary is different from which of the
Company, which shall be adjusted as the Company; or subsidiaries shall prepare financial
statement again required by the Company when preparing the consolidated financial statements.
As for the added subsidiary company not controlled by the same enterprise preparing the
consolidated financial statement, shall adjust individual financial statement based on the fair value
of the identifiable net assets on the acquisition date; as for the added subsidiary companies
controlled by the same enterprise preparing the financial statement, shall not adjust the financial
statement of the subsidiaries, namely survived by integration as participating in the consolidation
when the final control party starts implementing control and should adjust the period-begin
amount of the consolidated balance sheet and at the same time adjust the relevant items of the
compared statement.
As for the disposed subsidiaries, the operation result and the cash flow should be included in the
consolidated income statement and the consolidated cash flow before the disposing date; the
disposed subsidiaries of the current period, should not be adjusted the period-begin amount of the
consolidated balance sheet.
Where the Group losses control on its original subsidiaries due to disposal of some equity
investments or other reasons, the residual equity interests are re-measured according to the fair
value on the date when such control ceases. The summation of the consideration obtained from the
disposal of equity interests and the fair value of the residual equity interests, minus the portion in
the original subsidiary’s net assets measured on a continuous basis from the acquisition date that is
enjoyable by the Group according to the original shareholding percentage in the subsidiary, is
recorded in investment gains for the period when the Group’s control on the subsidiary ceases.
Other comprehensive incomes in relation to the equity investment and the other owners’ equities
changes except for the net gains and losses, other comprehensive income and profits distribution
in the original subsidiary are treated on the same accounting basis as the acquiree directly disposes
the relevant assets or liabilities (that is, except for the changes in the net liabilities or assets with a
defined benefit plan resulted from re-measurement of the original subsidiary, the rest shall all be
transferred into current investment gains) when such control ceases. And subsequent measurement
is conducted on the residual equity interests according to the No.2 Accounting Standard for
Business Enterprises-Long-term Equity Investments or the No.22 Accounting Standard for
Business Enterprises-Recognition and Measurement of Financial Instruments.
For the disposal of equity investment belongs to a package deal, should be considered as a
transaction and conduct accounting treatment. However, Before losing control, every disposal cost
and corresponding net assets balance of subsidiary of disposal investment are confirmed as other
comprehensive income in consolidated financial statements, which together transferred into the
current profits and losses in the lose 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 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.
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 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.
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
significant single amounts refers to the accounts receivable of the
Recognition criteria of accounts receivable with individual and
single amount more than RMB1 million (RMB1 million include)
significant amount
(including 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 shall withdrawn on the basis of the balance
Withdrawal method of the bad debt provision of the accounts between the current values of the predicted future cash flow
receivable with significant single amounts lower than book value. Upon independent impairment test, the
accounts receivable with significant single amounts has not been
impaired, it shall be withdrawn bad debt provision based on
ending balance by adopting aging analysis method.
(2) Account receivable withdrawal bad debt provision by the credit risk portfolio
Name of the group Method
The age of the accounts receivable as the credit risk portfolio Aging analysis
In the group, adopting aging analysis withdraws bad debt provision:
√ Applicable □ Not applicable
Withdrawal proportion for accounts Withdrawal proportion for other accounts
Age
receivable receivable
Within 1 year (including 1 year) 2.00% 2.00%
1-2 years 5.00% 5.00%
2-3 years 15.00% 15.00%
3-4 years 30.00% 30.00%
4-5 years 60.00% 60.00%
Over 5 years 100.00% 100.00%
In the groups, adopting balance percentage method to withdraw bad debt provision:
□ Applicable √ Not applicable
In the groups, 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 individually
Recognition criteria of accounts receivable with individual but
insignificant amount: insignificant single amounts refers to the
Reason of individually withdrawing bad debt provision accounts receivable of the single amount lower than RMB1
million (RMB1 million include) (including 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 future cash
Withdrawal method for bad debt provision
flows of the account receivable that less than its carrying 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
(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 cost and net realizable
value. When all the inventories are checked roundly, for those which were destroyed, outdated in
all or in part, sold at a loss, etc, the Company shall estimate the irrecoverable part of its cost and
withdrawal the inventory falling price reserve at the year-end. Where the cost of the single
inventory item is higher than the net realizable value, the inventory falling price reserve shall be
withdrawn and recorded into profits and losses of the current period. Of which: in the normal
production and operating process, as for the commodities inventory directly for sales such as the
finished products, commodities and the materials for sales, should recognize the net realizable
value according to the amount of the estimated selling price of the inventory minuses the
estimated selling expenses and the relevant taxes; as for the materials inventory needs to be
processed in the normal production and operating process, should recognize its net realizable
value according to the amount of the estimated selling price of the finished products minuses the
cost predicts to be occur when the production completes and the estimated selling expenses as
well as the relevant taxes; on the balance sheet date, for the same inventory with one part agreed
by the contract price and other parts not by the contract price, should be respectively recognized
the net realizable value. For items of inventories relating to a product line that are produced and
marketed in the same geographical area, have the same or similar end users or purposes, and
cannot be practicably evaluated separately from other items in that product line provision for
decline in value is determined on an aggregate basis; for large quantity and low value items of
inventories, provision for decline in value is made based on categories of inventories.
(4) The perpetual inventory system is maintained for stock system.
(5) Amortization method of low-value consumption goods and packages
It is one time amortization method of low-value consumption goods and packages when
consuming.
13. Divided as 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
The initial investment cost of the long-term equity investment shall be recognized by adopting the
following ways in accordance with different methods of acquisition:
① As for those forms under the same control of the enterprise combine, if the combine party
takes the cash payment, non-cash assets transformation, liabilities assumption or equity securities
issuance as the combination consideration, should take the shares of the book value by the
ultimate control party in the consolidate financial statement of the owners’ equities of the
combiners acquired on the merger date as the initial investment cost. The difference between the
initial investment cost and the book value of the paid combination consideration or the total
amount of the issued shares of the long-term equity investment should be adjusted the capital
reserve; If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted. To
include each direct relevant expense occurred when executing the enterprise merger into the
current gains and losses; while the handling charges and commission occurs from the issuing the
equity securities or the bonds for the enterprise merger should be included in the initial
measurement amount of the shareholders’ equities or the liabilities.
② As for long-term equity investment acquired through the merger of enterprises not under the
same control, its initial investment cost shall regard as the combination cost calculated by the fair
value of the assets, equity instrument issued and liabilities incurred or undertaken on the purchase
date adding the direct cost related with the acquisition. The identifiable assets of the combined
party and the liabilities (including contingent liability) undertaken on the combining date shall be
measured at the fair value without considering the amount of minority interest. The acquirer shall
recognize the positive balance between the combination costs and the fair value of the identifiable
net assets it obtains from the acquiree as business reputation. The acquirer shall record the
negative balance between the combination costs and the fair value of the identifiable net assets it
obtains from the acquiree into the consolidated income statement directly. The agent expense and
other relevant management expenses such as the audit, legal service and evaluation consultation
occurs from the enterprise merger, should be included in the current gains and losses when occur;
while the handling charges and commission occurs from the issuing the equity securities or the
bonds for the enterprise merger should be included in the initial measurement amount of the
shareholders’ equities or the liabilities.
③ Long-term equity investment obtained by other means
The initial cost of a long-term equity investment obtained by making payment in cash shall be the
purchase cost which is actually paid.
The initial cost of a long-term equity investment obtained on the basis of issuing equity securities
shall be the fair value of the equity securities issued.
The initial cost of a long-term equity investment of an investor shall be the value stipulated in the
investment contract or agreement, the unfair value stipulated in the contract or agreement shall be
measured at fair value.
As for long-term investment obtained by the exchange of non-monetary assets, where it is
commercial in nature, the fair value of the assets surrendered shall be recognized as the initial cost
of the long-term equity investment received; where it is not commercial in nature, the book value
of the assets surrendered shall be recognized as the initial cost of the long-term equity investment
received.
The initial cost of a long-term equity investment obtained by recombination of liabilities shall be
recognized at fair value of long-term equity investment.
(3) Subsequent measurement and recognition of profits and losses
① An investment in the subsidiary company shall be measured by employing the cost method
Where the Company hold, and is able to do equity investment with control over an invested entity,
the invested entity shall be its subsidiary company. Where the Company holds the shares of an
entity over 50%, or, while the Company holds the shares of an entity below 50%, but has a real
control to the said entity, then the said entity shall be its subsidiary company.
② An investment in the joint enterprise or associated enterprise shall be measured by employing
the equity method
Where the Company hold, and is able to do equity investment with joint control with other parties
over an invested entity, the invested entity shall be its joint enterprise. Where the Company hold,
and is able to have equity investment with significant influences on an invested entity, the invested
entity shall be its associated entity.
