CHANGCHAI COMPANY, LIMITED
SEMI-Financial Report 2019
I. Auditor’s Report
Whether the interim report has been audited?
□Yes √ No
The interim report of the Company has not been audited.
II. Financial Statements
The unit of the financial statements attached: RMB
1. Consolidated Balance Sheet
Prepared by Changchai Company, Limited
Unit: RMB
Item 30 June 2019 31 December 2018
Current assets:
Monetary capital 628,482,778.12 800,960,036.69
Settlement reserve
Interbank loans granted
Trading financial assets
Financial assets at fair value through profit or loss
Derivative financial assets
Notes receivable 445,812,473.66 495,370,782.47
Accounts receivable 743,272,680.28 378,859,159.11
Financing backed by accounts receivable
Prepayments 9,479,067.06 11,352,297.10
Premiums receivable
Reinsurance receivables
Receivable reinsurance contract reserve
Other receivables 10,675,479.55 9,244,584.42
Including: Interest receivable 0.00 0.00
Dividends receivable 0.00 0.00
Financial assets purchased under resale agreements
1
Inventories 480,107,549.12 557,953,891.70
Contract assets
Assets classified as held for sale
Current portion of non-current assets
Other current assets 16,368,809.68 34,357,608.97
Total current assets 2,334,198,837.47 2,288,098,360.46
Non-current assets:
Loans and advances to customers
Investments in debt obligations
Available-for-sale financial assets 498,851,369.49
Investments in other debt obligations
Held-to-maturity investments
Long-term receivables
Long-term equity investments 0.00
Investments in other equity instruments 601,731,811.25
Other non-current financial assets
Investment property 49,551,837.23 50,656,007.63
Fixed assets 473,064,733.73 511,250,371.37
Construction in progress 80,277,379.05 89,090,384.71
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets 100,425,529.49 103,092,879.38
R&D expense
Goodwill
Long-term prepaid expense
Deferred income tax assets 979,822.71 979,822.71
Other non-current assets 0.00
Total non-current assets 1,306,031,113.46 1,253,920,835.29
Total assets 3,640,229,950.93 3,542,019,195.75
Current liabilities:
Short-term borrowings 22,000,000.00 27,000,000.00
Borrowings from central bank
Interbank loans obtained
2
Trading financial liabilities
Financial liabilities at fair value through profit or loss
Derivative financial liabilities
Notes payable 498,805,800.00 438,375,400.00
Accounts payable 534,631,506.05 591,754,875.77
Advances from customers 58,809,277.68 34,500,232.97
Financial assets sold under repurchase agreements
Customer deposits and interbank deposits
Payables for acting trading of securities
Payables for underwriting of securities
Payroll payable 31,235,024.32 50,500,592.99
Taxes payable 2,964,557.12 7,066,085.89
Other payables 192,072,806.77 199,412,250.90
Including: Interest payable 0.00
Dividends payable 3,891,433.83 3,891,433.83
Handling charges and commissions payable
Reinsurance payables
Contract liabilities
Liabilities directly associated with assets classified as held
for sale
Current portion of non-current liabilities 18,500,000.00 18,500,000.00
Other current liabilities 2,664,523.79 2,082,985.18
Total current liabilities 1,361,683,495.73 1,369,192,423.70
Non-current liabilities:
Insurance contract reserve
Long-term borrowings 2,000,000.00
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term payroll payable
Provisions
Deferred income 59,928,484.84 59,928,484.84
3
Deferred income tax liabilities 63,288,082.24 47,971,780.36
Other non-current liabilities
Total non-current liabilities 123,216,567.08 109,900,265.20
Total liabilities 1,484,900,062.81 1,479,092,688.90
Owners’ equity:
Share capital 561,374,326.00 561,374,326.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 164,328,665.43 164,328,665.43
Less: Treasury stock
Other comprehensive income 351,736,375.00 264,405,675.00
Specific reserve 15,182,958.83 15,182,958.83
Surplus reserves 320,133,050.15 320,133,050.15
General reserve
Retained earnings 722,907,018.25 717,883,351.33
Total equity attributable to owners of the Company as the
2,135,662,393.66 2,043,308,026.74
parent
Non-controlling interests 19,667,494.46 19,618,480.11
Total owners’ equity 2,155,329,888.12 2,062,926,506.85
Total liabilities and owners’ equity 3,640,229,950.93 3,542,019,195.75
Legal representative: Shi Xinkun General Manager: Zhang Xin
Head of the accounting department: Jiang He
2. Balance Sheet of the Company as the Parent
Unit: RMB
Item 30 June 2019 31 December 2018
Current assets:
Monetary capital 581,281,428.17 759,404,219.72
Trading financial assets
Financial assets at fair value through profit or loss
Derivative financial assets
Notes receivable 437,789,558.88 490,519,795.91
4
Accounts receivable 665,339,555.79 300,357,283.81
Financings backed by accounts receivable
Prepayments 5,409,681.35 4,768,038.11
Other receivables 23,668,652.76 21,681,331.85
Including: Interest receivable
Dividends receivable
Inventories 346,525,723.89 437,423,195.46
Contract assets
Assets classified as held for sale
Current portion of non-current assets
Other current assets 2,436,589.67 23,099,858.67
Total current assets 2,062,451,190.51 2,037,253,723.53
Non-current assets:
Investments in debt obligations
Available-for-sale financial assets 470,940,000.00
Investments in other debt obligations
Held-to-maturity investments
Long-term receivables
Long-term equity investments 251,752,730.03 241,752,730.03
Investments in other equity instruments 573,682,000.00
Other non-current financial assets
Investment property 49,551,837.23 50,656,007.63
Fixed assets 383,536,146.88 413,186,680.19
Construction in progress 78,194,210.25 87,007,215.91
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets 71,081,380.60 72,184,608.63
R&D expense
Goodwill
Long-term prepaid expense
Deferred income tax assets 930,641.19 930,641.19
Other non-current assets
Total non-current assets 1,408,728,946.18 1,336,657,883.58
5
Total assets 3,471,180,136.69 3,373,911,607.11
Current liabilities:
Short-term borrowings 5,000,000.00 10,000,000.00
Trading financial liabilities
Financial liabilities at fair value through profit or loss
Derivative financial liabilities
Notes payable 484,035,800.00 425,995,400.00
Accounts payable 500,784,658.07 561,555,397.44
Advances from customers 57,107,885.83 32,072,387.55
Contract liabilities
Payroll payable 24,268,608.35 43,597,759.22
Taxes payable 988,338.92 2,443,767.89
Other payables 178,675,594.58 185,022,961.56
Including: Interest payable
Dividends payable 3,243,179.97 3,243,179.97
Liabilities directly associated with assets classified as held
for sale
Current portion of non-current liabilities 18,500,000.00 18,500,000.00
Other current liabilities
Total current liabilities 1,269,360,885.75 1,279,187,673.66
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term payroll payable
Provisions
Deferred income 59,928,484.84 59,928,484.84
Deferred income tax liabilities 62,071,125.00 46,659,825.00
Other non-current liabilities
Total non-current liabilities 121,999,609.84 106,588,309.84
Total liabilities 1,391,360,495.59 1,385,775,983.50
6
Owners’ equity:
Share capital 561,374,326.00 561,374,326.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 183,071,147.70 183,071,147.70
Less: Treasury stock
Other comprehensive income 351,736,375.00 264,405,675.00
Specific reserve 15,182,958.83 15,182,958.83
Surplus reserves 320,133,050.15 320,133,050.15
Retained earnings 648,321,783.42 643,968,465.93
Total owners’ equity 2,079,819,641.10 1,988,135,623.61
Total liabilities and owners’ equity 3,471,180,136.69 3,373,911,607.11
Legal representative: Shi Xinkun General Manager: Zhang Xin
Head of the accounting department: Jiang He
3. Consolidated Income Statement
Unit: RMB
Item H1 2019 H1 2018
1. Revenue 1,115,829,845.59 1,186,760,892.26
Including: Operating revenue 1,115,829,845.59 1,186,760,892.26
Interest income
Premium income
Handling charge and commission income
2. Costs and expenses 1,096,080,768.77 1,164,582,065.19
Including: Cost of sales 970,438,847.36 1,034,354,908.99
Interest expense
Handling charge and commission expense
Surrenders
Net claims paid
Net amount provided as insurance contract
reserve
Expenditure on policy dividends
7
Reinsurance premium expense
Taxes and surcharges 4,997,355.73 5,739,473.26
Selling expense 58,258,398.98 52,228,075.86
Administrative expense 34,102,694.86 28,367,615.31
R&D expense 30,064,283.46 34,066,872.15
Finance costs -1,780,811.62 -132,337.12
Including: Interest expense 1,567,625.50 1,805,097.10
Interest income 1,642,256.03 891,663.17
Add: Other income 129,300.00 129,600.00
Return on investment (“-” for loss) 179,073.85 376,091.68
Including: Share of profit or loss of joint ventures and
associates
Income from the derecognition of financial assets at
amortized cost (“-” for loss)
Foreign exchange gain (“-” for loss)
Net gain on exposure hedges (“-” for loss)
Gain on changes in fair value (“-” for loss)
Credit impairment loss (“-” for loss) -5,260,420.00
Asset impairment loss (“-” for loss) -26,096.43 -9,957,456.74
Asset disposal income (“-” for loss) 988,535.95
3. Operating profit (“-” for loss) 15,759,470.19 22,684,518.75
Add: Non-operating income 566,931.38 2,103,083.03
Less: Non-operating expense 217,837.98 1,527,166.21
4. Profit before tax (“-” for loss) 16,108,563.59 23,260,435.57
Less: Income tax expense -2,998,475.83 4,352,526.65
5. Net profit (“-” for net loss) 19,107,039.42 18,907,908.92
5.1 By operating continuity
5.1.1 Net profit from continuing operations (“-” for net
19,107,039.42 18,907,908.92
loss)
5.1.2 Net profit from discontinued operations (“-” for net
loss)
5.2 By ownership
5.2.1 Net profit attributable to owners of the Company as
19,058,025.07 18,638,557.66
the parent
5.2.1 Net profit attributable to non-controlling interests 49,014.35 269,351.26
8
6. Other comprehensive income, net of tax 87,330,700.00 -126,198,225.00
Attributable to owners of the Company as the parent 87,330,700.00 -126,198,225.00
6.1 Items that will not be reclassified to profit or loss 87,330,700.00
6.1.1 Changes caused by remeasurements on defined
benefit pension schemes
6.1.2 Other comprehensive income that will not be
reclassified to profit or loss under the equity method
6.1.3 Changes in the fair value of investments in other
87,330,700.00
equity instruments
6.1.4 Changes in the fair value of the company’s credit
risks
6.1.5 Other
6.2 Items that will be reclassified to profit or loss -126,198,225.00
6.2.1 Other comprehensive income that will be
reclassified to profit or loss under the equity method
6.2.2 Changes in the fair value of investments in other
debt obligations
6.2.3 Gain/Loss on changes in the fair value of
-126,198,225.00
available-for-sale financial assets
6.2.4 Other comprehensive income arising from the
reclassification of financial assets
6.2.5 Gain/Loss arising from the reclassification of
held-to-maturity investments to available-for-sale financial
assets
6.2.6 Allowance for credit impairments in investments
in other debt obligations
6.2.7 Reserve for cash flow hedges
6.2.8 Differences arising from the translation of foreign
currency-denominated financial statements
6.2.9 Other
Attributable to non-controlling interests 0.00
7. Total comprehensive income 106,437,739.42 -107,290,316.08
Attributable to owners of the Company as the parent 106,388,725.07 -107,559,667.34
Attributable to non-controlling interests 49,014.35 269,351.26
8. Earnings per share
8.1 Basic earnings per share 0.0339 0.0332
8.2 Diluted earnings per share 0.0339 0.0332
9
Where business combinations under common control occurred in the Current Period, the net profit achieved by
the acquirees before the combinations was RMB , with the amount for the same period of last year being
RMB .
Legal representative: Shi Xinkun General Manager: Zhang Xin
Head of the accounting department: Jiang He
4. Income Statement of the Company as the Parent
Unit: RMB
Item H1 2019 H1 2018
1. Operating revenue 1,033,329,175.58 1,121,335,123.15
Less: Cost of sales 907,286,315.49 991,077,844.49
Taxes and surcharges 3,963,893.19 4,388,116.03
Selling expense 53,346,830.95 46,378,981.86
Administrative expense 25,476,365.88 23,307,342.62
R&D expense 27,891,685.42 30,051,019.61
Finance costs -3,010,192.35 -1,920,963.99
Including: Interest expense 1,314,360.50 1,528,387.25
Interest income 1,165,423.09 684,552.38
Add: Other income 129,300.00 129,600.00
Return on investment (“-” for loss) 0.00 21,000.00
Including: Share of profit or loss of joint ventures and
associates
Income from the derecognition of financial assets at
amortized cost (“-” for loss)
Net gain on exposure hedges (“-” for loss)
Gain on changes in fair value (“-” for loss)
Credit impairment loss (“-” for loss) -5,260,420.00
Asset impairment loss (“-” for loss) -26,096.43 -9,924,969.03
Asset disposal income (“-” for loss) 988,535.95
2. Operating profit (“-” for loss) 14,205,596.52 18,278,413.50
Add: Non-operating income 230,353.36 1,760,229.91
Less: Non-operating expense 166,954.64 1,525,338.21
3. Profit before tax (“-” for loss) 14,268,995.24 18,513,305.20
Less: Income tax expense -4,118,680.40 3,037,417.85
10
4. Net profit (“-” for net loss) 18,387,675.64 15,475,887.35
4.1 Net profit from continuing operations (“-” for net loss) 18,387,675.64 15,475,887.35
4.2 Net profit from discontinued operations (“-” for net loss)
5. Other comprehensive income, net of tax 87,330,700.00 -126,198,225.00
5.1 Items that will not be reclassified to profit or loss 87,330,700.00
5.1.1 Changes caused by remeasurements on defined
benefit pension schemes
5.1.2 Other comprehensive income that will not be
reclassified to profit or loss under the equity method
5.1.3 Changes in the fair value of investments in other
87,330,700.00
equity instruments
5.1.4 Changes in the fair value of the company’s credit
risks
5.1.5 Other
5.2 Items that will be reclassified to profit or loss -126,198,225.00
5.2.1 Other comprehensive income that will be
reclassified to profit or loss under the equity method
5.2.2 Changes in the fair value of investments in other
debt obligations
5.2.3 Gain/Loss on changes in the fair value of
-126,198,225.00
available-for-sale financial assets
5.2.4 Other comprehensive income arising from the
reclassification of financial assets
5.2.5 Gain/Loss arising from the reclassification of
held-to-maturity investments to available-for-sale financial
assets
5.2.6 Allowance for credit impairments in investments in
other debt obligations
5.2.7 Reserve for cash flow hedges
5.2.8 Differences arising from the translation of foreign
currency-denominated financial statements
5.2.9 Other
6. Total comprehensive income 105,718,375.64 -110,722,337.65
7. Earnings per share
7.1 Basic earnings per share
7.2 Diluted earnings per share
Note: 1. Pay attention to the influence of the R&D expense of the Company as the parent on the administrative
11
expense
Legal representative: Shi Xinkun General Manager: Zhang Xin
Head of the accounting department: Jiang He
5. Consolidated Cash Flow Statement
Unit: RMB
Item H1 2019 H1 2018
1. Cash flows from operating activities:
Proceeds from sale of commodities and rendering of
922,256,275.09 1,052,665,606.90
services
Net increase in customer deposits and interbank deposits
Net increase in borrowings from central bank
Net increase in loans from other financial institutions
Premiums received on original insurance contracts
Net proceeds from reinsurance
Net increase in deposits and investments of policy holders
Interest, handling charges and commissions received
Net increase in interbank loans obtained
Net increase in proceeds from repurchase transactions
Net proceeds for acting trading of securities
Tax rebates 21,598,658.84 20,142,964.09
Cash generated from other operating activities 8,300,459.20 6,122,580.97
Subtotal of cash generated from operating activities 952,155,393.13 1,078,931,151.96
Payments for commodities and services 898,343,434.08 861,702,539.28
Net increase in loans and advances to customers
Net increase in deposits in central bank and in interbank
loans granted
Payments for claims on original insurance contracts
Net increase in financial assets held for trading
Net increase in interbank loans granted
Interest, handling charges and commissions paid
Policy dividends paid
Cash paid to and for employees 151,721,498.93 171,524,903.87
Taxes paid 17,834,800.18 14,854,230.49
12
Cash used in other operating activities 38,483,364.71 36,458,331.47
Subtotal of cash used in operating activities 1,106,383,097.90 1,084,540,005.11
Net cash generated from/used in operating activities -154,227,704.77 -5,608,853.15
2. Cash flows from investing activities:
Proceeds from disinvestment 7,000,000.00 13,534,013.89
Return on investment 179,073.85 376,091.68
Net proceeds from the disposal of fixed assets, intangible
988,535.95 125,474.80
assets and other long-lived assets
Net proceeds from the disposal of subsidiaries and other
0.00
business units
Cash generated from other investing activities
Subtotal of cash generated from investing activities 8,167,609.80 14,035,580.37
Payments for the acquisition of fixed assets, intangible
11,782,972.46 18,849,002.37
assets and other long-lived assets
Payments for investments 12,638,441.76
Net increase in pledged loans granted
Net payments for the acquisition of subsidiaries and other
business units
Cash used in other investing activities 24,265,444.20
Subtotal of cash used in investing activities 24,421,414.22 43,114,446.57
Net cash generated from/used in investing activities -16,253,804.42 -29,078,866.20
3. Cash flows from financing activities:
Capital contributions received
Including: Capital contributions by non-controlling
interests to subsidiaries
Borrowings obtained 12,000,000.00 17,000,000.00
Net proceeds from issuance of bonds
Cash generated from other financing activities
Subtotal of cash generated from financing activities 12,000,000.00 17,000,000.00
Repayments of borrowings 19,000,000.00 7,000,000.00
Payments for interest and dividends 15,977,861.20 18,263,008.91
Including: Dividends paid by subsidiaries to
non-controlling interests
Cash used in other financing activities
Subtotal of cash used in financing activities 34,977,861.20 25,263,008.91
Net cash generated from/used in financing activities -22,977,861.20 -8,263,008.91
13
4. Effect of foreign exchange rate changes on cash and cash
equivalents
5. Net increase in cash and cash equivalents -193,459,370.39 -42,950,728.26
Add: Cash and cash equivalents, beginning of the period 687,079,639.59 325,263,654.43
6. Cash and cash equivalents, end of the period 493,620,269.20 282,312,926.17
Legal representative: Shi Xinkun General Manager: Zhang Xin
Head of the accounting department: Jiang He
6. Cash Flow Statement of the Company as the Parent
Unit: RMB
Item H1 2019 H1 2018
1. Cash flows from operating activities:
Proceeds from sale of commodities and rendering of
825,164,929.97 978,362,086.38
services
Tax rebates 16,338,954.71 14,838,384.91
Cash generated from other operating activities 5,103,265.56 5,251,560.76
Subtotal of cash generated from operating activities 846,607,150.24 998,452,032.05
Payments for commodities and services 834,695,159.25 801,461,497.18
Cash paid to and for employees 127,977,021.88 143,561,299.80
Taxes paid 9,992,032.82 10,023,890.64
Cash used in other operating activities 30,159,658.65 32,113,861.57
Subtotal of cash used in operating activities 1,002,823,872.60 987,160,549.19
Net cash generated from/used in operating activities -156,216,722.36 11,291,482.86
2. Cash flows from investing activities:
Proceeds from disinvestment
Return on investment 21,000.00
Net proceeds from the disposal of fixed assets, intangible
988,535.95 102,774.58
assets and other long-lived assets
Net proceeds from the disposal of subsidiaries and other
business units
Cash generated from other investing activities
Subtotal of cash generated from investing activities 988,535.95 123,774.58
Payments for the acquisition of fixed assets, intangible
9,220,626.97 17,662,045.01
assets and other long-lived assets
14
Payments for investments 10,000,000.00 0.00
Net payments for the acquisition of subsidiaries and other
business units
Cash used in other investing activities
Subtotal of cash used in investing activities 19,220,626.97 17,662,045.01
Net cash generated from/used in investing activities -18,232,091.02 -17,538,270.43
3. Cash flows from financing activities:
Capital contributions received
Borrowings obtained 5,000,000.00 10,000,000.00
Net proceeds from the issuance of bonds
Cash generated from other financing activities
Subtotal of cash generated from financing activities 5,000,000.00 10,000,000.00
Repayments of borrowings 10,000,000.00
Payments for interest and dividends 15,404,432.84 17,733,682.52
Cash used in other financing activities 0.00
Subtotal of cash used in financing activities 25,404,432.84 17,733,682.52
Net cash generated from/used in financing activities -20,404,432.84 -7,733,682.52
4. Effect of foreign exchange rate changes on cash and cash
equivalents
5. Net increase in cash and cash equivalents -194,853,246.22 -13,980,470.09
Add: Cash and cash equivalents, beginning of the period 651,854,206.79 272,064,464.71
6. Cash and cash equivalents, end of the period 457,000,960.57 258,083,994.62
Legal representative: Shi Xinkun General Manager: Zhang Xin
Head of the accounting department: Jiang He
15
7. Consolidated Statements of Changes in Owners’ Equity
H1 2019
Unit: RMB
H1 2019
Equity attributable to owners of the Company as the parent
Non-co
Other equity
Other Retaine ntrollin Total
Item Share instruments Capital Less: Specifi Surplus Genera
compre d Subtota g owners
capita Prefe Perp reserve Treasur c reserve l Other
rred etual Othe hensive earning l interest ’ equity
l s y stock reserve s reserve
share bond r income s s
s s
1. Balances as at 561,3 164,32 264,40 320,13 717,88 2,043,3 2,062,9
15,182, 19,618,
the end of the prior 74,32 8,665.4 5,675.0 3,050.1 3,351.3 08,026. 26,506.
