2015 Semi-annual Report of Changchai Company, Limited
CHANGCHAI COMPANY, LIMITED
2015 Semi-annual Report
20 August 2015
1
2015 Semi-annual Report of Changchai Company, Limited
Section I. Important Reminders, Contents & Definition
The Board of Directors, the Supervisory Committee as well as all directors, supervisors and senior
management staff of Changchai Company, Limited (hereinafter referred to as “the Company”)
warrant that this report is factual, accurate and complete without any false record, misleading
statement or material omission. And they shall be jointly and severally liable for that.
Except for the follow directors, others are present the meeting of the Board
for deliberating the semi-annual report of the Company in person.
Name of director Position Reason for absence Name of authorized
absent director
LI Minghui Independent Director On business Shen Ningwu
The Company plans not to distribute cash dividends or bonus shares or turn capital reserve into
share capital.
Mr. Xue Guojun, company principal, Mr. He Jianguang, chief of the accounting work, and Mr. Jiang
He, chief of the accounting organ (chief of accounting), hereby confirm that the Financial Report
enclosed in this report is factual, accurate and complete.
English Translation for Reference Only. Should there be any discrepancy between the two versions,
the Chinese version shall prevail.
2
2015 Semi-annual Report of Changchai Company, Limited
Contents
2015 Semi-annual Report.....................................................................................................................1
Section I. Important Reminders, Contents & Definition .....................................................................2
Section II. Company Profile.................................................................................................................5
Section III. Highlights of Accounting Data & Financial Indicators ....................................................7
Section IV. Report of the Board of Directors.......................................................................................9
Section V. Significant Events.............................................................................................................18
Section VI. Change in Shares & Shareholders ..................................................................................23
Section VII. Preferred Shares.............................................................................................................27
Section VIII. Directors, Supervisors & Senior Management Staff ....................................................27
Section IX. Financial Report..............................................................................................................28
Section X. Documents Available for Reference...............................................................................122
3
2015 Semi-annual Report of Changchai Company, Limited
Definition
Refers
Term Definition
to
Refers
Company, the Company, Changchai Changchai Company, Limited
to
Refers
Changchai Benniu Chuangzhou Changchai Benniu Diesel Engine Fittings Co., Ltd.
to
Refers
Changchai Wanzhou Changchai Wanzhou Diesel Engine Co., Ltd
to
Refers
Housheng Investment Changzhou Housheng Investment Co., Ltd.
to
Refers
Housheng Agricultural Equipment Changzhou Changchai Housheng Agricultural Equipment Co., Ltd.
to
Fuji Robin Refers Changzhou Changchai Fuji Robin Gasoline Engine Co., Ltd.
Refers
Yuan, Ten thousand Yuan RMB Yuan, RMB Ten thousand
to
Refers
Reporting period 1 Jan. 2015-30 Jun. 2015
to
4
2015 Semi-annual Report of Changchai Company, Limited
Section II. Company Profile
I. Basic information of the Company
Stock abbreviation SCCA, SCCB Stock code 000570, 200570
Stock exchange listed with Shenzhen Stock Exchange
Chinese name of the Company 常柴股份有限公司
Abbr. of the Chinese name of the
苏常柴
Company
English name of the Company CHANGCHAI COMPANY,LIMITED
Abbr. of the English name of the
CHANGCHAI CO.,LTD.
Company
Legal representative of the
Xue Guojun
Company
II. Contact information
Company Secretary Securities Affairs Representative
Name Shi Jianchun He Jianjiang
123 Huaide Middle Road, Changzhou, 123 Huaide Middle Road, Changzhou,
Contact address
Jiangsu, China Jiangsu, China
Tel. (86)519-86610041 (86)519-68683155
Fax (86)519-86630954 (86)519-86630954
E-mail ccsjc@changchai.com cchjj@changchai.com
III. Other information
1. Ways to contact the Company
Did any change occur to the registered address, office address and their postal codes, website address and email
address of the Company during the reporting period?
□ Applicable √ Inapplicable
The registered address, office address and their postal codes, website address and email address of the Company
did not change during the reporting period. The said information can be found in the 2014 Annual Report.
2. About information disclosure and where this report is placed
Did any change occur to information disclosure media and where this report is placed during the reporting period?
5
2015 Semi-annual Report of Changchai Company, Limited
□ Applicable √ Inapplicable
The newspapers designated by the Company for information disclosure, the website designated by CSRC for
disclosing this report and the location where this report is placed did not change during the reporting period. The
said information can be found in the 2014 Annual Report.
3. Change of the registered information
Did any change occur to the registered information during the reporting period?
□ Applicable √ Inapplicable
The registration date and place of the Company, its business license No., taxation registration No. and
organizational code did not change during the reporting period. The said information can be found in the 2014
Annual Report.
6
2015 Semi-annual Report of Changchai Company, Limited
Section III. Highlights of Accounting Data & Financial Indicators
I. Major accounting data and financial indicators
Does the Company adjust retrospectively or restate accounting data of previous years due to change of any
accounting policy or correction of any accounting error?
□ Yes √ No
Reporting period Same period of last year YoY +/- (%)
Operating revenues (RMB Yuan) 1,359,895,900.69 1,339,876,201.72 1.49%
Net profit attributable to shareholders of the
37,563,399.18 34,303,430.49 9.50%
Company (RMB Yuan)
Net profit attributable to shareholders of the
Company after extraordinary gains and losses 35,710,619.28 33,519,687.43 6.54%
(RMB Yuan)
Net cash flows from operating activities
46,727,741.12 -30,355,787.85 ——
(RMB Yuan)
Basic EPS (RMB Yuan/share) 0.07 0.06 16.67%
Diluted EPS (RMB Yuan/share) 0.07 0.06 16.67%
Weighted average ROE (%) 1.85% 1.88% -0.03%
As at the end of the
As at the end of last year +/- (%)
reporting period
Total assets (RMB Yuan) 3,393,725,938.24 3,166,783,758.18 7.17%
Net assets attributable to shareholders of the
2,121,204,022.93 1,936,936,835.27 9.51%
Company (RMB Yuan)
II. 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 √ Inapplicable
No difference.
2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and
Chinese accounting standards
□ Applicable √ Inapplicable
No difference.
7
2015 Semi-annual Report of Changchai Company, Limited
3. Explain reasons for the differences between accounting data under domestic and overseas accounting
standards
□ Applicable √ Inapplicable
III. Items and amounts of extraordinary gains and losses
√ Applicable □ Inapplicable
Unit: RMB Yuan
Item Amount Explanation
Gains/losses on the disposal of non-current assets (including the
106,674.56
offset part of asset impairment provisions)
Government grants recognized in the current period, except for
those acquired in the ordinary course of business or granted at
2,573,286.81
certain quotas or amounts according to the country’s unified
standards
Capital occupation charges on non-financial enterprises that are
981,088.78
recorded into current gains and losses
Gains and losses on change in fair value from tradable financial
assets and tradable financial liabilities, as well as investment
income from disposal of tradable financial assets and tradable
409,642.19
financial liabilities and financial assets available for sales except
for effective hedging related with normal businesses of the
Company
Non-operating income and expenses other than the above -1,848,228.92
Less: Income tax effects 380,667.93
Minority interests effects (after tax) -10,984.41
Total 1,852,779.90
Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition in
the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the
Public—Extraordinary Gains and Losses, or classifies any extraordinary gain/loss item mentioned in the said
explanatory announcement as a recurrent gain/loss item
□ Applicable √ Inapplicable
No such cases in the reporting period.
8
2015 Semi-annual Report of Changchai Company, Limited
Section IV. Report of the Board of Directors
I. Overview
For the first half of 2015, the Company totally sold 487,000 units of various diesel engines and generator sets,
down 9.46% over the same period of last year, including 403,000 units of single-cylinder diesel engines (a
year-on-year decrease of 12.22%), and 79,500 units of multi-cylinder diesel engines (a year-on-year increase of
8.76%). It achieved a sales income of RMB 1,359,895,900, up 1.49% from the same period of last year; and net
profit attributable to shareholders of the Company of RMB 37.5634 million, up 9.50% on the year-on-year basis.
In the reporting period, macro-economic development entered a gear-shifting period amid transformation for
upgrading. The changes in the ways and focuses of state subsidization for agricultural machinery as well as the
stricter emission policies for trucks led to fierce competition in the market of diesel engines for automobile. The
production and sales volumes of our single-cylinder diesel engines dropped from the same period of last year due
to the overcapacity and the downsized total available market, but the volumes still topped the industry. Meanwhile,
we achieved preliminary results in adjusting our product mix, with a larger proportion of multi-cylinder diesel
engines in the total sales income as well as a faster-growing sales volume of multi-cylinder diesel engines for
harvesters and roller tractors. In the reporting period, we also achieved better gross profits and net profits than the
same period of last year due to our good cost control amid low prices of raw and auxiliary materials.
II. Main business analysis
YoY change of major financial data:
Unit: RMB Yuan
Reporting period Same period of last year YoY +/- % Main reasons for change
Operating revenues 1,359,895,900.69 1,339,876,201.72 1.49%
Operating costs 1,179,073,102.73 1,165,484,758.63 1.17%
Selling expenses 58,059,098.92 58,523,814.07 -0.79%
Administrative expenses 84,401,024.18 82,882,576.84 1.83%
Financial expenses -6,673,703.74 -7,132,562.78 ——
Income tax expenses 7,503,443.33 7,094,145.06 5.77%
R&D inputs 35,771,589.22 35,653,949.24 0.33%
Net cash flows from
46,727,741.12 -30,355,787.85 ——
operating activities
Net cash flows from
-65,286,749.02 -95,192,599.69 ——
investing activities
Net cash flows from
-17,079,395.46 -8,974,014.89 ——
financing activities
Net increase in cash and -35,638,403.36 -134,484,653.68 ——
9
2015 Semi-annual Report of Changchai Company, Limited
cash equivalents
Major changes to the profit structure or sources of the Company during the reporting period:
□ Applicable √ Inapplicable
No major changes occurred to the profit structure or sources of the Company during the reporting period.
Reporting period progress of the future development planning in the disclosed documents of the Company such as
share-soliciting prospectuses, offering prospectuses, asset reorganization reports, etc.:
□ Applicable √ Inapplicable
Overview of the reporting period progress of the business plans disclosed in previous periods:
The progress of the business plans of Y2015 that disclosed in the 2014 annual report was normal during the
reporting period.
III. Breakdown of main business
Unit: RMB Yuan
Increase/decrease
Increase/decrease Increase/decrease
Gross profit of operating
Operating revenues Operating costs of operating costs of gross profit
rate revenues over last
over last year rate over last year
year
Classified by industry
Internal
combustion 1,350,510,775.34 1,173,357,978.37 13.12% 1.78% 1.28% 0.43%
engine
Classified by product
Diesel engines 1,350,510,775.34 1,173,357,978.37 13.12% 1.78% 1.28% 0.43%
Classified by region
Domestic 1,245,394,090.93 1,071,606,955.97 13.95% 1.85% 1.35% 0.44%
Overseas 105,116,684.41 101,751,022.40 3.20% 0.96% 0.56% 0.39%
V. Core competitiveness analysis
1. Brand advantage
Incorporated in 1913, the Company has a history over 100 years, with its diesel engines well received both at
home and abroad.
The trademark of “Changchai” was the first among the production goods in the country to be recognized as a
“Famous Trademark of China”. In 2005, the single-cylinder diesel engines of the Company were among the first
to be titled as “Brandname Products of China”. In 2013, through the review and approval of General
Administration of Quality Supervision, Inspection and Quarantine of the People’s Republic of China, the diesel
engine products of the Company gained the export inspection-free qualification. In 2014, Changchai was awarded
the honorary title of “Y2012-Y2013 State-level Enterprise of Observing Contracts and Keeping Promise” and had
been awarded the title of “China Pacesetter Enterprise of Internal Combustion Engine and Accessories
10
2015 Semi-annual Report of Changchai Company, Limited
Manufacturing Industry” for five years in a row. For decades, the Company developed in a sound manner and
cultivated the “Changchai” brand, a famous small diesel engine brand of China with independent intellectual
property rights.
2. Product advantage
Currently, the Company is mainly engaged in small power single-cylinder and multi-cylinder diesel engines. It
has a complete product range, a wide power level coverage, a high reputation and intellectual property rights for
its main products. The sales of the single cylinder diesel had been China’ first for consecutive years. It owns a
state-level technical center, a post doctoral scientific research station and Jiangsu Small-and Medium-power
Internal Combustion Engine Engineering Research Center. Quite a few of its multi-cylinder diesel engines have
passed the European Union EC certification and the America EPA certification. Besides, it has the capability to
develop and put into pass production products meeting the national emission standard IV.
3. Sales network advantage
The Company has built up a sales service network covering the whole country. With 11 marketing units, 31 sales
service centers, over 400 service locations and 600 cooperation maintenance stations, the service network
covering the major cities and the countryside, the Company is able to provide quality, efficient and timely services
for its customers.
VI. Investment analysis
1. Investments in equities of external parties
(1) Investments in external parties
□ Applicable √ Inapplicable
(2) Equity-holdings in financial enterprises
√ Applicable □ Inapplicable
Gain/loss
Initial Opening Closing in the
Opening Closing Closing book
Enterprise Enterprise investment equity-hol equity-hol reporting Accountin Equity
equity-hol equity-hol value (RMB
name variety cost (RMB dings dings period g title source
ding ratio ding ratio Yuan)
Yuan) (share) (share) (RMB
Yuan)
Bank of Long-term
Commerci Promoter’s
Jiangsu 38,000,000.00 38,000,000 0.42% 38,000,000 0.42% 38,000,000.00 0.00 equity
al bank shares
Co., Ltd. investment
Total 38,000,000.00 38,000,000 -- 38,000,000 -- 38,000,000.00 0.00 -- --
(3) Investment in securities
□ Applicable √ Inapplicable
11
2015 Semi-annual Report of Changchai Company, Limited
The Company did not invest in any securities in the reporting period.
(4) Explanation about shareholdings in other listed companies
√ Applicable □ Inapplicable
At the end of the reporting period, the Company held 72.25 million “Foton Motor” shares measured as
available-for-sale financial assets and 50,000 “Ninghu Expressway” shares measured as a long-term equity
investment.
2. Wealth management entrustment, derivative investments and entrustment loans
(1) Wealth management entrustment
√ Applicable □ Inapplicable
Unit: RMB Ten thousand
Principal
Actual
Related-p actually Impairme
Payment gain/loss
Name of Related-p arty Product Beginnin Ending recovered nt Expected
Amount determina in
trustee arty transactio variety g date date in provision gain
tion reporting
n or not reporting (if any)
period
period
Wealth
managem
ent
product Lump-su
with m
Bank of 2015/04/2 2015/10/2
No No guarantee 10,000,000 determina 0 0 22.94 0
Jiangsu 2 1
d tion upon
principal maturity
and
floating
gain
Wealth
managem
ent
product Lump-su
with m
Ping An 2015/01/2 2015/07/2
No No guarantee 10,000,000 determina 0 0 23.92 0
Bank 9 8
d tion upon
principal maturity
and
floating
gain
12
2015 Semi-annual Report of Changchai Company, Limited
Total 20,000,000 -- -- -- 0 0 46.86 0
Source of the entrusted funds Our own idle funds
Cumulative overdue principals and gains 0
Lawsuits (if applicable) Inapplicable
Disclosure date of the board announcement
approving the wealth management 2015/01/13
entrustment (if any)
Disclosure date of the general meeting
announcement approving the wealth
management entrustment (if any)
(2) Derivative investment
□ Applicable √ Inapplicable
The Company did not carry out any derivative investment in the reporting period.
(3) Entrustment loans
□ Applicable √ Inapplicable
There were no entrustment loans in the reporting period.
3. Use of raised funds
□ Applicable √ Inapplicable
There was no any use of raised funds in the reporting period.
4. Analysis to main subsidiaries and stock-participating companies
√ Applicable □ Inapplicable
Main subsidiaries and stock-participating companies:
Unit: RMB Yuan
Main
Company Company Registered Operating Operating
Industry products/serv Total assets Net assets Net profit
name variety capital revenues profit
ices
Production
Machinery
Changchai and sales of
Subsidiary manufactur 55063000.00 161,874,643.07 106,884,890.68 67,632,681.97 -1,844,604.10 -1,232,772.87
Benniu diesel engine
e
fittings
Changchai Machinery Production
Subsidiary 35000000.00 131,960,175.85 108,822,191.59 46,544,637.20 2,089,186.30 1,748,347.34
Wanzhou manufactur and sales of
13
2015 Semi-annual Report of Changchai Company, Limited
e diesel engine
External
investment
Housheng
Subsidiary Service and 30000000.00 34,657,503.17 33,941,890.45 177,000.00 1,187,290.16 1,040,226.53
Investment
consulting
service
Production
and sales of
agricultural
Housheng Machinery
machinery
Agricultural Subsidiary manufactur 10000000.00 9,080,360.36 6,875,312.49 898,135.12 -905,632.50 -905,911.21
product of
Equipment e
rice
transplanter
etc.
Production
Machinery
Joint stock and sales of USD
Fuji Robin manufactur 85,258,850.18 63,204,874.75 76,175,353.71 1,606,595.86 1,204,946.89
company gasoline 4500000.00
e
engines
5. Significant projects invested with non-raised funds
□ Applicable √ Inapplicable
No significant projects of investments with non-raised funds during the reporting period.
VI. Predict the operating results of Jan.-Sep. 2015
Warning of possible loss or considerable YoY change of the accumulated net profit made during the period-begin
to the end of the next reporting period according to prediction, as well as explanations on the reasons:
□ Applicable √ Inapplicable
VII. Explanation of the Board of Directors and Board of Supervisors on Non-standard
Auditing Report issued by the CPA firm for the reporting period
□ Applicable √ Inapplicable
VIII. Explanation by the Board of Directors about the “non-standard audit report” for last
year
□ Applicable √ Inapplicable
IX. Implementation of profit allocation during the reporting period
Profit allocation plan implemented during the reporting period, especially execution and adjustment of the cash
14
2015 Semi-annual Report of Changchai Company, Limited
dividend plan and the plan for turning capital reserve into share capital:
√ Applicable □ Inapplicable
On 19 May 2015, the Y2014 Annual General Meeting of the Company reviewed and approved the Y2014 Equity
Distribution Proposal as: based on the current share capital of 561,374,326 shares, the Company distributed the
cash (tax including) of RMB 0.20 Yuan for every 10 shares to the whole shareholders. On 16 Jun. 2015, the
Company disclosed Y2014 Implementation Announcement on Equity Distribution. The register date of the A
share equity of the equity distribution was: 24 Jun. 2015, the date of ex-right and ex-interest was: 25 Jun. 2015;
the last trading date of B share was: 24 Jun. 2015, and the equity register date was 29 Jun. 2015 as well as the date
of ex-right and ex-interest was: 25 Jun. 2015.