After the Company acquired the long-term equity investment, should respectively recognize
investment income and other comprehensive income according to the net gains and losses as well
as the portion of other comprehensive income which should be enjoyed or be shared, and at the
same time adjust the book value of the long-term equity investment; corresponding reduce the
book value of the long-term equity investment according to profits which be declared to distribute
by the investees or the portion of the calculation of cash dividends which should be enjoyed; for
the other changes except for the net gains and losses, other comprehensive income and the owners’
equity except for the profits distribution of the investees, should adjust the book value of the
long-term equity investment as well as include in the owners’ equity .
The investing enterprise shall, on the ground of the fair value of all identifiable assets of the
invested entity when it obtains the investment, recognize the attributable share of the net profits
and losses of the invested entity after it adjusts the net profits of the invested entity.
If the accounting polices 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 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 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 estates
Measurement mode of investment real estates:
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 estates 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) Conditions for recognition
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 methods
Expected net salvage
Category of fixed assets Method Useful life Annual deprecation
value
Houses and buildings Average method of useful life 20-40 2.50-5
Machine equipment Average method of useful life 6-15 6.67-16.67
Transportation
Average method of useful life 5-10 10-20
equipment
Electronic equipment Average method of useful life
Other equipment Average method of useful life 5-10 10-20
(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 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 process
(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 hasn’t audit 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.
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.
19. Intangible assets
(1) Pricing method, using life and impairment test of intangible assets
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 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.
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 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.
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; and
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
(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 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, equally
distributed within the useful lives of the relevant assets, and included in the current profits and
losses.
(2) Judgment basis and accounting treatment of government subsidies related to profits
The government subsidies pertinent to incomes shall be treated respectively in accordance with
the circumstances as follows: those subsidies used for compensating the related future expenses or
losses of the enterprise shall be recognized as deferred income and shall included in the current
profits and losses during the period when the relevant expenses are recognized; or those subsidies
used for compensating the related expenses or losses incurred to the enterprise shall be directly
included in the current profits 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.
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;
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 of accounting policies
□ Applicable √ Inapplicable
(2) Change of main accounting estimates
□ Applicable √ Inapplicable
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 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
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 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. Taxation
1. Main taxes and tax rate
Type of tax Taxation basis Tax rates
VAT Payable to sales revenue 13%, 17%
Tax paid in accordance with the tax
Urban maintenance and construction tax Taxable turnover amount
regulations of tax units location
Corporate income tax Taxable income 25% or 15%
Education surcharge Taxable turnover amount 5%
2. Tax preference
In 2009, 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.
VII. Notes on major items in consolidated financial statements of the Company
1. Monetary funds
Unit: RMB
Item Closing balance Opening balance
Cash on hand 317,822.87 252,373.65
Bank deposits 594,616,540.49 526,463,864.56
Other monetary funds 78,861,683.78 74,596,477.41
Total 673,796,047.14 601,312,715.62
At the period-end, the restricted monetary fund was RMB78,861,683.78 in total, of which: the
bank acceptance deposit was RMB78,861,683.78.
2. Notes receivable
(1) Notes receivable listed by category
Unit: RMB
Item Closing balance Opening balance
Bank acceptance bill 278,520,898.26 498,502,274.42
Total 278,520,898.26 498,502,274.42
(2) Notes receivable pledged at the period-end
Naught
(3) Notes receivable which had endorsed by the Company or had discounted and had not
due on the balance sheet date at the period-end
Unit: RMB
Amount of recognition termination at the Amount of not terminated recognition at
Item
period-end the period-end
Bank acceptance bill 463,361,452.46
Total 463,361,452.46
(4) There was no any notes be transferred to accounts receivable owning to the drawer failed
to performance of the Company at the period-end
3. Accounts receivable
(1) Accounts receivable disclosed by category
Unit: RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Item Withdra Book
Proportio wal Proportio Withdrawal Book value
Amount Amount value Amount Amount
n proportio n proportion
n
Accounts receivable
with significant
single amount for 32,467,2 28,615,5 3,851,654 32,966, 28,743,56 4,223,004.7
3.98% 88.14% 6.03% 87.19%
which bad debt 31.93 77.21 .72 572.81 8.09 2
provision separately
accrued
Accounts receivable
withdrawn bad debt
781,385, 217,630, 563,754,5 511,838 207,464,0 304,373,91
provision according 95.81% 27.85% 93.66% 40.53%
263.07 695.93 67.14 ,003.05 87.27 5.78
to credit risks
characteristics
Accounts receivable
with insignificant
single amount for 1,686,71 1,686,71 1,686,7 1,686,716
0.21% 100.00% 0.31% 100.00%
which bad debt 6.39 6.39 16.39 .39
provision separately
accrued
Total 815,539, 247,932, 567,606,2 546,491 237,894,3 308,596,92
100.00% 100.00% 100.00% 43.53%
211.39 989.53 21.86 ,292.25 71.75 0.50
Accounts receivable with significant single amount for which bad debt provision separately accrued at period end:
√ Applicable □ Not applicable
Unit: RMB
Accounts receivable Closing balance
(classified by units) Book balance Bad debt provision Withdrawal Proportion Withdrawal Reason
Customer 1 3,863,600.00 1,931,800.00 50.00% Estimated irrecoverable
Customer 2 1,902,326.58 1,902,326.58 100.00% Difficult to recover
Customer 3 6,215,662.64 6,193,248.32 99.64% Difficult to recover
Customer 4 4,115,396.29 2,217,955.89 53.89% Estimated irrecoverable
Customer 5 3,279,100.00 3,279,100.00 100.00% Estimated irrecoverable
Customer 6 2,592,177.01 2,592,177.01 100.00% Estimated irrecoverable
Customer 7 5,359,381.00 5,359,381.00 100.00% Difficult to recover
Customer 8 2,584,805.83 2,584,805.83 100.00% Difficult to recover
Customer 9 1,060,660.44 1,060,660.44 100.00% Difficult to recover
Customer 10 1,494,122.14 1,494,122.14 100.00% Difficult to recover
Total 32,467,231.93 28,615,577.21 -- --
In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable □ Not applicable
Unit: RMB
Closing balance
Aging
Accounts receivable Bad debt provision Withdrawal Proportion
Subitem within 1 year
Subtotal of within 1 year 446,547,327.18 8,930,946.54 2.00%
1-2 years 125,094,600.52 6,254,730.03 5.00%
2-3 years 2,943,628.31 441,544.25 15.00%
Over 3 years 206,799,707.06 202,003,475.12
3 to 4 years 6,227,544.95 1,868,263.49 30.00%
4 to 5 years 1,092,376.21 655,425.73 60.00%
Over 5 years 199,479,785.90 199,479,785.90 100.00%
Total 781,385,263.07 217,630,695.93
(2) Accounts receivable withdraw, reversed or collected during the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of
RMB13,290,094.03; the amount of the reversed or collected part during the Reporting Period was
of RMB3,251,476.25.
(3) List of the accounts receivable actual written-off during the Reporting Period
Naught
(4) Top 5 of the closing balance of the accounts receivable collected according to the arrears
party
At period end, the total amount of top 5 of the closing balance of the accounts receivable collected
according to the arrears party was RMB314,311,923.70, 38.54% of the closing balance of the
accounts receivable and the relevant closing balance of bad debt provision was
RMB33,195,372.32.
4. Prepayment
(1) List by aging analysis:
Unit: RMB
Aging Closing balance Opening balance
Amount Proportion Amount Proportion
Within 1 year 9,122,952.07 89.95% 11,891,116.78 92.30%
1 to 2 years 35,241.25 0.35% 7,418.00 0.06%
2 to 3 years 114,790.79 1.13% 114,790.79 0.89%
Over 3 years 868,946.13 8.57% 868,946.13 6.75%
Total 10,141,930.24 -- 12,882,271.70 --
(2) Top 5 of the closing balance of the prepayment colleted according to the prepayment
target
At the period-end, the total amount of top 5 of the closing balance of the prepayment collected
according to the prepayment target was RMB7,513,250.28, 74.08% of the closing balance of the
accounts receivable.