958.83 480.11
year 6.00 3 0 5 3 74 85
Add: Adjustments
for changed
accounting policies
Adjustments for
corrections of
previous errors
Adjustments for
business
combinations
under common
control
Other
adjustments
16
2. Balances as at 561,3 164,32 264,40 320,13 717,88 2,043,3 2,062,9
15,182, 19,618,
the beginning of 74,32 8,665.4 5,675.0 3,050.1 3,351.3 08,026. 26,506.
958.83 480.11
the year 6.00 3 0 5 3 74 85
3. Increase/
decrease in the 87,330, 5,023,6 92,354, 49,014. 92,403,
period (“-” for 700.00 66.92 366.92 35 381.27
decrease)
3.1 Total 106,38 106,43
87,330, 19,058, 49,014.
comprehensive 8,725.0 7,739.4
700.00 025.07 35
income 7 2
3.2 Capital
increased and
reduced by owners
3.2.1
Ordinary shares
increased by
shareholders
3.2.2 Capital
increased by
holders of other
equity instruments
3.2.3
Share-based
payments included
in owners’ equity
3.2.4 Other
3.3 Profit -14,034 -14,034 -14,03
17
distribution ,358.15 ,358.15 4,358.1
5
3.3.1
Appropriation to
surplus reserves
3.3.2
Appropriation to
general reserve
3.3.3
-14,03
Appropriation to -14,034 -14,034
4,358.1
owners (or ,358.15 ,358.15
5
shareholders)
3.3.4 Other
3.4 Transfers
within owners’
equity
3.4.1 Increase
in capital (or share
capital) from
capital reserves
3.4.2 Increase
in capital (or share
capital) from
surplus reserves
3.4.3 Loss
offset by surplus
reserves
18
3.4.4 Changes
in defined benefit
pension schemes
transferred to
retained earnings
3.4.5 Other
comprehensive
income transferred
to retained
earnings
3.4.6 Other
3.5 Specific
reserve
3.5.1 Increase
in the period
3.5.2 Used in
the period
3.6 Other
4. Balances as at 561,3 164,32 351,73 320,13 722,90 2,135,6 2,155,3
15,182, 19,667,
the end of the 74,32 8,665.4 6,375.0 3,050.1 7,018.2 62,393. 29,888.
958.83 494.46
period 6.00 3 0 5 5 66 12
H1 2018
Unit: RMB
H1 2018
Equity attributable to owners of the Company as the parent Non-con Total
Item
Share Other equity Capital Less: Other Specifi Surplu Genera Retaine Subtot trolling owners’
Other
capita instruments reserve Treasur compre c s l d al interests equity
19
l Prefe Perp s y stock hensiv reserve reserve reserve earning
rred etual e s s
share bond Other
s s income
1. Balances as at 561,3 164,32 515,06 313,70 679,13 2,246,
13,289, 19,473,1 2,266,37
the end of the 74,32 8,665.4 8,550.0 5,210.1 1,047.0 896,85
059.21 56.31 0,014.17
prior year 6.00 3 0 6 6 7.86
Add: Adjustments
for changed
0.00
accounting
policies
Adjustments for
corrections of 0.00
previous errors
Adjustments for
business
combinations 0.00
under common
control
Other
0.00
adjustments
2. Balances as at 561,3 164,32 515,06 313,70 679,13 2,246,
13,289, 19,473,1 2,266,37
the beginning of 74,32 8,665.4 8,550.0 5,210.1 1,047.0 896,85
059.21 56.31 0,014.17
the year 6.00 3 0 6 6 7.86
3. Increase/
-126,1 -124,4
decrease in the 1,797,3 269,351. -124,13
98,225. 00,897
period (“-” for 27.88 26 1,545.86
00 .12
decrease)
20
3.1 Total -126,1 -107,5
18,638, 269,351. -107,29
comprehensive 98,225. 59,667
557.66 26 0,316.08
income 00 .34
3.2 Capital
increased and
0.00
reduced by
owners
3.2.1
Ordinary shares
0.00
increased by
shareholders
3.2.2 Capital
increased by
0.00
holders of other
equity instruments
3.2.3
Share-based
payments 0.00
included in
owners’ equity
3.2.4 Other 0.00
-16,84
3.3 Profit -16,841 -16,841,
1,229.
distribution ,229.78 229.78
78
3.3.1
Appropriation to 0.00
surplus reserves
21
3.3.2
Appropriation to 0.00
general reserve
3.3.3
-16,84
Appropriation to -16,841 -16,841,
1,229.
owners (or ,229.78 229.78
78
shareholders)
3.3.4 Other 0.00
3.4 Transfers
within owners’ 0.00
equity
3.4.1
Increase in capital
(or share capital) 0.00
from capital
reserves
3.4.2
Increase in capital
(or share capital) 0.00
from surplus
reserves
3.4.3 Loss
offset by surplus 0.00
reserves
3.4.4
Changes in
0.00
defined benefit
pension schemes
22
transferred to
retained earnings
3.4.5 Other
comprehensive
income 0.00
transferred to
retained earnings
3.4.6 Other 0.00
3.5 Specific
0.00
reserve
3.5.1
Increase in the 0.00
period
3.5.2 Used in
0.00
the period
3.6 Other 0.00
4. Balances as at 561,3 164,32 388,87 313,70 680,92 2,122,
13,289, 19,742,5 2,142,23
the end of the 74,32 8,665.4 0,325.0 5,210.1 8,374.9 495,96
059.21 07.57 8,468.31
period 6.00 3 0 6 4 0.74
Legal representative: Shi Xinkun General Manager: Zhang Xin Head of the accounting department: Jiang He
8. Statements of Changes in Owners’ Equity of the Company as the Parent
H1 2019
Unit: RMB
Item H1 2019
23
Other equity instruments Other Retaine
Less: Total
Share Preferre Perpetu Capital comprehe Specific Surplus d
Treasury Other owners’
capital d al Other reserves nsive reserve reserves earning
stock equity
shares bonds income s
1. Balances as at the 561,374 183,071,1 264,405,6 15,182,95 320,133,0 643,968 1,988,135,6
end of the prior year ,326.00 47.70 75.00 8.83 50.15 ,465.93 23.61
Add: Adjustments
for changed
accounting policies
Adjustments for
corrections of
previous errors
Other
adjustments
2. Balances as at the
561,374 183,071,1 264,405,6 15,182,95 320,133,0 643,968 1,988,135,6
beginning of the
,326.00 47.70 75.00 8.83 50.15 ,465.93 23.61
year
3. Increase/
decrease in the 87,330,70 4,353,3 91,684,017.
period (“-” for 0.00 17.49 49
decrease)
3.1 Total
87,330,70 18,387, 105,718,375
comprehensive
0.00 675.64 .64
income
3.2 Capital
increased and
reduced by owners
24
3.2.1 Ordinary
shares increased by
shareholders
3.2.2 Capital
increased by
holders of other
equity instruments
3.2.3
Share-based
payments included
in owners’ equity
3.2.4 Other
3.3 Profit -14,034 -14,034,358
distribution ,358.15 .15
3.3.1
Appropriation to
surplus reserves
3.3.2
Appropriation to -14,034 -14,034,358
owners (or ,358.15 .15
shareholders)
3.3.3 Other
3.4 Transfers
within owners’
equity
3.4.1 Increase
in capital (or share
25
capital) from capital
reserves
3.4.2 Increase
in capital (or share
capital) from
surplus reserves
3.4.3 Loss
offset by surplus
reserves
3.4.4 Changes
in defined benefit
pension schemes
transferred to
retained earnings
3.4.5 Other
comprehensive
income transferred
to retained earnings
3.4.6 Other
3.5 Specific
reserve
3.5.1 Increase
in the period
3.5.2 Used in
the period
3.6 Other
4. Balances as at the 561,374 183,071,1 351,736,3 15,182,95 320,133,0 648,321 2,079,819,6
26
end of the period ,326.00 47.70 75.00 8.83 50.15 ,783.42 41.10
H1 2018
Unit: RMB
H1 2018
Other equity instruments Other
Less:
Item Share Preferr Perpet Capital compreh Specific Surplus Retained Total owners’
Treasury Other
capital ed ual Other reserves ensive reserve reserves earnings equity
stock
shares bonds income
1. Balances as at 561,37
183,071, 515,068, 13,289,05 313,705, 602,959,13 2,189,467,42
the end of the 4,326.0 0.00
147.70 550.00 9.21 210.16 5.85 8.92
prior year 0
Add: Adjustments
for changed
0.00
accounting
policies
Adjustments for
corrections of 0.00
previous errors
Other
0.00
adjustments
2. Balances as at 561,37
183,071, 515,068, 13,289,05 313,705, 602,959,13 2,189,467,42
the beginning of 4,326.0 0.00
147.70 550.00 9.21 210.16 5.85 8.92
the year 0
3. Increase/
decrease in the -126,198 -1,365,342. -127,563,567
0.00
period (“-” for ,225.00 43 .43
decrease)
27
3.1 Total
-126,198 15,475,887 -110,722,337
comprehensive 0.00
,225.00 .35 .65
income
3.2 Capital
increased and 0.00
reduced by owners
3.2.1
Ordinary shares
0.00
increased by
shareholders
3.2.2 Capital
increased by
0.00
holders of other
equity instruments
3.2.3
Share-based
0.00
payments included
in owners’ equity
3.2.4 Other 0.00
3.3 Profit -16,841,22 -16,841,229.
0.00
distribution 9.78 78
3.3.1
Appropriation to 0.00
surplus reserves
3.3.2
-16,841,22 -16,841,229.
Appropriation to 0.00
9.78 78
owners (or
28
shareholders)
3.3.3 Other 0.00
3.4 Transfers
within owners’ 0.00
equity
3.4.1 Increase
in capital (or share
0.00
capital) from
capital reserves
3.4.2 Increase
in capital (or share
0.00
capital) from
surplus reserves
3.4.3 Loss
offset by surplus 0.00
reserves
3.4.4
Changes in
defined benefit
0.00
pension schemes
transferred to
retained earnings
3.4.5 Other
comprehensive
income transferred 0.00
to retained
earnings
29
3.4.6 Other 0.00
3.5 Specific
0.00
reserve
3.5.1 Increase
0.00
in the period
3.5.2 Used in
0.00
the period
3.6 Other 0.00
4. Balances as at 561,37
183,071, 388,870, 13,289,05 313,705, 601,593,79 2,061,903,86
the end of the 4,326.0 0.00
147.70 325.00 9.21 210.16 3.42 1.49
period 0
Legal representative: Shi Xinkun General Manager: Zhang Xin Head of the accounting department: Jiang He
30
Changchai Company, Limited Interim Report 2019
III. Company Profile
Changchai Company, Limited (hereinafter referred to as “the Company”) was founded on 5 May 1994, which is a
company limited by shares promoted solely by Changzhou Diesel Engine Plant through the approval by the State
Commission for Restructuring the Economic Systems with document TGS [1993] No. 9 on 15 January 1993 by
way of public offering of shares. With the approved of the People’s Government of Jiangsu Province SZF [1993]
No. 67, as well as reexamined and approved by China Securities Regulatory Commission (“CSRC”) through
document ZJFSZ (1994) No. 9, the Company initially issued A shares to the public from 15 March 1994 to 30
March 1994. As approved by the Shenzhen Stock Exchange through document SZSFZ (1994) No. 15, such
tradable shares of the public got listing on 1 July 1994 at Shenzhen Stock Exchange with “Su Changchai A” for
short of stock, as well as “0570” as stock code (present stock code is “000570”).
In 1996, with the recommendation of the Office of the People’s Government of Jiangsu Province SZBH [1996]
No. 13, as well as first review by Shenzhen Municipal Securities Administration Office through SZBZ [1996] No.
24, and approval of the State Council Securities Commission ZWF [1996] No. 27, the Company issued 100
million B shares to qualified investors on 27 August 1996 to 30 August 1996, getting listed on 13 September
1996.
On 9 June 2006, the Company held a shareholders’ general meeting related to A shares market to examine and
approve share merger reform plan, and performed the share merger reform on 19 June 2006.
As examined and approved at the 2 nd Extraordinary General Meeting of 2009 in September 2009, based on the
total share capital of 374,249,551 shares as at 30 June 2009, the Company implemented the profit distribution plan,
i.e. to distribute 5 bonus shares and cash of RMB0.80 for every 10 shares, with registered capital increased by
RMB187,124,775.00, as well as registered capital of RMB561,374,326.00 after change. As at 31 December 2015,
the total share capital of the Company is 561,374,326.00 shares, as well as registered capital of
RMB561,374,326.00, which verified by Jiangsu Gongzheng Tianye Certified Public Accountants Company
Limited with issuing Capital Verification Report SGC [2010] No. B002. And the unified social credit code of the
enterprise business license of the Company is 91320400134792410W.
The Company’s registered address is situated at No. 123 Huaide Middle Road, Changzhou, Jiangsu, as well as its
head office located at No. 123 Huaide Middle Road, Changzhou, Jiangsu.
The Company belongs to manufacturing with business scope including manufacturing and sale of diesel engine,
diesel engines part and casting, grain harvesting machine, rotary cultivators, walking tractor, mould and fixtures,
assembling and sale of diesel generating set and pumping unit. The Company mainly engaged in the production
and sales of small and medium-sized single cylinders and multi-cylinder diesel engine with the label of Changchai
Brand. The diesel engine produced and sold by the Company were mainly used in tractors, combine harvest
models, light commercial vehicle, farm equipment, small-sized construction machinery, generating sets and
shipborne machinery and equipment, etc. The Company’s main business remained unchanged in the Reporting
Period.
The Company established the Shareholders’ General Meeting, the Board of Directors and the Supervisory
Committee, Corporate office, Financial Department, Political Department, Investment and Development
Department, Audit Department, Human Recourses Department, Production Department, Procurement Department,
Sales Company, Chief Engineer Office, Technology Center, QA Department, Foundry Branch, Machine
Processing Branch, Single-cylinder Engine branch, Multi-cylinder Engine Branch and Overseas Business
Department in the Company.
The financial report has been approved to be issued by the Board of Directors on 27 August 2019.
The consolidated scope of the Company of the Reporting Period includes the Company as the parent and 6
31
Changchai Company, Limited Interim Report 2019
subsidiaries. For the details of the consolidated scope of the Reporting Period and the changes situation, please
refer to the changes of the consolidated scope of the notes to the financial report and the notes to the equities
among other entities.
IV. Basis for Preparation of the Financial Report
1. Basis for Preparation
With the going-concern assumption as the basis and based on transactions and other events that actually occurred,
the Group prepared financial statements in accordance with The Accounting Standards for Business
Enterprises—Basic Standard issued by the Ministry of Finance with Decree No. 33 and revised with Decree No.
76, the various specific accounting standards, the Application Guidance of Accounting Standards for Business
Enterprises, the Interpretation of Accounting Standards for Business Enterprises and other regulations issued and
revised from 15 February 2006 onwards (hereinafter jointly referred to as “the Accounting Standards for Business
Enterprises”, “China Accounting Standards” or “CAS”), as well as the Rules for Preparation Convention of
Disclosure of Public Offering Companies No.15 – General Regulations for Financial Reporting (revised in 2014)
by China Securities Regulatory Commission.
In accordance with relevant provisions of the Accounting Standards for Business Enterprises, the Group adopted
the accrual basis in accounting. Except for some financial instruments, where impairment occurred on an asset, an
impairment reserve was withdrawn accordingly pursuant to relevant requirements.
2. Continuation
The Company comprehensively evaluated the information acquired recently that there would be no such factors in
the 12 months from the end of the Reporting Period that would obviously influence the continuation capability of
the Company and predicted that the operating activities would continue in the future 12 months of the Company.
The financial statement compiled base on the continuous operation.
V. Important Accounting Policies and Estimations
Notification of specific accounting policies and accounting estimations:
The Company and each subsidiary according to the actual production and operation characteristics and in accord
with the regulations of the relevant ASBE, formulated certain specific accounting policies and accounting
estimations, which mainly reflected in the 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.
32
Changchai Company, Limited Interim Report 2019
2. Fiscal Period
The fiscal periods are divided into fiscal year and metaphase, the fiscal year is from January 1 to December 31
and as the metaphase included monthly, quarterly and semi-yearly periods.