Y2014 profits distribution had completed the execution.
Special explanation of the cash dividend policy
Whether conformed with the regulations of the Articles of association or the requirements of the
Yes
resolutions of the shareholders’ meeting:
Whether the dividend standard and the proportion were definite and clear: Yes
Whether the relevant decision-making process and the system were complete: Yes
Whether the independent director acted dutifully and exerted the proper function: Yes
Whether the medium and small shareholders had the chances to fully express their suggestions and
Yes
appeals, of which their legal interest had gained fully protection:
Whether the conditions and the process met the regulations and was transparent of the adjustment or
Yes
altered of the cash dividend policy:
X. Preplan for profit distribution and turning capital reserve into share capital for the
reporting period
□ Applicable √ Inapplicable
The Company planed not to distribute cash dividends or bonus shares or turn capital reserve into share capital for
the reporting period.
XI. Researches, visits and interviews received in the reporting period
√ Applicable □ Inapplicable
Way of
Main discussion and materials provided
Time Place receptio Visitor type Visitor
by the Company
n
List of the execution progress of the
http://irm.cninfo.com.cn/s Individual
25 Jun. 2015 Other Individual national significant special project of the
zse/ investor
Company
http://irm.cninfo.com.cn/s Individual List of the power industrial park planning
23 Jun. 2015 Other Individual
zse/ investor of the Company
15 Jun. 2015 http://irm.cninfo.com.cn/s Other Individual Individual List of the shareholders number
15
2015 Semi-annual Report of Changchai Company, Limited
zse/ investor
http://irm.cninfo.com.cn/s Individual List of the stocks of Jiangsu Bank held
15 Jun. 2015 Other Individual
zse/ investor by the Company
http://irm.cninfo.com.cn/s Individual List of the power industrial park planning
3 Jun. 2015 Other Individual
zse/ investor of the Company
http://irm.cninfo.com.cn/s Individual Plan of the future development of the
26 May 2015 Other Individual
zse/ investor Company
http://irm.cninfo.com.cn/s Individual
25 May 2015 Other Individual
zse/ investor List of the shareholders number
http://irm.cninfo.com.cn/s Individual
24 May 2015 Other Individual
zse/ investor List of the products of the Company
http://irm.cninfo.com.cn/s Individual
19 May 2015 Other Individual
zse/ investor List of the shareholders number
http://irm.cninfo.com.cn/s Individual List of the joint stock company, Tsinghua
9 May 2015 Other Individual
zse/ investor Investment Company
http://irm.cninfo.com.cn/s Individual Plan of the future development of the
5 May 2015 Other Individual
zse/ investor Company
http://irm.cninfo.com.cn/s Individual Plan of the future development of the
4 May 2015 Other Individual
zse/ investor Company
http://irm.cninfo.com.cn/s Individual Whether there was reorganization
29 Apr. 2015 Other Individual
zse/ investor intention of the Company
http://irm.cninfo.com.cn/s Individual Plan of the future development of the
28 Apr. 2015 Other Individual
zse/ investor Company
http://irm.cninfo.com.cn/s Individual List of the state-owned enterprise reform
28 Apr. 2015 Other Individual
zse/ investor and shareholding of the employees
http://irm.cninfo.com.cn/s Individual List of the sales of the multi-cylinder
28 Apr. 2015 Other Individual
zse/ investor diesel engine of the Company
http://irm.cninfo.com.cn/s Individual List of the power industrial park planning
16 Apr. 2015 Other Individual
zse/ investor of the Company
http://irm.cninfo.com.cn/s Individual List of the power industrial park planning
15 Apr. 2015 Other Individual
zse/ investor of the Company
http://irm.cninfo.com.cn/s Individual
15 Apr. 2015 Other Individual
zse/ investor List of the shareholders number
http://irm.cninfo.com.cn/s Individual Plan of the future development of the
15 Apr. 2015 Other Individual
zse/ investor Company
http://irm.cninfo.com.cn/s Individual Plan of the future development of the
26 Mar. 2015 Other Individual
zse/ investor Company
http://irm.cninfo.com.cn/s Individual Plan of the future development of the
23 Mar. 2015 Other Individual
zse/ investor Company
16
2015 Semi-annual Report of Changchai Company, Limited
http://irm.cninfo.com.cn/s Individual Plan of the future development of the
22 Mar. 2015 Other Individual
zse/ investor Company
http://irm.cninfo.com.cn/s Individual
16 Mar. 2015 Other Individual Stocks price of the Company
zse/ investor
http://irm.cninfo.com.cn/s Individual List of the influences of the Internet of
15 Mar. 2015 Other Individual
zse/ investor the Company
http://irm.cninfo.com.cn/s Individual Plan of the future development of the
12 Mar. 2015 Other Individual
zse/ investor Company
http://irm.cninfo.com.cn/s Individual Plan of the future development of the
12 Mar. 2015 Other Individual
zse/ investor Company
http://irm.cninfo.com.cn/s Individual List of the newly appointed Independent
12 Mar. 2015 Other Individual
zse/ investor Director of the Company
http://irm.cninfo.com.cn/s Individual List of the reform of the diversified o
8 Mar. 2015 Other Individual
zse/ investor wnership of the Company
http://irm.cninfo.com.cn/s Individual
1 Mar. 2015 Other Individual List of the agricultural informatization
zse/ investor
http://irm.cninfo.com.cn/s Individual List of the external cooperation of the
27 Feb. 2015 Other Individual
zse/ investor Company
http://irm.cninfo.com.cn/s Individual List of the external cooperation of the
27 Feb. 2015 Other Individual
zse/ investor Company
http://irm.cninfo.com.cn/s Individual List of the reform of the diversified o
25 Feb. 2015 Other Individual
zse/ investor wnership of the Company
http://irm.cninfo.com.cn/s Individual Relevant situation of the products of the
16 Feb. 2015 Other Individual
zse/ investor Company
http://irm.cninfo.com.cn/s Individual
9 Feb. 2015 Other Individual List of the shareholders number
zse/ investor
http://irm.cninfo.com.cn/s Individual
21 Jan. 2015 Other Individual List of the state-owned enterprise reform
zse/ investor
http://irm.cninfo.com.cn/s Individual
19 Jan. 2015 Other Individual List of the agricultural modernization
zse/ investor
http://irm.cninfo.com.cn/s Individual
14 Jan. 2015 Other Individual Stocks price movements of the Company
zse/ investor
http://irm.cninfo.com.cn/s Individual
13 Jan. 2015 Other Individual List of the shareholders of the Company
zse/ investor
http://irm.cninfo.com.cn/s Individual
12 Jan. 2015 Other Individual Stocks price of the Company
zse/ investor
http://irm.cninfo.com.cn/s Individual
1 Jan. 2015 Other Individual List of the shareholders of the Company
zse/ investor
17
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Section V. Significant Events
I. Corporate governance
In the reporting period, the Company was strictly in line with laws, statutes such as Company Law, Securities
Laws, Code of Corporate Governance of Listed Companies, Guide Opinion on Establishment of Independent
Director System by Listed Companies and Guidelines on Internal Controls of Listed Companies and so on,
continuously perfected corporate governance, established and accomplished internal management and control
system, consistently and deeply put forward corporate governance activities, so as to further normalized operation
of the Company, raising corporate governance level, laying a guard for steady and healthy development of the
Company, protect legal rights and interests of the Company and all shareholders.
According to each law and regulation and the traits of the industry, operation mode and self business, the
Company formulated or revised a whole set of internal control system throughout routine operation management
as well as formed the normative documents such as Internal Control Manual of Suzhou Changchai and Assemble
of Internal Control System of Suzhou Changzhou. The content was a series of administration system, process and
standard including each operation aspect and level such as purchase, sales, finance, assets, human resources,
internal audit supervision, which ensured all kinds of work, had rules to follow.
There is not discrepancy between the corporate governance and Company Law, relevant regulations of CSRC.
II. Lawsuits or arbitrations
Significant lawsuits or arbitrations
√ Applicable □ Inapplicable
Amount
involved in
the lawsuit Forming the Progress of Trial result and Enforcement on
Basic information of the (arbitration estimated the lawsuit influence of the the judgment of Disclosure Disclosure
lawsuit (arbitration) ) (RMB liabilities or (arbitration lawsuit the lawsuit date index
Ten not? ) (arbitration) (arbitration)
Thousand
Yuan)
About the lawsuit case of
Shandong Hongli Group
Co., Ltd., the accused
Judged for Under the
company owed
the second compulsory
accumulatively RMB 14.36
trial and no execution by the
million to the Company. The
1,436 No progress of court and in the
Company sued to
the process of
Changzhou Intermediate
reporting liquidation and
People’s Court in 2001 and
period bankruptcy
sued for compulsory
execution in April, 2002.
Currently, the defendant has
18
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
started the bankruptcy
procedure.
About the lawsuit case of
Beijing Baic Changsheng
Had
Automobile Co., Ltd., the
mediated.
accused company owed
Up the end
accumulatively RMB 8.0636
of the
million to the Company.
reporting
According to the paper of
period,
civil mediation issued by the
Baic
people's court of Beijing
Changshen
Shunyi on 31 Oct. 2013, the
g had paid http//www.cn
Company will amortize the
RMB 4.5 info.com.cn.
arrears of RMB 8.0636
806.36 No million to 30 Aug. 2013 Announceme
million. If Baic Changsheng
the nt No.: 2013
failed to execute the
Company. -015, 019
reconciliation agreement on
Recently,
time, the Company should
the
applied for the compulsory
Company
execution of the whole
is applying
unpaid accounts at one time
for
and the Baic Changsheng
compulsor
should pay for the otherwise
y
liquidated damages of RMB
execution.
40,000 and the interests of
the overdue payment.
Other lawsuits
□ Applicable √ Inapplicable
III. Media query
□Applicable √Inapplicable
The Company was not involved in any media query in the reporting period.
IV. Bankruptcy or Reorganization Events
□ Applicable √ Inapplicable
There Company was not involved in any bankruptcy or reorganization events in the reporting period.
V. Transaction in Assets
1. Purchase of assets
□ Applicable √ Inapplicable
19
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
There is no purchase of assets in the Company during the reporting period
2. Sale of assets
□ Applicable √ Inapplicable
There is no sale of assets in the Company during the reporting period.
3. Business combination
□ Applicable √ Inapplicable
There is no business combination in the Company during the reporting period.
VI. Implementation and Influence of Equity Incentive Plan of the Company
□ Applicable √ Inapplicable
There is no equity incentive plan and its implementation in the Company during the reporting period.
VII. Significant related-party transactions
1. Related-party transactions concerning routine operation
□ Applicable √ Inapplicable
There is no related-party transaction concerning routine operation in the Company during the reporting period.
2. Related-party transactions arising from asset acquisition or sale
□ Applicable √ Inapplicable
The Company was not involved in any related-party transactions arising from asset acquisition or sale during the
reporting period.
3. Related-party transitions with joint investments
□ Applicable √ Inapplicable
The Company was not involved in any related-party transaction with joint investments during the reporting
period.
4. Credits and liabilities with related parties
□ Applicable √ Inapplicable
The Company was not involved in any credit and liability with related parties during the reporting period.
5. Other significant related-party transactions
□ Applicable √ Inapplicable
20
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
The Company was not involved in any other related-party transaction during the reporting period.
VIII. Particulars about the non-operating occupation of funds by the controlling shareholder
and other related parties of the Company
□ Applicable √ Inapplicable
The Company was not involved in the non-operating occupation of funds by the controlling shareholder and other
related parties during the reporting period.
IX. Particulars about significant contracts and their fulfillment
1. Particulars about trusteeship, contract and lease
(1) Trusteeship
□ Applicable √ Inapplicable
There was no any trusteeship of the Company in the reporting period.
(2) Contract
□ Applicable √ Inapplicable
There was no any contract of the Company in the reporting period.
(3) Lease
□ Applicable √ Inapplicable
There was no any lease of the Company in the reporting period.
2. Guarantees provided by the Company
□ Applicable √ Inapplicable
There was no any guarantee provided by the Company in the reporting period.
3. Other significant contracts
□ Applicable √ Inapplicable
There was no other significant contract of the Company in the reporting period.
4. Other significant transactions
□ Applicable √ Inapplicable
There was no other significant transaction of the Company in the reporting period.
21
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
X. Commitments made by the Company or shareholders holding over 5% of the Company’s
shares in the reporting period or such commitments carried down into the reporting period
□ Applicable √ Inapplicable
No such situation of the Company during the reporting period.
XI. Particulars about engagement and disengagement of CPAs firm
Whether the semi-annual financial report had been audited?
□ Yes √ No
This semi-annual report is un-audited.
XII. Punishment and Rectification
□ Applicable √ Inapplicable
There was no any punishment and rectification of the Company in the reporting period.
XIII. Reveal of the delisting risks of illegal or violation
□ Applicable √ Inapplicable
There was no any delisting risk of illegal or violation of the Company in the reporting period.
XIV. Explanation about other significant matters
□ Applicable √ Inapplicable
No such cases in the reporting period.
22
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Section VI. Change in Shares & Shareholders
I. Change in shares
Unit: share
Before the change Increase/decrease (+, -) After the change
Capitalizat
Percentag New Bonus ion of Subtot Percentag
Number Other Number
e shares shares capital al e
reserve
I. Shares subject to
0 0.00% 0 0.00%
moratorium
1. Shares held by the State 0 0.00% 0 0.00%
2. Shares held by
0 0.00% 0 0.00%
state-owned corporation
3. Other shares held by
0 0.00% 0 0.00%
domestic investors
Including: shares held by
domestic non-state-owned 0 0.00% 0 0.00%
corporation
Shares held by domestic
0 0.00% 0 0.00%
natural person
4. Shares held by foreign
0 0.00% 0 0.00%
investors
Including: shares held by
0 0.00% 0 0.00%
foreign corporation
Shares held by foreign
0 0.00% 0 0.00%
natural person
II. Shares not subject to
561,374,326 100.00% 561,374,326 100.00%
trading moratorium
1. RMB ordinary shares 411,374,326 73.28% 411,374,326 73.28%
2. Domestically listed
150,000,000 26.72% 150,000,000 26.72%
foreign shares
3. Overseas listed foreign
0 0.00% 0 0.00%
shares
4. Others 0 0.00% 0 0.00%
III. Total shares 561,374,326 100.00% 561,374,326 100.00%
23
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Reasons for changes in shares
□ Applicable √ Inapplicable
Approval of share changes
□ Applicable √ Inapplicable
Transfer of share ownership
□ Applicable √ Inapplicable
Effects of changes in shares on the basic EPS, diluted EPS, net assets per share attributable to common
shareholders of the Company and other financial indexes over the last year and the last reporting period
□ Applicable √ Inapplicable
Other contents that the Company considers necessary or is required by the securities regulatory authorities to
disclose
□ Applicable √ Inapplicable
Change of the total shares, shareholder structure, asset structure and liability structure
□ Applicable √ Inapplicable
II. Total number of shareholders and their shareholding
Unit: share
Total number of preferred shareholders that
Total number of common shareholders at
56,034 had restored the voting right at the end of 0
the end of the reporting period
the reporting period (if any) (note 8)
Shareholding of common shareholders holding more than 5% shares or the top 10 of common shareholders
Increase Pledged or frozen
Number of and Number of shares
Number of shares
Holding shareholding decrease shares held
Nature of held not subject to
Name of shareholder percentage at the end of of shares subject to
shareholder trading Status of Number
(%) the reporting during trading
moratorium shares of shares
period reporting moratorium
period
State-owned Assets
Supervision and
Administration On behalf of
30.02% 168,497,736 168,497,736
Commission of the State
Changzhou Municipal
People’s Government
Domestic
Huang Lihou 0.99% 5,575,000 5,575,000
individual
Lhasa Ruida Investment
Consulting Management Other 0.69% 3,890,333 3,890,333
Co., Ltd.
KGI ASIA LIMITED Foreign 0.56% 3,124,845 3,124,845
24
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
corporation
BNP PARIBAS WEALTH
Foreign
MANAGEMENT HONG 0.55% 3,099,873 3,099,873
corporation
KONG BRANCH
Domestic
Zheng Caiping 0.49% 2,762,282 2,762,282
individual
Domestic
Guo Chunling 0.49% 2,736,986 2,736,986
individual
Harvest
Capital-CMBC-Zongyi
Other 0.44% 2,486,900 2,486,900
Holding Jinxiu No. 5
Asset Management Plan
Founder BEA Trust Co.,
Ltd.-Shenlong No. 31
Collection of Securities Other 0.40% 2,250,000 2,250,000
Investment Funds of the
Trust Plan
Domestic
Jiang Xuezhen 0.37% 2,050,000 2,050,000
individual
It is unknown whether there was any associated relationship among the top ten tradable
Explanation on associated relationship
shareholders and among the top ten shareholders not subject to trading moratorium, or
or/and persons acting in concert among
whether they are persons acting in concert as described by Measures for the Administrative of
the above-mentioned shareholders:
Disclosure of Shareholder Equity Changes.
Particulars about shares held by top 10 common shareholders not subject to trading moratorium
Number of shares held not subject Type of share
Name of shareholder to trading moratorium at the end of
Type of share Number
the period
State-owned Assets Supervision and Administration
Commission of Changzhou Municipal People’s 168,497,736 RMB ordinary share 168,497,736
Government
Huang Lihou 5,575,000 RMB ordinary share 5,575,000
Lhasa Ruida Investment Consulting Management Co.,
3,890,333 RMB ordinary share 3,890,333
Ltd.
Domestically listed
KGI ASIA LIMITED 3,124,845 3,124,845
foreign share
BNP PARIBAS WEALTH MANAGEMENT HONG Domestically listed
3,099,873 3,099,873
KONG BRANCH foreign share
Zheng Caiping 2,762,282 RMB ordinary share 2,762,282
Guo Chunling 2,736,986 RMB ordinary share 2,736,986
25
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Harvest Capital-CMBC-Zongyi Holding Jinxiu No. 5
2,486,900 RMB ordinary share 2,486,900
Asset Management Plan
Founder BEA Trust Co., Ltd.-Shenlong No. 31
Collection of Securities Investment Funds of the Trust 2,250,000 RMB ordinary share 2,250,000
Plan
Jiang Xuezhen 2,050,000 RMB ordinary share 2,050,000
Explanation on associated relationship among the top It is unknown whether there was any associated relationship among the top ten
ten shareholders of tradable share not subject to trading tradable shareholders and among the top ten shareholders not subject to
moratorium, as well as among the top ten shareholders trading moratorium, or whether they are persons acting in concert as described
of tradable share not subject to trading moratorium and by Measures for the Administrative of Disclosure of Shareholder Equity
top ten shareholders, or explanation on acting-in-concert Changes.