5. Other accounts receivable
(1) Other accounts receivable disclosed by category
Unit: RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Category Withdra Book
Proportio wal Proportio Withdrawal Book value
Amount Amount value Amount Amount
n proportio n proportion
n
Other accounts
receivable with
significant single 2,853,18 2,853,18 2,853,1 2,853,188
5.70% 100.00% 7.66% 100.00%
amount for which 8.02 8.02 88.02 .02
bad debt provision
separately accrued
Other accounts
receivable withdrawn
45,263,6 27,027,2 18,236,44 32,431, 26,808,67 5,622,539.8
bad debt provision 90.40% 59.71% 87.10% 82.66%
54.42 07.00 7.42 210.57 0.76 1
according to credit
risks characteristics
Other accounts
receivable with
insignificant single 1,952,62 1,952,62 1,952,6 1,952,628
3.90% 100.00% 5.24% 100.00%
amount for which 8.15 8.15 28.15 .15
bad debt provision
separately accrued
Total 50,069,4 31,833,0 18,236,44 37,237, 31,614,48 5,622,539.8
100.00% 63.58% 100.00% 84.90%
70.59 23.17 7.42 026.74 6.93 1
Other accounts receivable with significant single amount for which bad debt provision separately accrued:
√ Applicable □ Not applicable
Unit: RMB
Other account receivable Closing balance
(classified by units) Book balance Bad provision Withdrawal proportion Withdrawal reason
Changchai Group Import
2,853,188.02 2,853,188.02 100.00% Difficult to recover
& Export Company
Total 2,853,188.02 2,853,188.02 -- --
In the groups, other accounts receivable adopting aging analysis method to accrue bad debt provision:
√ Applicable □ Not applicable
Unit: RMB
Closing balance
Aging
Other account receivable Bad provision Withdrawal proportion
Subitem within 1 year
Subtotal of within 1 year 16,348,668.83 326,973.38 2.00%
1-2 years 270,511.72 13,525.59 5.00%
2-3 years 746,557.24 16,232.27 15.00%
Over 3 years 27,897,916.63 26,670,475.77
3 to 4 years 670,650.62 37,747.29 30.00%
4 to 5 years 1,486,343.82 891,806.29 60.00%
Over 5 years 25,740,922.19 25,740,922.19 100.00%
Total 45,263,654.42 27,027,207.00
(2) Accounts receivable withdraw, reversed or collected during the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB218,536.24.
(3) List of the other accounts receivable actual written-off during the Reporting Period
Naught
(4) Other accounts receivable classified by the nature of accounts
Unit: RMB
Nature Closing book balance Opening book balance
Margin and cash pledge 4,200.00 4,200.00
Unit current amount 32,156,632.14 20,433,624.06
Employee loan 2,026,731.24 2,011,484.92
Other 15,881,907.21 14,787,717.76
Total 50,069,470.59 37,237,026.74
(5) Top 5 of the closing balance of the other accounts receivable collected according to the
arrears party
Unit: RMB
Proportion of the Closing balance of
total year end bad debt provision
Name of units Nature Closing balance Aging
balance of the
accounts receivable
Xuzhou East China
Casting General Current 6,000,000.00 Within 1 year 11.98% 120,000.00
Factory
Changzhou
Changjiang Casting Current 5,000,000.00 Within 1 year 9.99% 100,000.00
Materials Co., Ltd.
Changzhou
Compressor Co., Current 2,940,000.00 Over 5 years 5.87% 2,940,000.00
Ltd.
Import and Export
Company of Current 2,853,188.02 Over 5 years 5.70% 2,853,188.02
Changchai Group
Changzhou New
District Accounting Current 1,626,483.25 Over 5 years 3.25% 1,626,483.25
Center
Total -- 18,419,671.27 -- 36.79% 7,639,671.27
(6) The amount of the period-begin increased of 224.35% over that of the period-end, which
mainly due to the subsidiary Housheng Investment lent RMB11 million to Xuzhou East China
Casting Factory and Changzhou Changjiang Casting Materials Co., Ltd.
6. Inventory
(1) Category of inventory
Unit: RMB
Item Closing balance Opening balance
Falling price Falling price
Book balance Book value Book balance Book value
reserves reserves
Raw material 88,721,968.31 2,587,305.60 86,134,662.71 111,288,103.55 2,587,305.60 108,700,797.95
Goods in process 118,460,998.75 23,144,279.29 95,316,719.46 110,165,018.34 23,144,279.29 87,020,739.05
Inventory goods 181,128,422.74 20,277,368.92 160,851,053.82 208,519,567.29 20,277,368.92 188,242,198.37
Materials
processed on 17,045,095.69 17,045,095.69 12,310,710.53 12,310,710.53
commission
Low priced and
easily worn 2,152,264.35 1,300,787.34 851,477.01 2,316,353.80 1,300,787.34 1,015,566.46
articles
Total 407,508,749.84 47,309,741.15 360,199,008.69 444,599,753.51 47,309,741.15 397,290,012.36
(2) Falling price reserves of inventory
Unit: RMB
Increased amount Decreased amount
Item Opening balance Reverse or Closing balance
Withdrawal Other Other
write-off
Raw materials 2,587,305.60 2,587,305.60
Goods in process 23,144,279.29 23,144,279.29
Inventory goods 20,277,368.92 20,277,368.92
Low priced and
easily worn 1,300,787.34 1,300,787.34
articles
Total 47,309,741.15 47,309,741.15
7. Other current assets
Unit: RMB
Item Closing balance Opening balance
The VAT tax credits 10,645,221.04 28,304,691.41
Bank financial products 20,000,000.00
Financial products from securities
12,000,000.00 12,000,000.00
companies
Export drawback receivable
Total 22,645,221.04 60,304,691.41
8. Available-for-sale financial assets
(1) List of available-for-sale financial assets
Unit: RMB
Item Closing balance Opening balance
Depreciation Depreciation
Book balance Book value Book balance Book value
reserves reserves
Available-for-sale equity
445,647,000.00 1,210,000.00 444,437,000.00 504,190,000.00 1,210,000.00 502,980,000.00
instruments:
Measured by fair value 399,237,000.00 399,237,000.00 457,780,000.00 457,780,000.00
Measured by cost
46,410,000.00 1,210,000.00 45,200,000.00 46,410,000.00 1,210,000.00 45,200,000.00
method
Total 445,647,000.00 1,210,000.00 444,437,000.00 504,190,000.00 1,210,000.00 502,980,000.00
(2) Available-for-sale financial assets measured by fair value at the period-end
Unit: RMB
Available-for-sale equity Available-for-sale debt
Category Total
instruments instruments
Cost of equity instruments /amortized
41,874,500.00 41,874,500.00
cost of debt instruments
Fair value 399,237,000.00 399,237,000.00
Changes of fair value accumulated
recorded into other comprehensive 303,758,125.00 303,758,125.00
income
(3) Available-for-sale financial assets measured by cost at the period-end
Unit: RMB
Book balance Impairment provision Shareholdi Cash
ng bonus of
Investee Period-beg Period-beg proportion the
Increase Decrease Period-end Increase Decrease Period-end
in in among the reporting
investees period
Jiangsu 38,000,000 38,000,000
0.42%
Bank .00 .00
Qidong
Liantong
7,200,000. 7,200,000.
Dynamom 3.20% 160,000.00
00 00
eter Co.,
Ltd.
1,210,000. 1,210,000. 1,210,000. 1,210,000.
Others
00 00 00 00
46,410,000 46,410,000 1,210,000. 1,210,000.
Total -- 160,000.00
.00 .00 00 00
Other were respectively the investment of RMB0.51 million in Chengdu Changchai Wanzhou Diesel Engine
Distribution Company, RMB0.29 million in Chongqing Wanzhou District Changchai Wanzhou Diesel Engine
Accessories Company, RMB0.02 million in Changzhou Economic Technology Development Company, RMB0.1
million in Changzhou Tractor Company, RMB0.2 million in Changzhou Economic Commission Industrial Funds
Fraternity and RMB0.09 million in Beijing Engineering Machinery Agricultural Machinery Company, and all of
the above investment were difficult to recover that should withdraw the impairment provision in full amount.
(4) Changes of the impairment of the available-for-sale financial assets during the reporting
period
Unit: RMB
Available-for-sale equity Available-for-sale debt
Category Total
instruments instruments
Balance of the withdrawn
1,210,000.00 1,210,000.00
impairment at the period-begin
Balance of the withdrawn
1,210,000.00 1,210,000.00
impairment at the period-end
9. Long-term equity investment
Unit: RMB
Increase/decrease
Closing
Gains and Adjustme
Cash Withdraw balance
Additiona losses nt of
Opening Reduced Changes bonus or al of Closing of
Investees l recognize other
balance investmen of other profits impairme Other balance impairme
investmen d under comprehe
t equity announce nt nt
t the equity nsive
d to issue provision provision
method income
I．Joint ventures
II. Associated enterprises
Changzho
u Fuji
Changcha
20,769,30 821,264.1 21,590,56
i Robin
4.76 2 8.88
Gasoline
Engine
Co., Ltd.
Beijing
Tsinghua
Industrial
Investme
44,182.50
nt
Managem
ent Co.,
Ltd.