3. Operating Cycle
A normal operating cycle refers to a period from the Group purchasing assets for processing to realizing cash or
cash equivalents. An operating cycle for the Group is 12 months, which is also the classification criterion for the
liquidity of its assets and liabilities.
4. Currency Used in Bookkeeping
Renminbi is functional currency of the Company.
5. Accounting Methods for Business Combinations under the Same Control and Business Combinations not
under the Same Control
(1) Business combinations under the same control:
A business combination under the same control is a business combination in which all of the combining
enterprises are ultimately controlled by the same party or the same parties both before and after the business
combination and on which the control is not temporary.
For the merger of enterprises under the same control, if the consideration of the merging enterprise is that it makes
payment in cash, transfers non-cash assets or bear its debts, it shall, on the date of merger, regard the share of the
book value of the owner's equity of the merged enterprise as the initial cost of the long-term equity investment.
The difference between the initial cost of the long-term equity investment and the payment in cash, non-cash
assets transferred as well as the book value of the debts borne by the merging party shall offset against the capital
reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted.
If the consideration of the merging enterprise is that it issues equity securities, it shall, on the date of merger,
regard the share of the book value of the owner's equity of the merged enterprise as the initial cost of the
long-term equity investment. The total face value of the stocks issued shall be regarded as the capital stock, while
the difference between the initial cost of the long-term equity investment and total face value of the shares issued
shall offset against the capital reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be
adjusted.
All direct costs for the business combination, including expenses for audit, evaluating and legal services shall be
recorded into the profits and losses at the current period. The expenses such as the handling charges and
commission etc, premium income of deducting the equity securities, and as for the premium income was
insufficient to dilute, the retained earnings shall be written down.
Owning to the reasons such as the additional investment, for the equity investment held before acquiring the
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
33
Changchai Company, Limited Interim Report 2019
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
34
Changchai Company, Limited Interim Report 2019
participating in the consolidation when the final control party starts implementing control and should adjust the
period-begin amount of the consolidated balance sheet and at the same time adjust the relevant items of the
compared statement.
As for the disposed subsidiaries, the operation result and the cash flow should be included in the consolidated
income statement and the consolidated cash flow before the disposing date; the disposed subsidiaries of the
current period, should not be adjusted the period-begin amount of the consolidated balance sheet.
Where the Group losses control on its original subsidiaries due to disposal of some equity investments or other
reasons, the residual equity interests are re-measured according to the fair value on the date when such control
ceases. The summation of the consideration obtained from the disposal of equity interests and the fair value of the
residual equity interests, minus the portion in the original subsidiary’s net assets measured on a continuous basis
from the acquisition date that is enjoyable by the Group according to the original shareholding percentage in the
subsidiary, is recorded in investment gains for the period when the Group’s control on the subsidiary ceases. Other
comprehensive incomes in relation to the equity investment and the other owners’ equities changes except for the
net gains and losses, other comprehensive income and profits distribution in the original subsidiary are treated on
the same accounting basis as the acquiree directly disposes the relevant assets or liabilities (that is, except for the
changes in the net liabilities or assets with a defined benefit plan resulted from re-measurement of the original
subsidiary, the rest shall all be transferred into current investment gains) when such control ceases. And
subsequent measurement is conducted on the residual equity interests according to the No.2 Accounting Standard
for Business Enterprises-Long-term Equity Investments or the No.22 Accounting Standard for Business
Enterprises-Recognition and Measurement of Financial Instruments.
For the disposal of equity investment belongs to a package deal, should be considered as a transaction and conduct
accounting treatment. However, Before losing control, every disposal cost and corresponding net assets balance of
subsidiary of disposal investment are confirmed as other comprehensive income in consolidated financial
statements, which together transferred into the current profits and losses in the loss of control, when the Group
losing control on its subsidiary.
For the disposal of the equity investment not belongs to a package deal, should be executed accounting treatment
according to the relevant policies of partly disposing the equity investment of the subsidiaries under the situation
not lose the control right before losing the control right; when losing the control right, the former should be
executed accounting treatment according to the general disposing method of the disposal of the subsidiaries.
7. Classification of Joint Arrangements and Accounting Treatment of Joint Operations
The Group classifies joint arrangements into joint operations and joint ventures.
A joint operation refers to a joint arrangement where the Group is the joint operations party of the joint
arrangement and enjoys assets and has to bear liabilities related to the arrangement. The Company confirms the
following items related to the interests share among the joint operations and executes accounting treatment
according to the regulations of the relevant ASBE:
(1) Recognizes the assets that it holds and bears in the joint operation and recognizes the jointly-held assets
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
35
Changchai Company, Limited Interim Report 2019
(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
Classification of Financial Instruments
(1) The Company classifies the financial assets into the following three categories based on the business
model for financial assets management and characteristics of contractual cash flow of financial assets:
36
Changchai Company, Limited Interim Report 2019
① Financial assets measured at amortized cost
② Financial assets measured at fair value and changes thereof recorded into other comprehensive income
③ Financial assets at fair value through profit or loss
The classification of debt instrument investment depends on the Company’s business model in which it holds the
investment; the classification of equity instrument investment depends on whether the Company has made the
irrevocable option of measuring the investment at fair value with changes recognized into other comprehensive
income at the initial recognition. Only when changing the business model of a financial asset will the Company
reclassify all affected relevant financial assets.
(2) Financial liabilities are classified into the following two categories:
① Financial liabilities at fair value through profit or loss
② Financial liabilities measured at amortized cost
Recognition Basis for Financial Instruments:
(1) Financial assets measured at amortized cost
The financial assets of the Company are classified as financial assets measured at amortized cost when meet the
following conditions at the same time:
① The business mode of the Company to manage the financial assets targets at collecting the contractual cash
flow.
② The contract of the financial assets stipulates that the cash flow generated in the specific date is the payment of
the interest based on the principal and outstanding principal amount.
(2) Financial assets measured at fair value and changes thereof recorded into other comprehensive income
The financial assets of the Company are classified as financial assets measured at fair value and changes thereof
recorded into other comprehensive income when meet the following conditions at the same time:
① Business mode for managing financial assets of the Company takes contract cash flow collected as target and
selling as target.
② The contract of the financial assets stipulates that the cash flow generated in the specific date is the payment of
the interest based on the principal and outstanding principal amount.
At initial recognition, the Company may designate non-trading equity instrument investments as financial assets
measured at fair value with changes recognized into other comprehensive income, present them as other equity
instrument investment items, and recognize dividend income when conditions are met (The designation should not
be revoked once made).
Such designated equity instrument investments should not include the following: The purpose of acquiring the
financial asset is for sale in a short term; at initial recognition, the equity instrument investment is part of an
identifiable financial asset portfolio under centralized management, and there is objective evidence proving an
actual short-term profit model recently; the investment is a derivative instrument (excluding derivative
instruments conforming with the definition in financial guarantee contracts and designated as effective hedging
instruments).
(3) Financial assets at fair value through profit or loss
The Company classifies financial assets except for above-mentioned financial assets measured at amortized cost
and financial assets measured at fair value and changes thereof recorded into other comprehensive income as
financial assets at fair value through profit or loss.
For financial assets formed from contingent consideration recognized by the Company in business combinations
not under common control, they should be classified as financial assets measured at fair value with changes
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Changchai Company, Limited Interim Report 2019
included into current profits/losses.
At initial recognition, financial assets can be designated as those measured at fair value with changes included into
current profits/losses (The designation should not be revoked once made) if it can eliminate or obviously reduce
accounting mismatching.
For mixed contracts containing one or more embedded derivatives with the master contract not classified as the
aforementioned financial assets, the Company may designate them in entirety as a financial instrument measured
at fair value with changes included into current profits/losses, with the exception of the following:
① The embedded derivative(s) will not cause significant changes to the cash flow of the mixed contracts.
② When determining whether to split similar mixed contracts at initial recognition, the Company is able to
decide that the embedded derivatives included in the contracts should not be split almost without any analysis. If
the prepayment right of embedded loans allows the holder to pay off loans in advance at an amount close to the
amortized cost, that prepayment right does not need to be split.
(4) Financial liabilities at fair value through profit or loss
This category consists of trading financial liabilities (including derivative instruments belonging to financial
liabilities) and those designated as financial liabilities at fair value through profit or loss.
In business combinations not under common control, the financial liabilities formed from contingent consideration
recognized by the Company as a purchaser should be treated in accounting as financial liabilities measured at fair
value with changes included into current profits/losses.
At initial recognition, to provide more relevant accounting information, the Company designates financial
liabilities that meet one of the following conditions as financial liabilities measured at fair value with changes
included into current profits/losses (The designation shall not be revoked once made)
① The financial liability is able to eliminate or obviously reduce accounting mismatching.
② In accordance with corporate risk management or investment strategies in official written documents,
management and performance appraisals are conducted on financial liabilities portfolio or financial assets and
financial liabilities portfolio based on fair value, based on which a reporting is provided to key management
personnel within a company.
(5) Financial liabilities measured at amortized cost
The Company classifies financial liabilities except for the following as financial liabilities measured at amortized
cost:
① Financial liabilities at fair value through profit or loss
② Financial liabilities formed due to transfer of financial assets failing to comply with the derecognition
condition or continuously getting involved in transferred financial assets
③ Financial guarantee contract not in the ① and ② of this Article and commitments of loans with the interest
rate lower than the market interest rate not in the ① of this article.
Initial Measurement of Financial Instruments:
Financial assets or liabilities shall be measured at their fair values when initially recognized. For financial assets
or liabilities at fair value through profit or loss, the transaction expenses thereof shall be directly included into the
current profit or loss; for other financial assets or liabilities, the transaction expenses thereof shall be included into
the initially recognized amount.
The fair value generally is the transaction price of relevant financial assets or liabilities. When there is difference
between the fair value thereof and the transaction price thereof, treat them in the following cases:
At initial recognition, when the fair value of financial assets or financial liabilities is determined based on the
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Changchai Company, Limited Interim Report 2019
quotations of the same assets or liabilities on active markets or by the valuation technology that only uses
observable market data, the difference between that fair value and the trade price should be recognized as a gain
or loss.
When the fair value of financial assets or financial liabilities is recognized in other ways at initial recognition, the
difference between that fair value and the trade price should be deferred. After the initial recognition, based on the
extent of changes of a factor in an accounting period, the deferred difference should be recognized as a gain or
loss during the accounting period. Such factors should be limited to factors that will be considered by market
players in pricing the financial instrument, including time.
Subsequent Measurement of Financial Instruments:
After the initial recognition, for various financial assets, the subsequent measurement at amortized cost, at fair
value and changes thereof recorded into other comprehensive income or at fair value through profit or loss shall
be respectively made.
The amortized cost of financial assets or financial liabilities should be recognized by the result of making the
following adjustments to the initially recognized amount of the financial assets or financial liabilities:
Deduct the repaid principal.
Add or minus the cumulative amortization formed from the amortization of the difference between the initially
recognized amount and the amount on the maturity date in the effective interest method.
Deduct cumulative withdrawn provisions for losses (applicable to financial assets only).
Other than financial assets, gains or losses from financial liabilities measured at amortized cost that are not part of
any hedging relationship are included into current profits/losses at derecognition, or recorded into profits/losses
for the related period at amortization in the effective interest method.
When the Company designates financial liabilities as those measured at fair value with changes included into
current profits/losses in accordance with standards and regulations at initial recognition, the amount of changes in
the fair value of the financial liabilities arising from the credit risk changes of the Company itself will be recorded
into other comprehensive income, and other fair value changes will be recorded into current profits/losses.
However, if such accounting treatment causes or expands the accounting mismatching in profits/losses, all gains
or losses from the financial liabilities (including the amount affected by credit risk changes of the Company itself)
will be recorded into current profits/losses.
Derecognition of Financial Instruments:
(1) Financial assets shall be derecognized when meets one of the following conditions:
① The contractual right to collect the cash flow of the financial assets has been terminated.
② The financial asset has been transferred and the transfer conforms to the regulations governing the
derecognition of financial assets in the Accounting Standards for Business Enterprises No.23-Transfer of
Financial Assets. The derecognition of financial assets or liabilities in the Standards refers to that the Company
transferred the financial assets or liabilities previously recognized out of the balance sheet.
(2) Derecognition condition for financial liabilities
In case of current obligation of financial liabilities (or partial financial liabilities) being terminated, derecognition
of such financial liabilities (or partial financial liabilities) is conducted by the Company. If the Company
(borrower) concludes an agreement with the lender to replace original financial liabilities with new ones and
contact terms of new financial liabilities are different from those of original financial liabilities, derecognition of
original financial liabilities and recognition of new financial liabilities shall be conducted.
In case of material alteration of contract terms of original financial liabilities (partial financial liabilities) by the
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Changchai Company, Limited Interim Report 2019
Company, derecognition of original financial liabilities and recognition of new financial liabilities as per modified
terms shall be conducted.
In case of derecognition of financial liabilities (partial financial liabilities), the Company includes the balance
between its carrying value and payment consideration (including non-cash assets transferred out or borne
liabilities) into the current profit or loss.
When the Company repurchases part of financial liabilities, the overall book value of the financial abilities will be
distributed in the proportion of the fair value of the part continuing to be recognized and that of the derecognized
part on the repurchase date in the overall fair value. The difference between the book value distributed to the
derecognized part and the consideration paid (including non-cash assets transferred out or liabilities borne) should
be recorded into current profits/losses.
Recognition Basis and Measurement Method for Transfer of Financial Assets:
In the event of the transfer of a financial asset, the Company will assess the extent to which it retains the risks and
rewards of the asset and treats them in the following cases:
(1) If almost all risks and rewards of ownership of the financial asset are transferred, the financial asset is
derecognised and the rights and obligations arising or retained in the transfer are separately recognized as assets or
liabilities.
(2) If almost all risks and rewards of ownership of the financial asset are retained, the financial asset is
continuously recognized.
(3) If almost all risks and rewards of ownership of the financial asset are neither transferred nor retained, the
Company shall treat them in the following cases according to whether the control over the financial asset has been
retained:
① If the control over the financial asset has not been retained, the Company shall derecognize the financial asset,
and separately recognize the rights and obligations arising or retained in the transfer as assets or liabilities.
② If the control over the financial asset has been retained, the Company shall continuously recognize the related
financial asset and corresponding liabilities according to the extent of continuous involvement in the transferred
financial asset. The extent of continuous involvement in the transferred financial asset refers to the extent of risks
or rewards born by the Company generated from the value variation of the transferred financial asset.
The principle of substance outweighing formalization is adopted for judging whether the transfer of financial
assets meets the aforementioned conditions for the derecognition of financial assets. The Company classifies the
transfer of financial assets into whole transfer and partial transfer of financial assets:
(1) When the whole transfer of financial assets meets the derecognition conditions, the difference between the
following two items should be recorded into current profits/losses:
① book value of the transferred financial assets on the date of derecognition.
② sum of the consideration received from the transfer of the financial assets, and the corresponding derecognized
portion (The financial assets involved in the transfer are financial assets measured at fair value with changes
recorded into other comprehensive income) of the cumulative fair value changes originally directly recorded into
other comprehensive income.
(1) When financial assets are partially transferred and the whole transferred part meets the derecognition
conditions, the overall book value of the financial assets before the transfer should be apportioned between the
derecognized part and the part continuing to be recognized (In such case, the retained service assets should be
regarded as part of the financial assets continuing to be recognized) by their respective relative fair values on the
date of transfer, and the difference between the following two items should be recorded into current profits/losses:
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Changchai Company, Limited Interim Report 2019
① book value of the derecognized part on the date of derecognition.
② sum of the consideration received from the derecognized part, and the corresponding derecognized portion
(The financial assets involved in the transfer are financial assets measured at fair value with changes recorded into
other comprehensive income) of the cumulative fair value changes originally recorded into other comprehensive
income.
When the transfer of financial assets does not meet the derecognition conditions, the financial assets should
continue to be recognized and the consideration received should be recognized as financial liabilities.
Recognition method of fair value of financial assets and financial liabilities
The fair value of financial liabilities or financial liabilities existing on active markets should be recognized by
quotations on active markets; quotations on active markets includes quotations of related assets or liabilities that
are easy to and can be obtained regularly from exchanges, dealers, brokers, industry groups, pricing institutions or
regulatory authorities, and that can represent market transactions that actually and frequently occur on the basis of
fair transactions.
For initially obtained or derivative financial assets or financial liabilities undertaken, the fair value thereof shall be
recognized based on the market transaction price.
The fair value of financial assets or liabilities without active market shall be recognized by valuation techniques.
In valuation, the Company adopts applicable valuation techniques supported by sufficient utilizable data and other
information in current circumstances, selects input values consistent with asset or liability characteristics
considered in relevant asset or liability transactions of market participators and prioritizes the applying relevant
observable input values. Unobservable input values shall not be applied unless relevant observable input values
are not accessible or feasible.
Impairment Allowance for Financial Assets (excluding Accounts Receivable):
(1) Based on expected credit losses, the Company evaluates the expected credit losses of financial assets measured
at amortized cost and of financial assets measured at fair value with changes recorded into other comprehensive
income, carries out the accounting treatment of impairment and recognizes the provisions for losses. Expected
credit losses refer to the weighted average of the credit losses of financial instruments with default risk as the
weight. Credit losses refer to the difference between all contract cash flows receivable by the Company in
accordance with contracts discounted by the original effective interest rate and all cash flows expected to receive,
as well as the present value of all cash shortages.
(2) When one or more events with adverse effects on the expected future cash flow of financial assets occur, the
financial assets turn into financial assets with credit impairment. The evidence for credit impairment of financial
assets includes the following observable information:
① The issuer or the debtor encounters significant financial difficulties;
② The debtor breaches the contract, such as default or overdue payment of interests or principal;
③ The creditor makes a compromise for the debtor which would be impossible in any other circumstances out of
economic or contractual consideration related to the debtor’s financial difficulties;
④ The debtor will probably go bankrupt or carry out other financial restructuring;
⑤ The issuer or the debtor’s financial difficulties result in the disappearance of the active markets of the financial
assets;
⑥ A financial asset was bought or originated with a big discount, which reflects the fact of credit losses.
Credit impairment of financial assets can be caused by multiple events together and not necessarily by separately
identifiable events.
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(3) For financial assets with credit impairment bought or originated, only the cumulative changes in expected
credit losses during the whole duration as at the balance sheet date since initial recognition will be recognized as
provisions for losses. On each balance sheet date, the amount of changes in expected credit losses for the whole
duration will be included into current profits/losses as impairment losses or gains. Even when the expected credit
losses for the whole duration recognized on the balance sheet date are less than the expected credit losses reflected
in the estimation of cash flows at initial recognition, the favorable changes in the expected credit losses are
recognized as impairment gains.
(4) Other than the circumstances of withdrawal of provisions for losses for financial instruments in the above item
(3), the Company evaluates whether the credit risk of related financial instruments has increased substantially as
at each balance sheet date since initial recognition, and measures the provisions for losses and recognizes
expected credit losses and the changes according to the following:
① If the credit risk of the financial instruments has increased substantially since initial recognition, the provisions
for losses will be measured by the amount equivalent to the expected credit losses of the financial instruments for
the whole duration. Regardless of whether the Company evaluates credit losses based on individual financial
instruments or financial instrument portfolios, the amount of increase or reverse of provisions for losses formed
thereof should be included into current profits/losses as impairment losses or gains.