The shareholder, Mr. Huang Lihou totally held the shares of the Company of
5,575,000 shares through the securities ordinary account and securities
guarantee account of the customer credit transactions with the proportion of
the share holding of 0.99%, of which owning to had participated in the
securities lending and borrowing business during the reporting period, held the
Particular about shareholder participate in the securities shares of the Company of 5,470,000 shares through the securities guarantee
lending and borrowing business account of the customer credit transactions provided by Guotai Junan
Securities Co., Ltd, with the proportion of the share holding of 0.97%.
The shareholder, Ms. Guo Chunling held the shares of the Company of
2,736,986 shares through the securities guarantee account of the customer
credit transactions provided by China Securities Co., Ltd with the proportion
of the share holding of 0.49%.
Did any top 10 common shareholders or the top 10 common shareholders not subject to trading moratorium of the
Company carry out an agreed buy-back in the reporting period?
□ Yes √ No
The top 10 common shareholders or the top 10 common shareholders not subject to trading moratorium of the
Company had not carried out any agreed buy-back in the reporting period.
III. Change of the controlling shareholder or the actual controller
Change of the controlling shareholder in the reporting period
□ Applicable √ Inapplicable
There was no any change of the controlling shareholder of the Company in the reporting period.
Change of the actual controller in the reporting period
□ Applicable √ Inapplicable
There was no any change of the actual controller of the Company in the reporting period.
IV. Particulars on shareholding increase scheme during the reporting period proposed or
implemented by the shareholders and act-in-concert persons
□ Applicable √ Inapplicable
26
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Within the scope known to the Company, there was no any shareholding increase scheme during the reporting
period proposed or implemented by the shareholders and act-in-concert persons.
Section VII. Situation of the Preferred Shares
□ Applicable √ Inapplicable
There was no any preferred share of the Company during the reporting period.
Section VIII. Directors, Supervisors, Senior Management Staffs and
Employees
I. Changes in shareholding of directors, supervisors and senior management staffs
□ Applicable √ Inapplicable
There was no change in Directors, Supervisors, Senior Management Staffs and Employees, for details, please refer to 2014 Annual
Report
II. Changes in directors, supervisors and senior management staffs
√ Applicable □ Inapplicable
Name Position Type Date Reason
Jiang Huaping Director Left 31 Mar. 2015 Voluntary turnover
Cao Huiming Independent Director Left 31 Mar. 2015 Voluntary turnover
Zhu Jianming Independent Director Left 31 Mar. 2015 Voluntary turnover
Xu Qian Director Elected 31 Mar. 2015 Elected from the general election
Li Minghui Independent Director Elected 31 Mar. 2015 Elected from the general election
Jia Bin Independent Director Elected 31 Mar. 2015 Elected from the general election
Zhang Xin Deputy GM Hired 22Apr. 2015 Hired by the board of director
27
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
IX. Financial Report
I. Audit report
Has this semi-annual report been audited?
□ Yes √ No
The semi-annual financial report has not been audited.
II. Financial statements
Currency unit for the statements in the notes to these financial statements: RMB Yuan
1. Consolidated balance sheet
Prepared by Changchai Company, Limited
Unit: RMB Yuan
Item Closing balance Opening balance
Current Assets:
Monetary funds 503,417,212.62 531,969,747.91
Settlement reserves
Intra-group lendings
Financial assets measured by fair
value with the changes be included in 9,000,000.00 2,109,642.19
the current gains and losses
Derivative financial assets
Notes receivable 269,208,012.32 314,236,128.92
Accounts receivable 584,913,353.24 374,335,355.22
Accounts paid in advance 11,837,790.22 15,092,855.36
Premiums receivable
Reinsurance premiums receivable
Receivable reinsurance contract
reserves
Interest receivable
Dividend receivable
Other accounts receivable 19,462,565.99 8,662,701.30
Financial assets purchased under
agreements to resell
28
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Inventories 410,182,764.21 497,588,717.86
Assets divided available for sale
Non-current assets due within 1 year
Other current assets 30,671,616.22 31,729,042.18
Total current assets 1,838,693,314.82 1,775,724,190.94
Non-current assets:
Loans by mandate and advances
granted
Available-for-sale financial assets 683,651,500.00 497,850,000.00
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investment 20,857,608.46 20,459,975.99
Investing property 58,385,200.43 59,489,370.83
Fixed assets 569,470,784.08 572,785,946.61
Construction in progress 118,201,531.73 134,948,317.87
Engineering materials
Disposal of fixed assets
Production biological assets
Oil-gas assets
Intangible assets 103,381,135.40 104,441,092.62
R&D expense
Goodwill
Long-term deferred expenses
Deferred income tax assets 1,084,863.32 1,084,863.32
Other non-current assets
Total of non-current assets 1,555,032,623.42 1,391,059,567.24
Total assets 3,393,725,938.24 3,166,783,758.18
Current liabilities:
Short-term borrowings 15,000,000.00 20,000,000.00
Borrowings from Central Bank
Customer bank deposits and due to
banks and other financial institutions
Intra-group borrowings
Financial liabilities measured by fair
value with the changes be included in
29
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
the current gains and losses
Derivative financial liabilities
Notes payable 249,710,000.00 218,351,400.00
Accounts payable 535,114,777.12 550,858,517.60
Accounts received in advance 37,751,020.98 29,364,756.16
Financial assets sold for repurchase
Handling charges and commissions
payable
Employee’s compensation payable 27,862,331.94 61,303,762.60
Tax payable 7,587,985.57 14,511,976.27
Interest payable
Dividend payable 3,891,433.83 3,891,433.83
Other accounts payable 232,856,816.80 196,560,865.32
Reinsurance premiums payable
Insurance contract reserves
Payables for acting trading of
securities
Payables for acting underwriting of
securities
Liabilities divided available for sale
Non-current liabilities due within 1
year
Other current liabilities 2,545,053.11 2,992,996.74
Total current liabilities 1,112,319,419.35 1,097,835,708.52
Non-current liabilities:
Long-term borrowings
Bonds payable
Of which: preferred shares
Perpetual capital securities
Long-term payables
Long-term payroll payables
Specific payables
Estimated liabilities
Deferred income 53,852,992.51 54,185,979.32
Deferred income tax liabilities 89,486,550.00 61,616,325.00
30
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Other non-current liabilities
Total non-current liabilities 143,339,542.51 115,802,304.32
Total liabilities 1,255,658,961.86 1,213,638,012.84
Owners’ equity
Share capital 561,374,326.00 561,374,326.00
Other equity instruments
Of which: preferred shares
Perpetual capital securities
Capital reserves 164,328,665.43 164,328,665.43
Less: Treasury stock
Other comprehensive income 507,090,450.00 349,159,175.00
Specific reserves 8,332,077.21 8,332,077.21
Surplus reserves 298,151,696.96 298,151,696.96
Provisions for general risks
Retained profits 581,926,807.33 555,590,894.67
Total equity attributable to owners of
2,121,204,022.93 1,936,936,835.27
the Company
Minority interests 16,862,953.45 16,208,910.07
Total owners’ equity 2,138,066,976.38 1,953,145,745.34
Total liabilities and owners’ equity 3,393,725,938.24 3,166,783,758.18
Legal representative: Xue Guojun Person-in-charge of the accounting work: He Jianguang
Chief of the accounting division: Jiang He
2. Balance sheet of the Company
Unit: RMB Yuan
Item Closing balance Opening balance
Current Assets:
Monetary funds 485,352,175.96 494,366,603.39
Financial assets measured by fair
value with the changes be included in
the current gains and losses
Derivative financial assets
Notes receivable 267,808,012.32 312,466,128.92
Accounts receivable 540,715,101.16 331,239,446.99
31
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Accounts paid in advance 4,946,349.52 10,139,747.15
Interest receivable
Dividend receivable
Other accounts receivable 6,495,179.57 5,712,047.44
Inventories 345,328,801.99 426,235,429.74
Assets divided available for sale
Non-current assets due within 1 year
Other current assets 20,000,000.00 20,637,141.03
Total current assets 1,670,645,620.52 1,600,796,544.66
Non-current assets:
Available-for-sale financial assets 676,451,500.00 490,650,000.00
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investment 205,324,108.46 204,926,475.99
Investing property 58,385,200.43 59,489,370.83
Fixed assets 456,219,196.87 454,717,057.95
Construction in progress 118,177,771.05 134,948,317.87
Engineering materials
Disposal of fixed assets
Production biological assets
Oil-gas assets
Intangible assets 81,146,972.05 81,914,372.57
R&D expense
Goodwill
Long-term deferred expenses
Deferred income tax assets 1,084,863.32 1,084,863.32
Other non-current assets
Total of non-current assets 1,596,789,612.18 1,427,730,458.53
Total assets 3,267,435,232.70 3,028,527,003.19
Current liabilities:
Short-term borrowings
Financial liabilities measured by fair
value with the changes be included in
the current gains and losses
Derivative financial liabilities
32
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Notes payable 237,710,000.00 206,351,400.00
Accounts payable 488,343,819.70 501,904,239.41
Accounts received in advance 51,997,516.49 37,247,846.51
Employee’s compensation payable 24,051,977.01 56,426,935.61
Tax payable 3,994,399.32 12,438,714.42
Interest payable
Dividend payable 3,243,179.97 3,243,179.97
Other accounts payable 226,437,190.72 191,066,117.22
Liabilities divided available for sale
Non-current liabilities due within 1
year
Other current liabilities
Total current liabilities 1,035,778,083.21 1,008,678,433.14
Non-current liabilities:
Long-term borrowings
Bonds payable
Of which: preferred shares
Perpetual capital securities
Long-term payables
Long-term payroll payables
Specific payables
Estimated liabilities
Deferred income 53,852,992.51 54,185,979.32
Deferred income tax liabilities 89,486,550.00 61,616,325.00
Other non-current liabilities
Total non-current liabilities 143,339,542.51 115,802,304.32
Total liabilities 1,179,117,625.72 1,124,480,737.46
Owners’ equity:
Share capital 561,374,326.00 561,374,326.00
Other equity instruments
Of which: preferred shares
Perpetual capital securities
Capital reserves 183,071,147.70 183,071,147.70
Less: Treasury stock
Other comprehensive income 507,090,450.00 349,159,175.00
33
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Specific reserves 8,332,077.21 8,332,077.21
Surplus reserves 298,151,696.96 298,151,696.96
Retained profits 530,297,909.11 503,957,842.86
Total owners’ equity 2,088,317,606.98 1,904,046,265.73
Total liabilities and owners’ equity 3,267,435,232.70 3,028,527,003.19
3. Consolidated income statement
Unit: RMB Yuan
Item Jan.-Jun. 2015 Jan.-Jun 2014
I. Total operating revenues 1,359,895,900.69 1,339,876,201.72
Including: Sales income 1,359,895,900.69 1,339,876,201.72
Interest income
Premium income
Handling charge and commission
income
II. Total operating cost 1,319,907,071.98 1,300,717,656.51
Including: Cost of sales 1,179,073,102.73 1,165,484,758.63
Interest expenses
Handling charge and commission
expenses
Surrenders
Net claims paid
Net amount withdrawn for the
insurance contract reserve
Expenditure on policy dividends
Reinsurance premium
Taxes and associate charges 2,280,012.43 315,287.40
Selling and distribution expenses 58,059,098.92 58,523,814.07
Administrative expenses 84,401,024.18 82,882,576.84
Financial expenses -6,673,703.74 -7,132,562.78
Asset impairment loss 2,767,537.46 643,782.35
Add: Gain/(loss) from change in fair
value (“-” means loss)
Gain/(loss) from investment (“-”
4,900,603.44 1,472,670.17
means loss)
34
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Including: share of profits in associates
and joint ventures
Foreign exchange gains (“-” means loss)
III. Business profit (“-” means loss) 44,889,432.15 40,631,215.38
Add: non-operating income 3,664,111.90 7,218,462.62
Of which: gains from non-current
asset disposal 106,674.56 158,173.02
Less: non-operating expense 2,832,658.16 5,605,447.60
Of which: losses from non-current
14,758.29 61,479.60
asset disposal
IV. Total profit (“-” means loss) 45,720,885.89 42,244,230.40
Less: Income tax expense 7,503,443.33 7,094,145.06
V. Net profit (“-” means loss) 38,217,442.56 35,150,085.34
Attributable to owners of the
37,563,399.18 34,303,430.49
Company
Minority shareholders’ income 654,043.38 846,654.85
VI. After-tax net amount of other
157,931,275.00 36,048.75
comprehensive incomes
After-tax net amount of other
comprehensive incomes attributable to 157,931,275.00 36,048.75
owners of the Company
(I) Other comprehensive incomes
that will not be reclassified into gains and
losses
1. Changes in net liabilities or
assets with a defined benefit plan upon
re-measurement
2. Enjoyable shares in other
comprehensive incomes in investees that
cannot be reclassified into gains and
losses under the equity method
(II) Other comprehensive incomes
that will be reclassified into gains and 157,931,275.00 -36,048.75
losses
1. Enjoyable shares in other
comprehensive incomes in investees that
will be reclassified into gains and losses
under the equity method
35
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
2. Gains and losses on fair
value changes of available-for-sale 157,931,275.00 36,048.75
financial assets
3. Gains and losses on
reclassifying held-to-maturity
investments into available-for-sale
financial assets
4. Effective hedging gains and
losses on cash flows
5. Foreign-currency financial
statement translation difference
6. Other
After-tax net amount of other
comprehensive incomes attributable to
minority shareholders
VII. Total comprehensive incomes 196,148,717.56 35,186,134.09
Attributable to owners of the
195,494,674.18 34,339,479.24
Company
Attributable to minority
654,043.38 846,654.85
shareholders
VIII. Earnings per share
(I) Basic earnings per share 0.07 0.06
(II) Diluted earnings per share 0.07 0.06
Legal representative: Xue Guojun Person-in-charge of the accounting work: He Jianguang
Chief of the accounting division: Jiang He
4. Income statement of the Company
Unit: RMB Yuan
Item Jan.-Jun. 2015 Jan.-Jun 2014
I. Total sales 1,371,231,764.35 1,354,997,514.11
Less: cost of sales 1,200,341,035.82 1,192,418,726.32
Business taxes and surcharges 2,092,245.81
Distribution expenses 55,751,714.71 55,680,402.73
Administrative expenses 76,865,506.74 75,405,434.27
Financial costs -7,439,596.01 -8,790,528.16
Impairment loss 2,767,537.46 643,782.35
36
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Add: gain/(loss) from change in
fair value (“-” means loss)
Gain/(loss) from investment (“-”
3,509,872.47 3,060,393.67
means loss)
Of which: income form investment
on associates and joint ventures
II. Business profit (“-” means loss) 44,363,192.29 42,700,090.27
Add: non-business income 3,052,280.67 6,216,359.80
Of which: gains from non-current
asset disposal
Less: non-business expense 2,800,072.37 5,559,301.31
Of which: losses from non-current
14,758.29 61,479.60
asset disposal
III. Total profit (“-” means loss) 44,615,400.59 43,357,148.76
Less: income tax expense 7,047,847.82 6,533,070.61
IV. Net profit (“-” means loss) 37,567,552.77 36,824,078.15
V. After-tax net amount of other
157,931,275.00 -1,700.00
comprehensive incomes
(I) Other comprehensive
incomes that will not be reclassified
into gains and losses
1. Changes in net liabilities or
assets with a defined benefit plan upon
re-measurement
2. Enjoyable shares in other
comprehensive incomes in investees
that cannot be reclassified into gains
and losses under the equity method
(II) Other comprehensive
incomes that will be reclassified into 157,931,275.00 -1,700.00
gains and losses
1. Enjoyable shares in other
comprehensive incomes in investees
that will be reclassified into gains and
losses under the equity method
2. Gains and losses on fair
value changes of available-for-sale 157,931,275.00 -1,700.00
financial assets
3. Gains and losses on
37
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
reclassifying held-to-maturity
investments into available-for-sale
financial assets
4. Effective hedging gains
and losses on cash flows
5. Foreign-currency financial
statement translation difference
6. Other
VI. Total comprehensive incomes 195,498,827.77 36,822,378.15
VII. Earnings per share
(I) Basic earnings per share 0.07 0.07
(II) Diluted earnings per share 0.07 0.07
38
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
5. Consolidated cash flow statement
Unit: RMB Yuan
Item Jan.-Jun. 2015 Jan.-Jun 2014
I. Cash flows from operating activities:
Cash received from sale of
1,379,194,450.30 1,394,839,795.50
commodities and rendering of service
Net increase of deposits from
customers and dues from banks
Net increase of loans from the
central bank
Net increase of funds borrowed
from other financial institutions
Cash received from premium of
original insurance contracts
Net cash received from reinsurance
business
Net increase of deposits of policy
holders and investment fund
Net increase of dispose of the
financial assets measured by fair value
with the changes be included in the
current gains and losses
Cash received from interest,
handling charges and commissions
Net increase of intra-group
borrowings
Net increase of funds in repurchase
business
Tax refunds received 17,902,474.19 19,215,031.04
Other cash received relating to
11,362,233.37 18,014,958.47
operating activities
Subtotal of cash inflows from operating
1,408,459,157.86 1,432,069,785.01
activities
Cash paid for goods and services 1,117,905,635.90 1,252,794,264.51
Net increase of customer lendings
and advances
Net increase of funds deposited in
the central bank and amount due from
39
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
banks
Cash for paying claims of the
original insurance contracts
Cash for paying interest, handling
charges and commissions
Cash for paying policy dividends
Cash paid to and for employees 161,565,170.00 145,777,445.78
Various taxes paid 48,202,988.69 26,373,319.83
Other cash payment relating to
34,057,622.15 37,480,542.74
operating activities
Subtotal of cash outflows from
1,361,731,416.74 1,462,425,572.86
operating activities
Net cash flows from operating activities 46,727,741.12 -30,355,787.85
II. Cash flows from investing activities:
Cash received from withdrawal of
2,109,642.19
investments
Cash received from return on
3,953,970.87 1,472,670.17
investments
Net cash received from disposal of
fixed assets, intangible assets and other 283,604.57 158,173.02
long-term assets
Net cash received from disposal of
subsidiaries or other business units
Other cash received relating to
20,000.00
investing activities
Subtotal of cash inflows from investing
6,347,217.63 1,650,843.19
activities
Cash paid to acquire fixed assets,
intangible assets and other long-term 31,633,966.65 61,493,442.88
assets
Cash paid for investment 20,000,000.00
Net increase of pledged loans
Net cash paid to acquire
23,850,000.00
subsidiaries and other business units
Other cash payments relating to
20,000,000.00 11,500,000.00
investing activities
Subtotal of cash outflows from
71,633,966.65 96,843,442.88
investing activities
40
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Net cash flows from investing activities -65,286,749.02 -95,192,599.69
III. Cash Flows from Financing
Activities:
Cash received from capital
contributions
Including: Cash received from
minority shareholder investments by
subsidiaries
Cash received from borrowings 10,000,000.00
Cash received from issuance of
bonds
Other cash received relating to
4,046.87
financing activities
Subtotal of cash inflows from financing
10,004,046.87
activities
Repayment of borrowings 15,000,000.00
Cash paid for interest expenses and
12,083,442.33 8,974,014.89
distribution of dividends or profit
Including: dividends or profit paid
553,400.00
by subsidiaries to minority shareholders
Other cash payments relating to
financing activities
Sub-total of cash outflows from
27,083,442.33 8,974,014.89
financing activities
Net cash flows from financing activities -17,079,395.46 -8,974,014.89
IV. Effect of foreign exchange rate
37,748.75
changes on cash and cash equivalents
V. Net increase in cash and cash
-35,638,403.36 -134,484,653.68
equivalents
Add: Opening balance of cash and
464,761,820.50 610,882,216.18
cash equivalents
VI. Closing balance of cash and cash
429,123,417.14 476,397,562.50
equivalents
6. Cash flow statement of the Company
Unit: RMB Yuan
Item Jan.-Jun. 2015 Jan.-Jun 2014
41
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
I. Cash flows from operating activities:
Cash received from sale of
1,382,174,877.12 1,396,130,314.62
commodities and rendering of service
Tax refunds received 17,902,474.19 19,215,031.04
Other cash received relating to
9,780,837.80 16,849,880.76
operating activities
Subtotal of cash inflows from operating
1,409,858,189.11 1,432,195,226.42
activities
Cash paid for goods and services 1,148,582,635.11 1,283,081,961.60
Cash paid to and for employees 145,784,170.00 128,355,508.04
Various taxes paid 45,452,896.38 22,352,270.90
Other cash payment relating to
32,169,844.52 32,394,115.76
operating activities
Subtotal of cash outflows from
1,371,989,546.01 1,466,183,856.30
operating activities
Net cash flows from operating activities 37,868,643.10 -33,988,629.88
II. Cash flows from investing activities:
Cash received from retraction of
investments
Cash received from return on
3,112,240.00 2,446,600.00
investments
Net cash received from disposal of
fixed assets, intangible assets and other 106,674.57 158,173.02
long-term assets
Net cash received from disposal of
subsidiaries or other business units
Other cash received relating to
investing activities
Subtotal of cash inflows from investing
3,218,914.57 2,604,773.02
activities
Cash paid to acquire fixed assets,
intangible assets and other long-term 29,560,366.65 56,797,296.86
assets
Cash paid for investment 20,000,000.00
Net cash paid to acquire
24,626,700.00
subsidiaries and other business units
Other cash payments relating to
investing activities
42
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Subtotal of cash outflows from
49,560,366.65 81,423,996.86
investing activities
Net cash flows from investing activities -46,341,452.08 -78,819,223.84
III. Cash Flows from Financing
Activities:
Cash received from capital
contributions
Cash received from borrowings
Cash received from issuance of
bonds
Other cash received relating to
financing activities
Subtotal of cash inflows from financing
activities
Repayment of borrowings
Cash paid for interest expenses
11,227,486.52 8,420,614.89
and distribution of dividends or profit
Other cash payments relating to
financing activities
Sub-total of cash outflows from
11,227,486.52 8,420,614.89
financing activities
Net cash flows from financing activities -11,227,486.52 -8,420,614.89
IV. Effect of foreign exchange rate
changes on cash and cash equivalents
V. Net increase in cash and cash
-19,700,295.50 -121,228,468.61
equivalents
Add: Opening balance of cash and
430,758,675.98 574,440,388.77
cash equivalents
VI. Closing balance of cash and cash
411,058,380.48 453,211,920.16
equivalents
43
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
7. Consolidated Statement of Changes in Owners’ Equity
Jan.-Jun. 2015
Unit: RMB Yuan
Jan.-Jun. 2015
Equity attributable to owners of the Company
Other equity
instruments
Other Minorit Total
Item Perpet
Less: General
Share Capital compre Specific Surplus Retaine y owners’
ual
Prefer treasury risk
capital capita reserve hensive reserve reserve d profit interests equity
red Other stock reserve
l income
shares
securi
ties
I. Balance at the 561,3 164,32 349,15 298,15 555,59 16,208 1,953,
8,332,
end of the 74,32 8,665. 9,175. 1,696. 0,894. ,910.0 145,74
077.21
previous year 6.00 43 00 96 67 7 5.34
Add: change of
accounting policy
Correction of
errors in previous
periods
Business
combination under
the same control
Other
561,3 164,32 349,15 298,15 555,59 16,208 1,953,
II. Balance at the 8,332,
74,32 8,665. 9,175. 1,696. 0,894. ,910.0 145,74
period-begin 077.21
6.00 43 00 96 67 7 5.34
III. Increase/
157,93 26,335 184,92
decrease in the 654,04
1,275. ,912.6 1,231.