Subtotal 20,769,30 821,264.1 21,590,56 44,182.50
4.76 2 8.88
20,769,30 821,264.1 21,590,56
Total 44,182.50
4.76 2 8.88
10. Investment property
(1) Investment property adopted the cost measurement mode
√ Applicable □ Not applicable
Unit: RMB
Item Houses and buildings Land use right Construction in progress Total
I. Original book value
1. Opening balance 87,632,571.14 87,632,571.14
2. Increased amount
of the period
(1) Outsourcing
(2) Transfer of
inventory\fixed
assets\project under
construction
(3) Increased from
enterprise merger
3. Decreased
amount of the period
(1) Disposal
(2) Other transfer
4. Closing balance 87,632,571.14 87,632,571.14
II. Accumulative
depreciation and
accumulative
amortization
1.Opening balance 30,351,541.11 30,351,541.11
2. Increased amount
1,104,170.40 1,104,170.40
of the period
(1) Withdrawal or
1,104,170.40 1,104,170.40
amortization
3. Decreased
amount of the period
(1) Disposal
(2) Other transfer
4. Closing balance 31,455,711.51 31,455,711.51
III. Depreciation reserves
1.Opening balance
2. Increased amount
of the period
(1) Withdrawal
3. Decreased
amount of the period
(1) Disposal
(2) Other transfer
4. Closing balance
IV. Book value
1. Closing book
56,176,859.63 56,176,859.63
value
2. Opening book
57,281,030.03 57,281,030.03
value
11. Fixed assets
List of fixed assets
Unit: RMB
Houses and Machinery Transportation
Item Other Total
buildings equipment equipment
I. Original book
value
1. Opening
419,409,924.25 802,789,176.38 23,547,415.98 34,971,574.20 1,280,718,090.81
balance
2. Increased
15,205,415.74 41,931,939.19 1,880,778.49 2,330,411.06 61,348,544.48
amount of the period
(1) Purchase 661,187.08 407,209.33 1,068,396.41
(2) Transfer of
project under 15,205,415.74 41,270,752.11 1,880,778.49 1,923,201.73 60,280,148.07
construction
(3) Increased
from enterprise
merger
3. Decreased
4,061,877.00 3,045,487.26 2,148,795.61 1,232,211.06 10,488,370.93
amount of the period
(1) Disposal or
4,061,877.00 3,045,487.26 2,148,795.61 1,232,211.06 10,488,370.93
scrap
4. Closing balance 430,553,462.99 841,675,628.31 23,279,398.86 36,069,774.20 1,331,578,264.36
II. Accumulative
depreciation
1.Opening balance 212,091,873.84 468,192,248.83 15,368,212.09 26,845,593.79 722,497,928.55
2. Increased
amount of the period 9,729,309.18 30,252,266.58 951,416.36 1,752,041.36 42,685,033.48
(1) Withdrawal 9,729,309.18 30,252,266.58 951,416.36 1,752,041.36 42,685,033.48
3. Decreased
3,641,066.64 2,652,615.33 1,942,516.55 947,412.61 9,183,611.13
amount of the period
(1) Disposal or
3,641,066.64 2,652,615.33 1,942,516.55 947,412.61 9,183,611.13
scrap
4. Closing balance 218,180,116.38 495,791,900.08 14,377,111.90 27,650,222.54 755,999,350.90
III. Depreciation
reserves
1.Opening balance 3,618,269.03 3,618,269.03
2. Increased
amount of the period
(1) Withdrawal
3. Decreased
amount of the period
(1) Disposal or
scrap
4. Closing balance 3,618,269.03 3,618,269.03
IV. Book value
1. Closing book
212,373,346.61 342,265,459.20 8,902,286.96 8,419,551.66 571,960,644.43
value
2. Opening book
207,318,050.41 330,978,658.52 8,179,203.89 8,125,980.41 554,601,893.23
value
The depreciation amount of the Reporting Period was of RMB42,685,033.48. The original value transferred into
the fixed assets from the construction in progress of the Reporting Period was of RMB60,280,148.07.
12. Construction in progress
(1) List of construction in progress
Unit: RMB
Closing amount Opening amount
Item Book balance Bad debt Book value Book balance Bad debt Book value
provision provision
Trial production
workshop project 22,960,533.29 22,960,533.29
technology center
Casting
renovation 396,000.00 396,000.00
project
Expansion
capacity of
41,887,573.16 41,887,573.16 40,050,712.95 40,050,712.95
multi-cylinder
(The 2nd Period)
Base of land in
33,550.53 33,550.53
Hehai Road
Diesel Engine
Cylinder Body
Flexible 11,039,316.25 11,039,316.25 1,851,752.13 1,851,752.13
Manufacturing
Line
Equipment to be
installed and
24,034,695.54 24,034,695.54 42,905,906.11 42,905,906.11
payment for
projects
Total 76,961,584.95 76,961,584.95 108,198,455.01 108,198,455.01
(2) Changes of significant construction in progress
Unit: RMB
Amount Proporti Accumul Of
Capitaliz
that Other on ative which:
Increase ation rate
Estimate transferr decrease estimate amount the
Name of Opening d amount Closing Project of the Capital
d ed to d amount d of the of amount
item balance of the balance progress interests resources
number fixed of the project capitaliz of the
period of the
assets of period accumul ed capitaliz
period
the ative interests ed
period input interests
of the
period
Trial
producti
on
22,960,5 22,960,5
worksho 0.00 Other
33.29 33.29
p project
technolo
gy center
Casting
renovati 396,000. 396,000.
0.00 Other
on 00 00
project
Expansio
n
capacity
of 40,050,7 2,097,06 260,200. 41,887,5
Other
multi-cyl 12.95 0.78 57 73.16
inder
(The 2nd
Period)
Base of
land in 33,550.5 33,550.5
0.00 Other
Hehai 3 3
Road
Diesel
Engine
Cylinder
Body 1,851,75 9,187,56 11,039,3
Other
Flexible 2.13 4.12 16.25
Manufac
turing
Line
65,292,5 11,284,6 23,650,2 52,926,8
Total -- -- --
48.90 24.90 84.39 89.41
13. Intangible assets
(1) List of intangible assets
Unit: RMB
Non-patented
Item Land use right Patent right Software Other Total
technology
I. Total original
book value
1. Opening
137,782,945.30 5,871,691.42 143,654,636.72
balance
2. Increase in
the reporting 488,876.81 488,876.81
period
(1) Purchase 488,876.81 488,876.81
(2) Internal R
&D
(3) Increase
from enterprise
combination
3. Decrease in the
reporting period
(1) Purchase
4. Closing
137,782,945.30 6,360,568.23 144,143,513.53
balance
II. Total accrued
amortization
1. Opening
38,511,304.87 2,041,869.38 40,553,174.25
balance
2. Increase in the
1,396,024.56 1,012,489.19 2,408,513.75
reporting period
(1) Withdrawal 1,396,024.56 1,012,489.19 2,408,513.75
3. Decrease in the
reporting period
(1) Disposal
4. Closing
39,907,329.43 3,054,358.57 42,961,688.00
balance
III. Total
impairment
provision
1. Opening
balance
2. Increase in
the reporting
period
(1) Withdrawal
3. Decrease in the
reporting period
(1) Disposal
4. Closing
balance
IV. Total book
value of
intangible assets
1. Book value of
97,875,615.87 3,306,209.66 101,181,825.53
the period-end
2. Book value of
99,271,640.43 3,829,822.04 103,101,462.47
the period-begin
14. Deferred income tax assets/deferred income tax liabilities
(1) Deferred income tax assets had not been off-set
Unit: RMB
Closing balance Opening balance
Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax
difference assets difference assets
Assets impairment
6,416,872.53 962,530.88 6,416,872.53 962,530.88
provision
Total 6,416,872.53 962,530.88 6,416,872.53 962,530.88
(2) Deferred income tax liabilities had not been off-set
Unit: RMB
Closing balance Opening balance
Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax
difference liabilities difference liabilities
Change in fair value of
357,362,500.00 53,604,375.00 415,905,500.00 62,385,825.00
available financial assets
Total 357,362,500.00 53,604,375.00 415,905,500.00 62,385,825.00
(3) List of the unrecognized deferred income tax assts
Unit: RMB
Item Closing balance Opening balance
Bad debt provision 273,349,140.17 263,091,986.15
Inventory falling price reserves 47,309,741.15 47,309,741.15
Total 320,658,881.32 310,401,727.30
15. Other non-current assets
Unit: RMB
Item Impairment
Impairment provision
Closing balance provision at the Opening balance
at the period-begin
period-end
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 loans
(1) Category of short-term loans
Unit: RMB
Item Closing balance Opening balance
Mortgage loan 5,000,000.00 12,000,000.00
Guaranteed loan 5,000,000.00 5,000,000.00
Total 10,000,000.00 17,000,000.00
(2) List of the short-term loans overdue but not return at period end
17. Notes payable
Unit: RMB
Category Closing balance Opening balance
Bank acceptance bill 278,909,300.00 238,200,000.00
Total 278,909,300.00 238,200,000.00
No such case.