② If the credit risk of the financial instruments has not increased substantially since initial recognition, the
provisions for losses will be measured by the amount equivalent to the expected credit losses of the financial
instruments for the next 12 months. Regardless of whether the Company evaluates credit losses based on
individual financial instruments or financial instrument portfolios, the amount of increase or reverse of provisions
for losses formed thereof should be included into current profits/losses as impairment losses or gains.
Expected credit losses for the next 12 months refer to the expected credit losses resulting from potential default
events in respect of financial instruments in the 12 months (which should be the expected duration if the expected
duration of the financial instruments is less than 12 months) following the balance sheet date, which are part of the
expected credit losses for the whole duration.
The Company shall consider all reasonable and well-founded information, including forward-looking information.
In some circumstances, the Company considers whether the credit risk has substantially increased based on
portfolios to ensure that the expected credit losses for the whole duration will be recognized immediately upon
substantial increase of the credit risk since the initial recognition of the financial instruments.
Offset of Financial Assets and Financial Liabilities:
Financial assets and financial liabilities shall be presented separately in the balance sheet and shall not be offset.
But, when meeting the following conditions at the same time, the financial assets and financial liabilities shall be
presented in the balance sheet with the net amount after the set-off:
(1) The Company has a legal right that is currently enforceable to set off the recognized financial assets and
financial liabilities;
(2) The Company intends either to settle on a net basis, or to realize the financial asset and settle the financial
liability simultaneously.
11. Notes Receivable
On the basis of expected credit losses, the company evaluates the expected credit losses of financial instruments
on the basis of single item and combination, carries out impairment treatment and confirms the loss provision. For
the notes receivable, the company divides the notes receivable into bank acceptance bill combination and
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Changchai Company, Limited Interim Report 2019
commercial acceptance bill combination according to the credit risk characteristics, and calculates the expected
credit loss on the basis of the combination. For the notes receivable divided into portfolios, the company shall,
when evaluating the expected credit losses, consider the reasonable and reasonable information related to the past
events, the current situation and the forecast of future economic conditions, determine the expected credit loss rate
and calculate the expected credit losses.
12. Accounts Receivable
(1) Accounts Receivable
For accounts receivable, regardless of whether it contains significant financing elements, the company always
measures its loss provision in accordance with the amount equivalent to the expected credit loss in the whole
duration, and the resulting increase or refunded amount of loss provision is recorded as impairment loss or profit
in the current profit and loss. The company combines the accounts receivable with similar credit risk
characteristics (aging), and estimates the proportion of bad debt provision for the accounts receivable based on all
reasonable and valid information, including forward-looking information, as follows:
Withdrawal proportion of accounts Withdrawal proportion of other
Aging
receivable receivables
Within 1 year (including 1 year) 2.00% 2.00%
1 to 2 years 5.00% 5.00%
2 to 3 years 15.00% 15.00%
3 to 4 years 30.00% 30.00%
4 to 5 years 60.00% 60.00%
Over 5 years 100.00% 100.00%
If there is objective evidence that a certain account receivable has suffered from credit impairment, the company
shall separately make bad debt provision for the account receivable and confirm the expected credit loss.
(2)Other receivables
For the measurement of impairment loss of other receivables, the measurement method of impairment loss of the
aforementioned receivables shall be applied.
13. Inventory
Is the Company subject to any disclosure requirements for special industries?
No
(1) Category of Inventory
Inventory refers to the held-for-sale finished products or commodities, goods in process, materials consumed in
the production process or the process providing the labor service etc. Inventory is mainly including the raw
materials, low priced and easily worn articles, unfinished products, inventories and work in process–outsourced
etc.
(2) Pricing method
Purchasing and storage of the various inventories should be valued according to the planed cost and the dispatch
be calculated according to the weighted average method; carried forward the cost of the finished products
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Changchai Company, Limited Interim Report 2019
according to the actual cost of the current period and the sales cost according to the weighted average method.
(3) Determination basis of the net realizable value of inventory and withdrawal method of the provision for falling
price of inventory
At the balance sheet date, inventories are measured at the lower of the costs and net realizable value. When all the
inventories are checked roundly, for those which were destroyed, outdated in all or in part, sold at a loss, etc, the
Company shall estimate the irrecoverable part of its cost and withdrawal the inventory falling price reserve at the
year-end. Where the cost of the single inventory item is higher than the net realizable value, the inventory falling
price reserve shall be withdrawn and recorded into profits and losses of the current period. Of which: in the
normal production and operating process, as for the commodities inventory directly for sales such as the finished
products, commodities and the materials for sales, should recognize the net realizable value according to the
amount of the estimated selling price of the inventory minuses the estimated selling expenses and the relevant
taxes; as for the materials inventory needs to be processed in the normal production and operating process, should
recognize its net realizable value according to the amount of the estimated selling price of the finished products
minuses the cost predicts to be occur when the production completes and the estimated selling expenses as well as
the relevant taxes; on the balance sheet date, for the same inventory with one part agreed by the contract price
and other parts not by the contract price, should be respectively recognized the net realizable value. For items of
inventories relating to a product line that are produced and marketed in the same geographical area, have the same
or similar end users or purposes, and cannot be practicably evaluated separately from other items in that product
line provision for decline in value is determined on an aggregate basis; for large quantity and low value items of
inventories, provision for decline in value is made based on categories of inventories.
(4) The perpetual inventory system is maintained for stock system.
(5) Amortization method of low-value consumables and packages
One time amortization method is adopted for low-value consumables and packages.
14. 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.
15. 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.
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(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
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Changchai Company, Limited Interim Report 2019
Company holds the shares of an entity below 50%, but has a real control to the said entity, then the said entity
shall be its subsidiary company.
2) An investment in the joint enterprise or associated enterprise shall be measured by employing the equity
method
Where the Company hold, and is able to do equity investment with joint control with other parties over an
invested entity, the invested entity shall be its joint enterprise. Where the Company hold, and is able to have
equity investment with significant influences on an invested entity, the invested entity shall be its associated
entity.
After the Company acquired the long-term equity investment, should respectively recognize investment income
and other comprehensive income according to the net gains and losses as well as the portion of other
comprehensive income which should be enjoyed or be shared, and at the same time adjust the book value of the
long-term equity investment; corresponding reduce the book value of the long-term equity investment according
to profits which be declared to distribute by the investees or the portion of the calculation of cash dividends which
should be enjoyed; for the other changes except for the net gains and losses, other comprehensive income and the
owners’ equity except for the profits distribution of the investees, should adjust the book value of the long-term
equity investment as well as include in the owners’ equity .
The investing enterprise shall, on the ground of the fair value of all identifiable assets of the invested entity when
it obtains the investment, recognize the attributable share of the net profits and losses of the invested entity after it
adjusts the net profits of the invested entity.
If the accounting policy adopted by the investees is not accord with that of the Group, should be adjusted
according to the accounting policies of the Group and the financial statement of the investees during the
accounting period and according which to recognize the investment income as well as other comprehensive
income.
For the transaction happened between the Company and associated enterprises as well as joint ventures, if the
assets launched or sold not form into business, the portion of the unrealized gains and losses of the internal
transaction, which belongs to the Group according to the calculation of the enjoyed proportion, should recognize
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
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Changchai Company, Limited Interim Report 2019
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
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Changchai Company, Limited Interim Report 2019
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.
16. Investment Property
Measurement mode of investment real estate:
Measurement of cost model
Depreciation or amortization method
The investment real estate shall be measured at its cost. Of which, the cost of an investment real estate by
acquisition consists of the acquisition price, relevant taxes, and other expense directly relegated to the asset; the
cost of a self-built investment real estate composes of the necessary expenses for building the asset to the hoped
condition for use. The investment real estate invested by investors shall be recorded at the value stipulated in the
investment contracts or agreements, but the unfair value appointed in the contract or agreement shall be entered
into the account book at the fair value.
As for withdrawal basis of provision for impairment of investment real estates, please refer to withdrawal method
for provision for impairment of fixed assets.
17. Fixed Assets
(1) Recognition Conditions
Fixed assets refers to the tangible assets that simultaneously possess the features as follows: (a) they are held for
the sake of producing commodities, rendering labor service, renting or business management; and (b) their useful
life is in excess of one fiscal year. The fixed assets are only recognized when the relevant economic benefits
probably flow in the Company and its cost could be reliable measured.
(2) Depreciation Method
Category of fixed Depreciation
depreciable life Salvage value Annual deprecation
assets method
Housing and Straight-line
20-40 2.50%-5%
building method
Machinery Straight-line
6-15 6.67%-16.67%
equipment method
Transportation Straight-line
5-10 10%-20%
equipment method
Straight-line
Other equipment 5-10 10%-20%
method
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Changchai Company, Limited Interim Report 2019
(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
18. Construction in Progress
(1) Valuation of the progress in construction
Construction in progress shall be measured at actual cost. Self-operating projects shall be measured at direct
materials, direct wages and direct construction fees; construction contract shall be measured at project price
payable; project cost for plant engineering shall be recognized at value of equipments installed, cost of installation,
trail run of projects. Costs of construction in process also include borrowing costs and exchange gains and losses,
which should be capitalized.
(2) Standardization on construction in process transferred into fixed assets and time point thereof
The construction in process, of which the fixed assets reach to the predicted condition for use, shall carry forward
fixed assets on schedule. The one that has not audited the final accounting shall recognize the cost and make
depreciation in line with valuation value. The construction in process shall adjust the original valuation value at its
historical cost but not adjust the depreciation that has been made after auditing the final accounting.
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Changchai Company, Limited Interim Report 2019
19. 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.
20. Intangible Assets
(1) Pricing Method, Service Life, and Impairment Test
(1) Pricing method of intangible assets
Intangible assets purchased should take the actual payment and the relevant other expenses as the actual cost.
For the intangible assets invested by the investors should be recognized the actual cost according to the value of
the investment contracts or agreements, however, for the value of the contracts or agreements is not fair, the actual
cost should be recognized according to the fair value.
For the intangible assets acquires from the exchange of the non-currency assets, if own the commercial nature,
should be recorded according to the fair value of the swap-out assets; for those not own the commercial nature,
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Changchai Company, Limited Interim Report 2019
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.
21. 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
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Changchai Company, Limited Interim Report 2019
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.
22. 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.
23. 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
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Changchai Company, Limited Interim Report 2019
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 Other Long-term Welfare for Staff
Naught
24. Provisions
(1) Criteria of estimated liabilities
Only if the obligation pertinent to a contingencies shall be recognized as an estimated debts when the following
conditions are satisfied simultaneously:
1) That obligation is a current obligation of the Company;
2) It is likely to cause any economic benefit to flow out of the Company as a result of performance of the
obligation;
3) The amount of the obligation can be measured in a reliable way.
(2) Measurement of estimated liabilities
The Company shall measure the estimated debts in accordance with the best estimate of the necessary expenses
for the performance of the current obligation.
The Company shall check the book value of the estimated debts on the Balance Sheet Date. If there is any
conclusive evidence proving that the said book value can’t truly reflect the current best estimate, the Company
shall, subject to change, make adjustment to carrying value to reflect the current best estimate.
25. Revenue
Is the Company subject to any disclosure requirements for special industries?
No
Has implemented new standards governing revenue or not
□ Yes √ No
(1) Recognition of revenue from sale of goods: the revenue from selling shall be recognized by the following
conditions: The significant risks and rewards of ownership of the goods have been transferred to the buyer by the
Company; the Company retains neither continuous management right that usually keeps relation with the
ownership nor effective control over the sold goods; the relevant amount of revenue can be measured in a reliable
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Changchai Company, Limited Interim Report 2019
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.
26. Government Subsidies
(1) Type
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.
(2) Recognition of Government Subsidies
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.
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Changchai Company, Limited Interim Report 2019
(3) Accounting Treatment
The government subsidies pertinent to assets shall be recognized as deferred income, and included in the current
gains and losses or offset the book value of related assets within the useful lives of the relevant assets with a
reasonable and systematic method. Government subsidies pertinent to income used to compensate the relevant
costs, expenses or losses of the Company in the subsequent period shall be recognized as deferred income, and
shall be included in the current profit and loss during the period of confirming the relevant costs, expenses or
losses; those used to compensate the relevant costs, expenses or losses of the Company already happened shall be
included in the current gains and losses or used to offset relevant costs directly.
For government subsidies that include both assets-related and income-related parts, they should be distinguished
separately for accounting treatment; for government subsidies that are difficult to be distinguished, they should be
classified as income-related.
Government subsidies related to the daily activities of the Company shall be included into other income or used to
offset relevant costs by the nature of economic business; those unrelated shall be included into non-operating
income.
The government subsidies recognized with relevant deferred income balance but need to return shall be used to
offset the book balance of relevant deferred income, the excessive part shall be included in the current gains and
losses or adjusting the book value of assets for the government subsidies assets-related that offset the book value
of relevant assets when they are initially recognized; those belong to other cases shall be directly included in the
current gains and losses.
27. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Basis of recognizing the deferred income tax assets
According to the difference between the book value of the assets and liabilities and their tax basis, A deferred tax
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.
28. 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
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Changchai Company, Limited Interim Report 2019
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.
29. 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
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Changchai Company, Limited Interim Report 2019
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.
30. Changes in Main Accounting Policies and Estimates
(1) Change of Accounting Policies
√ Applicable □ Not applicable
Changes to the accounting policies and why Approval process Remark
The Notice on Revising and Issuing the Formats of
2019 Financial Statements for General Enterprises On 27 August 2019, the
issued by the Ministry of Finance on 30 April 2019 Company held the 20th
requires the companies which have implemented the Meeting of the 8th Board of
new standards governing financial instruments but not Directors and the 16th
Refer to (1) of other
the new standards governing revenue and lease or Meeting of the 8th
notes for details
companies which have implemented the new standards Supervisory Committee and
governing financial instruments and revenue but not the approved the Proposal on
new standards governing lease to adjust items of Changes of Some Accounting
financial statements in line with requirements in Policies
Appendix 1 and Appendix 2 of this Notice.
The Company starts to implement the Accounting
Standards for Business Enterprises No.22-Recognition
and Measurement of Financial Instruments, Accounting
Standards for Business Enterprises No.23-Transfer of
On 9 April 2019, the
Financial Assets, Accounting Standards for Business
Company held the 17th
Enterprises No.24-Hedge Accounting and Accounting
Meeting of the 8th Board of
Standards for Business Enterprises No.37-Presentation
Directors and 13th Meeting Refer to (2) of other
of Financial Instruments, which revised and issued by
of the 8th Supervisory notes for details
the Ministry of Finance in March 2017 and hereinafter
Committee and approved the
collectively referred to as new standards governing
Proposal on Changes in
financial instruments since 1 January 2019 which
Some Accounting Policies
stipulate that the company shall classify and measure
financial instruments in accordance with regulations on
the execution date, when the data of comparative
financial statements of prior years do not comply with
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Changchai Company, Limited Interim Report 2019
the new standards, no adjustment is made by the
Company.