period (“-” means 3.38
00 6 04
decrease)
(I) Total amount
157,93 37,563 196,14
of the 654,04
1,275. ,399.1 8,717.
comprehensive 3.38
00 8 56
income
(II) Capital paid
in and reduced by
44
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
owners
1. Common shares
invested by the
shareholders
2. Capital invested
by the owners of
other equity
instruments
3. Amounts of
share-based
payments
recognized in
owners’ equity
4. Others
-11,22 -11,22
(III) Profit
7,486. 7,486.
distribution
52 52
1. Appropriations
to surplus reserves
2. Appropriations
to general risk
provisions
3. Appropriations -11,22 -11,22
to owners (or 7,486. 7,486.
shareholders) 52 52
4. Other
(IV) Internal
carry-forward of
owners’ equity
1. New increase of
capital (or share
capital) from
capital public
reserves
2. New increase of
capital (or share
capital) from
surplus reserves
3. Surplus reserves
for making up
45
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
losses
4. Other
(V) Specific
reserve
1. Withdrawn for
the period
2. Used in the
period
(VI) Other
561,3 164,32 507,09 298,15 581,92 16,862 2,138,
IV. Closing 8,332,
74,32 8,665. 0,450. 1,696. 6,807. ,953.4 066,97
balance 077.21
6.00 43 00 96 33 5 6.38
Jan.-Jun. 2014
Unit: RMB Yuan
Jan.-Jun. 2014
Equity attributable to owners of the Company
Other equity
instruments
Minorit
Other Total
Item Perpet y
Less: General
Share Capital compre Specific Surplus Retaine owners’
ual interest
Prefer treasury risk
capital reserve hensive reserve reserve d profit equity
capita s
red Other stock reserve
l income
shares
securi
ties
I. Balance at the 561,3 171,01 277,84 289,62 502,71 16,482 1,826,
6,996,
end of the 74,32 6,154. 7,575. 9,574. 3,176. ,094.1 059,15
256.56
previous year 6.00 25 00 39 25 5 6.60
Add: change of
accounting policy
Correction of
errors in previous
periods
Business
combination under
the same control
Other
561,3 171,01 277,84 289,62 502,71 16,482 1,826,
II. Balance at the 6,996,
74,32 6,154. 7,575. 9,574. 3,176. ,094.1 059,15
period-begin 256.56
6.00 25 00 39 25 5 6.60
46
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
III. Increase/
25,367 26,212
decrease in the -1,700. 846,65
,164.3 ,119.2
period (“-” means 00 4.85
5 0
decrease)
(I) Total amount
34,341 35,186
of the -1,700. 846,65
,179.2 ,134.0
comprehensive 00 4.85
4 9
income
(II) Capital paid
in and reduced by
owners
1. Common shares
invested by the
shareholders
2. Capital invested
by the owners of
other equity
instruments
3. Amounts of
share-based
payments
recognized in
owners’ equity
4. Others
(III) Profit -8,974, -8,974,
distribution 014.89 014.89
1. Appropriations
to surplus reserves
2. Appropriations
to general risk
provisions
3. Appropriations
-8,974, -8,974,
to owners (or
014.89 014.89
shareholders)
4. Other
(IV) Internal
carry-forward of
owners’ equity
1. New increase of
capital (or share
47
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
capital) from
capital public
reserves
2. New increase of
capital (or share
capital) from
surplus reserves
3. Surplus reserves
for making up
losses
4. Other
(V) Specific
reserve
1. Withdrawn for
the period
2. Used in the
period
(VI) Other
561,3 171,01 277,84 289,62 528,08 17,328 1,852,
IV. Closing 6,996,
74,32 6,154. 5,875. 9,574. 0,340. ,749.0 271,27
balance 256.56
6.00 25 00 39 60 0 5.80
48
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
8. Statement of changes in owners’ equity of the Company
Jan.-Jun. 2015
Unit: RMB Yuan
Jan.-Jun. 2015
Other equity instruments
Perpetu Other
Less: Total
Item Share Capital comprehe Specific Surplus Retaine
al
Preferre treasury owners’
capital capital Other reserve nsive reserve reserve d profit
d shares stock equity
securiti income
es
I. Balance at the 561,37 503,95 1,904,0
183,071, 349,159, 8,332,07 298,151,
end of the previous 4,326.0 7,842. 46,265.
147.70 175.00 7.21 696.96
year 0 86 73
Add: change of
accounting policy
Correction of
errors in previous
periods
Other
561,37 503,95 1,904,0
II. Balance at the 183,071, 349,159, 8,332,07 298,151,
4,326.0 7,842. 46,265.
period-begin 147.70 175.00 7.21 696.96
0 86 73
III. Increase/
26,340
decrease in the 157,931, 184,271
,066.2
period (“-” means 275.00 ,341.25
5
decrease)
(I) Total amount
37,567
of the 157,931, 195,498
,552.7
comprehensive 275.00 ,827.77
7
income
(II) Capital paid
in and reduced by
owners
1. Common shares
invested by the
shareholders
2. Capital invested
by the owners of
49
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
other equity
instruments
3. Amounts of
share-based
payments
recognized in
owners’ equity
4. Others
-11,22
(III) Profit -11,227,
7,486.
distribution 486.52
52
1. Appropriations
to surplus reserves
2. Appropriations -11,22
-11,227,
to general risk 7,486.
486.52
provisions 52
3. Appropriations
to owners (or
shareholders)
4. Other
(IV) Internal
carry-forward of
owners’ equity
1. New increase of
capital (or share
capital) from
capital public
reserves
2. New increase of
capital (or share
capital) from
surplus reserves
3. Surplus reserves
for making up
losses
4. Other
(V) Specific
reserve
1. Withdrawn for
the period
50
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
2. Used in the
period
561,37 530,29 2,088,3
183,071, 507,090, 8,332,07 298,151,
(VI) Other 4,326.0 7,909. 17,606.
147.70 450.00 7.21 696.96
0 11 98
Jan.-Jun. 2014
Unit: RMB Yuan
Jan.-Jun. 2014
Other equity instruments
Perpetu Other
Less: Total
Item Share Capital comprehe Specific Surplus Retaine
al
Preferre treasury owners’
capital capital Other reserve nsive reserve reserve d profit
d shares stock equity
securiti income
es
I. Balance at the 561,37 435,67 1,754,5
183,044, 277,847, 6,996,25 289,629,
end of the previous 4,326.0 9,354. 71,396.
309.95 575.00 6.56 574.39
year 0 63 53
Add: change of
accounting policy
Correction of
errors in previous
periods
Other
561,37 435,67 1,754,5
II. Balance at the 183,044, 277,847, 6,996,25 289,629,
4,326.0 9,354. 71,396.
period-begin 309.95 575.00 6.56 574.39
0 63 53
III. Increase/
28,403
decrease in the -1,700.0 28,401,
,463.2
period (“-” means 0 763.26
6
decrease)
(I) Total amount
36,824
of the -1,700.0 36,822,
,078.1
comprehensive 0 378.15
5
income
(II) Capital paid
in and reduced by
owners
1. Common shares
invested by the
shareholders
51
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
2. Capital invested
by the owners of
other equity
instruments
3. Amounts of
share-based
payments
recognized in
owners’ equity
4. Others
(III) Profit -8,420, -8,420,6
distribution 614.89 14.89
1. Appropriations
to surplus reserves
2. Appropriations
-8,420, -8,420,6
to general risk
614.89 14.89
provisions
3. Appropriations
to owners (or
shareholders)
4. Other
(IV) Internal
carry-forward of
owners’ equity
1. New increase of
capital (or share
capital) from
capital public
reserves
2. New increase of
capital (or share
capital) from
surplus reserves
3. Surplus reserves
for making up
losses
4. Other
(V) Specific
reserve
1. Withdrawn for
52
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
the period
2. Used in the
period
561,37 464,08 1,782,9
183,044, 277,845, 6,996,25 289,629,
(VI) Other 4,326.0 2,817. 73,159.
309.95 875.00 6.56 574.39
0 89 79
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 Jan. 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 Mar. 1994 to 30 Mar.
1994. As approved by the Shenzhen Stock Exchange through document SZSFZ (1994) No. 15, such tradable
shares of the public got listing on 1 Jul. 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 Aug. 1996 to 30 Aug. 1996, getting listed on 13 Sep. 1996.
On 9 Jun. 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 Jun. 2006.
As examined and approved at the 2009 2nd Extraordinary Shareholders’ General Meeting in Sep. 2009, based on
the total share capital of 374,249,551 shares as at 30 Jun. 2009, the Company implemented the profit distribution
plan, i.e. to distribute 5 bonus shares and cash of RMB 0.8 for every 10 shares, with registered capital increased
by RMB 187,124,775.00, as well as registered capital of RMB 561,374,326.00 after change. As at 31 Dec. 2013,
the total share capital of the Company is 561,374,326 shares, as well as registered capital of RMB 561,374,326.00,
which verified by Jiangsu Gongzheng Tianye Certified Public Accountants Company Limited with issuing Capital
Verification Report SGC [2010] No. B002. The Company had registered the change with the administrative
authorities for industry and commerce, and obtained the renewed business license as legal person with No.
320400000004012.
The Company’s registered address is situated at No. 123 Huaide Middle Road, Changzhou, Jiangsu, as well as its
head office located at No. 123 Huaide Middle Road, Changzhou, Jiangsu.
The Company belongs to manufacturing with business scope including manufacturing and sale of diesel engine,
diesel engines part and casting, grain harvesting machine, rotary cultivators, walking tractor, mould and fixtures,
assembling and sale of diesel generating set and pumping unit. The Company mainly engaged in the production
and sales of small and medium-sized single cylinders and multi-cylinder diesel engine with the label of Changchai
Brand. The diesel engine produced and sold by the Company were mainly used in tractors, combine harvest
models, light commercial vehicle, farm equipment, small-sized construction machinery, generating sets and
shipborne machinery and equipment, etc. The Company’s main business remained unchanged in the reporting
53
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
period.
The Company established the Shareholders’ General Meeting, the Board of Directors and the Board of
Supervisors ， Corporate office, Financial Department, Political Department, Investment and Development
Department, Enterprise Management Department, Human Recourses Department, Production Department,
Procurement Department, Sales Company, Market Department, Chief Engineer Office, Technology Center, QA
Department, Foundry Branch, Machine Processing Branch, Single-cylinder Engine branch, Multi-cylinder Engine
Branch and Overseas Business Department in the Company.
The financial report has been approved to be issued by the Board of Directors on 18 Aug. 2015.
IV. Basis for preparation of the financial report
1. Basis for preparation
With the going-concern assumption as the basis and based on transactions and other events that actually occurred,
the Group prepared financial statements in accordance with issued by the Ministry of Finance with Decree No. 33 and revised with Decree No.
76, the 41 specific accounting standards, the Application Guidance of Accounting Standards for Business
Enterprises, the Interpretation of Accounting Standards for Business Enterprises and other regulations issued and
revised from 15 Feb. 2006 onwards (hereinafter jointly referred to as “the Accounting Standards for Business
Enterprises”, “China Accounting Standards” or “CAS”), as well as the Rules for Preparation Convention of
Disclosure of Public Offering Companies No.15 – General Regulations for Financial Reporting (revised in 2014)
by China Securities Regulatory Commission.
In accordance with relevant provisions of the Accounting Standards for Business Enterprises, the Group adopted
the accrual basis in accounting. Except for some financial instruments, where impairment occurred on an asset, an
impairment reserve was withdrawn accordingly pursuant to relevant requirements.
2. Continuation
The Company comprehensively evaluated the information acquired recently that there would be no such factors in
the 12 months from the end of the reporting period that would obviously influence the continuation capability of
the Company and predicted that the operating activities would continue in the future 12 months of the Company.
The financial statement compiled base on the continuous operation.
V. Important accounting policies and estimations
Note to accounting policies and estimations:
The Company and each subsidiary according to the actual production and operation characteristics and in accord
with the regulations of the relevant ASBE, formulated certain specific accounting polices and accounting
estimations, which mainly reflected in the withdrawal method of the bad debt provision of the accounts receivable
(Notes III, 11), the measurement of the inventory (Notes III, 12) and the depreciation of the fixed assets (Notes III,
54
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
16) etc. As for the details of the significant accounting judgment and the estimations made by the management
layer, please refer to Notes III, 30 “Important accounting judgment and estimations”.
1. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Group are in compliance with in compliance with the Accounting
Standards for Business Enterprises, which factually and completely present the Company’s and the Group’s
financial positions, business results and cash flows and other relevant information.
2. Fiscal period
The fiscal periods are divided into fiscal year and metaphase, the fiscal year is from Jan. 1 to Dec. 31 and as the
metaphase included monthly, quarterly and semi-yearly periods.
3. Operating cycle
A normal operating cycle refers to a period from the Group purchasing assets for processing to realizing cash or
cash equivalents. An operating cycle for the Group is 12 months, which is also the classification criterion for the
liquidity of its assets and liabilities.
4. Currency used in bookkeeping
Renminbi is functional currency of the Company.
5. Accounting methods for business combinations under the same control and business combinations not
under the same control
(1) Business combinations under the same control:
A business combination under the same control is a business combination in which all of the combining
enterprises are ultimately controlled by the same party or the same parties both before and after the business
combination and on which the control is not temporary.
For the merger of enterprises under the same control, if the consideration of the merging enterprise is that it makes
payment in cash, transfers non-cash assets or bear its debts, it shall, on the date of merger, regard the share of the
book value of the owner's equity of the merged enterprise as the initial cost of the long-term equity investment.