18. Accounts payable
(1) List of accounts payable
Unit: RMB
Item Closing balance Opening balance
Goods payment 509,018,960.25 535,978,470.07
Total 509,018,960.25 535,978,470.07
(2)There was no note of the accounts payable aging over one year
19. Advance from customers
(1) List of advance from customers
Unit: RMB
Item Closing balance Opening balance
Goods payment 39,284,991.46 26,665,671.38
Total 39,284,991.46 26,665,671.38
(2) There was no significant advance from customers aging over one year
20. Payroll payable
(1) List of Payroll payable
Unit: RMB
Item Opening balance Increase Decrease Closing balance
I. Short-term salary 60,309,349.29 127,405,958.34 154,244,490.70 33,470,816.93
II. Post-employment
benefit-defined 18,367,799.93 18,367,799.93
contribution plans
III. Termination benefits
IV. Other benefits due
within one year
Total 60,309,349.29 145,773,758.27 172,612,290.63 33,470,816.93
(2) List of Short-term salary
Unit: RMB
Item Opening balance Increase Decrease Closing balance
1. Salary, bonus,
53,805,049.80 103,933,731.06 130,970,704.71 26,768,076.15
allowance, subsidy
2. Employee welfare 3,883,673.30 3,883,673.30
3. Social insurance 8,719,918.78 8,719,918.78
Of which: 1. Medical
6,833,863.52 6,833,863.52
insurance premiums
Work-related injury
1,446,486.71 1,446,486.71
insurance
Maternity insurance 439,568.55 439,568.55
4. Housing fund 7,973,387.00 7,973,387.00
5. Labor union budget
and employee education 6,504,299.49 2,895,248.20 2,696,806.91 6,702,740.78
budget
6.Short-term absence
with payment
7. Short-term profit
sharing plan
Total 60,309,349.29 127,405,958.34 154,244,490.70 33,470,816.93
(3) List of drawing scheme
Unit: RMB
Item Opening balance Increase Decrease Closing balance
1. Basic pension benefits 17,276,042.90 17,276,042.90
2. Unemployment
1,091,757.03 1,091,757.03
insurance
Annuity
Total 18,367,799.93 18,367,799.93
21. Taxes payable
Unit: RMB
Item Closing balance Opening balance
VAT 467,010.50
Business tax 2,900.00
Corporate income tax 635,775.94 5,923,463.67
Personal income tax 113,640.60 49,924.16
Urban maintenance and construction tax 1,996,316.42
Property tax 945,986.32 143,204.50
Education surcharge 840,517.28
Comprehensive fees 853,871.38 1,374,726.40
Total 2,549,274.24 10,798,062.93
22. Dividends payable
Unit: RMB
Item Closing balance Opening balance
Common stock dividends 3,243,179.97 3,243,179.97
Minority dividends 648,253.86 648,253.86
Total 3,891,433.83 3,891,433.83
Reason of not pay overdue 1 year: the shareholder had not drawn down yet.
23. Other accounts payable
(1) Other accounts payable listed by nature of the account
Unit: RMB
Item Closing balance Opening balance
Margin &cash pledge 3,043,793.03 3,149,353.59
Intercourse funds between entities 16,340,217.93 15,550,754.25
Personal amount payable 959,580.09 955,910.51
Sales discount and three guarantees 165,265,432.24 146,392,031.63
Others 40,337,014.54 35,103,582.48
Total 225,946,037.83 201,151,632.46
(2) Other significant accounts payable with aging over one year
Other significant accounts payable with aging over one year mainly was the temporary receivable and charges
owed.
24. Other current-liabilities
Unit: RMB
Item Closing balance Opening balance
Sewage charge 200,000.00 200,000.00
Energy charge 1,615,216.25 1,795,289.06
Others 105,797.62 407,998.00
Total 1,921,013.87 2,403,287.06
25. Deferred revenue
Unit: RMB
Item Opening balance Increase Decrease Closing balance Formed reason
Government Government
53,121,605.70 532,186.81 52,589,418.89
subsidies allocations
Total 53,121,605.70 532,186.81 52,589,418.89 --
Item involving government subsidies:
Unit: RMB
Amount recorded
into Related to
Amount of newly
Item Opening balance non-operating Other changes Closing balance assets/related
subsidy
income in report income
period
Electric control of
diesel engine
research and Related to the
1,842,000.00 199,200.00 1,642,800.00
development and assets
industrialization
allocations
National major
Related to the
project special 28,770,000.00 28,770,000.00
assets
allocations
Remove Related to the
22,509,605.70 332,986.81 22,176,618.89
compensation assets
Total 53,121,605.70 532,186.81 52,589,418.89 --
26. Share capital
Unit: RMB
Increase/decrease (+/-)
Opening Capitalized Closing
New shares
balance Bonus shares Capital Others Subtotal balance
issued
reserves
The sum of
561,374,326.00 561,374,326.00
shares
27. Capital surplus
Unit: RMB
Item Opening balance Increase Decrease Closing balance
Capital premium 143,990,690.24 143,990,690.24
Other capital reserves 20,337,975.19 20,337,975.19
Total 164,328,665.43 164,328,665.43
28. Other comprehensive income
Unit: RMB
Reporting Period
Less: recorded
in other
Amount comprehensive Attributable
Attributable
Opening before income in Less: to owners Closing
Item to minority
balance income tax prior period Income tax of the balance
shareholder
in current and transferred expense Company
s after tax
period to profit or after tax
loss in current
period
II. Other comprehensive reclassified 353,519,675. -58,543,000 -8,781,450. -49,761,550 303,758,1
into profits or losses 00 .00 00 .00 25.00
Profits or losses of change in
353,519,675. -58,543,000 -8,781,450. -49,761,550 303,758,1
fair value of available-for-sale
00 .00 00 .00 25.00
financial assets
353,519,675. -58,543,000 -8,781,450. -49,761,550 303,758,1
Total
00 .00 00 .00 25.00
29. Special reserves
Unit: RMB
Item Opening balance Increase Decrease Closing balance
Safety production cost 10,069,746.98 10,069,746.98
Total 10,069,746.98 10,069,746.98
30. Surplus reserves
Unit: RMB
Item Opening balance Increase Decrease Closing balance
Statutory surplus
292,601,428.01 292,601,428.01
reserves
Discretionary surplus
13,156,857.90 13,156,857.90
reserves
Total 305,758,285.91 305,758,285.91
31. Retained profits
Unit: RMB
Item Reporting Period Last period
Opening balance of retained profits before
607,859,611.69 555,590,894.67
adjustments
Opening balance of retained profits after
607,859,611.69 555,590,894.67
adjustments
Add: Net profit attributable to owners of the
35,018,142.36 71,102,792.49
Company
Less: Withdrawal of statutory surplus reserves 7,606,588.95
Dividend of common stock payable 12,911,609.50 11,227,486.52
Closing retained profits 629,966,144.55 607,859,611.69
32. Revenue and Cost of Sales
Unit: RMB
Reporting Period Same period of last year
Item
Sales revenue Cost of sales Sales revenue Cost of sales
Main operations 1,152,656,941.95 976,226,687.99 1,350,510,775.34 1,173,357,978.37
Other operations 11,003,779.74 8,367,576.44 9,385,125.35 5,715,124.36
Total 1,163,660,721.69 984,594,264.43 1,359,895,900.69 1,179,073,102.73
33. Business tax and surcharges
Unit: RMB
Item Reporting Period Same period of last year
Business tax 94,345.65 120,612.60
Urban maintenance and construction tax 1,130,189.36 1,255,742.07
Education Surcharge 792,992.40 903,657.76
Total 2,017,527.41 2,280,012.43
34. Sales expenses
Unit: RMB
Item Reporting Period Same period of last year
Office expenses 9,181,360.21 8,713,283.05
Employee’s remuneration 12,133,611.70 12,430,572.11
Sales promotional expense 7,436,628.43 6,919,526.51
Three guarantees 26,050,046.98 24,877,205.63
Transport fees 3,854,006.91 4,383,942.37
Others 862,820.37 734,569.25
Total 59,518,474.60 58,059,098.92
35. Administrative expenses
Unit: RMB
Item Reporting Period Same period of last year
Office expenses 8,381,652.44 12,135,083.25
Employee’s remuneration 32,126,018.65 30,279,507.54
Depreciation and amortization 8,374,082.68 8,657,938.02
Research and development expense 20,553,134.25 22,045,157.07
Transport fees 1,035,214.39 2,218,091.89
Repair charge 2,044,525.58 2,101,559.99
Taxes 3,789,425.82 3,785,315.92
Security charge 881,547.58 951,236.54
Others 1,303,014.31 2,227,133.96
Total 78,488,615.70 84,401,024.18
36. Financial expenses
Unit: RMB
Item Reporting Period Same period of last year
Interest expenses 1,917,987.53 1,317,324.03
Less: Interest income 2,859,561.84 3,247,570.12
Exchange net profit or loss -1,649,720.29 -1,609,657.81
Others -2,219,840.69 -3,133,799.84
Total -4,811,135.29 -6,673,703.74
37. Asset impairment loss
Unit: RMB
Item Reporting Period Same period of last year
I. Bad debt loss 10,257,154.02 2,767,537.46
Total 10,257,154.02 2,767,537.46
38. Investment income
Unit: RMB
Item Reporting Period Same period of last year
Long-term equity investment income