Other notes:
(1) Influence of Changes in Formats of Financial statements
Affected items in the consolidated balance sheet and amount thereof:
31 December 2018 1 January 2019
Notes receivable and Notes receivable 495,370,782.47
874,229,941.58
accounts receivable Accounts receivable 378,859,159.11
Notes payable and Notes payable 438,375,400.00
1,030,130,275.77
accounts payable Accounts payable 591,754,875.77
Affected items in the balance sheet of the Company as the parent and amount thereof:
31 December 2018 1 January 2019
Notes receivable and Notes receivable 490,519,795.91
790,877,079.72
accounts receivable Accounts receivable 300,357,283.81
Notes payable and Notes payable 425,995,400.00
accounts payable 987,550,797.44
Accounts payable 561,555,397.44
(2) Influence of Execution of New Standards Governing Financial Instruments
Affected items in the consolidated balance sheet and amount thereof:
Affected amount
Item Affected by Affected by
31 December 2018 1 January 2019
classification and impairment of
measurement financial assets
Available-for-sale
498,851,369.49 -498,851,369.49
financial assets
Other investments
in equity 498,851,369.49 498,851,369.49
instruments
Affected items in the balance sheet of the Company as the parent and amount thereof:
Affected amount
Affected by Affected by
Item 31 December 2018 1 January 2019
classification and impairment of
measurement financial assets
Available-for-sale
470,940,000.00 -470,940,000.00
financial assets
Other investments
in equity 470,940,000.00 470,940,000.00
instruments
(2) Changes in Accounting Estimates
□ Applicable √ Not applicable
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Changchai Company, Limited Interim Report 2019
(3) Adjustments to the Financial Statements at the Beginning of the First Execution Year of any New
Standards Governing Financial Instruments, Revenue or Leases
√ Applicable □ Not applicable
Consolidated Balance Sheet
Unit: RMB
Item 31 December 2018 1 January 2019 Adjusted
Current assets:
Monetary capital 800,960,036.69 800,960,036.69
Settlement reserve
Interbank loans granted
Trading financial assets
Financial assets at fair value through profit or
loss
Derivative financial assets
Notes receivable 495,370,782.47 495,370,782.47
Accounts receivable 378,859,159.11 378,859,159.11
Financing backed by accounts receivable
Prepayments 11,352,297.10 11,352,297.10
Premiums receivable
Reinsurance receivables
Receivable reinsurance contract reserve
Other receivables 9,244,584.42 9,244,584.42
Including: Interest receivable
Dividends receivable
Financial assets purchased under resale
agreements
Inventories 557,953,891.70 557,953,891.70
Contract assets
Assets classified as held for sale
Current portion of non-current assets
Other current assets 34,357,608.97 34,357,608.97
Total current assets 2,288,098,360.46 2,288,098,360.46
Non-current assets:
Loans and advances to customers
Investments in debt obligations
59
Changchai Company, Limited Interim Report 2019
Available-for-sale financial assets 498,851,369.49 -498,851,369.49
Investments in other debt obligations
Held-to-maturity investments
Long-term receivables
Long-term equity investments
Investments in other equity instruments 498,851,369.49 498,851,369.49
Other non-current financial assets
Investment property
Fixed assets 50,656,007.63 50,656,007.63
Construction in progress 511,250,371.37 511,250,371.37
Productive living assets 89,090,384.71 89,090,384.71
Oil and gas assets
Right-of-use assets
Intangible assets 103,092,879.38 103,092,879.38
R&D expense
Goodwill
Long-term prepaid expense
Deferred income tax assets 979,822.71 979,822.71
Other non-current assets
Total non-current assets 1,253,920,835.29 1,253,920,835.29
Total assets 3,542,019,195.75 3,542,019,195.75
Current liabilities:
Short-term borrowings 27,000,000.00 27,000,000.00
Borrowings from central bank
Interbank loans obtained
Trading financial liabilities
Financial liabilities at fair value through profit
or loss
Derivative financial liabilities
Notes payable 438,375,400.00 438,375,400.00
Accounts payable 591,754,875.77 591,754,875.77
Advances from customers 34,500,232.97 34,500,232.97
Financial assets sold under repurchase
agreements
Customer deposits and interbank deposits
60
Changchai Company, Limited Interim Report 2019
Payables for acting trading of securities
Payables for underwriting of securities
Payroll payable 50,500,592.99 50,500,592.99
Taxes payable 7,066,085.89 7,066,085.89
Other payables 199,412,250.90 199,412,250.90
Including: Interest payable
Dividends payable 3,891,433.83 3,891,433.83
Handling charges and commissions payable
Reinsurance payables
Contract liabilities
Liabilities directly associated with assets
classified as held for sale
Current portion of non-current liabilities 18,500,000.00 18,500,000.00
Other current liabilities 2,082,985.18 2,082,985.18
Total current liabilities 1,369,192,423.70 1,369,192,423.70
Non-current liabilities:
Insurance contract reserve
Long-term borrowings 2,000,000.00 2,000,000.00
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term payroll payable
Provisions
Deferred income 59,928,484.84 59,928,484.84
Deferred income tax liabilities 47,971,780.36 47,971,780.36
Other non-current liabilities
Total non-current liabilities 109,900,265.20 109,900,265.20
Total liabilities 1,479,092,688.90 1,479,092,688.90
Owners’ equity:
Share capital 561,374,326.00 561,374,326.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
61
Changchai Company, Limited Interim Report 2019
Capital reserves 164,328,665.43 164,328,665.43
Less: Treasury stock
Other comprehensive income 264,405,675.00 264,405,675.00
Specific reserve 15,182,958.83 15,182,958.83
Surplus reserves 320,133,050.15 320,133,050.15
General reserve
Retained earnings 717,883,351.33 717,883,351.33
Total equity attributable to owners of the
2,043,308,026.74 2,043,308,026.74
Company as the parent
Non-controlling interests 19,618,480.11 19,618,480.11
Total owners’ equity 2,062,926,506.85 2,062,926,506.85
Total liabilities and owners’ equity 3,542,019,195.75 3,542,019,195.75
Note for adjustment
Balance Sheet of the Company as the Parent
Unit: RMB
31 December
Item 1 January 2019 Adjusted
2018
Current assets:
Monetary capital 759,404,219.72 759,404,219.72
Trading financial assets
Financial assets at fair value through profit or
loss
Derivative financial assets
Notes receivable 490,519,795.91 490,519,795.91
Accounts receivable 300,357,283.81 300,357,283.81
Financings backed by accounts receivable
Prepayments 4,768,038.11 4,768,038.11
Other receivables 21,681,331.85 21,681,331.85
Including: Interest receivable
Dividends receivable
Inventories 437,423,195.46 437,423,195.46
Contract assets
Assets classified as held for sale
Current portion of non-current assets
Other current assets 23,099,858.67 23,099,858.67
Total current assets 2,037,253,723.53 2,037,253,723.53
62
Changchai Company, Limited Interim Report 2019
Non-current assets:
Investments in debt obligations
Available-for-sale financial assets 470,940,000.00 -470,940,000.00
Investments in other debt obligations
Held-to-maturity investments
Long-term receivables
Long-term equity investments 241,752,730.03 241,752,730.03
Investments in other equity instruments 470,940,000.00 470,940,000.00
Other non-current financial assets
Investment property 50,656,007.63 50,656,007.63
Fixed assets 413,186,680.19 413,186,680.19
Construction in progress 87,007,215.91 87,007,215.91
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets 72,184,608.63 72,184,608.63
R&D expense
Goodwill
Long-term prepaid expense
Deferred income tax assets 930,641.19 930,641.19
Other non-current assets
Total non-current assets 1,336,657,883.58 1,336,657,883.58
Total assets 3,373,911,607.11 3,373,911,607.11
Current liabilities:
Short-term borrowings 10,000,000.00 10,000,000.00
Trading financial liabilities
Financial liabilities at fair value through profit
or loss
Derivative financial liabilities
Notes payable 425,995,400.00 425,995,400.00
Accounts payable 561,555,397.44 561,555,397.44
Advances from customers 32,072,387.55 32,072,387.55
Contract liabilities
Payroll payable 43,597,759.22 43,597,759.22
Taxes payable 2,443,767.89 2,443,767.89
63
Changchai Company, Limited Interim Report 2019
Other payables 185,022,961.56 185,022,961.56
Including: Interest payable
Dividends payable 3,243,179.97 3,243,179.97
Liabilities directly associated with assets
classified as held for sale
Current portion of non-current liabilities 18,500,000.00 18,500,000.00
Other current liabilities
Total current liabilities 1,279,187,673.66 1,279,187,673.66
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term payroll payable
Provisions
Deferred income 59,928,484.84 59,928,484.84
Deferred income tax liabilities 46,659,825.00 46,659,825.00
Other non-current liabilities
Total non-current liabilities 106,588,309.84 106,588,309.84
Total liabilities 1,385,775,983.50 1,385,775,983.50
Owners’ equity:
Share capital 561,374,326.00 561,374,326.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 183,071,147.70 183,071,147.70
Less: Treasury stock
Other comprehensive income 264,405,675.00 264,405,675.00
Specific reserve 15,182,958.83 15,182,958.83
Surplus reserves 320,133,050.15 320,133,050.15
Retained earnings 643,968,465.93 643,968,465.93
Total owners’ equity 1,988,135,623.61 1,988,135,623.61
Total liabilities and owners’ equity 3,373,911,607.11 3,373,911,607.11
64
Changchai Company, Limited Interim Report 2019
Note for adjustment
(4) Retroactive Adjustments to Comparative Data of Prior Years when First Execution of any New
Standards Governing Financial Instruments or Leases
□ Applicable √ Not applicable
VI. Taxation
1. Main Taxes and Tax Rate
Category of taxes Tax basis Tax rate
VAT Payable to sales revenue 17%, 16%, 13%, 11%, 10%, 6%
Urban maintenance and Tax paid in accordance with the
Taxable turnover amount
construction tax tax regulations of tax units location
Enterprise income tax Taxable income 25% or 15% or 5%
Education surcharge Taxable turnover amount 5%
Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate
Name Income tax rate
Changzhou Housheng Investment Co., Ltd. 5%
Changchai Co., Ltd. 15%
Changchai Wanzhou Diesel Engine Co., Ltd. 15%
Changzhou Changchai Benniu Diesel Engine Fittings Co., Ltd. 25%
Changzhou Changchai Housheng Agricultural Equipment Co., Ltd. 25%
Changzhou Fuji Changchai Robin Gasoline Engine Co., Ltd. 25%
Jiangsu Changchai Machinery Co., Ltd. 25%
2. Tax Preference
In 2018, 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. Changzhou housheng investment co., LTD., a holding subsidiary, will collect enterprise income tax
at a reduced rate of 5% from January 1, 2019 solstice on December 31, 2021 according to the notice of
implementing the preferential tax reduction and exemption policy for small and micro enterprises issued by the
ministry of finance and the state administration of taxation.
65
Changchai Company, Limited Interim Report 2019
3. Other
VII. Notes to Major Items in the Consolidated Financial Statements of the Company
1. Monetary Capital
Unit: RMB
Item Ending balance Beginning balance
Cash on hand 401,268.09 441,363.70
Bank deposits 493,219,001.11 684,620,907.41
Other monetary capital 134,862,508.92 115,897,765.58
Total 628,482,778.12 800,960,036.69
At the end of Reporting Period, the monetary fund of the Company used restrictedly was RMB134,862,508.92,
among which cash deposit of bank acceptance bill was RMB134,862,508.92.
2. Notes Receivable
(1) Notes Receivable Listed by Category
Unit: RMB
Item Ending balance Beginning balance
Bank acceptance bill 445,812,473.66 495,370,782.47
Total 445,812,473.66 495,370,782.47
Please refer to the relevant information of disclosure of bad debt provision of other accounts receivable if
adopting the general mode of expected credit loss to withdraw bad debt provision of notes receivable.
□ Applicable √ Not applicable
(2) 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 Amount of not terminated
Item
at the period-end recognition at the period-end
Bank acceptance bill 412,187,005.64
Total 412,187,005.64
3. Accounts Receivable
(1) Accounts Receivable Disclosed by Category
Unit: RMB
66
Changchai Company, Limited Interim Report 2019
Ending balance Beginning balance
Carrying Bad debt Carrying Bad debt
amount provision amount provision
Carryi
Category Withd Withd Carryin
ng
Amou Propo Amou rawal Amou Propor Amou rawal g value
value
nt rtion nt propo nt tion nt propor
rtion tion
Accounts
receivable for
31,08 30,19 32,02 31,133
which bad debt 97.14 887,4 97.23 887,436
0,167. 3.12% 2,731. 0,727. 5.13% ,291.1
provision % 36.42 % .42
94 52 53 1
separately
accrued
Of which:
Accounts
receivable with
significant
28,20 27,31 28,20 27,317
single amount 96.85 887,4 96.85 887,436
5,070. 2.83% 7,634. 5,070. 4.52% ,634.1
for which bad % 36.42 % .42
58 16 58 6
debt provision
separately
accrued
Accounts
receivable with
insignificant
2,875, 2,875, 3,815,
single amount 100.0 3,815, 100.0
097.3 0.29% 097.3 0.00 656.9 0.61% 0.00
for which bad 0% 656.95 0%
6 6 5
debt provision
separately
accrued
Accounts
receivable
965,9 223,5 742,3 591,4 213,51
withdrawal of 96.88 23.15 94.87 36.10 377,971
83,82 98,58 85,24 89,45 7,727.
bad debt % % % % ,722.69
4.54 0.68 3.86 0.66 97
provision by
group
Of which:
997,0 253,7 743,2 623,5 244,65
100.0 25.45 100.00 39.24 378,859
Total 63,99 91,31 72,68 10,17 1,019.
0% % % % ,159.11
2.48 2.20 0.28 8.19 08
Accounts receivable for which bad debt provision separately accrued:
67
Changchai Company, Limited Interim Report 2019
Unit: RMB
Ending balance
Name Carrying Bad debt Withdrawal
Reason for withdrawal
amount provision proportion
Customer 1 1,902,326.58 1,902,326.58 100.00% Difficult to recover
Customer 2 1,161,700.00 580,850.00 50.00% Expected to difficultly recover
Customer 3 6,215,662.64 6,215,662.64 100.00% Difficult to recover
Customer 4 2,484,497.34 2,177,910.92 87.66% Expected to difficultly recover
Customer 5 3,279,100.00 3,279,100.00 100.00% Expected to difficultly recover
Customer 6 2,068,377.01 2,068,377.01 100.00% Expected to difficultly 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 1,679,109.54 1,679,109.54 100.00% Difficult to recover
Customer
1,470,110.64 1,470,110.64 100.00% Expected to difficultly recover
10
Other 2,875,097.36 2,875,097.36 100.00% Expected to difficultly recover
30,192,731.5
Total 31,080,167.94 -- --
2
Accounts receivable withdrawal of bad debt provision by group:
Unit: RMB
Ending balance
Aging
Carrying amount Bad debt provision Withdrawal proportion
Subtotal of within 1 year 721,064,680.68 14,421,293.61 2.00%
1 to 2 years 25,520,630.47 1,276,031.52 5.00%
2 to 3 years 9,204,859.37 1,380,728.91 15.00%
3 to 4 years 4,527,490.28 1,358,247.08 30.00%
4 to 5 years 1,259,710.47 755,826.28 60.00%
Over 5 years 204,406,453.27 204,406,453.27 100.00%
Total 965,983,824.54 223,598,580.68 --
Notes of the basis of recognizing the group:
Please refer to the relevant information of disclosure of bad debt provision of other accounts receivable if
adopting the general mode of expected credit loss to withdraw bad debt provision of accounts receivable.
□ Applicable √ Not applicable
Disclosure by aging
Unit: RMB
Aging Ending balance
68
Changchai Company, Limited Interim Report 2019
Within 1 year (including 1 year) 721,064,680.68
1 to 2 years 25,520,630.47
2 to 3 years 9,204,859.37
Over 3 years 241,273,821.96
3 to 4 years 4,527,490.28
4 to 5 years 2,421,410.47
Over 5 years 234,324,921.21
Total 997,063,992.48
(2) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
Information of withdrawal of bad debt provision:
Unit: RMB
Changes in the Reporting Period
Beginning
Item Reversal or Ending balance
balance Withdrawal Write-off
recovery
Bad debt
244,651,019.08 9,140,293.12 253,791,312.20
provision
Total 244,651,019.08 9,140,293.12 253,791,312.20
(3) Top 5 of the Ending Balance of the Accounts Receivable Collected according to the Arrears Party
At the period-end, the total top 5 of the ending balance of the accounts receivable collected according to the
arrears party was RMB506,859,995.98 accounting for 51.05% of the total ending balance of accounts
receivable. And the ending balance of bad debt provision withdrawn was RMB10,137,199.92.
4. Prepayments
(1) List by Aging Analysis
Unit: RMB
Ending balance Beginning balance
Aging
Amount Proportion Amount Proportion
Within 1 year 7,211,398.19 76.08% 9,535,876.40 84.01%
1 to 2 years 642,569.54 6.78% 437,529.70 3.85%
2 to 3 years 256,574.65 2.71% 57,536.24 0.51%
Over 3 years 1,368,524.68 14.44% 1,321,354.76 11.63%
Total 9,479,067.06 -- 11,352,297.10 --
69
Changchai Company, Limited Interim Report 2019
(2) Top 5 of the Ending Balance of the Prepayments Collected according to the Prepayment Target
At the period-end, the total top 5 of the ending balance of the prepayments collected according to the
prepayment target was RMB2,155,392.45 accounting for 22.74% of the total ending balance of
prepayments.
5. Other Receivables
Unit: RMB
Item Ending balance Beginning balance
Interest receivable 0.00
Dividend receivable 0.00
Other receivables 10,675,479.55 9,244,584.42
Total 10,675,479.55 9,244,584.42
(1) Other receivables
1) Other Receivables Classified by Accounts Nature
Unit: RMB
Nature Ending carrying value Beginning carrying value
Margin and cash pledge 4,200.00 4,200.00
Intercourse funds 26,523,461.40 25,451,250.34
Petty cash and borrowings by employees 1,392,153.09 1,232,153.09
Other 15,865,412.52 15,546,601.57
Total 43,785,227.01 42,234,205.00
2) Withdrawal of Bad Debt Provision
□ Applicable √ Not applicable
Disclosure by aging
Unit: RMB
Aging Ending balance
Within 1 year (including 1 year) 8,679,465.27
1 to 2 years 1,854,683.70
2 to 3 years 320,558.17
Over 3 years 32,930,519.87
3 to 4 years 152,883.41
4 to 5 years 70,403.10
Over 5 years 32,707,233.36
Total 43,785,227.01
70
Changchai Company, Limited Interim Report 2019
3) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
Information of withdrawal of bad debt provision:
Unit: RMB
Changes in the Reporting Period
Category Beginning balance Reversal or Ending balance
Withdrawal
recovery
Other receivables 32,989,620.58 120,126.88 33,109,747.46
Total 32,989,620.58 120,126.88 33,109,747.46
4) Top 5 of the Ending Balance of the Other Receivables Collected according to the Arrears Party
Unit: RMB
Proportion to
Ending balance
Ending ending balance
Name of the entity Nature Aging of bad debt
balance of other
provision
receivables%
Changzhou Changjiang
Intercourse Within 1
Casting Materials Co., 5,000,000.00 11.42% 100,000.00
funds year
Ltd.
Changzhou Compressors Intercourse Over 5
2,940,000.00 6.71% 2,940,000.00
Factory funds years
Changchai Group Imp. & Intercourse Over 5
2,853,188.02 6.52% 2,853,188.02
Exp. Co., Ltd. funds years
Changzhou New District Intercourse Over 5
1,626,483.25 3.71% 1,626,483.25
Accounting Centre funds years
Changzhou Group Intercourse Over 5
1,140,722.16 2.61% 1,140,722.16
Settlement Centre funds years
13,560,393.4
Total -- -- 30.97% 8,660,393.43
3
6. Inventory
Whether the Company has executed the new income standards
√Yes □ No
(1) Category of Inventory
Unit: RMB
Ending balance Beginning balance
Item Falling price Falling price
Carrying Carrying Carrying Carrying
reserves of reserves of
amount value amount value
inventory or inventory or
71
Changchai Company, Limited Interim Report 2019
depreciation depreciation
reserves of reserves of
contract contract
performance performance
cost cost
Raw 85,753,215.7 79,991,735.9 134,454,498. 128,608,994.
5,761,479.77 5,845,504.24
materials 0 3 93 69
Goods in 150,248,131. 24,091,709.6 126,156,421. 166,798,553. 24,187,100.5 142,611,452.
process 41 2 79 34 4 80
Materials
12,093,880.8 11,018,124.3 13,330,233.2 12,336,933.1
processed on 1,075,756.43 993,300.18
1 8 9 1
commission
Finished 277,626,321. 16,116,367.3 261,509,954. 288,979,920. 16,035,855.0 272,944,065.
goods 85 9 46 46 3 43
Low priced
and easily 3,654,121.30 2,222,808.74 1,431,312.56 3,632,711.20 2,180,265.53 1,452,445.67
worn articles
529,375,671. 49,268,121.9 480,107,549. 607,195,917. 49,242,025.5 557,953,891.
Total
07 5 12 22 2 70
Whether the Company needs to comply with the disclosure requirements of Shenzhen Stock Exchange Industry
Information Disclosure Guidelines No. 4 - Listed companies engaged in seed industry and planting business
No
(2) Falling Price Reserves of Inventories and Depreciation Reserves of Contract Performance Cost
Unit: RMB
Increase Decrease
Beginning Ending
Item Reverse or
balance Withdrawal Other Other balance
write-off
Raw materials 5,845,504.24 0.00 0.00 84,024.47 0.00 5,761,479.77
Goods in process 24,187,100.54 0.00 0.00 95,390.92 0.00 24,091,709.62
Materials processed on
993,300.18 82,456.25 0.00 0.00 0.00 1,075,756.43
commission
Finished goods 16,035,855.03 80,512.36 0.00 0.00 0.00 16,116,367.39
Low priced and easily
2,180,265.53 42,543.21 0.00 0.00 0.00 2,222,808.74
worn articles
Total 49,242,025.52 205,511.82 0.00 179,415.39 0.00 49,268,121.95
72
Changchai Company, Limited Interim Report 2019
7. Other Current Assets
Whether the Company has executed the new income standards
√Yes □ No
Unit: RMB
Item Ending balance Beginning balance
The VAT tax credits 6,768,809.68 25,962,369.29
Bank financial products 0.00 0.00
Prepaid expense 87,542.21 86,761.81
Securities company financial product 9,500,000.00 8,253,873.41
Other 12,457.79 54,604.46
Total 16,368,809.68 34,357,608.97
8. Long-term Equity Investment
Unit: RMB
Increase/decrease
Gain Adjust Endin
Begin Cash Endin
or loss ment Withd g
ning bonus g
recogn of rawal balanc
balanc Additi Reduc Chang or balanc
Invest ized other of e of
e onal ed es in profit e
ees under compr deprec Other deprec
(carryi invest invest other annou (carryi
the ehensi iation iation
ng ment ment equity nced ng
equity ve reserv reserv
value) to value)
metho incom es es
issue
d e
I. Joint ventures
II. Associated enterprises
Beijin
g
Tsingh
ua
Indust
44,182 44,182 44,182
rial 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
.50 .50 .50
Invest
ment
Mana
gemen
t Co.,
73
Changchai Company, Limited Interim Report 2019
Ltd.