The difference between the initial cost of the long-term equity investment and the payment in cash, non-cash
assets transferred as well as the book value of the debts borne by the merging party shall offset against the capital
reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted.
If the consideration of the merging enterprise is that it issues equity securities, it shall, on the date of merger,
regard the share of the book value of the owner's equity of the merged enterprise as the initial cost of the
long-term equity investment. The total face value of the stocks issued shall be regarded as the capital stock, while
the difference between the initial cost of the long-term equity investment and total face value of the shares issued
55
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
shall offset against the capital reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be
adjusted.
All direct costs for the business combination, including expenses for audit, evaluating and legal services shall be
recorded into the profits and losses at the current period. The expenses such as the handling charges and
commission etc, premium income of deducting the equity securities, and as for the premium income was
insufficient to dilute, the retained earnings shall be written down.
Owning to the reasons such as the additional investment, for the equity investment held before acquiring the
control right of the combined parties, the confirmed relevant gains and losses, other comprehensive income and
the changes of other net assets since the date of the earlier one between the date when acquiring the original equity
right and the date when the combine parties and combined ones were under the same control to the combination
date, should be respectively written down and compared with the beginning balance of retained earnings or the
current gains and losses during the statement period.
(2) Business combinations not under the same control
A business combination not under the same control is a business combination in which the combining enterprises
are not ultimately controlled by the same party or the same parties both before and after the business combination.
The combination costs of the acquirer and the identifiable net assets obtained by the acquirer in a business
combination shall be measured at the fair values. The acquirer shall recognize the positive balance between the
combination costs and the fair value of the identifiable net assets it obtains forms the acquiree as business
reputation. The direct relevant expenses occurred from the enterprise combination should be included in the
current gains and losses when occurred. The combination costs of the acquirer and the identifiable net assets
obtained by it in the combination shall be measured according to their fair values at the acquiring date. The
difference between the fair value of the assets paid out by the Company and its book value should be included in
the current gains and losses. The purchase date refers to the date that the purchaser acquires the control right of the
acquiree.
For the business combinations not under the same control realized through step by step multiple transaction, as for
the equity interests that the Group holds in the acquiree before the acquiring date, they shall be re-measured
according to their fair values at the acquiring date; the positive difference between their fair values and carrying
amounts shall be recorded into the investment gains for the period including the acquiring date. The equity holed
by the acquiree which involved with the other comprehensive income and the other owners’ equities changes
except for the net gains and losses, other comprehensive income and the profits distribution and other related
comprehensive gains and other owners’ equities which in relation to the equity interests that the Group holds in
the acquiree before the acquiring date should be transferred into the current investment income on the acquiring
date, except for the other comprehensive income occurred from the re-measurement of the net profits of the
defined benefit plans or the changes of the net assets of the investees.
6. Methods for preparing consolidated financial statements
The Company confirms the consolidated scope based on the control and includes the subsidiaries with actual
control right into the consolidated financial statement.
The consolidated financial statement of the Company is compiled according to the regulations of No. 33 of
ASBE-Consolidated Financial Statement and the relevant regulations and as for the whole significant
come-and-go balance, investment, transaction and the unrealized profits should be written off when compiling the
consolidated financial statement. The portion of a subsidiary’s shareholders’ equity and the portion of a
56
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
subsidiary’s net profits and losses for the period not held by the Group are recognized as minority interests and
minority shareholder profits and losses respectively and presented separately under shareholders’ equity and net
profits in the consolidation financial statements. The portion of a subsidiary’s net profits and losses for the period
that belong to minority interests is presented as the item of “minority shareholder profits and losses” under the
bigger item of net profits in the consolidated financial statements. Where the loss of a subsidiary shared by
minority shareholders exceeds the portion enjoyed by minority shareholders in the subsidiary’s opening owners’
equity, minority interests are offset.
The accounting policy or accounting period of each subsidiary is different from which of the Company, which
shall be adjusted as the Company; or subsidiaries shall prepare financial statement again required by the Company
when preparing the consolidated financial statements.
As for the added subsidiary company not controlled by the same enterprise preparing the consolidated financial
statement, shall adjust individual financial statement based on the fair value of the identifiable net assets on the
acquisition date; as for the added subsidiary companies controlled by the same enterprise preparing the financial
statement, shall not adjust the financial statement of the subsidiaries, namely survived by integration as
participating in the consolidation when the final control party starts implementing control and should adjust the
period-begin amount of the consolidated balance sheet and at the same time adjust the relevant items of the
compared statement.
As for the disposed subsidiaries, the operation result and the cash flow should be included in the consolidated
income statement and the consolidated cash flow before the disposing date; the disposed subsidiaries of the
current period, should not be adjusted the period-begin amount of the consolidated balance sheet.
Where the Group losses control on its original subsidiaries due to disposal of some equity investments or other
reasons, the residual equity interests are re-measured according to the fair value on the date when such control
ceases. The summation of the consideration obtained from the disposal of equity interests and the fair value of the
residual equity interests, minus the portion in the original subsidiary’s net assets measured on a continuous basis
from the acquisition date that is enjoyable by the Group according to the original shareholding percentage in the
subsidiary, is recorded in investment gains for the period when the Group’s control on the subsidiary ceases. Other
comprehensive incomes in relation to the equity investment and the other owners’ equities changes except for the
net gains and losses, other comprehensive income and profits distribution in the original subsidiary are treated on
the same accounting basis as the acquiree directly disposes the relevant assets or liabilities (that is, except for the
changes in the net liabilities or assets with a defined benefit plan resulted from re-measurement of the original
subsidiary, the rest shall all be transferred into current investment gains) when such control ceases. And
subsequent measurement is conducted on the residual equity interests according to the No.2 Accounting Standard
for Business Enterprises-Long-term Equity Investments or the No.22 Accounting Standard for Business
Enterprises-Recognition and Measurement of Financial Instruments.
For the disposal of equity investment belongs to a package deal, should be considered as a transaction and conduct
accounting treatment. However, Before losing control, every disposal cost and corresponding net assets balance of
subsidiary of disposal investment are confirmed as other comprehensive income in consolidated financial
statements, which together transferred into the current profits and losses in the lose of control, when the Group
losing control on its subsidiary.
For the disposal of the equity investment not belongs to a package deal, should be executed accounting treatment
according to the relevant policies of partly disposing the equity investment of the subsidiaries under the situation
not lose the control right before losing the control right; when losing the control right, the former should be
executed accounting treatment according to the general disposing method of the disposal of the subsidiaries.
57
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
7. Classification of joint arrangements and accounting treatment of joint operations
The Group classifies joint arrangements into joint operations and joint ventures。
A joint operation refers to a joint arrangement where the Group is the joint operations party of the joint
arrangement and enjoys assets and has to bear liabilities related to the arrangement. The Company confirms the
following items related to the interests share among the joint operations and executes accounting treatment
according to the regulations of the relevant ASBE:
(1) Recognizes the assets that it holds and bears in the joint operation and recognizes the jointly-held assets
according to the Group’s stake in the joint operation;
(2) Recognizes the liabilities that it holds and bears in the joint operation and recognizes the jointly-held liabilities
according to the Group’s stake in the joint operation;
(3) Recognizes the income from sale of the Group’s share in the output of the joint operation
(4) Recognizes the income from sale of the joint operation’s outputs according to the Group’s stake in it
(5) Recognizes the expense solely incurred to the Group and the expense incurred to the joint operation according
to the Group’s stake in it.
8. Recognition standard for cash and cash equivalents
In the Group’s understanding, cash and cash equivalents include cash on hand, any deposit that can be used for
cover, and short-term (usually due within 3 months since the day of purchase) and high circulating investments,
which are easily convertible into known amount of cash and whose risks in change of value are minimal.
9. Foreign currency businesses and translation of foreign currency financial statements
(1) Foreign currency business
Concerning the foreign-currency transactions that occurred, the foreign currency shall be converted into the
recording currency according to the middle price of the market exchange rate disclosed by the People’s Bank of
China on the date of the transaction. Among the said transactions that occurred, those involving foreign exchanges
shall be converted according to the exchange rates adopted in the actual transactions.
On the balance sheet date, the foreign-currency monetary assets and the balance of the liability account shall be
converted into the recoding currency according to the middle price of the market exchange rates disclosed by the
People’s Bank of China on the Balance Sheet Date. The difference between the recording-currency amount
converted according to the exchange rate on the Balance Sheet Date and the original book recording-currency
amount shall be recognized as gains/losses from foreign exchange. And the exchange gain/loss caused by the
foreign-currency borrowings related to purchasing fixed assets shall be handled according to the principle of
capitalizing borrowing expenses; the exchange gain/loss incurred in the establishment period shall be recorded
into the establishment expense; others shall be recorded into the financial expenses for the current period.
On the balance sheet date, the foreign-currency non-monetary items measured by historical cost shall be converted
according to the middle price of the market exchange disclosed by the People’s Bank of China on the date of the
transaction, with no changes in the original recording-currency amount; while the foreign-currency non-monetary
items measured by fair value shall be converted according to the middle price of the market exchange disclosed by
the People’s Bank of China on the date when the fair value is recognized, and the exchange gain/loss caused
58
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
thereof shall be recognized as the gain/loss from fair value changes and recorded into the gain/loss of the current
period.
(2) Translation of foreign currency
The assets and liabilities items among the balance sheet of the foreign operation shall be translated at a spot
exchange rate on the balance sheet date. Among the owner’s equity items, except for the items as “undistributed
profits”, other items shall be translated at the spot exchange rate at the time when they are incurred. And the
revenues and expenses items among the balance sheet of the foreign operation shall be translated at the
approximate exchange rate of the transaction date. The difference caused from the above transaction of the foreign
currency statement should be listed in the other comprehensive income among the owners’ equities.
10. Financial instruments
(1) Category of financial instruments
The Company classifies the financial assets into four kinds such as trading financial assets, available-for-sale
financial assets, accounts receivable and held-to-maturity investment according to the investment purpose and the
economy nature.
The Company classifies the financial liabilities into two kinds such as the financial liabilities measured by fair
value with the changes included in the current gains and losses and the other financial liabilities measured by
amortized cost according to the economy nature.
(2) Recognition basis and measurement methods of financial instruments
The trading financial assets should be measured by fair value with the changes of fair value included in the current
gains and losses; the available-for-sale financial assets should be measured by fair value with the changes of fair
value included in the owners’ equities; and the accounts receivable and the held-to-maturity investment should be
measured by amortized cost.
(3) Recognition basis and measurement methods of financial instruments transformation
The Company transfers or delivers a financial asset to a party other than the issuer of the financial asset and the
transformation of the financial assets could be whole of the financial assets or a part of it, which including two
methods:
The enterprise transfers the right to another party for receiving the cash flow of the financial asset;
The enterprise transfers the financial asset to another party, but maintains the right to receive the cash flow of the
financial asset and undertakes the obligation to pay the cash flow it receives to the final recipient.
Where the Company has transferred a part or nearly all of the risks and rewards related to the ownership of the
financial asset to the transferee, it shall stop recognizing the financial asset and the difference between the
consideration received and the book value of the transferred financial assets should be recognized as gains and
losses and at the same time transfers the accumulative gains or losses from the recognized financial assets among
the original owners’ equities in the gains and losses; if it retained nearly all of the risks and rewards related to the
ownership of the financial asset, it shall continue to recognize the whole or part of the financial assets and the
consideration received be recognized as financial liabilities.
Where the Company neither transfers nor retains nearly all of the risks and rewards related to the ownership of a
financial asset, and it does not cease its control on the said financial asset, it recognizes the relevant financial asset
and liability accordingly according to the extent of its continuous involvement in the transferred financial asset.
(4) De-recognition conditions of financial liabilities
59
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Only when the prevailing obligations of a financial liability are relieved in all or in part may the recognition of the
financial liability be terminated in all or partly.
(5) Recognition methods of the fair value of main financial assets and financial liabilities
As for the financial assets held by the Company or the financial liabilities plans to undertake, if there exists active
market, should adopt the current offering price in the active market, and as for the financial assets plans to be
purchased by the Company or the financial liabilities undertook, should adopt the current offering in the active
market, and if there is no current offering price or asking price, should adopt the market quotation of the recent
transactions or the adjusted market quotation of the recent transactions, except for there is definite evidence
indicate the market quotation is not the fair value.
Where there is no active market for a financial instrument, the enterprise concerned shall adopt value appraisal
techniques, including the prices adopted by the parties, who are familiar with the condition, in the latest market
transaction upon their own free will, the current fair value obtained by referring to other financial instruments of
the same essential nature etc.
(6) Impairment test method and withdrawal methods of impairment provision of financial assets (excluding
accounts receivable)
The Company shall carry out an inspection, on the balance sheet day, on the carrying amount of the financial
assets other than those measured at their fair values and of which the variation is recorded into the profits and
losses of the current period. Where there is any objective evidence proving that such financial asset has been
impaired, an impairment provision shall be made. For the financial assets with significant single amount, if there
is objective evidence indicates the occurred impairment, should recognize the impairment losses and should
include which in the current gains and losses. As for the financial assets with insignificant single amount but not
occur impairment, the Company should execute the impairment test by credit groups according to the credit
degree of the customers and the actual situation of the happen of the bad debts over the years for recognizing the
impairment losses.
The expression “objective evidence proving that the financial asset has been impaired” refers to the actually
incurred events which, after the financial asset is initially recognized, have an impact on the predicted future cash
flow of the said financial asset that can be reliably measured by the enterprise.
The objective evidences that can prove the impairment of a financial asset shall include:
A serious financial difficulty occurs to the issuer or debtor;
The debtor breaches any of the contractual stipulations, for example, fails to pay or delays the payment of interests
or the principal, etc.;
The creditor makes any concession to the debtor who is in financial difficulties due to economic or legal factors,
etc.;
The debtor will probably become bankrupt or carry out other financial reorganizations;
The financial asset can no longer continue to be traded in the active market due to serious financial difficulties of
the issuer;
It is impossible to identify whether the cash flow of a certain asset within a certain combination of financial assets
has decreased or not. But after making an overall appraisal according to the public data available, it is found that
the predicted future cash flow of the said combination of financial assets has indeed decreased since it was
initially recognized and such decrease can be measured, for example, the ability of the debtor of the said
combination of financial assets worsens gradually, the unemployment rate of the country or region where the
debtor is situated increases, the prices of the region where the guaranty is situated are obviously dropping, or the
industrial sector concerned is in slump, etc.;
60
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Any seriously disadvantageous change has occurred to technical, market, economic or legal environment, etc.
wherein the debtor operates its business, which makes the investor of an equity instrument unable to take back its
investment;
Where the fair value of the equity instrument investment drops significantly or not contemporarily;
Other objective evidences showing the impairment of the financial asset.
Where a financial asset measured on the basis of post-amortization costs is impaired, the carrying amount of the
said financial asset shall be calculated by the difference between the book value and the current value of the
predicted future cash flow of the impairment losses.
Where any financial asset measured on the basis of post-amortization costs is recognized as having suffered from
any impairment loss, if there is any objective evidence proving that the value of the said financial asset has been
restored, and it is objectively related to the events that occur after such loss is recognized, the impairment-related
losses as originally recognized shall be reversed and be recorded into the profits and losses of the current period.
Where a sellable financial asset is impaired, even if the recognition of the financial asset has not been terminated,
the accumulative losses arising from the decrease of the fair value of the owner’s equity which is directly included
shall be transferred out and recorded into the profits and losses of the current period.. The accumulative losses are
the initial cost after deducting the principal, the amortization amount, fair value of current period and balance after
originally recorded into impairment loss of profits or losses. After the recognition of impairment losses, if there is
any objective evidence indicated that the value of financial assets is resumed and objectively related to the events
after the recognition of impairment losses, transfer the impairment losses originally recognized, transfer the
impairment losses of available for sale equity instrument investment and recognized as other comprehensive
income, and transfer the impairment losses of available for sale liability instruments and record into current profits
or losses.
11. Receivables
(1) Accounts receivable with significant single amount for which the bad debt provision is made
individually
significant single amounts refers to the accounts receivable of the
Recognition criteria of accounts receivable with individual and single amount more than RMB 1 million (RMB 1 million
significant amount include) (including accounts receivable and other accounts
receivable)
The Company makes an independent impairment test on the
accounts receivable with significant single amount, and provision
for bad debts shall withdrawn on the basis of the balance
Withdrawal method of the bad debt provision of the accounts between the current values of the predicted future cash flow
receivable with significant single amounts lower than book value. Upon independent impairment test, the
accounts receivable with significant single amounts has not been
impaired, it shall be withdrawn bad debt provision based on
ending balance by adopting aging analysis method.
61
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
(2) Account receivable withdrawal bad debt provision by the credit risk portfolio
Name of the group Method
The age of the accounts receivable as the credit risk portfolio Aging analysis
In the group, adopting aging analysis withdraws bad debt provision:
√ Applicable □ Inapplicable
Withdrawal proportion for accounts Withdrawal proportion for other accounts
Age
receivable receivable
Within 1 year (including 1 year) 2.00% 2.00%
1-2 years 5.00% 5.00%
2-3 years 15.00% 15.00%
3-4 years 30.00% 30.00%
4-5 years 60.00% 60.00%
Over 5 years 100.00% 100.00%
In the groups, adopting balance percentage method to withdraw bad debt provision:
□ Applicable √ Inapplicable
In the groups, adopting other methods to withdraw bad debt provision:
□ Applicable √ Inapplicable
(3) Accounts receivable with an insignificant single amount but for which the bad debt provision is made
individually
Recognition criteria of accounts receivable with individual but
insignificant amount: insignificant single amounts refers to the
Reason of individually withdrawing bad debt provision accounts receivable of the single amount lower than RMB 1
million (RMB 1 million include) (including accounts receivable
and other accounts receivable).
As for an account receivable with an insignificant single amount
and which can not show its risk feature when withdrawing a
bad-bet provision for it on the group basis, the bad-debt
provision for the account receivable shall be withdrawn based on
the difference of the expected present value of the future cash
Withdrawal method for bad debt provision
flows of the account receivable that less than its carrying amount.
The Company shall withdraw the bad-debt provision for such an
account receivable by combining the aging method and
individual judgment based on the debtor entity’s actual financial
position, cash flows and other relevant information.
12. Inventory
62
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
(1) Category of Inventory
Inventory refers to the held-for-sale finished products or commodities, goods in process, materials consumed in
the production process or the process providing the labor service etc. Inventory is mainly including the raw
materials, low priced and easily worn articles, unfinished products, inventories and work in process–outsourced
etc.
(2) Pricing method
Purchasing and storage of the various inventories should be valued according to the planed cost and the dispatch
be calculated according to the weighted average method; carried forward the cost of the finished products
according to the actual cost of the current period and the sales cost according to the weighted average method.