821,264.12 397,632.47
accounted by equity method
Investment income received from disposal of
financial assets measured by fair value and the
555,871.52 673,457.57
changes be included in the current profits and
losses during holding period
Investment income received from holding of
160,000.00 3,829,513.40
available-for-sale financial assets
Investment income from disposal of bank
364,000.00
financial products
Total 1,901,135.64 4,900,603.44
39. Non-operating gains
Unit: RMB
Recorded in the amount of the
Item Reporting Period Same period of last year
non-recurring gains and losses
Total gains from disposal of
6,113,117.21 106,674.56 6,113,117.21
non-current assets
Including: Gains from disposal
6,113,117.21 106,674.56 6,113,117.21
of fixed assets
Government subsidies 3,787,728.09 2,573,286.81 3,787,728.09
Insurance compensation 144,000.00 604,260.63 144,000.00
Penalty income 36,121.36
Gains from disposal of current
377,937.49 185,478.91 377,937.49
assets
Account payable no need to pay 85,655.38
Others 213,411.26 72,634.25 213,411.26
Total 10,636,194.05 3,664,111.90 10,636,194.05
Government subsidies recorded into current profits and losses
Unit: RMB
Whether
subsidies
Special Related to
Distribution Distribution influence the Reporting Same period
Item Nature subsidy or assets/related
entity reason current Period of last year
not income
profits and
losses or not
The central
budget Related to the
1,000,000.00
investment income
plans
Special fund
for
Promoting
the
transformatio Related to the
1,250,000.00 1,600,300.00
n of income
industrial
economy
steady
growth
The mayor Related to the
500,000.00
award income
Famous Related to the
300,000.00
brand reward income
Science and
Technology Related to the
30,000.00
Progress income
Award
Talent
Related to the
development 103,800.00 110,000.00
income
funds
Borrowing
Related to the
fiscal interest 500,000.00
income
discount
Other
Related to the
incentives 300,941.28
income
and subsidies
Remove 332,986.81 332,986.81 Related to the
compensation assets
Total -- -- -- -- -- 3,787,728.09 2,573,286.81 --
40. Non-operating expenses
Unit: RMB
Recorded in the amount of the
Item Reporting Period Same period of last year
non-recurring gains and losses
Loss on disposal of non-current
32,408.99 14,758.29 32,408.99
assets
Including: Loss on disposal of
32,408.99 14,758.29 32,408.99
fixed assets
Donation 100,000.00 100,000.00 100,000.00
The flood control security fund 1,359,895.90
Loss on disposal of current
3,988,707.85 1,242,677.62 3,988,707.85
assets
Others 26,723.88 115,326.35 26,723.88
Total 4,147,840.72 2,832,658.16 4,147,840.72
41. Income tax expense
(1) Lists of income tax expense
Unit: RMB
Item Reporting Period Same period of last year
Current income tax expense 6,581,748.12 7,503,443.33
Total 6,581,748.12 7,503,443.33
(2) Adjustment process of accounting profit and income tax expense:
Unit: RMB
Item Reporting Period
Total profits 41,985,309.79
Current income tax expense accounted by tax and relevant
6,297,796.47
regulations
Influence of different tax rate suitable to subsidiary -385,858.50
Influence of income tax before adjustment 36,073.11
Influence of non taxable income -457,500.00
Influence of not deductable costs, expenses and losses 1,734,785.66
Influence of deductible temporary difference or deductible losses
791,426.54
of deferred income tax assets derecognized in Reporting Period.
Tax preference incurred from qualified expense -1,434,975.16
Income tax expense 6,581,748.12
42. Supplementary information to cash flow statement
(1) Other cash received relevant to operating activities:
Unit: RMB
Item Reporting Period Same period of last year
Subsidies and grants 3,454,741.28 2,240,300.00
Cash received from other current account 1,964,606.67 5,874,363.25
Interest income 2,559,453.88 3,247,570.12
Total 7,978,801.83 11,362,233.37
(2) Other cash paid relevant to operating activities:
Unit: RMB
Item Reporting Period Same period of last year
Sales expense paid in Reporting Period 18,835,610.08 14,343,363.07
Administration expense paid in Reporting
23,200,555.04 19,150,193.53
Period
Handling charges for financial expense in
359,561.84 242,529.32
Reporting Period
Others 580,495.00 321,536.23
Total 42,976,221.96 34,057,622.15
43. Supplemental information for Cash Flow Statement
(1) Supplemental information for Cash Flow Statement
Unit: RMB
Supplemental information Reporting Period Same period of last year
1. Reconciliation of net profit to net cash
-- --
flows generated from operating activities
Net profit 35,403,561.67 38,217,442.56
Add: Provision for impairment of assets 10,257,154.02 2,767,537.46
Depreciation of fixed assets, of oil-gas
42,685,033.48 40,473,167.52
assets, of productive biological assets
Amortization of intangible assets 2,408,513.75 1,728,810.62
Losses on disposal of fixed assets, intangible
assets and other long-term assets (gains: -6,113,117.21 -106,674.56
negative)
Financial cost (gains: negative) 2,163,147.25 1,350,365.56
Investment loss (gains: negative) -1,901,135.64 -4,900,603.44
Increase in deferred income tax liabilities
-8,781,450.00 27,870,225.00
(“-” means decrease)
Decrease in inventory (gains: negative) 37,091,003.67 87,405,953.65
Decrease in accounts receivable from
-25,134,137.10 -109,506,857.89
operating activities (gains: negative)
Increase in payables from operating
29,957,339.40 -38,571,625.36
activities (decrease: negative)
Net cash flows generated from operating
118,035,913.29 46,727,741.12
activities
2. Significant investing and financing
activities without involvement of cash -- --
receipts and payments
3. Change of cash and cash equivalent: -- --
Closing balance of cash 594,934,363.36 429,123,417.14
Less: Opening balance of cash 526,716,238.21 464,761,820.50
Net increase in cash and cash equivalents 68,218,125.15 -35,638,403.36
(2) Cash and cash equivalents
Unit: RMB
Item Closing balance Opening balance
I. Cash 594,934,363.36 526,716,238.21
Including: Cash on hand 317,822.87 252,373.65
Bank deposit on demand 594,616,540.49 526,463,864.56
II. Closing balance of cash and cash
594,934,363.36 526,716,238.21
equivalents
44. The assets with the ownership or use right restricted
Unit: RMB
Item Closing book value Restricted reason
Bank acceptance draft deposited in the
Monetary capital 78,861,683.78
margin
Houses and buildings 7,562,514.22 Pledge for bank loan
Land use right 19,763,533.25 Pledge for bank loan
Total 106,187,731.25 --
45. Foreign currency monetary items
Unit: RMB
Closing foreign currency Closing convert to RMB
Item Exchange rate
balance balance
Monetary capital
Including: USD 6,109,769.87 6.6312 40,515,105.96
HKD 1,380,790.93 0.8547 1,180,162.01
Account receivable
Including: USD 5,168,227.43 6.6312 34,271,549.73
VIII. Changes of merge scope
N/A
IX. Equity in other entities
1. Equity in subsidiary
(1) The structure of the enterprise group
Main operating Nature of Holding percentage (%)
Name Registration place Way of gaining
place business Directly Indirectly
Changchai
Wanzhou Diesel Chongqing Chongqing Industry 60.00% Set-up
Engine Co., Ltd.
Changzhou
Changchai
Benniu Diesel Changzhou Changzhou Industry 99.00% 1.00% Set-up
Engine Fittings
Co., Ltd.
Changzhou
Changzhou Changzhou Service 100.00% Set-up
Housheng
Investment Co.,
Ltd.
Changzhou
Changchai
Housheng
Changzhou Changzhou Industry 70.00% 25.00% Set-up
Agricultural
Equipment Co.,
Ltd.
(2) Significant not wholly owned subsidiary
Unit: RMB
The profits and losses Declaring dividends Balance of minority
Shareholding proportion
Name arbitrate to the minority distribute to minority shareholder at closing
of minority shareholder
shareholders shareholder period
Changchai Wanzhou
40.00% 273,763.13 17,598,896.38
Diesel Engine Co., Ltd.
Changzhou Changchai
Housheng Agricultural 5.00% 111,656.18 376,976.40
Equipment Co., Ltd.
(3) The main financial information of significant not wholly owned subsidiary
Unit: RMB
Closing balance Opening balance
Non-curr Non-curr Non-curr Non-curr
Name Current Total Current Total Current Total Current Total
ent ent ent ent
assets assets liabilities liabilities assets assets liabilities liabilities
assets liability assets liability
Changch
ai
Wanzhou 49,129,3 28,148,8 77,278,1 33,280,9 33,280,9 41,770,9 28,631,8 70,402,7 27,089,9 27,089,9
Diesel 66.56 13.62 80.18 39.25 39.25 53.46 30.17 83.63 50.52 50.52
Engine
Co., Ltd.