Subtot 44,182 44,182 44,182
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
al .50 .50 .50
44,182 44,182 44,182
Total 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
.50 .50 .50
9. Other Equity Instrument Investment
Unit: RMB
Item Ending balance Beginning balance
Foton Automobile 342,465,000.00 262,990,000.00
Bank of Jiangsu 130,680,000.00 107,460,000.00
Jiangsu Expressway Co., Ltd. 537,000.00 490,000.00
Jiangsu Liance Electromechanical Technology Co.,
7,200,000.00 7,200,000.00
Ltd.
Changzhou Synergetic Innovation Private Equity
100,000,000.00 100,000,000.00
Fund (Limited Partnership)
Kailong High Technology Co., Ltd. 20,001,268.00 20,001,268.00
Guizhou Warmen Pharmaceutical Co, Ltd. 200,104.80 200,104.80
Guizhou Anda Energy Technology Co., Ltd. 195,297.49 195,297.49
Henan Lantian Gas Co., Ltd. 160,744.76 160,744.76
Anhui Hofo Electromechanical Co., Ltd. 138,441.76
Hebei Songhe Recycling Resources Co., Ltd. 104,699.44 104,699.44
Hunan Litian High-tech Materials Co., Ltd. 49,255.00 49,255.00
Total 601,731,811.25 498,851,369.49
Non-trading equity instrument investment disclosed by category
Unit: RMB
Reason for
assigning to
Amount of Reason for
measure by
other other
fair value of
Dividend comprehensi comprehensi
Accumulativ Accumulativ which
Item income ve ve income
e gains e losses changes be
recognized transferred to transferred to
included to
retained retained
other
earnings earnings
comprehensi
ve income
Changzhou Judged by
74
Changchai Company, Limited Interim Report 2019
Synergetic management
Innovation layer
Private meaningfully
Equity Fund
(Limited
Partnership)
Jiangsu
Liance Judged by
Electromech management
anical layer
Technology meaningfully
Co., Ltd.
Judged by
Kailong High
management
Technology
layer
Co., Ltd.
meaningfully
Judged by
Foton management
Automobile layer
meaningfully
Judged by
Bank of management
Jiangsu layer
meaningfully
Judged by
Jiangsu
management
Expressway
layer
Co., Ltd.
meaningfully
On April 9, 2019, the company's eighth seventeen board meetings, reviewed and adopted the "about the company
involved in the financial assets held by the business loan refinancing bill, agree that the company will, no more
than 100 million shares held by" fukuda car "shares and 18 million shares of stock bank in jiangsu province to
participate in to refinance securities lending transactions. At the end of the reporting period, the company still had
280,000 shares of foton motor during the loan period.
10. Investment Property
(1) Investment Property Adopting the Cost Measurement Mode
√ Applicable □ Not applicable
Unit: RMB
Item Houses and Land use Construction in Total
75
Changchai Company, Limited Interim Report 2019
buildings right progress
I. Original carrying value 87,632,571.14 87,632,571.14
1.Beginning balance
2.Increased amount of the period
(1) Outsourcing
(2) Transfer from inventories/fixed
assets/construction in progress
(3)Enterprise combination increase
3.Decreased amount of the period
(1) Disposal
(2) Other transfer
4. Ending balance 87,632,571.14 87,632,571.14
II.Accumulative depreciation and
accumulative amortization
1.Beginning balance 36,976,563.51 36,976,563.51
2.Increased amount of the period 1,104,170.40 1,104,170.40
(1) Withdrawal or amortization 1,104,170.40 1,104,170.40
3.Decreased amount of the period
(1) Disposal
(2) Other transfer
4. Ending balance 38,080,733.91 38,080,733.91
III.Depreciation reserves
1.Beginning balance
2.Increased amount of the period
(1) Withdrawal
3.Decreased amount of the period
(1) Disposal
(2) Other transfer
4. Ending balance
IV. Carrying value
1.Ending carrying value 49,551,837.23 49,551,837.23
2.Beginning carrying value 50,656,007.63 50,656,007.63
(2) Investment Property Adopted the Fair Value Measurement Code
□ Applicable √ Not applicable
76
Changchai Company, Limited Interim Report 2019
11. Fixed Assets
Unit: RMB
Item Ending balance Beginning balance
Fixed assets 473,064,733.73 511,250,371.37
Total 473,064,733.73 511,250,371.37
(1) List of Fixed Assets
Unit: RMB
Houses and Machinery Transportation Other
Item Total
buildings equipment equipment equipment
I. Original
carrying value
1. Beginning
447,076,373.55 936,110,914.94 18,083,828.53 44,422,389.46 1,445,693,506.48
balance
2. Increased
amount of the
period
(1)
Purchase
(2)
Transfer from
0.00 6,833,909.02 0.00 172,389.13 7,006,298.15
construction in
progress
(3)
Enterprise
combination
increase
3. Decreased
amount of the
period
(1)
Disposal or 1,369,274.57 3,257,085.78 4,626,360.35
scrap
4. Ending
447,076,373.55 941,575,549.39 18,083,828.53 41,337,692.81 1,448,073,444.28
balance
77
Changchai Company, Limited Interim Report 2019
II.Accumulative
depreciation
1. Beginning
265,778,832.18 619,622,564.64 13,341,638.03 34,205,985.26 932,949,020.11
balance
2. Increased
amount of the 8,608,066.58 33,218,854.43 1,263,298.28 1,974,286.00 45,064,505.29
period
(1)
8,608,066.58 33,218,854.43 1,263,298.28 1,974,286.00 45,064,505.29
Withdrawal
3. Decreased
amount of the 0.00 1,242,002.26 0.00 3,256,927.59 4,498,929.85
period
(1)
Disposal or 0.00 1,242,002.26 0.00 3,256,927.59 4,498,929.85
scrap
4. Ending
274,386,898.76 651,599,416.81 14,604,936.31 32,923,343.67 973,514,595.55
balance
III.Depreciation
reserves
1. Beginning
1,494,115.00 1,494,115.00
balance
2. Increased
amount of the
period
(1)
Withdrawal
3. Decreased
amount of the
period
(1)
Disposal or
scrap
4. Ending
1,494,115.00 1,494,115.00
balance
IV. Carrying
78
Changchai Company, Limited Interim Report 2019
value
1. Ending
172,689,474.79 288,482,017.58 3,478,892.22 8,414,349.14 473,064,733.73
carrying value
2. Beginning
181,297,541.37 314,994,235.30 4,742,190.50 10,216,404.20 511,250,371.37
carrying value
12. Construction in Progress
Unit: RMB
Item Ending balance Beginning balance
Construction in progress 80,277,379.05 89,090,384.71
Total 80,277,379.05 89,090,384.71
(1) List of Construction in Progress
Unit: RMB
Ending balance Beginning balance
Item Carrying Depreciation Carrying Carrying Depreciation Carrying
amount reserves value amount reserves value
Trial
production
workshop 14,349,461.8 14,349,461.8 14,349,461.8 14,349,461.8
project 0 0 0 0
technology
center
Casting
renovation 396,000.00 396,000.00 396,000.00 396,000.00
project
Expansion
capacity of
11,375,531.7 11,375,531.7 11,371,098.2 11,371,098.2
multi-cylinde
4 4 4 4
r (The 2nd
Period)
Diesel
Engine 23,485,515.7 23,485,515.7 19,061,813.9 19,061,813.9
Cylinder 0 0 5 5
Body
79
Changchai Company, Limited Interim Report 2019
Flexible
Manufacturin
g Line
35KV
1,402,649.07 1,402,649.07 1,321,959.41 1,321,959.41
Substation
Equipment to
be installed 29,268,220.7 29,268,220.7 42,590,051.3 42,590,051.3
and payment 4 4 1 1
for projects
80,277,379.0 80,277,379.0 89,090,384.7 89,090,384.7
Total
5 5 1 1
(2) Changes in Significant Construction in Progress during the Reporting Period
Unit: RMB
Propo Of
rtion which Capit
of Accu : alizati
accu mulat Amo on
mulat ed unt of rate
Trans Other
Begin Incre Endin ed amou capita of Capit
ferred decre Job
Budg ning ased g invest nt of lized intere al
Item in ased sched
et balan amou balan ment intere intere sts for resou
fixed amou ule
ce nt ce in st sts for the rces
assets nt
constr capita the Repor
uctio lizati Repor ting
ns to on ting Perio
budge Perio d
t d
Trial
produ
ction
works 14,34 14,34 Unco
2,289 62.67 0.00
hop 9,461 0.00 0.00 0.00 9,461 mplet 0.00 0.00 Other
.63 % %
.80 .80 ed
proje
ct
techn
ology
80
Changchai Company, Limited Interim Report 2019
center
Expa
nsion
capac
ity of
multi- 11,37 11,37 Unco
7,019 4,433 91.94 0.00
cylin 1,098 0.00 5,531 mplet 0.00 0.00 Other
.00 .50 % %
.24 .74 ed
der
(The
2nd
Perio
d)
Diese
l
Engin
e
Cylin
der 19,06 4,423 23,48 Unco
11,60 43.40 0.00
Body 1,813 ,701. 0.00 0.00 5,515 mplet 0.00 0.00 Other
4.00 % %
Flexi .95 75 .70 ed
ble
Manu
factur
ing
Line
35KV 1,321 1,402 Unco
80,68 0.00
Subst ,959. 0.00 0.00 ,649. mplet 0.00 0.00 Other
9.66 %
ation 41 07 ed
46,10 4,508 50,61
20,91 0.00
Total 4,333 ,824. 0.00 0.00 3,158 -- -- 0.00 0.00 --
2.63 %
.40 91 .31
13. Intangible Assets
(1) List of Intangible Assets
Unit: RMB
Item Land use right Software License fee Total
I. Original carrying value
81
Changchai Company, Limited Interim Report 2019
1. Beginning balance 144,770,507.85 11,517,579.94 5,488,000.00 161,776,087.79
2. Increased amount of the period
(1) Purchase
(2) Internal R&D
(3) Business combination increase
3. Decreased amount of the period
(1) Disposal
4. Ending balance 144,770,507.85 11,517,579.94 5,488,000.00 161,776,087.79
II. Accumulated amortization
1. Beginning balance 48,128,022.51 9,549,052.64 1,006,133.26 58,683,208.41
2. Increased amount of the period 1,486,425.13 906,524.78 274,399.98 2,667,349.89
(1) Withdrawal 1,486,425.13 906,524.78 274,399.98 2,667,349.89
3. Decreased amount of the period
(1) Disposal
4. Ending balance 59,614,447.64 10,455,577.42 1,280,533.24 61,350,558.30
III. Depreciation reserves
1. Beginning balance
2. Increased amount of the period
(1) Withdrawal
3. Decreased amount of the period
(1) Disposal
4. Ending balance
IV. Carrying value
1. Ending carrying value 95,156,060.21 1,062,002.52 4207466.76 100,425,529.49
2. Beginning carrying value 96,642,485.34 1,968,527.30 4,481,866.74 103,092,879.38
14. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Deferred Income Tax Assets that Had not Been Off-set
Unit: RMB
Ending balance Beginning balance
Deductible Deferred Deductible Deferred
Item
temporary income tax temporary income tax
difference assets difference assets
Provision for impairment of assets 6,401,000.68 979,822.71 6,401,000.68 979,822.71
82
Changchai Company, Limited Interim Report 2019
Total 6,401,000.68 979,822.71 6,401,000.68 979,822.71
(2) Deferred Income Tax Liabilities Had Not Been Off-set
Unit: RMB
Ending balance Beginning balance
Deductible Deferred Deductible Deferred
Item
temporary income tax temporary income tax
difference liabilities difference liabilities
Assets evaluation appreciation for
business combination not under the 4,867,828.96 1,216,957.24 5,247,821.44 1,311,955.36
same control
Changes in fair value of other equity
413,807,500.00 62,071,125.00 311,065,500.00 46,659,825.00
instrument investment
Total 418,675,328.96 63,288,082.24 316,313,321.44 47,971,780.36
(3) List of Unrecognized Deferred Income Tax Assets
Unit: RMB
Item Ending balance Beginning balance
Deductable temporary difference 320,481,664.50 320,481,664.50
Total 320,481,664.50 320,481,664.50
15. Other Non-current Assets
Whether the Company has executed the new income standards
√Yes □ No
Unit: RMB
Ending balance Beginning balance
Deprecia Depreciat
Item Carrying Carrying Carrying Carrying
tion ion
amount value amount value
reserves reserves
4,000,000 4,000,000
Entrusted loans 0.00 0.00 0.00 0.00
.00 .00
4,000,000 4,000,000
Total 0.00 0.00 0.00 0.00
.00 .00
83
Changchai Company, Limited Interim Report 2019
16. Short-term Borrowings
(1) Category of Short-term Borrowings
Unit: RMB
Item Ending balance Beginning balance
Mortgage loans 7,000,000.00 7,000,000.00
Guaranteed loans 10,000,000.00 10,000,000.00
Credit loans 5,000,000.00 10,000,000.00
Total 22,000,000.00 27,000,000.00
17. Notes Payable
Unit: RMB
Category Ending balance Beginning balance
Bank’s acceptance bill 498,805,800.00 438,375,400.00
Total 498,805,800.00 438,375,400.00
18. Accounts Payable
(1) List of Accounts Payable
Unit: RMB
Item Ending balance Beginning balance
Loans 534,631,506.05 591,754,875.77
Total 534,631,506.05 591,754,875.77
19. Advances from Customers
Whether the Company has executed the new income standards
√ Yes □ No
(1) List of Advances from Customers
Unit: RMB
Item Ending balance Beginning balance
Loans 58,809,277.68 34,500,232.97
Total 58,809,277.68 34,500,232.97
84
Changchai Company, Limited Interim Report 2019
20. Payroll Payable
(1) List of Payroll Payable
Unit: RMB
Beginning Ending
Item Increase Decrease
balance balance
I. Short-term salary 50,500,592.99 130,770,536.38 150,036,105.05 31,235,024.32
II. Post-employment benefit-defined
16,142,912.97 16,142,912.97
contribution plans
Total 50,500,592.99 146,913,449.35 166,179,018.02 31,235,024.32
(2) List of Short-term Salary
Unit: RMB
Beginning Ending
Item Increase Decrease
balance balance
1. Salary, bonus, allowance, subsidy 41,939,857.83 110,265,454.00 129,160,534.40 23,044,777.43
2.Employee welfare 89,592.74 1,568,150.28 1,467,821.58 189,921.44
3. Social insurance 7,901,233.35 7,901,233.35
Of which: Medical insurance
6,550,754.26 6,550,754.26
premiums
Work-related injury
653,467.90 653,467.90
insurance
Maternity insurance 697,011.19 697,011.19
4. Housing fund 8,704,590.00 8,704,590.00
5.Labor union budget and employee
8,471,142.42 2,331,108.75 2,801,925.72 8,000,325.45
education budget
Total 50,500,592.99 130,770,536.38 150,036,105.05 31,235,024.32
(3) List of Defined Contribution Plans
Unit: RMB
Ending
Item Beginning balance Increase Decrease
balance
1. Basic pension benefits 15,706,350.31 15,706,350.31
2. Unemployment insurance 436,562.66 436,562.66
Total 16,142,912.97 16,142,912.97
85
Changchai Company, Limited Interim Report 2019
21. Taxes Payable
Unit: RMB
Item Ending balance Beginning balance
VAT 1,063,147.40 876,055.81
Corporate income tax 1,789,869.44 3,665,483.92
Personal income tax 18,174.27 140,662.05
Urban maintenance and
20,540.15 993,210.56
construction tax
Property tax 30,187.88 94,256.40
Land use tax 21,000.00 100,135.19
Stamp duty 6,673.85 4,594.61
Education Surcharge 14,671.54 116,355.46
Comprehensive fees 0.00 1,075,134.76
Environmental protection tax 292.59 197.13
Total 2,964,557.12 7,066,085.89
22. Other Payables
Unit: RMB
Item Ending balance Beginning balance
Interest payable 0.00
Dividends payable 3,891,433.83 3,891,433.83
Other payables 188,181,372.94 195,520,817.07
Total 192,072,806.77 199,412,250.90
(1) Dividends Payable
Unit: RMB
Item Ending balance Beginning balance
Ordinary share dividends 3,243,179.97 3,243,179.97
Dividends for non-controlling shareholders 648,253.86 648,253.86
Total 3,891,433.83 3,891,433.83
86
Changchai Company, Limited Interim Report 2019
Other explanations, including important dividends payable that have not been paid for more than one year, shall
disclose the reason for the non-payment: shareholders have not received dividends for more than one year.