(3) Determination basis of the net realizable value of inventory and withdrawal method of the provision for falling
price of inventory
At the balance sheet date, inventories are measured at the lower of the cost and net realizable value. When all the
inventories are checked roundly, for those which were destroyed, outdated in all or in part, sold at a loss, etc, the
Company shall estimate the irrecoverable part of its cost and withdrawal the inventory falling price reserve at the
year-end. Where the cost of the single inventory item is higher than the net realizable value, the inventory falling
price reserve shall be withdrawn and recorded into profits and losses of the current period. Of which: in the
normal production and operating process, as for the commodities inventory directly for sales such as the finished
products, commodities and the materials for sales, should recognize the net realizable value according to the
amount of the estimated selling price of the inventory minuses the estimated selling expenses and the relevant
taxes; as for the materials inventory needs to be processed in the normal production and operating process, should
recognize its net realizable value according to the amount of the estimated selling price of the finished products
minuses the cost predicts to be occur when the production completes and the estimated selling expenses as well as
the relevant taxes; on the balance sheet date, for the same inventory with one part agreed by the contract price
and other parts not by the contract price, should be respectively recognized the net realizable value. For items of
inventories relating to a product line that are produced and marketed in the same geographical area, have the same
or similar end users or purposes, and cannot be practicably evaluated separately from other items in that product
line provision for decline in value is determined on an aggregate basis; for large quantity and low value items of
inventories, provision for decline in value is made based on categories of inventories.
(4) The perpetual inventory system is maintained for stock system.
(5) Amortization method of low-value consumption goods and packages
It is one time amortization method of low-value consumption goods and packages when consuming.
13. Divided as assets held for sale
The Company recognizes the components (or the non-current assets) which meet with the following conditions as
assets held for sale:
(1) The components must be immediately sold only according to the usual terms of selling this kind of
components under the current conditions;
(2) The Company had made solutions on disposing the components (or the non-current assets), for example, the
Company should gain the approval from the shareholders according to the regulations and had acquired the
approved from the Annual General Meeting or the relevant authority institutions;
(3) The Company had signed the irrevocable transformation agreement with the transferee;
63
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
(4) The transformation should be completed within 1 year.
14. Long-term equity investments
(1) Judgment standard of joint control and significant influences
Joint control, refers to the control jointly owned according to the relevant agreement on an arrangement by the
Company and the relevant activities of the arrangement should be decided only after the participants which share
the control right make consensus. Significant influence refers to the power of the Group which could anticipate in
the finance and the operation polices of the investees, but could not control or jointly control the formulation of
the policies with the other parties.
(2) Recognition for initial investment cost
The initial investment cost of the long-term equity investment shall be recognized by adopting the following ways
in accordance with different methods of acquisition:
① As for those forms under the same control of the enterprise combine, if the combine party takes the cash
payment, non-cash assets transformation, liabilities assumption or equity securities issuance as the combination
consideration, should take the shares of the book value by the ultimate control party in the consolidate financial
statement of the owners’ equities of the combiners acquired on the merger date as the initial investment cost. The
difference between the initial investment cost and the book value of the paid combination consideration or the
total amount of the issued shares of the long-term equity investment should be adjusted the capital reserve; If the
capital reserve is insufficient to dilute, the retained earnings shall be adjusted. To include each direct relevant
expense occurred when executing the enterprise merger into the current gains and losses; while the handling
charges and commission occurs from the issuing the equity securities or the bonds for the enterprise merger
should be included in the initial measurement amount of the shareholders’ equities or the liabilities.
② As for long-term equity investment acquired through the merger of enterprises not under the same control, its
initial investment cost shall regard as the combination cost calculated by the fair value of the assets, equity
instrument issued and liabilities incurred or undertaken on the purchase date adding the direct cost related with the
acquisition. The identifiable assets of the combined party and the liabilities (including contingent liability)
undertaken on the combining date shall be measured at the fair value without considering the amount of minority
interest. The acquirer shall recognize the positive balance between the combination costs and the fair value of the
identifiable net assets it obtains from the acquiree as business reputation. The acquirer shall record the negative
balance between the combination costs and the fair value of the identifiable net assets it obtains from the acquiree
into the consolidated income statement directly. The agent expense and other relevant management expenses such
as the audit, legal service and evaluation consultation occurs from the enterprise merger, should be included in the
current gains and losses when occur; while the handling charges and commission occurs from the issuing the
equity securities or the bonds for the enterprise merger should be included in the initial measurement amount of
the shareholders’ equities or the liabilities.
③ Long-term equity investment obtained by other means
The initial cost of a long-term equity investment obtained by making payment in cash shall be the purchase cost
which is actually paid.
The initial cost of a long-term equity investment obtained on the basis of issuing equity securities shall be the fair
value of the equity securities issued.
The initial cost of a long-term equity investment of an investor shall be the value stipulated in the investment
contract or agreement, the unfair value stipulated in the contract or agreement shall be measured at fair value.
64
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
As for long-term investment obtained by the exchange of non-monetary assets, where it is commercial in nature,
the fair value of the assets surrendered shall be recognized as the initial cost of the long-term equity investment
received; where it is not commercial in nature, the book value of the assets surrendered shall be recognized as the
initial cost of the long-term equity investment received.
The initial cost of a long-term equity investment obtained by recombination of liabilities shall be recognized at
fair value of long-term equity investment.
(3) Subsequent measurement and recognition of profits and losses
① An investment in the subsidiary company shall be measured by employing the cost method
Where the Company hold, and is able to do equity investment with control over an invested entity, the invested
entity shall be its subsidiary company. Where the Company holds the shares of an entity over 50%, or, while the
Company holds the shares of an entity below 50%, but has a real control to the said entity, then the said entity
shall be its subsidiary company.
② An investment in the joint enterprise or associated enterprise shall be measured by employing the equity
method
Where the Company hold, and is able to do equity investment with joint control with other parties over an
invested entity, the invested entity shall be its joint enterprise. Where the Company hold, and is able to have
equity investment with significant influences on an invested entity, the invested entity shall be its associated
entity.
After the Company acquired the long-term equity investment, should respectively recognize investment income
and other comprehensive income according to the net gains and losses as well as the portion of other
comprehensive income which should be enjoyed or be shared, and at the same time adjust the book value of the
long-term equity investment; corresponding reduce the book value of the long-term equity investment according
to profits which be declared to distribute by the investees or the portion of the calculation of cash dividends which
should be enjoyed; for the other changes except for the net gains and losses, other comprehensive income and the
owners’ equity except for the profits distribution of the investees, should adjust the book value of the long-term
equity investment as well as include in the owners’ equity .
The investing enterprise shall, on the ground of the fair value of all identifiable assets of the invested entity when
it obtains the investment, recognize the attributable share of the net profits and losses of the invested entity after it
adjusts the net profits of the invested entity.
If the accounting polices adopted by the investees is not accord with that of the Group, should be adjusted
according to the accounting policies of the Group and the financial statement of the investees during the
accounting period and according which to recognize the investment income as well as other comprehensive
income.
For the transaction happened between the Company and associated enterprises as well as joint ventures, if the
assets launched or sold not form into business, the portion of the unrealized gains and losses of the internal
transaction, which belongs to the Group according to the calculation of the enjoyed proportion, should recognize
the investment gains and losses on the basis. But the losses of the unrealized internal transaction happened
between the Company and the investees which belongs to the impairment losses of the transferred assets, should
not be neutralized.
The Company shall recognize the net losses of the invested enterprise according to the following sequence: first of
all, to write down the book value of the long-term equity investment. Secondly, if the book value of the long-term
equity investment is insufficient for written down, should be continued to recognized the investment losses limited
to the book value of other long-term equity which forms of the net investment of the investees and to written
65
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
down the book value of the long-term accounts receivable etc. Lastly, through the above handling, for those
should still undertake the additional obligations according to the investment contracts or the agreements, it shall
be recognized as the estimated liabilities in accordance with the estimated duties and then recorded into
investment losses at current period. If the invested entity realizes any net profits later, the Group shall, after the
amount of its attributable share of profits offsets against its attributable share of the un-recognized losses, resume
recognizing its attributable share of profits.
In the preparation for the financial statements, the balance existed between the long-term equity investment
increased by acquiring shares of minority interest and the attributable net assets on the subsidiary calculated by
the increased shares held since the purchase date (or combination date), the capital reserves shall be adjusted, if
the capital reserves are not sufficient to offset, the retained profits shall be adjusted; the Company disposed part of
the long-term equity investment on subsidiaries without losing its controlling right on them, the balance between
the disposed price and attributable net assets of subsidiaries by disposing the long-term equity investment shall be
recorded into owners’ equity.
For other ways on disposal of long-term equity investment, the balance between the book value of the disposed
equity and its actual payment gained shall be recorded into current profits and losses.
For the long-term equity investment measured by adopting equity method, if the remained equity after disposal
still adopts the equity method for measurement, the other comprehensive income originally recorded into owners’
equity should adopt the same basis of the accounting disposal of the relevant assets or liabilities directly disposed
by the investees according to the corresponding proportion. The owners’ equity recognized owning to the changes
of the other owners’ equity except for the net gains and losses, other comprehensive income and the profits
distribution of the investees, should be transferred into the current gains and losses according to the proportion.
For the long-term equity investment which adopts the cost method of measurement, if the remained equity still
adopt the cost method, the other comprehensive income recognized owning to adopting the equity method for
measurement or the recognition and measurement standards of financial instrument before acquiring the control of
the investees, should adopt the same basis of the accounting disposal of the relevant assets or liabilities directly
disposed by the investees and should be carried forward into the current gains and losses according to the
proportion; the changes of the other owners’ equity except for the net gains and losses, other comprehensive
income and the profits distribution among the net assets of the investees which recognized by adopting the equity
method for measurement, should be carried forward into the current gains and losses according to the proportion.
For those the Company lost the control of the investees by disposing part of the equity investment as well as the
remained equity after disposal could execute joint control or significant influences on the investees, should change
to measure by equity method when compiling the individual financial statement and should adjust the
measurement of the remained equity to equity method as adopted since the time acquired; if the remained equity
after disposal could not execute joint control or significant influences on the investees, should change the
accounting disposal according to the relevant regulations of the recognition and measurement standards of
financial instrument, and its difference between the fair value and book value on the date lose the control right
should be included in the current gains and losses. For the other comprehensive income recognized by adopting
equity method for measurement or the recognition and measurement standards of financial instrument before the
Group acquired the control of the investees, should execute the accounting disposal by adopting the same basis of
the accounting disposal of the relevant assets or liabilities directly disposed by the investees when lose the control
of them, while the changes of the other owners’ equity except for the net gains and losses, other comprehensive
income and the profits distribution among the net assets of the investees which recognized by adopting the equity
method for measurement, should be carried forward into the current gains and losses according to the proportion.
Of which, for the disposed remained equity which adopted the equity method for measurement, the other
66
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
comprehensive income and the other owners’ equity should be carried forward according to the proportion; for the
disposed remained equity which changed to execute the accounting disposal according to the recognition and
measurement standards of financial instrument, the other comprehensive income and the other owners’ equity
should be carried forward in full amount.
For those the Company lost the control of the investees by disposing part of the equity investment, the disposed
remained equity should change to calculate according to the recognition and measurement standards of financial
instrument, and difference between the fair value and book value on the date lose the control right should be
included in the current gains and losses. For the other comprehensive income recognized from the original equity
investment by adopting the equity method, should execute the accounting disposal by adopting the same basis of
the accounting disposal of the relevant assets or liabilities directly disposed by the investees when terminate the
equity method for measurement, while for the owners’ equity recognized owning to the changes of the other
owner’s equity except for the net gains and losses, other comprehensive income and the profits distribution of the
investees, should be transferred into the current investment income with full amount when terminate adopting the
equity method.
15. Investment real estates
Measurement mode of investment real estates:
Measurement of cost method
Depreciation or amortization method:
The investment real estate shall be measured at its cost. Of which, the cost of an investment real estate by
acquisition consists of the acquisition price, relevant taxes, and other expense directly relegated to the asset; the
cost of a self-built investment real estate composes of the necessary expenses for building the asset to the hoped
condition for use. The investment real estates invested by investors shall be recorded at the value stipulated in the
investment contracts or agreements, but the unfair value appointed in the contract or agreement shall be entered
into the account book at the fair value.
As for withdrawal basis of provision for impairment of investment real estates, please refer to withdrawal method
for provision for impairment of fixed assets.
16. Fixed assets
(1) Conditions for recognition
Fixed assets refers to the tangible assets that simultaneously possess the features as follows: (a) they are held for
the sake of producing commodities, rendering labor service, renting or business management; and (b) their useful
life is in excess of one fiscal year. The fixed assets are only recognized when the relevant economic benefits
probably flow in the Company and its cost could be reliable measured.
(2) Depreciation methods
Expected net salvage
Category of fixed assets Method Useful life Annual deprecation
value
Houses and buildings Average method of 20-40 2.50-5
67
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
useful life
Machine equipment Average method of
6-15 6.67-16.67
useful life
Transportation Average method of
5-10 10-20
equipment useful life
Average method of
Electronic equipment
useful life
Other equipment Average method of
5-10 10-20
useful life
(3) Recognition basis, pricing and depreciation method of fixed assets by finance lease
The Company recognizes those meet with the following one or certain standards as the fixed assets by finance lease:
① The leasing contract had agreed that (or made the reasonable judgment according to the relevant conditions on the lease starting
date) when the lease term expires, the ownership of leasing the fixed assets could be transferred to the Company;
② The Company owns the choosing right for purchasing and leasing the fixed assets, with the set purchase price which is estimated
far lower than the fair value of the fixed assets by finance lease when executing the choosing right, so the Company could execute the
choosing right reasonably on the lease starting date;
③ Even if the ownership of the fixed assets not be transferred, the lease period is of 75% or above of the useful life of the lease
fixed assets;
④ The current value of the minimum lease payment on the lease starting date of the Company is equal to 90% or above of the fair
value of the lease fixed assets on the lease starting date; the current value of the minimum lease receipts on the lease starting date of
the leaser is equal to 90% or above of the fair value of the lease fixed assets on the lease starting date;
⑤ The nature of the lease assets is special that only the Company could use it if not execute large transformation.
The fixed assets by finance lease should take the lower one between the fair value of the leasing assets and the current value of the
minimum lease payment on the lease starting date as the entry value. As for the minimum lease payment which be regarded as the
entry value of the long-term accounts payable, its difference should be regarded as the unrecognized financing expense. For the
initial direct expenses occur in the lease negotiations and the signing process of the lease contracts that attribute to the handling
expenses, counsel fees, travel expenses and stamp taxes of the lease items, should be included in the charter-in assets value. The
unrecognized financing expenses should be amortized by adopting the actual interest rate during the period of the lease term.
The fixed assets by finance lease shall adopt the same depreciation policy for self-owned fixed assets. If it is reasonable to be certain
that the lessee will obtain the ownership of the leased asset when the lease term expires, the leased asset shall be fully depreciated
over its useful life. If it is not reasonable to be certain that the lessee will obtain the ownership of the leased asset at the expiry of the
lease term, the leased asset shall be fully depreciated over the shorter one of the lease term or its useful life
17. Construction in process
(1) Valuation of the progress in construction
Construction in progress shall be measured at actual cost. Self-operating projects shall be measured at direct
materials, direct wages and direct construction fees; construction contract shall be measured at project price
payable; project cost for plant engineering shall be recognized at value of equipments installed, cost of installation,
trail run of projects. Costs of construction in process also include borrowing costs and exchange gains and losses,
which should be capitalized.
68
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
(2) Standardization on construction in process transferred into fixed assets and time point
The construction in process, of which the fixed assets reach to the predicted condition for use, shall carry forward
fixed assets on schedule. The one that hasn’t audit the final accounting shall recognize the cost and make
depreciation in line with valuation value. The construction in process shall adjust the original valuation value at its
historical cost but not adjust the depreciation that has been made after auditing the final accounting.
18. Borrowing costs
(1) Recognition principle of capitalization of borrowing costs
The borrowing costs shall include the interest on borrowings, amortization of discounts or premiums on
borrowings, ancillary expenses, and exchange balance on foreign currency borrowings. Where the borrowing
costs occurred belong to specifically borrowed loan or general borrowing used for the acquisition and construction
of investment real estates and inventories over one year (including one year) shall be capitalized, and record into
relevant assets cost. Other borrowing costs shall be recognized as expenses on the basis of the actual amount
incurred, and shall be recorded into the current profits and losses. The borrowing costs shall not be capitalized
unless they simultaneously meet the following three requirements: (1) The asset disbursements have already
incurred; (2) The borrowing costs have already incurred; and (3) The acquisition and construction or production
activities which are necessary to prepare the asset for its intended use or sale have already started.
(2) The period of capitalization of borrowing costs
The borrowing costs arising from acquisition and construction of fixed assets, investment real estates and
inventories, if they meet the above-mentioned capitalization conditions, the capitalization of the borrowing costs
shall be measured into asset cost before such assets reach to the intended use or sale, Where acquisition and
construction of fixed assets, investment real estates and inventories is interrupted abnormally and the interruption
period lasts for more than 3 months, the capitalization of the borrowing costs shall be suspended, and recorded
into the current expense, till the acquisition and construction of the assets restarts. When the qualified asset is
ready for the intended use or sale, the capitalization of the borrowing costs shall be ceased, the borrowing costs
occurred later shall be included into the financial expense directly at the current period.
(3) Measurement method of capitalization amount of borrowing costs
As for specifically borrowed loans for the acquisition and construction or production of assets eligible for
capitalization, the to-be-capitalized amount of interests shall be determined in light of the actual cost incurred of
the specially borrowed loan at the present period minus the income of interests earned on the unused borrowing
loans as a deposit in the bank or as a temporary investment.
Where a general borrowing is used for the acquisition and construction or production of assets eligible for
capitalization, the enterprise shall calculate and determine the to-be-capitalized amount of interests on the general
borrowing by multiplying the weighted average asset disbursement of the part of the accumulative asset
disbursements minus the general borrowing by the capitalization rate of the general borrowing used. The
capitalization rate shall be calculated and determined in light of the weighted average interest rate of the general
borrowing.
19. Intangible assets
69
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
(1) Pricing method, using life and impairment test of intangible assets
1) Pricing method of intangible assets
Intangible assets purchased should take the actual payment and the relevant other expenses as the actual cost.
For the intangible assets invested by the investors should be recognized the actual cost according to the value of
the investment contracts or agreements, however, for the value of the contracts or agreements is not fair, the actual
cost should be recognized according to the fair value.
For the intangible assets acquires from the exchange of the non-currency assets, if own the commercial nature,
should be recorded according to the fair value of the swap-out assets; for those not own the commercial nature,
should be recorded according to the book value of the swap-out assets.