Changzh
ou
Changch
ai 24,162,3 404,358. 24,566,7 17,027,2 17,027,2 16,619,1 440,565. 17,059,6 11,753,2 11,753,2
Houshen 97.91 36 56.27 28.33 28.33 27.25 96 93.21 88.83 88.83
g
Agricult
ural
Equipme
nt Co.,
Ltd.
Unit: RMB
Reporting Period Same period of last year
Total Total
Name Operation Operating Operation Operating
Net profit comprehensi Net profit comprehensi
revenue cash flow revenue cash flow
ve income ve income
Changchai
Wanzhou
29,922,164.7 46,604,607.8
Diesel 684,407.82 684,407.82 9,295,155.40 1,748,347.34 1,748,347.34 6,600,149.69
2 7
Engine Co.,
Ltd.
Changzhou
Changchai
Housheng 14,101,934.0 -10,382,517.5
2,233,123.56 2,233,123.56 897,928.98 -905,911.21 -905,911.21 -1,075,236.54
Agricultural 4 2
Equipment
Co., Ltd.
2. Equity in joint venture arrangement or associated enterprise
(1) Significant joint venture arrangement or associated enterprise
Holding percentage (%) Accounting
treatment of the
Main operating Nature of investment of
Name Registration place
place business Directly Indirectly joint venture or
associated
enterprise
Changzhou Fuji
Changchai Robin
Changzhou Changzhou Industry 33.00% Equity method
Gasoline Engine
Co., Ltd.
(2) Main financial information of significant associated enterprise
Unit: RMB
Closing balance/ Reporting Period Opening balance /last period
Current assets 78,600,777.00 70,218,388.26
Non-current assets 10,648,780.73 11,465,367.78
Total assets 89,249,557.73 81,683,756.04
Current liabilities 16,823,590.80 11,746,468.25
Non-current liability 7,000,000.00 7,000,000.00
Total liabilities 23,823,590.80 18,746,468.25
Equity attributable to owners of the
65,425,966.93 62,937,287.79
Company
Portion of net assets calculated according
21,590,569.09 20,769,304.76
to proportion of shareholdings
Book value of equity investment to
21,590,569.09 20,769,304.76
associated venture
Operation revenue 81,740,227.95 76,175,353.71
Net profit 2,488,679.14 1,204,946.89
Total comprehensive income 2,488,679.14 1,204,946.89
X. The risk related 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:
(1) Credit risk
Credit risk was one party of the contract failed to fulfill the obligations and causes loss of financial
assets of the other party.
The credit of risk of the Company mainly was related to account receivable, in order to control the
risk, the Company conduct the following methods.
The Company only conducts related transaction with approved and reputable third party, in line
with the policy of the Company, the Company need to conduct credit-check for the clients
adopting way of credit to conduct transaction. In addition, the Company continuously monitors the
balance of account receivable to ensure the Company would not face the significant bad debt risk.
(II) Liquidity Risk
Liquidity risk is referred to the risk of incurring capital shortage when performing settlement
obligation in the way of cash payment or other financial assets. The policies of the Company are
to ensure that there was sufficient cash to pay the due liabilities.
The liquidity risk was centralized controlled by the financial department of the Company. The
financial departments through supervising the balance of the cash and securities can be convert to
cash at any time and the rolling prediction of cash flow in future 12 months to ensure the
Company 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. The
export sales of the Company mainly was market of Southeast Asia region which settled by USD.
Though the Company’s export business receiving part of payment for goods in advance, but the
balance had 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 the fair value
1. Closing fair value of assets and liabilities calculated by fair value
Unit: RMB
Closing fair value
Item Fair value measurement Fair value measurement Fair value measurement
Total
items at level 1 items at level 2 items at level 3
I. Consistent fair value
-- -- -- --
measurement
(I) Available-for-sale
399,237,000.00 399,237,000.00
financial assets
(1) Equity tool investment 399,237,000.00 399,237,000.00
Total assets of consistent
399,237,000.00 399,237,000.00
fair value measurement
II. Inconsistent fair value
-- -- -- --
measurement
2. Market price recognition basis for consistent and inconsistent fair value measurement
items at level 1
Tradable financial assets and available for sale financial assets of the Company were funds and shares with the
closing price as the basis of fair value calculation at period-end.
XII. Related party and related Transaction
1. Information related to parent company of the Company
The actual controller of the Company is Changzhou Government State-owned Assets Supervision and
Administration Commission. As of 30 June 2016, it held 30.43% shares of the Company (state owned shares).
2. Subsidiaries of the Company
The details of subsidiaries of the Company please refer to equity in other entities in note to financial statements.
3. Information on the joint ventures and associated enterprises of the Company
The details of the joint ventures and associated enterprises of the Company please refer to equity in other entities
in note to financial statements.
4. The Company had no other related party.
5. The Company had no other related transaction need to be disclosed.
XIII. Commitments and contingency
1. Significant commitments
As of 30 June 2016, there were no significant commitments to be disclosed.
2. Contingency
Significant contingency at balance sheet date
Litigation and arbitration in the Reporting Period:
Name of the entity Date of Name of the litigation or Amount involved Notes
accepted arbitration institutions (RMB ten
thousand)
Shandong Hongli Group Co., 2001.6.27 Changzhou Intermediate 1,436.00 Under the
Ltd. People's Court bankruptcy and
liquidation
Beijing Beiqi Changsheng 2013.8.12 Beijing Shunyi District 806.36 Enforcing
Automobile Co., Ltd. People's Court conduct
Total 2,242.36
Notes:
(1) 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.
(2) As the litigation of Beijing Beiqi Changsheng Automobile Co., Ltd., the company owned our
Company 8.0636 million; Beijing Shunyi District People's Court accepted the case on Aug. 12
2013. Under the auspices, two sides concluded mediation agreement. Beiqi Changsheng pays
RMB 8,063,600.00 to the Company by stage. Although the Company bombarded many times,
Beijing Beiqi Changsheng Automobile Co., Ltd did not perform its obligation of payment in line
with mediation agreement. As of the end of Reporting Period, the Company had paid the payment
of goods RMB 4.2 million, the Company had applied to the Court for compulsory execution.
XIV. Other significant events
1. Segment information
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
1. Accounts receivable
(1) Accounts receivable classified by category
Unit: RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Category Withdra
Book
Proportio wal Proportio Withdrawal Book value
Amount Amount value Amount Amount
n proportio n proportion
n
Accounts receivable
with insignificant
single amount for 44,562,3 35,502,1 9,060,145 44,942, 35,630,15 9,312,311.3
5.95% 79.67% 9.24% 79.28%
which bad debt 11.89 66.30 .59 468.52 7.18 4
provision separately
accrued
Accounts receivable
withdrawal of bad
702,139, 195,359, 506,779,9 439,906 185,340,5 254,565,85
debt provision of by 93.82% 27.82% 90.41% 42.13%
081.00 088.90 92.10 ,391.76 36.87 4.89
credit risks
characteristics:
Accounts receivable 1,686,71 0.23% 1,686,71 100.00% 0.00 1,686,7 0.35% 1,686,716 100.00%
with insignificant 6.39 6.39 16.39 .39
single amount for
which bad debt
provision separately
accrued
748,388, 232,547, 515,840,1 486,535 222,657,4 263,878,16
Total 100.00% 45.76% 100.00% 45.76%
109.28 971.59 37.69 ,576.67 10.44 6.23
Accounts receivable with single significant amount and withdrawal bad debt provision separately at end of period
√ Applicable □ Not applicable
Unit: RMB
Accounts receivable Closing balance
(classified by units) Account receivable Bad debt provision Withdrawal proportion Withdrawal reason
Estimated difficult to
Customer 1 3,863,600.00 1,931,800.00 50.00%
recover
Customer 2 1,902,326.58 1,902,326.58 100.00% Difficult to recover
Customer 3 6,215,662.64 6,193,248.32 99.64% Difficult to recover
Estimated difficult to
Customer 4 4,115,396.29 2,217,955.89 53.89%
recover
Estimated difficult to
Customer 5 3,279,100.00 3,279,100.00 100.00%
recover
Estimated difficult to
Customer 6 2,592,177.01 2,592,177.01 100.00%
recover
Customer 7 5,359,381.00 5,359,381.00 100.00% Difficult to recover
Customer 8 2,584,805.83 2,584,805.83 100.00% Difficult to recover
Customer 9 1,060,660.44 1,060,660.44 100.00% Difficult to recover
Customer 10 1,494,122.14 1,494,122.14 100.00% Difficult to recover
Estimated difficult to
Customer 11 12,095,079.96 6,886,589.09 56.94%
recover
Total 44,562,311.89 35,502,166.30 -- --
In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable □ Not applicable
Unit: RMB
Closing balance
Aging
Account receivable Bad debt provision Withdrawal proportion
Subentry within 1 year
Subtotal of within 1 year 381,521,022.15 7,630,420.44 2.00%
1 to 2 years 127,647,057.22 6,382,352.84 5.00%
2 to 3 years 2,943,628.31 441,544.25 15.00%
Over 3 years 185,701,003.32 180,904,771.38
3 to 4 years 6,227,544.95 1,868,263.49 30.00%
4 to 5 years 1,092,376.21 655,425.73 60.00%
Over 5 years 178,381,082.16 178,381,082.16 100.00%
Total 702,139,081.00 195,359,088.90
(2) Bad debt provision withdrawal, reversed or recovered in the report period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB13, 142,037.40; the
amount of the reversed or collected part during the Reporting Period was of RMB 3,251,476.25.