(2) Other Payables
1) Other Payables Listed by Nature of Account
Unit: RMB
Item Ending balance Beginning balance
Margin & cash pledged 4,067,802.52 3,369,213.08
Intercourse funds among units 15,026,254.32 10,977,924.77
Intercourse funds among individuals 452,065.24 375,201.04
Sales discount and three guarantees 150,267,114.56 144,278,468.99
Other 18,368,136.30 36,520,009.19
Total 188,181,372.94 195,520,817.07
23. Current Portion of Non-current Liabilities
Unit: RMB
Item Ending balance Beginning balance
Current portion of long-term borrowings 18,500,000.00 18,500,000.00
Total 18,500,000.00 18,500,000.00
24. Other Current Liabilities
Whether the Company has executed the new income standards
√ Yes □ No
Unit: RMB
Item Ending balance Beginning balance
Electric charge 2,664,523.79 2,082,985.18
Total 2,664,523.79 2,082,985.18
25. Deferred Income
Unit: RMB
Beginning Reason for
Item Increase Decrease Ending balance
balance formation
Government
59,928,484.84 0.00 0.00 59,928,484.84
subsidies
87
Changchai Company, Limited Interim Report 2019
Total 59,928,484.84 59,928,484.84 --
Item involving government subsidies:
Unit: RMB
Amount
recorded Amount
Amount
into recorded Related
offset
Amount non-oper into other to
Beginnin cost in Other Ending
Item of newly ating income in assets/rel
g balance the changes balance
subsidy income in the ated to
Reporting
the Reporting income
Period
Reporting Period
Period
Electric
control of
diesel
engine
research
and 646,800.0 646,800.0 Related
developm 0 0 to assets
ent and
industrial
ization
allocation
s
National
major
project 28,770,00 28,770,00 Related
special 0.00 0.00 to assets
allocation
s
Remove
20,511,68 20,511,68 Related
compensa
4.84 4.84 to assets
tion
Research 10,000,00 10,000,00 Related
0.00 0.00 to assets
and
88
Changchai Company, Limited Interim Report 2019
developm
ent and
industrial
ization
allocation
s of
national
III/IV
standard
high-pow
ered
efficient
diesel
engine
for
agricultur
al use
26. Share Capital
Unit: RMB
Increase/decrease (+/-)
Beginning Bonus Ending
New shares Bonus
balance issue from Other Subtotal balance
issued shares
profit
The sum of 561,374,32 561,374,32
shares 6.00 6.00
27. Capital Reserves
Unit: RMB
Beginning
Item Increase Decrease Ending balance
balance
Capital premium (premium on stock) 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
89
Changchai Company, Limited Interim Report 2019
28. Other Comprehensive Income
Unit: RMB
Reporting Period
Less:
Record
Less: ed in
Recorded other
in other compre
comprehe hensiv Attribu
nsive e table to Attribu
Income
income in income owners table to
before Less: Endin
Beginni prior in prior of the non-co
taxatio Income g
Item ng period period Compa ntrollin
n in the tax balan
balance and and ny as g
Curren expens ce
transferre transfe the interest
t e
d in rred in parent s after
Period
profit or retaine after tax
loss in d tax
the earning
Current s in the
Period Curren
t
Period
I. Other comprehensive 102,74 351,7
264,405, 15,411, 87,330,
income that will not be 2,000.0 0.00 0.00 36,37
675.00 300.00 700.00
reclassified to profit or loss 0 5.00
Changes in fair 102,74 351,7
264,405, 15,411, 87,330,
value of other equity 2,000.0 0.00 0.00 36,37
675.00 300.00 700.00
instrument investment 0 5.00
102,74 351,7
Total of other 264,405, 15,411, 87,330,
2,000.0 0.00 36,37
comprehensive income 675.00 300.00 700.00
0 5.00
29. Specific Reserve
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Safety production
15,182,958.83 15,182,958.83
cost
Total 15,182,958.83 15,182,958.83
90
Changchai Company, Limited Interim Report 2019
30. Surplus Reserves
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Statutory surplus
306,976,192.25 306,976,192.25
reserves
Discretional surplus
13,156,857.90 13,156,857.90
reserves
Total 320,133,050.15 320,133,050.15
31. Retained Earnings
Unit: RMB
Reporting Same period of
Item
Period last year
Beginning balance of retained earnings before adjustments 717,883,351.33 679,131,047.06
Beginning balance of retained earnings after adjustments 717,883,351.33 679,131,047.06
Add: Net profit attributable to owners of the Company as the parent 19,058,025.07 18,638,557.66
Less: Withdrawal of statutory surplus reserves
Dividend of ordinary shares payable 14,034,358.15 16,841,229.78
Ending retained earnings 722,907,018.25 680,928,374.94
32. Operating Revenue and Cost of Sales
Unit: RMB
Reporting Period Same period of last year
Item
Operating revenue Cost of sales Operating revenue Cost of sales
Main operations 1,099,044,681.77 958,911,511.17 1,170,216,312.13 1,021,184,769.09
Other operations 16,785,163.82 11,527,336.19 16,544,580.13 13,170,139.90
Total 1,115,829,845.59 970,438,847.36 1,186,760,892.26 1,034,354,908.99
Whether the Company has executed the new income standards
√ Yes □ No
33. Taxes and Surtaxes
Unit: RMB
Item Reporting Period Same period of last year
Urban maintenance and 574,471.12 845,650.36
91
Changchai Company, Limited Interim Report 2019
construction tax
Education Surcharge 266,336.51 642,651.03
Property tax 1,986,524.35 2,069,927.39
Land use tax 1,713,504.95 1,586,101.00
Stamp duty 456,518.80 513,699.80
Other 81,443.68
Total 4,997,355.73 5,739,473.26
34. Selling Expense
Unit: RMB
Item Reporting Period Same period of last year
Office expenses 2,915,326.32 3,386,449.10
Employee’s remuneration 12,563,212.25 13,325,262.47
Sales promotional expense 3,165,350.00 4,262,413.37
Three guarantees 31,616,012.47 23,686,879.68
Transport charge 1,767,281.30 2,858,745.16
Other 6,231,216.64 4,708,326.08
Total 58,258,398.98 52,228,075.86
35. Administrative Expense
Unit: RMB
Item Reporting Period Same period of last year
Office expenses 6,785,232.65 5,654,457.09
Employee’s remuneration 11,852,036.58 12,037,442.78
Depreciation and amortization 7,665,203.65 5,697,101.23
Transport fees 1,205,423.26 1,056,769.14
Repair charge 992,564.62 1,032,605.25
Safety expenses 1,005,623.68 414,850.19
Other 4,596,610.42 2,474,389.63
Total 34,102,694.86 28,367,615.31
36. R&D Expense
Unit: RMB
92
Changchai Company, Limited Interim Report 2019
Item Reporting Period Same period of last year
Direct input expense 19,912,601.44 21,463,512.92
Employee’s remuneration 8,459,434.34 10,053,265.32
Depreciation and amortization 1,367,141.44 1,406,084.20
Entrusted R&D charges 0.00 700,000.00
Other 325,106.24 444,009.71
Total 30,064,283.46 34,066,872.15
37. Finance Costs
Unit: RMB
Item Reporting Period Same period of last year
Interest expense 1,567,625.50 1,805,097.10
Less: Interest income 1,642,256.03 891,663.17
Net foreign exchange gains or losses -1,047,246.55 -1,336,510.72
Other -658,934.54 290,739.67
Total -1,780,811.62 -132,337.12
38. Other Income
Unit: RMB
Sources Reporting Period Same period of last year
Government subsidies 129,300.00 129,600.00
39. Investment Income
Unit: RMB
Item Reporting Period Same Period of last year
Investment income received from holding of
21,000.00
available-for-sale financial assets
Investment income received from disposal of
179,073.85 355,091.68
securities companies’ financial products
Total 179,073.85 376,091.68
40. Credit Impairment Loss
Unit: RMB
Item Reporting Period Same period of last year
93
Changchai Company, Limited Interim Report 2019
Bad debt loss of other receivables -9,260,420.00
Entrusted loan impairment loss 4,000,000.00
Total -5,260,420.00
41. Asset Impairment Loss
Whether the Company has executed the new income standards
√ Yes □ No
Unit: RMB
Reporting Same period of
Item
Period last year
I. Bad debt loss -9,843,236.55
II. Loss on inventory valuation and contract performance cost -26,096.43 -114,220.19
Total -26,096.43 -9,957,456.74
42. Proceeds from Assets Disposal
Unit: RMB
Sources Reporting Period Same period of last year
Fixed asset disposal income 988,535.95 0.00
43. Non-operating Income
Unit: RMB
Amount recorded in the
Reporting Same period
Item current non-recurring
Period of last year
profit or loss
Income generated from disposal of current assets 324,516.28 913,253.12 324,516.28
Gains from disposal of non-current assets 220,802.18
Income from penalty 6,021.73
Other 242,415.10 963,006.00 242,415.10
Total 566,931.38 2,103,083.03 566,931.38
44. Non-operating Expense
Unit: RMB
Reporting Same period Amount recorded in the
Item
Period of last year current non-recurring
94
Changchai Company, Limited Interim Report 2019
profit or loss
Loss on disposal of non-current assets 215,077.98 759,756.94 215,077.98
Loss on disposal of current assets 585,214.30
Other 2,760.00 182,194.97 2,760.00
Total 217,837.98 1,527,166.21 217,837.98
45. Income Tax Expense
(1) List of Income Tax Expense
Unit: RMB
Item Reporting Period Same period of last year
Current income tax expense -2,998,475.83 4,352,526.65
Total -2,998,475.83 4,352,526.65
(2) Adjustment Process of Accounting Profit and Income Tax Expense
Unit: RMB
Item Reporting Period
Profit before taxation 16,108,563.59
Current income tax expense accounted at statutory/applicable tax rate 2,416,284.53
Influence of applying different tax rates by subsidiaries 1,285,450.52
Influence of income tax before adjustment -6,700,210.88
Income tax expense -2,998,475.83
46. Cash Flow Statement
(1) Cash Generated from Other Operating Activities
Unit: RMB
Item Reporting Period Same period of last year
Subsidy and appropriation 129,300.00 129,600.00
Other intercourses in cash 6,528,903.17 5,101,317.80
Interest income 1,642,256.03 891,663.17
Total 8,300,459.20 6,122,580.97
(2) Cash Used in Other Operating Activities
Unit: RMB
95
Changchai Company, Limited Interim Report 2019
Item Reporting Period Same period of last year
Selling expense paid in cash 22,265,032.54 21,006,830.47
Administrative expense paid in cash 15,584,623.25 14,557,302.97
Handling charge 275,426.54 282,442.51
Other 358,282.38 611,755.52
Total 38,483,364.71 36,458,331.47
Notes:
47. Supplemental Information for Cash Flow Statement
(1) Supplemental Information for Cash Flow Statement
Unit: RMB
Same period of
Supplemental information Reporting Period
last year
1. Reconciliation of net profit to net cash flows generated from
-- --
operating activities
Net profit 19,107,039.42 18,907,908.92
Add: Provision for impairment of assets 5,286,516.43 9,957,456.74
Depreciation of fixed assets, of oil-gas assets, of productive biological
45,064,505.29 45,126,800.50
assets
Depreciation of right-to-use assets 0.00 0.00
Amortization of intangible assets 2,667,349.89 3,009,252.65
Amortization of long-term deferred expenses 0.00 0.00
Losses on disposal of fixed assets, intangible assets and other
-988,535.95 521,857.30
long-term assets (gains by “-”)
Losses on the scrapping of fixed assets (gains by “-”) 0.00 0.00
Losses on the changes in fair value (gains by “-”) 0.00 0.00
Financial expenses (gains by “-”) -1,780,811.62 668,251.41
Investment losses (gains by “-”) 0.00 -376,091.68
Decrease in deferred income tax assets (increase by “-”) 0.00 0.00
Increase in deferred income tax liabilities (decrease by “-”) 0.00 0.00
Decrease in inventory (increase by “-”) 77,794,149.72 84,613,078.27
Decrease in accounts receivable from operating activities (increase by
-400,095,623.42 -250,092,116.94
“-”)
Increase in payables from operating activities (decrease by “-”) 80,746,953.05 84,973,677.86
Other -2,976,019.99 -2,918,928.18
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Changchai Company, Limited Interim Report 2019
Net cash flows generated from operating activities -154,227,704.77 -5,608,853.15
2. Investing and financing activities that do not involving cash receipts
-- --
and payment:
Debt transferred as capital 0.00
Convertible corporate bond due within one year 0.00
Fixed assets from financing lease 0.00
3. Net increase in cash and cash equivalents -- --
Ending balance of cash 493,620,269.20 282,312,926.17
Less: Beginning balance of cash 687,439,682.49 325,263,654.43
Less: Beginning balance of cash equivalents 0.00
Net increase in cash and cash equivalents -193,459,370.39 -42,950,728.26
(2) Cash and Cash Equivalents
Unit: RMB
Item Ending balance Beginning balance
I. Cash 476,941,653.95 687,439,682.49
Including: Cash on hand 401,268.09 441,363.70
Bank deposit on demand 470,286,840.55 684,620,907.41
Other monetary capital on demand 2,001,365.45 2,017,368.48
48. Assets with Restricted Ownership or Right to Use
Unit: RMB
Item Ending carrying value Reason for restriction
Monetary capital 134,862,508.92 As cash deposit for bank acceptance bill
Houses and buildings 2,936,446.13 Mortgaged for borrowings from banks
Land use right 995,328.00 Mortgaged for borrowings from banks
Machinery equipment 48,181,935.62 Mortgaged for borrowings from banks
Total 186,976,218.67 --
49. Foreign Currency Monetary Items
(1) Foreign Currency Monetary Items
Unit: RMB
Ending foreign currency Ending balance
Item Exchange rate
balance converted to RMB
97
Changchai Company, Limited Interim Report 2019
Monetary capital -- --
Of which: USD 5,085,852.32 6.8740 34,960,148.85
HKD 275,388.80 0.8797 242,259.52
SGD 54,427.95 5.0805 276,521.20
Accounts receivable -- --
Of which: USD 9,846,283.21 6.8740 67,683,350.78
EUR
HKD
50. Government Subsidy
(1) Basic Information on Government Subsidy
Unit: RMB
Amount recorded in the
Category Amount Listed items
current profit or loss
Tractor project of Luoyang hilly land 66,000.00 Other income 66,000.00
Specific fund for municipal-level foreign trade
63,300.00 Other income 63,300.00
development
VIII. Changes of Consolidation Scope
1. Changes in Combination Scope for Other Reasons
Note to changes in combination scope for other reasons (such as newly establishment or liquidation of subsidiaries,
etc.) and relevant information:
The information of newly establishment of subsidiaries
On 25 February 2019, the interim board meeting held by Changchai Company, Limited (hereinafter referred as
“the Company”), examined and approved the proposal of establishing wholly-owned subsidiary to implement the
production project of light duty engine and casting, agreed the Company to set up a wholly-owned subsidiary in
RMB300 million to implement the production project. The subsidiary completed the registration procedures and
gained the business license issued by Administrative Approval Bureau of Changzhou National High-tech Industry
Development Zone (Xinbei District) with the corporate name of Jiangsu Changchai Machinery Co., Ltd. and the
registered capital RMB300 million. For the detailed information, see the Announcement of Foreign Investment
and Establishing the Wholly-owned Subsidiary (Announcement No. 2019-004) and Announcement of Procedures
of Foreign Investment and Establishing the Wholly-owned Subsidiary (Announcement No. 2019-005) in Security
Times, Ta Kung Pao and the cninfo website on February 26, 2019 and March 7, 2019.
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Changchai Company, Limited Interim Report 2019
IX. Equity in Other Entities
1. Equity in Subsidiary
(1) Subsidiaries
Main operating Registration Nature of Holding percentage (%)
Name Way of gaining
place place business Directly Indirectly
Changchai
Wanzhou
Diesel Chongqing Chongqing Industry 60.00% Set-up
Engine Co.,
Ltd.
Changzhou
Changchai
Benniu
Changzhou Changzhou
Diesel Industry 99.00% 1.00% Set-up
City City
Engine
Fittings Co.,
Ltd.
Changzhou
Housheng Changzhou Changzhou
Service 100.00% Set-up
Investment City City
Co., Ltd.
Changzhou
Changchai
Housheng Changzhou Changzhou
Industry 70.00% 25.00% Set-up
Agricultural City City
Equipment
Co., Ltd.
Changzhou
Fuji
Changchai Combination
Changzhou Changzhou
Robin Industry 100.00% not under the
City City
Gasoline same control
Engine Co.,
Ltd.
Jiangsu
Changchai Changzhou Changzhou
Industry 100.00% Set-up
Machinery City City
Co., Ltd.
Notes to holding proportion in subsidiary different from voting proportion:
99
Changchai Company, Limited Interim Report 2019
Basis of holding half or less voting rights but still controlling the investee and holding more than half of the voting
rights but not controlling the investee:
Significant structural entities and controlling basis in the scope of combination:
Basis of determining whether the Company is the agent or the principal:
(2) Significant Non-wholly-owned Subsidiary
Unit: RMB
Declaring
Shareholding The profit or loss Balance of
dividends
proportion of attributable to the non-controlling
Name distributed to
non-controlling non-controlling interests at the
non-controlling
interests interests period-end
interests
Changchai Wanzhou
40.00%
Diesel Engine Co., Ltd.
Changzhou Changchai
Housheng Agricultural 5.00%
Equipment Co., Ltd.
(3) The Main Financial Information of Significant Not Wholly-owned Subsidiary
Unit: RMB
Ending balance Beginning balance
Non- Non-
Non- Tot Curre Non- Curre
Curre curre Total Curre curre Total
Name curre al nt curre Total nt
nt nt liabili nt nt liabili
nt asse liabil nt assets liabili
assets liabili ties assets liabili ties
assets ts ities assets ties
ty ty
Changch
139
ai
112,3 27,01 ,31 22,58 22,58 110,5 27,49 138,0 19,60 2,000 21,60
Wanzho
03,83 6,071 9,9 8,500 0.00 8,500 89,00 3,776 82,78 8,386 ,000. 8,386
u Diesel
9.91 .00 10. .69 .69 6.95 .10 3.05 .99 00 .99
Engine
91
Co., Ltd.
Changzh
ou
34,
Changch
33,80 370 33,56 33,56 35,77 36,40 35,02 35,02
ai 567,3 625,6
3,254 ,55 7,100 0.00 7,100 6,302 1,983 8,512 0.00 8,512
Houshen 02.35 80.72
.87 7.2 .58 .58 .79 .51 .30 .30
g
2
Agricult
ural
100
Changchai Company, Limited Interim Report 2019
Equipme
nt Co.,
Ltd.
Unit: RMB
Reporting Period Same period of last year
Cash Cash
Total Total
Operatin flows flows
Name comprehe Operating comprehe
g Net profit from Net profit from
nsive revenue nsive
revenue operating operating
income income
activities activities
Changchai
Wanzhou
23,600,8 257,014.1 257,014.1 -862,600. 27,534,78 603,341.0 603,341.0 -817,231.
Diesel
57.49 6 6 33 2.67 4 4 49
Engine
Co., Ltd.
Changzho
u
Changchai
Housheng 6,815,42 -570,014. -570,014. -1,101,48 11,788,19 560,296.8 560,296.8 -6,844,68
Agricultur 3.91 57 57 9.23 4.43 8 8 1.85
al
Equipmen
t Co., Ltd.
(4) Financial Support or Other Supports Provided to Structural Entities Incorporated into the Scope of
Consolidated Financial Statements
The Company provided Changzhou Changchai Housheng Agricultural Equipment Co., Ltd. bank loan guarantee
with RMB20 million at the end of the period.
2. Equity in the Structured Entity Excluded in the Scope of Consolidated Financial Statements
Notes to the structured entity excluded in the scope of consolidated financial statements:
In 2017, the Company set up Changzhou Xietong Private Equity Fund (Limited Partnership) together with
Synergetic Innovation Fund Management Co., Ltd. through joint investment. On 18 October 2018, new partners
were added. In line with the revised Partnership Agreement, the general partner is Synergetic Innovation Fund
Management Co., Ltd., and the limited partners are Changchai Company, Limited, Changzhou Zhongyou
Petroleum Sales Co., Ltd., Changzhou Fuel Co., Ltd., Tong Yinzhu and Tong Yinxin. In accordance with the
Partnership Agreement, the limited partner does not execute the partnership affairs. Thus, the Company does not
control Changzhou Xietong Private Equity Fund (Limited Partnership) and did not include it into the scope of
consolidated financial statements.
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Changchai Company, Limited Interim Report 2019
X. The Risk Related to Financial Instruments
The goal of the Company’s risk management was gaining the balance between the risk and income, and reduced
the negative impact to the operation performance of the Company in the lowest level and maximized the interests
of shareholders and other equity investors. Base on the risk management goal, the basis strategy of the Company’s
risk management was to recognized and analyze all kinds of risk that the Company faced, set up suitable risk
bottom line and conduct risk management, and supervised the risks timely and reliably and control the risk within
the limited scope.
The main risks of the Company due to financial instruments were credit risk, liquidity risk and market risk. The
management level had reviewed and approved the policies to manage the risks, which summarized as follows:
(I) Credit Risk
Credit risk was one party of the contract failed to fulfill the obligations and causes loss of financial assets of the
other party.