For the intangible assets acquires from the debts reorganization should be recognized by the fair value.
2) Amortization method and term of intangible assets
As for the intangible assets with limited service life, which are amortized by straight-line method when it is
available for use within the service period, shall be recorded into the current profits and losses. The Company
shall, at least at the end of each year, check the service life and the amortization method of intangible assets with
limited service life. When the service life and the amortization method of intangible assets are different from those
before, the years and method of the amortization shall be changed.
Intangible assets with uncertain service life may not be amortized. However, the Company shall check the service
life of intangible assets with uncertain service life during each accounting period. Where there are evidences to
prove the intangible assets have limited service life, it shall be estimated of its service life, and be amortized
according to the above method mentioned.
The rights to use land of the Company shall be amortized according to the rest service life.
(2) Accounting polices of internal R & D expenses
The internal research and development projects of an enterprise shall be classified into research phase and
development phase: the term “research” refers to the creative and planned investigation to acquire and understand
new scientific or technological knowledge; the term “development” refers to the application of research
achievements and other knowledge to a certain plan or design, prior to the commercial production or use, so as to
produce any new material, device or product, or substantially improved material, device and product.
The Company collects the expenses of the corresponding phases according to the above standard of classifying the
research phase and the development phase. The research expenditures for its internal research and development
projects of an enterprise shall be recorded into the profit or loss for the current period. The development
expenditures for its internal research and development projects of an enterprise may be capitalized when they
satisfy the following conditions simultaneously: it is feasible technically to finish intangible assets for use or sale;
it is intended to finish and use or sell the intangible assets; the usefulness of methods for intangible assets to
generate economic benefits shall be proved, including being able to prove that there is a potential market for the
products manufactured by applying the intangible assets or there is a potential market for the intangible assets
itself or the intangible assets will be used internally; it is able to finish the development of the intangible assets,
and able to use or sell the intangible assets, with the support of sufficient technologies, financial resources and
other resources; the development expenditures of the intangible assets can be reliably measured.
20. Impairment of long-term assets
70
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
For non-current financial Assets of fixed Assets, projects under construction, intangible Assets with limited
service life, investing real estate with cost model, long-term equity investment of subsidiaries, cooperative
enterprises and joint ventures, the Group should judge whether decrease in value exists on the date of balance
sheet. Recoverable amounts should be tested for decrease in value if it exists. Other intangible Assets of reputation
and uncertain service life and other non-accessible intangible assets should be tested for decrease in value no
matter whether it exists.
If the recoverable amount is less than book value in impairment test results, the provision for impairment of
differences should include in impairment loss. Recoverable amounts would be the higher of net value of asset fair
value deducting disposal charges or present value of predicted cash flow. Asset fair value should be determined
according to negotiated sales price of fair trade. If no sales agreement exists but with asset active market, fair
value should be determined according to the Buyer’s price of the asset. If no sales agreement or asset active
market exists, asset fair value could be acquired on the basis of best information available. Disposal expenses
include legal fees, taxes, cartage or other direct expenses of merchantable Assets related to asset disposal. Present
value of predicted asset cash flow should be determined by the proper discount rate according to Assets in service
and predicted cash flow of final disposal. Asset depreciation reserves should be calculated on the basis of single
Assets. If it is difficult to predict the recoverable amounts for single Assets, recoverable amounts should be
determined according to the belonging asset group. Asset group is the minimum asset combination producing cash
flow independently.
In impairment test, book value of the business reputation in financial report should be shared to beneficial asset
group and asset group combination in collaboration of business merger. It is shown in the test that if recoverable
amounts of shared business reputation asset group or asset group combination are lower than book value, it should
determine the impairment loss. Impairment loss amount should firstly be deducted and shared to the book value of
business reputation of asset group or asset group combination, then deduct book value of all assets according to
proportions of other book value of above assets in asset group or asset group combination except business
reputation.
After the asset impairment loss is determined, recoverable value amounts would not be returned in future.
21. Amortization method of long-term deferred expenses
Long-term deferred expanses of the Company shall be recorded in light of the actual expenditure, and amortized
averagely within benefit period. In case of no benefit in the future accounting period, the amortized value of such
project that fails to be amortized shall be transferred into the profits and losses of the current period.
22. Payroll
(1) Accounting treatment of short-term compensation
Short-term compensation mainly including salary, bonus, allowances and subsidies, employee services and
benefits, medical insurance premiums, birth insurance premium, industrial injury insurance premium, housing
fund, labor union expenditure and personnel education fund, non-monetary benefits etc. The short-term
compensation actually happened during the accounting period when the active staff offering the service for the
Group should be recognized as liabilities and is included in the current gains and losses or relevant assets cost. Of
which the non-monetary benefits should be measured according to the fair value.
(2) Accounting treatment of the welfare after demission
71
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
The Company classifies the welfare plans after demission into defined contribution plans and defined benefit
plans. Welfare plans after demission refers to the agreement on the welfare after demission reaches between the
Company and the employees, or the regulations or methods formulated by the Company for providing the welfare
after demission for the employees. Of which, defined contribution plans refers to the welfare plans after demission
that the Company no more undertake the further payment obligations after the payment of the fixed expenses for
the independent funds; defined benefit plans, refers to the welfare plans after demission except for the defined
contribution plans.
Defined contribution plans
During the accounting period that the Company providing the service for the employees, the Company should
recognize the liabilities according to the deposited amount calculated by defined contribution plans, and should be
included in the current gains and losses or the relevant assets cost.
(3) Accounting treatment of the demission welfare
The Company should recognize the payroll payment liabilities occur from the demission welfare according to the
earlier date between the following two conditions and include which in the current gains and losses when
providing the demission welfare for the employees: the Company could not unilaterally withdraw the demission
welfare owning to the relieve plans of the labor relationship or reduction; when the Company recognizing the
costs or expenses related to the reorganization involves with the demission welfare payments.
(4) Accounting treatment of the welfare of other long-term staffs
The Company should recognize the payroll payment liabilities occur from the demission welfare according to the
earlier date between the following two conditions and include which in the current gains and losses when
providing the demission welfare for the employees: the Company could not unilaterally withdraw the demission
welfare owning to the relieve plans of the labor relationship or reduction; when the Company recognizing the
costs or expenses related to the reorganization involves with the demission welfare payments.
23. Estimated liabilities
(1) Criteria of estimated liabilities
Only if the obligation pertinent to a contingencies shall be recognized as an estimated debts when the following
conditions are satisfied simultaneously:
① That obligation is a current obligation of the Company;
② It is likely to cause any economic benefit to flow out of the Company as a result of performance of the
obligation; and
③ The amount of the obligation can be measured in a reliable way.
(2) Measurement of estimated liabilities
The Company shall measure the estimated debts in accordance with the best estimate of the necessary expenses
for the performance of the current obligation.
The Company shall check the book value of the estimated debts on the Balance Sheet Date. If there is any
conclusive evidence proving that the said book value can’t truly reflect the current best estimate, the Company
shall, subject to change, make adjustment to carrying value to reflect the current best estimate.
24. Revenue
72
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
(1) Recognition of revenue from sale of goods: the revenue from selling shall be recognized by the following
conditions: The significant risks and rewards of ownership of the goods have been transferred to the buyer by the
Company; the Company retains neither continuous management right that usually keeps relation with the
ownership nor effective control over the sold goods; the relevant amount of revenue can be measured in a reliable
way; the relevant revenue and costs of selling goods can be measured in a reliable way. The amount of the revenue
from selling shall ascertain the revenue incurred by selling goods in accordance with the received or receivable
price stipulated in the contract or agreement signed between the enterprise and the buyer, unless the received or
receivable amount as stipulated in the contract or agreement is unfair.
(2) Recognition of revenue from providing labor services: When the total revenue and costs from providing labor
can be measured in a reliable way; the relevant economic benefits are likely to flow into the enterprise; the
schedule of completion under the transaction can be measured in a reliable way, the revenue from providing labor
shall be recognized. If the Company can reliably estimate the outcome of a transaction concerning the labor
services it provides, it shall recognize the revenue from providing services employing the
percentage-of-completion method on the date of the balance sheet, otherwise the revenue from the providing of
labor services shall be recognized in accordance with the amount of the cost of labor services incurred and
expected to be compensated. The Company recognized the completion process of the transaction concerning the
labor services according to the proportion of the occurred cost of the estimated total cost. The total amount of the
revenue from providing services should be recognized according to the contract price received or receivable from
the accepting of the labor services or the agreement price except for those unfair prices.
(3) Recognition of the revenue from transferring use rights of assets: When the relevant economic benefits are
likely to flow into the enterprises and the amount of revenues can be measured in a reliable way, the revenue from
abalienating the right to use assets shall be recognized. The amount of interest revenue should be measured and
confirmed in accordance with the length of time for which the enterprise's cash is used by others and the actual
interest rate；the amount of royalty revenue should be measured and confirmed in accordance with the period and
method of charging as stipulated in the relevant contract or agreement；as for the rental revenue: the amount of the
rental revenue from the operation lease should be recognized according to the straight-line method during each
period of the lease term or accrued into the current gains and losses if rental actual occurred.
25. Government subsidies
(1) Judgment basis and accounting treatment of government subsidies related to assets
A government subsidy means the monetary or non-monetary assets obtained free by an enterprise from the
government. Government subsidies consist of the government subsidies pertinent to assets and government
subsidies pertinent to income according to the relevant government documents.
For those the government documents not definite stipulate the assistance object, the judgment basis of the
Company classifies the government subsidies pertinent to assets and government subsidies pertinent to income is:
whether are used for purchasing or constructing or for forming the long-term assets by other methods.
The government subsidies should be recognized only when meet with the attached conditions of the government
subsidies as well as could be acquired.
If the government subsidies are the monetary assets, should be measured according to the received or receivable
amount; and for the government subsidies are the non-monetary assets, should be measured by fair value.
The government subsidies pertinent to assets shall be recognized as deferred income, equally distributed within
the useful lives of the relevant assets, and included in the current profits and losses.
73
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
(2) Judgment basis and accounting treatment of government subsidies related to profits
The government subsidies pertinent to incomes shall be treated respectively in accordance with the circumstances
as follows: those subsidies used for compensating the related future expenses or losses of the enterprise shall be
recognized as deferred income and shall included in the current profits and losses during the period when the
relevant expenses are recognized; or those subsidies used for compensating the related expenses or losses incurred
to the enterprise shall be directly included in the current profits and losses.
26. Deferred income tax assets and liabilities
(1) Basis of recognizing the deferred income tax assets
According to the difference between the book value of the assets and liabilities and their tax basis, A deferred tax
assets shall be measured in accord with the tax rates that are expected to apply to the period when the asset is
realized or the liability is settled.
The recognition of the deferred income tax assets is limited by the income tax payable that the Company probably
gains for deducting the deductible temporary differences. At the balance sheet date, where there is strong evidence
showing that sufficient taxable profit will be available against which the deductible temporary difference can be
utilized, the deferred tax asset unrecognized in prior period shall be recognized.
The Company assesses the carrying amount of deferred tax asset at the balance sheet date. If it’s probable that
sufficient taxable profit will not be available against which the deductible temporary difference can be utilized, the
Company shall write down the carrying amount of deferred tax asset, or reverse the amount written down later
when it’s probable that sufficient taxable profit will be available
(2) Basis of recognizing the deferred income tax liabilities
According to the difference between the book value of the assets and liabilities and their tax basis, A deferred tax
liabilities shall be measured in accord with the tax rates that are expected to apply to the period when the asset is
realized or the liability is settled.
27. Lease
(1) Accounting treatment of operating lease
Lessee in an operating lease shall treat the lease payment under an operating lease as a relevant asset cost or the
current profit or loss on a straight-line basis over the lease term. The initial direct costs incurred shall be
recognized as the current profit or loss; Contingent rents shall be charged as expenses in the periods in which they
are incurred.
Lessors in an operating lease shall be recognized as the current profit or loss on a straight-line basis over the lease
term; Initial direct costs incurred by lessors shall be recognized as the current profit or loss; the initial direct
expenses occur should be directly included in the current gains and losses except for those with larger amount and
be capitalized as well as be included in the gains and losses by stages. Contingent rents shall be charged as
expenses in the periods in which they are incurred.
(2) Accounting treatments of financial lease
When the Company as the lessee, On the lease beginning date, the Company shall record the lower one of the fair
value of the leased asset and the present value of the minimum lease payments on the lease beginning date as the
74
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
entering value in an account, recognize the amount of the minimum lease payments as the entering value in an
account of long-term account payable, and treat the balance between the recorded amount of the leased asset and
the long-term account payable as unrecognized financing charges and the occurred initial direct expenses, should
be recorded in the lease assets value. During each lease period, should recognize the current financing expenses
by adopting the actual interest rate.
When the Company as the leasor and on the beginning date of the lease term, the Company shall recognize the
sum of the minimum lease receipts on the lease beginning date and the initial direct costs as the entering value in
an account of the financing lease values receivable, and record the unguaranteed residual value at the same time.
The balance between the sum of the minimum lease receipts, the initial direct costs and the unguaranteed residual
value and the sum of their present values shall be recognized as unrealized financing income. During each lease
period, should recognize the current financing revenues adopting the actual interest rate.
28. Other significant accounting policies and estimates
(1) Operation termination
Operation termination refers to the compose part that meet with one of the following conditions which had been
disposed by the Group or be classified to held-to-sold as well as could be individually distinguished in operating
and compiling the financial statement:
① The compose part represents an individual main business or a main operation area;
② The compose part is a part intends to dispose and plan an individual main business or a main operation area;
③ The compose part is a subsidiary which be acquired only for resold.
(2) Hedging accounting
The term “hedging” refers to one or more hedging instruments which are designated by an enterprise for avoiding
the risks of foreign exchange, interest rate, commodity price, stock price, credit and etc., and which is expected to
make the changes in fair value or cash flow of hedging instrument(s) to offset all or part of the changes in the fair
value or cash flow of the hedged item.
The term “hedging instrument” shall refer to a derivative instrument which is designated by an enterprise for
hedging and by which it is expected that changes in its fair value or cash flow can offset the changes in fair value
or cash flow of the hedged item. For a hedging of foreign exchange risk, a non-derivative financial asset or
non-derivative financial liability may be used as a hedging instrument.
The “hedged item” shall refer to the following items which make an enterprise faced to changes in fair value or
cash flow and are designated as the hedged objectives.
The hedging should be executed by the hedging accounting methods when satisfying the following conditions at
the same time:
① At the commencement of the hedging, the enterprise shall specify the hedging relationship formally (namely
the relationship between the hedging instrument and the hedged item) and prepare a formal written document on
the hedging relationship, risk management objectives and the strategies of hedging.
② The hedging expectation is highly efficient and meets the risk management strategy, which is confirmed for the
hedging relationship by enterprise at the very beginning.
③ For a cash flow hedging of forecast transaction, the forecast transaction shall be likely to occur and shall make
the enterprise faced to the risk of changes in cash flow, which will ultimately affect the profits and losses.
④ The effectiveness of hedging can be reliably measured.
75
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
⑤ The hedging is highly effective in accounting period in which the hedging relationship is specified.
29. Changes in main accounting policies and estimates
(1) Change of accounting policies
□ Applicable √ Inapplicable
(2) Change of main accounting estimates
□ Applicable √ Inapplicable
30. Other
Critical accounting judgments and estimates
Due to the inside uncertainty of operating activity, the Group needed to make judgments, estimates and
assumption on the book value of the accounts without accurate measurement during the employment of
accounting policies. And these judgments, estimates and assumption were made basing on the prior experience of
the senior executives of the Group, as well as in consideration of other factors. These judgments, estimates and
assumption would also affect the report amount of income, costs, assets and liabilities, as well as the disclosure of
contingent liabilities on balance sheet date. However, the uncertainty of these estimates was likely to cause
significant adjustment on the book value of the affected assets and liabilities.
The Group would check periodically the above judgments, estimates and assumption on the basis of continuing
operation. For the changes in accounting estimates only affected on the current period, the influence should be
recognized at the period of change occurred; for the changes in accounting estimates affected the current period
and also the future period, the influence should be recognized at the period of change occurred and future period.
On the balance sheet date, the Group needed to make judgments, estimates and assumption on the accounts in the
following important items:
(1) Provision for bad debts
In accordance with the accounting policies of accounts receivable, the Group measured the losses for bad debts by
adopting allowance method. The impairment of accounts receivable was based on the appraisal of the
recoverability of accounts receivable. The impairment of accounts receivable was dependent on the judgment and
estimates. The actual amount and the difference of previous estimates would affect the book value of accounts
receivable and the withdrawal and reversal on provision for bad debts of accounts receivable during the period of
estimates being changed.
(2) Provision for falling price of inventories
In accordance with the accounting policies of inventories, for the inventories that the costs were more than the net
realizable value as well as out-of-date and dull-sale inventories, the Group withdrawn the provision for falling
price of inventories on the lower one between costs and net realizable value. Evaluating the falling price of
inventories needed the management level gain the valid evidence and take full consideration of the purpose of
inventories, influence of events after balance sheet date and other factors, and then made relevant judgments and
estimates. The actual amount and the difference of previous estimates would affect the book value of inventories
and the withdrawal and reversal on provision for bad debts of inventories during the period of estimates being
76
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
changed.
(3) Held-to-maturity investment
The Company classifies the non-derivative financial assets which meet with conditions with fixed or confirmable
repayment amount and fixed maturity date as well as the Company owns definite intention and ability to hold until
mature as the held-to-maturity investment. To execute the classification needs large judgment. In the process of
executing the judgment, the Company would assess the intention and ability of the investment which hold until
the due date. Except for the particular situation (for example, selling the investment with insignificant amount
when approaching the due date), if the Company fails to hold the investment until the due date, should re-classify
the investment to the available-for-sale financial assets and would no more be classified as the held-to-maturity
investment in the current fiscal year as well as the afterward two complete fiscal years. If there exits such situation,
that would probably cause significant influences on the value of the relevant financial assets presented on the
financial statement and may influence the risks management strategies of the financial instruments of the
Company.
(4) Held-to-maturity investment impairment
The Company confirms whether the held-to-maturity investment has impairment depends on the judgment from
the management layer to a large extent. The objective evidences of the impairments including the issuers which
occur serious financial difficulties that lead the financial assets could not continue to trade in the active market
and to execute the contracts regulations (for example, to return the interests or the principal violates a treaty) etc.
In the process of executing judgment, the Company needs to evaluate the influences of the objective evidences of
the impairment on the estimated future cash flow.