(3) Particulars of the actual verification of accounts receivable during the Reporting Period
N/A
(4) Top 5 of the closing balance of the accounts receivable collected according to the arrears
party
The total amount of top five of account receivable of closing balance collected by arrears party was RMB314,
715,720.86, 42.05% of total closing balance of account receivable. 42.05%, the relevant closing balance of bad
debt provision withdrawn was RMB33, 201,024.83
2. Other accounts receivable
(1) Other account receivable classified by category
Unit: RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Category Withdra
Book
Proportio wal Proportio Withdrawal Book value
Amount Amount value Amount Amount
n proportio n proportion
n
Other accounts
receivable with
insignificant single 2,853,18 2,853,18 2,853,1 2,853,188
8.03% 100.00% 8.44% 100.00%
amount for which 8.02 8.02 88.02 .02
bad debt provision
separately accrued
Other accounts 30,710,3 86.47% 24,123,2 78.55% 6,587,098 29,010, 85.79% 24,124,75 83.16% 4,885,363.0
receivable withdrawn 94.21 96.14 .07 122.91 9.90 1
bad debt provision
according to credit
risks characteristics
Other accounts
receivable with
insignificant single 1,952,62 1,952,62 1,952,6 1,952,628
5.50% 100.00% 5.77% 100.00%
amount for which 8.15 8.15 28.15 .15
bad debt provision
separately accrued
35,516,2 28,929,1 6,587,098 33,815, 28,930,57 4,885,363.0
Total 100.00% 81.45% 100.00% 85.55%
10.38 12.31 .07 939.08 6.07 1
Other receivable with single significant amount and withdrawal bad debt provision separately at end of period：
√ Applicable □ Not applicable
Unit: RMB
Closing balance
Other accounts receivable
Other accounts
(unit) Bad debt provision Withdrawal proportion Withdrawal reason
receivable
Changchai Group Import
2,853,188.02 2,853,188.02 100.00% Difficult to recover
& Export Co., Ltd.
Total 2,853,188.02 2,853,188.02 -- --
In the groups, other accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable □ Not applicable
Unit: RMB
Closing balance
Aging
Other accounts receivable Bad debt provision Withdrawal proportion
Subentry within 1 year
Subtotal of within 1 year 4,804,251.37 96,085.03 2.00%
1 to 2 years 212,264.36 10,613.22 5.00%
2 to 3 years 721,514.66 108,227.04 15.00%
Over 3 years 24,972,363.82 23,908,370.86
3 to 4 years 670,650.62 201,195.19 30.00%
4 to 5 years 1,486,343.82 891,806.29 60.00%
Over 5 years 22,815,369.38 22,815,369.38 100.00%
Total 30,710,394.21 24,123,296.14
(2) Bad debt provision withdrawal, reversed or recovered in the report period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB145, 216.33; the
amount of the reversed or collected part during the Reporting Period was of RMB 146,680.09.
(3) Particulars of the actual verification of other accounts receivable during the Reporting
Period
N/A
(4) Other account receivable classified by account nature
Unit: RMB
Nature Closing book balance Opening book balance
Margin &cash pledge 4,200.00 4,200.00
Intercourse funds between entities 18,046,889.10 17,463,134.91
Petty cash &employee borrowing 1,583,214.07 1,560,886.41
Others 15,881,907.21 14,787,717.76
Total 35,516,210.38 33,815,939.08
(5) The top five other account receivable classified by debtor at period-end
Unit: RMB
Closing balance of
Name of the entity Nature Closing balance Aging Proportion%
bad debt provision
Changzhou
Intercourse funds 2,940,000.00 Over 5 years 8.28% 2,940,000.00
Compressor Co., Ltd.
Changchai Group
Import & Export Co., Intercourse funds 2,853,188.02 Over 5 years 8.03% 2,853,188.02
Ltd.
Changzhou New
District Accounting Intercourse funds 1,626,483.25 Over 5 years 4.58% 1,626,483.25
Center
Changzhou
Xingsheng Property Intercourse funds 1,141,056.71 Within 1 year 3.21% 22,821.13
Management Co., Ltd.
OEM Group
Intercourse funds 1,140,722.16 Over 5 years 3.21% 1,140,722.16
Settlement Cente
Total -- 9,701,450.14 -- 27.32% 8,583,214.56
3. Long-term equity investment
Unit: RMB
Closing balance Opening balance
Item Depreciation Depreciation
Book balance Book value Book balance Book value
reserves reserves
Investment to the
184,466,500.00 184,466,500.00 184,466,500.00 184,466,500.00
subsidiary
Investment to
joint ventures and
21,634,751.38 44,182.50 21,590,568.88 20,813,487.26 44,182.50 20,769,304.76
associated
enterprises
Total 206,101,251.38 44,182.50 206,057,068.88 205,279,987.26 44,182.50 205,235,804.76
(1) Investment to the subsidiary
Unit: RMB
Withdrawn
Closing balance
impairment
Investee Opening balance Increase Decrease Closing balance of impairment
provision in the
provision
Reporting Period
Changchai
Wanzhou Diesel 51,000,000.00 51,000,000.00
Engine Co., Ltd.
Changzhou
Changchai Benniu
96,466,500.00 96,466,500.00
Diesel Engine
Fittings Co., Ltd.
Changzhou
Housheng
30,000,000.00 30,000,000.00
Investment Co.,
Ltd.
Changzhou
Changchai
Housheng
7,000,000.00 7,000,000.00
Agricultural
Equipment Co.,
Ltd.
Total 184,466,500.00 184,466,500.00
(2) Investment to joint ventures and associated enterprises
Unit: RMB
Increase/decrease in Reporting Period
Investme Closing
Adjustme
nt profit Withdraw balance
Additiona nt of Declarati
Opening Negative and loss Other n Closing of
Investee l other on of cash
balance investmen recognize equity impairme Others balance impairme
investmen comprehe dividends
t d under changes nt nt
t nsive or profits
the equity provision provision
income
method
I. Joint ventures
II. Associated enterprises
Changzho
u Fuji
Changcha
20,769,30 821,264.1 21,590,56
i Robin
4.76 2 8.88
Gasoline
Engine
Co., Ltd.
Beijing
Tsinghua
Xingye
Industrial
Investme 44,182.50 44,182.50 44,182.50
nt
Managem
ent Co.,
Ltd.
20,813,48 821,264.1 21,634,75
Subtotal 44,182.50
7.26 2 1.38
20,813,48 21,634,75
Total 44,182.50
7.26 1.38
4. Revenue and Cost of Sales
Unit: RMB
Reporting Period Same period of last year
Item
Sales revenue Cost of sales Sales revenue Cost of sales
Main operations 1,153,641,301.29 992,786,487.60 1,361,846,639.00 1,186,065,510.97
Other operations 10,055,027.37 7,398,827.46 9,385,125.35 6,353,215.35
Total 1,163,696,328.66 1,000,185,315.06 1,371,231,764.35 1,192,418,726.32
5. Investment income
Unit: RMB
Item Reporting Period Same period of last year
Long-term equity investment income
821,264.12 397,632.47
accounted by equity method
Investment income received from holding of
3,112,240.00
available-for-sale financial assets
Investment income from disposal of bank
364,000.00
financial products
Total 1,185,264.12 3,509,872.47
XVI. Supplementary materials
1. Items and amounts of extraordinary gains and losses
√ Applicable □ Not applicable
Unit: RMB
Item Amount Explanation
Gains/losses on the disposal of non-current
6,113,117.21
assets
Tax rebates, reductions or exemptions due to
approval beyond authority or the lack of 3,787,728.09
official approval documents
Gain/loss from change of fair value of
transactional assets and liabilities, and
investment gains from disposal of
transactional financial assets and liabilities 1,205,730.87
and available-for-sale financial assets, other
than valid hedging related to the Company’s
common businesses
Other non-operating income and expenses
-3,412,491.97
other than the above
Less: Income tax effects 986,443.45
Minority interests effects 200,000.00
Total 6,507,640.75 --
2. Return on equity and earnings per share
EPS (Yuan/share）
Profit as of Reporting Period Weighted average ROE (%)
EPS-basic EPS-diluted
Net profit attributable to common
1.76% 0.06 0.06
shareholders of the Company
Net profit attributable to common
shareholders of the Company after
1.43% 0.05 0.05
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
Changchai Company, Limited
18 August 2016