The credit of risk of the Company mainly was related to account receivable, in order to control the risk, the
Company conduct the following methods.
The Company only conducts related transaction with approved and reputable third party, in line with the policy of
the Company, the Company need to conduct credit-check for the clients adopting way of credit to conduct
transaction. In addition, the Company continuously monitors the balance of account receivable to ensure the
Company would not face the significant bad debt risk.
(II) Liquidity Risk
Liquidity risk is referred to the risk of incurring capital shortage when performing settlement obligation in the way
of cash payment or other financial assets. The policies of the Company are to ensure that there was sufficient cash
to pay the due liabilities.
The liquidity risk was centralized controlled by the financial department of the Company. The financial
departments through supervising the balance of the cash and securities can be convert to cash at any time and the
rolling prediction of cash flow in future 12 months to ensure the Company has sufficient cash to pay the liabilities
under the case of all reasonable prediction.
(III) Market Risk
Market risk is refer to risk of the fair value or future cash flow of financial instrument changed due to the change
of market price, including foreign exchange rate risk, interest rate risk.
1. Interest Rate Risk
Interest rate risk is refers to fluctuation risk of the fair value or future cash flow of financial instrument change due
to the change of market price.
2. Foreign Exchange Risk
Foreign exchange rate risk is referred to the risk incurred form the change of exchange rate. As for the Company’s
export business, customers will be given a certain credit term, if the RMB appreciates against the dollar, the
company's accounts receivable will incur foreign currency exchange loss.
XI. The Disclosure of Fair Value
1. Ending Fair Value of Assets and Liabilities at Fair Value
Unit: RMB
102
Changchai Company, Limited Interim Report 2019
Ending fair value
Fair value Fair value Fair value
Item
measurement measurement items measurement items Total
items at level 1 at level 2 at level 3
I. Consistent fair
-- -- -- --
value measurement
(III) Other equity
instrument 473,682,000.00 473,682,000.00
investment
Total assets
consistently
473,682,000.00 473,682,000.00
measured by fair
value
II. Inconsistent fair
-- -- -- --
value measurement
XII. Related Party and Related-party Transactions
1. Information Related to the Company as the Parent of the Company
Proportion of Proportion of
share held by voting rights
Registration Nature of Registered the Company as owned by the
Name
place business capital the parent Company as the
against the parent against
Company the Company
Changzhou No. 23, 25, 27,
Investment
Investment 29 Yanling West RMB1.2 billion 30.43% 30.43%
service
Group Co., Ltd. Road
Notes: Information on the Company as the parent
The Company as the parent of the Company is Changzhou Investment Group Co., Ltd. which is the wholly-owned
subsidiary of Changzhou People’s Government. In accordance with Changzhou People’s Government Document
(CZF [2006] No. 62), both the Company and Changzhou Investment Group Co., Ltd. are enterprises which
Changzhou People’s Government authorizes Changzhou Government State-owned Assets Supervision and
Administration Commission to perform duties of investors. Thus, after the sharer transfer, Changzhou Investment
Group Co., Ltd. is the controlling shareholder of the Company and Changzhou Government State-owned Assets
Supervision and Administration Commission is still the actual controller of the Company.
2. Subsidiaries of the Company
Refer to Note IX Equity in Other Entities for details.
103
Changchai Company, Limited Interim Report 2019
3. Information on the Joint Ventures and Associated Enterprises of the Company
Refer to Note IX Equity in Other Entities for details of significant joint ventures or associated enterprises of the
Company.
4. Information on Other Related Parties
Name Relationship with the Company
The director of the Company serves as the senior
Synergetic Innovation Fund Management Co., Ltd.
management of the company
5. Related-party Transactions
No.
6. Other
No.
XIII. Commitments and Contingency
1. Significant Commitments
Significant commitments on balance sheet date
As of 30 June 2019, there was no significant commitment for the Company to disclose.
2. Contingency
(1) Significant Contingency on Balance Sheet Date
Name of defendant Date of Name of the litigation or Amount Remark
accepted arbitration institutions involved
(RMB’0,000)
Shandong Hongli Group Co., Ltd. 27 June 2001 Changzhou Intermediate 1,436.00 Under the
People's Court bankruptcy and
liquidation
Total 1,436.00
Notes:
About the lawsuit case of Shandong Hongli Group Co., Ltd., the accused company owed accumulatively RMB
14.36 million to the Company. The Company sued to Changzhou Intermediate People’s Court in 2001 and sued
for compulsory execution in April 2002. Currently, the defendant has started the bankruptcy procedure. The
aforesaid payment has arranged for the full provision for bad debts.
104
Changchai Company, Limited Interim Report 2019
(2) In Despite of no Significant Contingency to Disclose, the Company Shall Also Make Relevant
Statements
There was no significant contingency in the Company.
XIV. Events after Balance Sheet Date
1. Significant Non-adjusted Events
Unit: RMB
Influence number to the Reason of inability to
Item Content financial position and estimate influence
operating results number
The Company accepted
the transfer of capital
contribution right with
RMB50 million of
Jiangsu Housheng
Under the pilot
New Energy Technology
Significant foreign production stage, it is
Co., Ltd. from
investment uncertain for the future
Changzhou Synergetic
operation condition
Innovation Private
Equity Fund (Limited
Partnership) in July
2019, and has subscribed
the capital contribution.
XV. Other Significant Events
1. Segment Information
(1) Basis for Determination of Segments and Governing Accounting Policies
Due to the operation scope of the Company and subsidiaries were similar, the Company conduct common
management, did not divide business unit, so the Company only made single branch report.
(2) Other Significant Transactions and Events with Influence on Investors’ Decision-making
There are no significant transactions and events with influence on investors’ decision-making at the period-end.
105
Changchai Company, Limited Interim Report 2019
XVI. Notes of Main Items in the Financial Statements of the Company as the Parent
1. Accounts Receivable
(1) Accounts Receivable Disclosed by Category
Unit: RMB
Ending balance Beginning balance
Carrying Bad debt Carrying Bad debt
amount provision amount provision
Carryi
Category Withd Withd Carryin
ng
Amou Propo Amou rawal Amou Propor Amou rawal g value
value
nt rtion nt propo nt tion nt propor
rtion tion
Accounts
receivable for
31,06 30,18 35,82 32,806
which bad debt 97.14 887,4 91.58 3,017,6
8,167. 3.46% 0,731. 3,767. 6.85% ,077.1
provision % 36.42 % 89.87
94 52 01 4
separately
accrued
Of which:
Accounts
receivable with
significant
28,20 27,31 32,00 28,990
single amount 96.85 887,4 90.57 3,017,6
5,070. 3.14% 7,634. 8,110. 6.12% ,420.1
for which bad % 36.42 % 89.87
58 16 06 9
debt provision
separately
accrued
Accounts
receivable with
insignificant
2,863, 2,863, 3,815,
single amount 100.0 3,815, 100.0
097.3 0.32% 097.3 0.00 656.9 0.73%
for which bad 0% 656.95 0%
6 6 5
debt provision
separately
accrued
Accounts
receivable 866,4 201,9 664,4 487,5 190,22
96.54 23.31 93.15 39.02 297,339
withdrawal of 44,67 92,55 52,119 66,50 6,913.
% % % % ,593.94
bad debt 2.05 2.68 .37 7.88 94
provision of by
106
Changchai Company, Limited Interim Report 2019
group
Of which:
897,5 232,1 665,3 523,3 223,03
100.0 25.87 100.00 42.61 300,357
Total 12,83 73,28 39,55 90,27 2,991.
0% % % % ,283.81
9.99 4.20 5.79 4.89 08
Accounts receivable for which bad debt provision separately accrued:
Unit: RMB
Ending balance
Name Withdrawal Reason for
Carrying amount Bad debt provision
proportion withdrawal
Customer 1 1,902,326.58 1,902,326.58 100.00% Difficult to recover
Customer 2 Expected to
1,161,700.00 580,850.00 50.00%
difficultly recover
Customer 3 6,215,662.64 6,215,662.64 100.00% Difficult to recover
Customer 4 Expected to
2,484,497.34 2,177,910.92 87.66%
difficultly recover
Customer 5 Expected to
3,279,100.00 3,279,100.00 100.00%
difficultly recover
Customer 6 Expected to
2,068,377.01 2,068,377.01 100.00%
difficultly 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 1,679,109.54 1,679,109.54 100.00% Difficult to recover
Customer 10 Expected to
1,470,110.64 1,470,110.64 100.00%
difficultly recover
Expected to
Other 2,863,097.36 2,863,097.36 100.00%
difficultly recover
Total 31,068,167.94 30,180,731.52 -- --
Accounts receivable withdrawal of bad debt provision of by group:
Unit: RMB
Ending balance
Name
Carrying amount Bad debt provision Withdrawal proportion
Within 1 year (including
653,939,222.84 13,078,784.46 2.00%
1 year)
0.00
1 to 2 years 19,477,754.24 973,887.71 5.00%
2 to 3 years 5,005,462.35 750,819.35 15.00%
107
Changchai Company, Limited Interim Report 2019
3 to 4 years 875,236.20 262,570.86 30.00%
4 to 5 years 551,265.32 330,759.19 60.00%
Over 5 years 186,595,731.10 186,595,731.10 100.00%
Total 866,444,672.05 201,992,552.68 --
Notes to the basis for the determination of the groups:
Please refer to the relevant information of disclosure of bad debt provision of other accounts receivable if
adopting the general mode of expected credit loss to withdraw bad debt provision of accounts receivable.
□ Applicable √ Not applicable
(2) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
Information of withdrawal of bad debt provision:
Unit: RMB
Changes in the Reporting Period
Beginning
Category Reversal or Ending balance
balance Withdrawal Write-off
recovery
Bad debt
223,032,991.08 9,140,293.12 232,173,284.20
provision
Total 223,032,991.08 9,140,293.12 232,173,284.20
(3) Top 5 Accounts Receivable in Ending Balance Collected according to the Arrears Party
The total top 5 accounts receivable in ending balance collected according to the arrears party was
RMB506,859,995.98, accounting for 56.47% of the total ending balance of accounts receivable. The
corresponding ending balance of bad debt provision withdrawn was RMB10,137,199.92.
2. Other Receivables
Unit: RMB
Item Ending balance Beginning balance
Other receivables 23,668,652.76 21,681,331.85
Total 23,668,652.76 21,681,331.85
(1) Other Receivables
1) Other Receivables Classified by Nature
Unit: RMB
Nature Ending carrying amount Beginning carrying amount
Cash deposit and margin 4,200.00 4,200.00
108
Changchai Company, Limited Interim Report 2019
Intercourse funds among units 36,584,562.50 36,267,607.16
Petty cash and borrowings by
625,874.64 596,876.87
employees
Other 17,125,861.51 15,364,366.83
Total 54,340,498.65 52,233,050.86
2) Withdrawal of Bad Debt Provision
Changes of carrying amount with significant amount changed of loss provision in the current period
□ Applicable √ Not applicable
Disclosure by aging
Unit: RMB
Aging Ending balance
Within 1 year (including 1 year) 27,175,672.59
1 to 2 years 1,795,421.38
2 to 3 years 269,006.89
3 to 4 years 96,930.77
4 to 5 years 60,094.33
Over 5 years 24,943,372.69
Total 54,340,498.65
3) Bad Debt Provision Withdrawal, Reversed or Recovered in the Reporting Period
Information of withdrawal of bad debt provision
Unit: RMB
Changes in the Reporting Period
Category Beginning balance Reversal or Ending balance
Withdrawal
recovery
Bad debt provision 30,551,719.01 120,126.88 30,671,845.89
Total 30,551,719.01 120,126.88 30,671,845.89
4) Top 5 of the Ending Balance of Other Receivables Collected according to the Arrears Party
Unit: RMB
Proportion to
Ending balance
Name of the ending balance
Nature Ending balance Aging of bad debt
entity of total other
provision
receivables%
Changzhou
Changchai
Intercourse
Benniu Diesel 10,000,000.00 Within 1 year 18.40% 200,000.00
funds
Engine Fittings
Co., Ltd.
109
Changchai Company, Limited Interim Report 2019
Changzhou
Changchai
Housheng Intercourse
8,360,314.98 Within 1 year 15.38% 167,206.30
Agricultural funds
Equipment Co.,
Ltd.
Changzhou
Intercourse
Compressors 2,940,000.00 Over 5 years 5.41% 2,940,000.00
funds
Factory
Changchai
Intercourse
Group Imp. & 2,853,188.02 Over 5 years 5.25% 2,853,188.02
funds
Exp. Co., Ltd.
Changzhou New
District Intercourse
1,626,483.25 Over 5 years 3.00% 1,626,483.25
Accounting funds
Centre
Total -- 25,779,986.25 -- 47.44% 7,786,877.57
3. Long-term Equity Investment
Unit: RMB
Ending balance Beginning balance
Item Carrying Depreciation Carrying Carrying Depreciation Carrying
amount reserve value amount reserve value
Investment to 251,752,730. 251,752,730. 241,752,730. 241,752,730.
subsidiaries 03 03 03 03
Investment to
joint ventures
and 44,182.50 44,182.50 0.00 44,182.50 44,182.50 44,182.50
associated
enterprises
251,796,912. 251,752,730. 241,796,912. 241,752,730.
Total 44,182.50 44,182.50
53 03 53 03
(1) Investment to Subsidiaries
Unit: RMB
Beginning Increase/decrease Ending Ending
balance Withdrawa balance balance of
Investee Additional Reduced
(carrying l of Other (carrying depreciatio
investment investment
value) depreciatio value) n reserve
110
Changchai Company, Limited Interim Report 2019
n reserve
Changchai
Wanzhou
51,000,000 51,000,000
Diesel 0.00 0.00 0.00 0.00 0.00
.00 .00
Engine Co.,
Ltd.
Changzhou
Changchai
Benniu
96,466,500 96,466,500
Diesel 0.00 0.00 0.00 0.00 0.00
.00 .00
Engine
Fittings Co.,
Ltd.
Changzhou
Housheng 40,000,000 40,000,000
0.00 0.00 0.00 0.00 0.00
Investment .00 .00
Co., Ltd.
Changzhou
Changchai
Housheng 7,000,000. 7,000,000.
0.00 0.00 0.00 0.00 0.00
Agricultural 00 00
Equipment
Co., Ltd.
Changzhou
Fuji
Changchai
47,286,230 47,286,230
Robin 0.00 0.00 0.00 0.00 0.00
.03 .03
Gasoline
Engine Co.,
Ltd.
Jiangsu
Changchai 10,000,000 10,000,000
0.00 0.00 0.00 0.00 0.00
Machinery .00 .00
Co., Ltd.
241,752,73 10,000,000 251,752,73
Total
0.03 .00 0.03
(2) Investment to Joint Ventures and Associated Enterprises
Unit: RMB
Invest Begin Increase/decrease Endin Endin
111
Changchai Company, Limited Interim Report 2019
ee ning Gains g g
Adjust
balanc and Cash balanc balanc
ment Withd
e losses bonus e e of
of rawal
(carryi Additi Reduc recogn Chang or (carryi deprec
other of
ng onal ed ized es of profits ng iation
compr impair Other
value) invest invest under other annou value) reserv
ehensi ment
ment ment the equity nced e
ve provis
equity to
incom ion
metho issue
e
d
I. Joint ventures
II. Associated enterprises
Beijin
g
Tsingh
ua
Xingy
e
Indust 44,182 44,182 44,182
rial .50 .50 .50
Invest
ment
Mana
gemen
t Co.,
Ltd.
Subtot 44,182 44,182 44,182
al .50 .50 .50
44,182 44,182 44,182
Total
.50 .50 .50
4. Operating Revenue and Cost of Sales
Unit: RMB
Reporting Period Same period of last year
Item
Operating revenue Cost of sales Operating revenue Cost of sales
Main operations 1,016,544,011.76 895,758,979.30 1,105,442,892.03 978,595,283.86
Other operations 16,785,163.82 11,527,336.19 15,892,231.12 12,482,560.63
Total 1,033,329,175.58 907,286,315.49 1,121,335,123.15 991,077,844.49
Whether the Company has executed the new income standards
√ Yes □ No
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Changchai Company, Limited Interim Report 2019
5. Investment Income
Unit: RMB
Item Reporting Period Same period of last year
Investment income from holding of
0.00 21,000.00
held-to-maturity investment
Total 0.00 21,000.00
XVII. Supplementary Materials
1. Items and Amounts of Non-recurring Profit or Loss
√ Applicable □ Not applicable
Unit: RMB
Item Amount Note
Gains/losses on the disposal of
988,535.95
non-current assets
Government grants recognized in
the current period, except for those
acquired in the ordinary course of
129,300.00
business or granted at certain quotas
or amounts according to the
government’s unified standards
Gain/loss from change of fair value
of trading assets and liabilities, and
derivative financial assets and
liabilities, and investment gains
from disposal of trading financial
179,073.85
assets and liabilities, derivative
financial assets and liabilities, and
other creditors’ investment, other
than valid hedging related to the
Company’s common businesses
Reversed portions of impairment
allowances for loan by mandate
4,000,000.00
which are tested individually for
impairment
Other non-operating income and
349,093.41
expenses other than the above
Less: Income tax effects 822,508.89
113
Changchai Company, Limited Interim Report 2019
Non-controlling interests effects -7,375.16
Total 4,830,869.48 --
Notes: The non-recurring items shall be presented by the amount before tax.
Explain the reasons if the Company classifies an item as an non-recurring gain/loss according to the definition in
the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the
Public—Non-recurring Gains and Losses, or classifies any extraordinary gain/loss item mentioned in the said
explanatory announcement as a recurrent gain/loss item
Applicable √ Not applicable
2. Return on Equity and Earnings Per Share
EPS (Yuan/share)
Profit as of Reporting Period Weighted average ROE (%)
EPS-basic EPS-diluted
Net profit attributable to
ordinary shareholders of the 0.97% 0.0339 0.0339
Company
Net profit attributable to
ordinary shareholders of the
0.73% 0.0253 0.0253
Company after deduction of
non-recurring profit or loss
3. Differences between Accounting Data under Domestic and Overseas Accounting Standards
(1) Differences of Net Profit and Net Assets Disclosed in Financial Reports Prepared under International
and Chinese Accounting Standards
□ Applicable √ Not applicable
(2) Differences of Net Profit and Net Assets Disclosed in Financial Reports Prepared under Overseas and
Chinese Accounting Standards
□ Applicable √ Not applicable
114
Changchai Company, Limited Interim Report 2019
Part XI Documents Available for Reference
(I) The financial statements signed and sealed by the Company’s legal representative,
General Manager and head of the financial department (accountant in charge).
(II) The originals of all the Company’s documents and announcements which were
disclosed on the website designated by the CSRC during the Reporting Period.
(III) The Interim Report disclosed in other securities markets.
The above-mentioned documents available for reference are all kept in the Secretariat
of the Board of Directors of the Company and the Shenzhen Stock Exchange.
This Interim Report has been prepared in both Chinese and English. Should there be
any discrepancies or misunderstandings between the two versions, the Chinese
version shall prevail.
The Board of Directors
Changchai Company, Limited
29 August 2019
115