(5) The impairment of financial assets available for sale
The Group judged whether the financial assets available for sale were impaired relying heavily on the judgment
and assumption of the management team, so as to decide whether recognized the impairment losses in the income
statement. During the process of making the judgment and assumption, the Group needed to appraise the balance
of the cost of the investment exceeding its fair value and the continuous period, the financial status and business
forecast in a short period, including the industrial situation, technical reform, credit level, default rate and risk of
counterparty.
(6) Provision for impairment of non-financial non-current assets
The Group made a judgment on the non-current assets other than financial assets whether they had any indication
of impairment on the balance sheet date. For the intangible assets without finite service life, other than the annual
impairment test, they should be subject to the impairment test when there was any indication of impairment. For
other non-current non-financial assets, which should be subjected to impairment test when there was indication of
impairment indicated that the book value can’t be recoverable.
When the book value of the assets or assets portfolio was more than the recoverable amount, which was the higher
one between the net amount of fair value after deducting the disposal expenses and the discounted amount of the
estimated future cash flow, it means impairment incurred.
The net amount of fair value after deducting the disposal expenses should be fixed the price in the sale agreement
for similar assets in the fair transaction minus the increased costs directly attributable to the assets disposal.
When estimated the discounted value of future cash flow, the Group needed to make important judgment on the
output, selling price, relevant costs and the discount rate for calculating the discounted amount, etc. When
estimated the recoverable amount, the Group would adopt all the available documents, including the prediction for
relevant output, selling price and relevant operating costs arising from reasonable and supportive assumptions.
The Group made the impairment test on goodwill at least one time per year, which required to predict the
77
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
discounted amount of the future cash flow of the assets or assets portfolio with the distributed good will, for which,
the Group needed to predict the future cash flow of the assets or assets portfolio, and adopt the property
discounted rate to decide the discounted amount of future cash flow.
(7) Depreciation and amortization
For the investment real estate, fixed assets and intangible assets, the Group withdrew the depreciation and
amortization by adopting the straight-line method during the service life after full consideration of the salvage
value. The Group checked the service life periodically so as to decide the amount of depreciation and amortization
at each reporting period. The service life was fixed by the Group in accordance with the previous experience of
the similar assets and the expected technical update. If there was any significant change on the previous estimates,
the depreciation and amortization expenses should be adjusted.
(8) Income tax
During the routine operating activities, there were some uncertainty in the ultimate tax treatment and calculation
for parts of transactions. Some accounts of such transaction could be listed as pre-tax expenditures only after the
approval of taxation authorities. If there were any differences between the ultimate result of recognition for these
taxation maters and their initial estimates, the differences would affect the current income tax and deferred income
tax at the period of ultimate recognition.
VI. Taxation
1. Main taxes and tax rate
Type of tax Taxation basis Tax rates
VAT Payable to sales revenue 13%、17%
Business tax Taxable operating revenue 5%
Tax paid in accordance with the tax
Urban maintenance and construction tax Taxable turnover amount
regulations of tax units location
Corporate income tax Taxable income 25% or 15%
Education surcharge Taxable turnover amount 5%
2. Tax preference
In 2009, the Company has been identified as High-tech Enterprises, therefore, it enjoys 15-percent preferential
rate for corporate income tax; the Company’s controlling subsidiary—Changchai Wanzhou Diesel Engine Co.,
Ltd., the controlling subsidiary company, shall pay the corporate income tax at tax rate 15% from 1 Jan. 2011 to
31 Dec. 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.
78
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
VII. Notes on major items in consolidated financial statements of the Company
1. Monetary funds
Unit: RMB Yuan
Item Closing balance Opening balance
Cash on hand 581,259.89 557,508.42
Bank deposits 428,542,157.25 464,204,312.08
Other monetary funds 74,293,795.48 67,207,927.41
Total 503,417,212.62 531,969,747.91
At the period-end, the restricted monetary fund was RMB 74,293,795.48 in total, of which: the bank acceptance
deposit was RMB 74,293,795.48.
2. Financial assets measured by fair value and the changes be included in the current gains and losses
Unit: RMB Yuan
Item Closing balance Opening balance
Tradable financial assets 9,000,000.00 2,109,642.19
Equity instruments investment 9,000,000.00 2,109,642.19
Total 9,000,000.00 2,109,642.19
The tradable financial assets in period end were Hai Heng Xin No. 5 priority growth funds.
3. Notes receivable
(1) Notes receivable listed by category
Unit: RMB Yuan
Item Closing balance Opening balance
Bank acceptance bill 269,208,012.32 314,236,128.92
Total 269,208,012.32 314,236,128.92
(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 Yuan
Amount of recognition termination at the Amount of not terminated recognition at
Item
period-end the period-end
Bank acceptance bill 388,039,971.28
Total 388,039,971.28
79
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
4. Accounts receivable
(1) Accounts receivable disclosed by category
Unit: RMB Yuan
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Item Withdra Book
Proportio wal Proportio Withdrawal Book value
Amount Amount value Amount Amount
n proportio n proportion
n
Accounts receivable
with significant
single amount for 27,617,8 22,676,2 4,941,687 28,819, 23,459,40 5,360,266.9
3.37% 82.11% 4.75% 81.40%
which bad debt 98.20 10.49 .71 671.25 4.33 2
provision separately
accrued
Accounts receivable
withdrawn bad debt
791,051, 211,443, 579,608,5 576,527 207,915,0 368,611,94
provision according 96.41% 26.73% 94.96% 36.06%
649.65 128.62 21.03 ,035.06 91.26 3.80
to credit risks
characteristics
Accounts receivable
with insignificant
single amount for 1,776,15 1,413,01 363,144.5 1,776,1 1,413,014
0.22% 79.55% 0.29% 79.55% 363,144.50
which bad debt 9.00 4.50 0 59.00 .50
provision separately
accrued
Total 820,445, 235,532, 584,913,3 607,122 232,787,5 374,335,35
100.00% 28.71% 100.00% 38.34%
706.85 353.61 53.24 ,865.31 10.09 5.22
Accounts receivable with significant single amount for which bad debt provision separately accrued at period end:
√ Applicable □ Inapplicable
Unit: RMB Yuan
Accounts receivable Closing balance
(classified by units) Book balance Bad debt provision Withdrawal Proportion Withdrawal Reason
Customer 1 7,063,600.00 3,531,800.00 50.00% Estimated irrecoverable
Customer 2 1,902,326.58 1,902,326.58 100.00% Difficult to recover
Customer 3 6,215,662.64 6,188,445.25 99.56% Difficult to recover
Customer 4 3,456,675.80 2,074,005.48 60.00% Estimated irrecoverable
Customer 5 1,035,446.35 1,035,446.35 100.00% Difficult to recover
80
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Customer 6 5,359,381.00 5,359,381.00 100.00% Difficult to recover
Customer 7 2,584,805.83 2,584,805.83 100.00% Difficult to recover
Total 27,617,898.20 22,676,210.49 -- --
In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable □ Inapplicable
Unit: RMB Yuan
Closing balance
Aging
Accounts receivable Bad debt provision Withdrawal Proportion
Subitem within 1 year
Within 1 year 584,187,309.44 11,683,746.19 2.00%
Subtotal of within 1 year 584,187,309.44 11,683,746.19 2.00%
1-2 years 3,174,199.41 158,709.97 5.00%
2-3 years 3,903,940.14 585,591.02 15.00%
Over 3 years 199,786,200.66 199,015,081.44
3 to 4 years 590,308.85 177,092.66 30.00%
4 to 5 years 894,757.57 536,854.54 60.00%
Over 5 years 198,301,134.24 198,301,134.24 100.00%
Total 791,051,649.65 211,443,128.62
In the groups, accounts receivable adopting balance percentage method to withdraw bad debt provision:
□ Applicable √ Inapplicable
(2) Accounts receivable withdraw, reversed or collected during the reporting period
The withdrawal amount of the bad debt provision during the reporting period was of RMB 12,817,232.55; the amount of the reversed
or collected part during the reporting period was of RMB 10,072,389.03.
(3) Top 5 of the closing balance of the accounts receivable collected according to the arrears party
At period end, the total amount of top 5 of the closing balance of the accounts receivable collected according to
the arrears party was RMB 291,925,358.60, 35.58% of the closing balance of the accounts receivable and the
relevant closing balance of bad debt provision was RMB 6,142,832.48.
5. Prepayment
(1) List by aging analysis:
Unit: RMB Yuan
Aging Closing balance Opening balance
Amount Proportion Amount Proportion
81
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Within 1 year 10,896,318.00 92.05% 14,026,514.13 92.93%
1 to 2 years 253,648.18 2.14% 127,345.30 0.84%
2 to 3 years 125,236.68 1.06% 70,049.80 0.46%
Over 3 years 562,587.36 4.75% 868,946.13 5.77%
Total 11,837,790.22 -- 15,092,855.36 --
(2) Top 5 of the closing balance of the prepayment colleted according to the prepayment target
At the period-end, the total amount of top 5 of the closing balance of the prepayment collected according to the
prepayment target was RMB 10,237,320.98, 86.48% of the closing balance of the accounts receivable.
6. Other accounts receivable
(1) Other accounts receivable disclosed by category
Unit: RMB Yuan
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Category Withdra Book
Proportio wal Proportio Withdrawal Book value
Amount Amount value Amount Amount
n proportio n proportion
n
Other accounts
receivable with
significant single 2,853,18 2,853,18 2,853,1 2,853,188
5.68% 100.00% 7.24% 100.00%
amount for which 8.02 8.02 88.02 .02
bad debt provision
separately accrued
Other accounts
receivable withdrawn
45,440,9 25,978,3 19,462,56 34,618, 25,955,69 8,662,701.3
bad debt provision 90.51% 57.17% 87.90% 74.98%
56.09 90.10 5.99 397.46 6.16 0
according to credit
risks characteristics
Other accounts
receivable with
insignificant single 1,910,73 1,910,73 1,910,7 1,910,737
3.81% 100.00% 4.86% 100.00%
amount for which 7.23 7.23 37.23 .23
bad debt provision
separately accrued
Total 50,204,8 30,742,3 19,462,56 39,382, 100.00% 30,719,62 78.00% 8,662,701.3
82
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
81.34 15.35 5.99 322.71 1.41 0
Other accounts receivable with significant single amount for which bad debt provision separately accrued:
√ Applicable □ Inapplicable
Unit: RMB Yuan
Other account receivable Closing balance
(classified by units) Book balance Bad provision Withdrawal proportion Withdrawal reason
Changchai Group Import
2,853,188.02 2,853,188.02 100.00% Difficult to recover
& Export Company
Total 2,853,188.02 2,853,188.02 -- --
In the groups, other accounts receivable adopting aging analysis method to accrue bad debt provision:
√ Applicable □ Inapplicable
Unit: RMB Yuan
Closing balance
Aging
Other account receivable Bad provision Withdrawal proportion
Subitem within 1 year
Within 1 year 17,673,291.29 353,465.83 2.00%
Subtotal of within 1 year 17,673,291.29 353,465.83 2.00%
1-2 years 606,445.70 30,322.29 5.00%
2-3 years 578,360.37 86,754.06 15.00%
Over 3 years 26,582,858.73 25,507,847.94
3 to 4 years 853,415.15 256,024.55 30.00%
4 to 5 years 1,194,050.48 716,430.29 60.00%
Over 5 years 24,535,393.10 24,535,393.10 100.00%
Total 45,440,956.09 25,978,390.10
In the groups, other accounts receivable adopting balance percentage method to withdraw bad debt provision:
□ Applicable √ Inapplicable
In the groups, other accounts receivable adopting other methods to accrue bad debt provision:
□ Applicable √ Inapplicable
(2) Accounts receivable withdraw, reversed or collected during the reporting period
The withdrawal amount of the bad debt provision during the reporting period was of RMB 821,568.37; the amount of the reversed or
collected part during the reporting period was of RMB 798,874.43.
(3) Other accounts receivable classified by the nature of accounts
Unit: RMB Yuan
Nature Closing book balance Opening book balance
83
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Margin and cash pledge 2,004,200.00 2,004,200.00
Unit current amount 30,809,981.36 20,035,808.86
Employee loan 2,588,136.65 2,584,081.29
Other 14,802,563.33 14,758,232.56
Total 50,204,881.34 39,382,322.71
(4) Top 5 of the closing balance of the other accounts receivable collected according to the arrears party
Unit: RMB Yuan
Proportion of the Closing balance of
total year end bad debt provision
Name of units Nature Closing balance Aging
balance of the
accounts receivable
Xuzhou East China
Casting General Current 8,000,000.00 Within 1 years 15.93% 160,000.00
Factory
Changjiang Casting
Current 3,000,000.00 Within 1 years 5.98% 60,000.00
Material Co. Ltd
Chongqing Wanzhou
District State-Owned
Current 2,940,000.00 Over 5 years 5.86% 2,940,000.00
Assets Guarantee Co.,
Ltd
Changzhou New
District Accounting Current 2,853,188.02 Over 5 years 5.68% 2,853,188.02
Center
OEM Group Settlement
Current 1,626,483.25 Over 5 years 3.24% 1,626,483.25
Center
Total 18,419,671.27 -- 36.69% 7,639,671.27
7. Inventory
(1) Category of inventory
Unit: RMB Yuan
Item Closing balance Opening balance
Falling price Falling price
Book balance Book value Book balance Book value
reserves reserves
Raw material 133,016,995.73 2,739,224.97 130,277,770.76 135,763,012.44 2,739,224.97 133,023,787.47
Goods in process 126,298,290.06 19,830,684.94 106,467,605.12 134,613,551.41 19,830,684.94 114,782,866.47
84
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Inventory goods 193,071,538.67 19,634,150.34 173,437,388.33 269,416,214.26 19,634,150.34 249,782,063.92
Total 452,386,824.46 42,204,060.25 410,182,764.21 539,792,778.11 42,204,060.25 497,588,717.86
(2) Falling price reserves of inventory
Unit: RMB Yuan
Increased amount Decreased amount
Item Opening balance Reverse or Closing balance
Withdrawal Other Other
write-off
Raw materials 2,739,224.97 2,739,224.97
Goods in process 19,830,684.94 19,830,684.94
Inventory goods 19,634,150.34 19,634,150.34
Total 42,204,060.25 42,204,060.25
8. Other current assets
Unit: RMB Yuan
Item Closing balance Opening balance
The VAT tax credits 10,671,616.22 28,131,657.32
Export drawback receivable 3,597,384.86
Bank financial products 20,000,000.00
Total 30,671,616.22 31,729,042.18
9. Available-for-sale financial assets
(1) List of available-for-sale financial assets
Unit: RMB Yuan
Item Closing balance Opening balance
Depreciation Depreciation
Book balance Book value Book balance Book value
reserves reserves
Available-for-sale equity
684,861,500.00 1,210,000.00 683,651,500.00 499,060,000.00 1,210,000.00 497,850,000.00
instruments:
Measured by fair value 638,451,500.00 638,451,500.00 452,650,000.00 452,650,000.00
Measured by cost
46,410,000.00 1,210,000.00 45,200,000.00 46,410,000.00 1,210,000.00 45,200,000.00
method
Total 684,861,500.00 1,210,000.00 683,651,500.00 499,060,000.00 1,210,000.00 497,850,000.00
85
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
(2) Available-for-sale financial assets measured by fair value at the period-end
Unit: RMB Yuan
Available-for-sale equity Available-for-sale debt
Category Total
instruments instruments
Cost of equity instruments /amortized cost of debt
41,874,500.00 41,874,500.00
instruments
Fair value 638,451,500.00 638,451,500.00
Changes of fair value accumulated recorded into
507,090,450.00 507,090,450.00
other comprehensive income
On 20 Apr. 2015, the Company held the 11th Session of the 7th Board of Directors, which reviewed and approved the Proposal on the
Company Lent the Shares of the “Futon Automobile” by Participating in the Securities Financing Business that agreed to use the
shares of the “Futon Automobile” of not more than 10 million shares for participating the lending transactions of refinance securities.
At the period-end, there were 4.8168 million shares of the “Futon Automobile” in the lending period of refinance securities of the
Company.
(3) Available-for-sale financial assets measured by cost at the period-end
Unit: RMB Yuan
Book balance Impairment provision Shareholdi Cash
ng bonus of
Investee Period-beg Period-beg proportion the
Increase Decrease Period-end Increase Decrease Period-end
in in among the reporting
investees period
Jiangsu 38,000,000 38,000,000 3,040,000.
0.42%
Bank .00 .00 00
Qidong
Liantong
7,200,000. 7,200,000.
Dynamom 3.20% 717,273.40
00 00
eter Co.,
Ltd.
1,210,000. 1,210,000. 1,210,000. 1,210,000.
Others
00 00 00 00
46,410,000 46,410,000 1,210,000. 1,210,000. 3,757,273.
Total --
.00 .00 00 00 40
(4) Changes of the impairment of the available-for-sale financial assets during the reporting period
Unit: RMB Yuan
Category Available-for-sale equity Available-for-sale debt Total
86
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
instruments instruments
Balance of the withdrawn impairment at
1,210,000.00 1,210,000.00
the period-begin
Balance of the withdrawn impairment at
1,210,000.00 1,210,000.00
the period-end
10. Long-term equity investment
Unit: RMB Yuan
Increase/decrease
Closing
Gains and Adjustme
Cash Withdraw balance
Additiona losses nt of
Opening Reduced Changes bonus or al of Closing of
Investees l recognize other
balance investmen of other profits impairme Other balance impairme
investmen d under comprehe
t equity announce nt nt
t the equity nsive
d to issue provision provision
method income
Associated enterprises
Changzho
u Fuji
Changcha
20,459,97 397,632.4 20,857,60
i Robin
5.99 7 8.46
Gasoline
Engine
Co., Ltd.
Beijing
Tsinghua
Industrial
Investme
44,182.50
nt
Managem
ent Co.,
Ltd.
20,459,97 397,632.4 20,857,60
Subtotal 44,182.50
5.99 7 8.46
20,459,97 397,632.4 20,857,60
Total 44,182.50
5.99 7 8.46
11. Investment property
(1) Investment property adopted the cost measurement mode
√ Applicable □ Inapplicable
87
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Unit: RMB Yuan
Item Houses and buildings Land use right construction in progress Total
I. Original book value
1. Opening balance 87,632,571.14 87,632,571.14
2. Increased amount of
the period
(1) Outsourcing
(2) Transfer of
inventory\fixed
assets\project under
construction
(3) Increased from
enterprise merger
3. Decreased amount of
the period
(1) Disposal
(2) Other transfer
4. Closing balance 87,632,571.14 87,632,571.14
II. Accumulative
depreciation and
accumulative amortization
1.Opening balance 28,143,200.31 28,143,200.31
2. Increased amount of
1,104,170.40 1,104,170.40
the period
(1) Withdrawal or
1,104,170.40 1,104,170.40
amortization
3. Decreased amount of
the period
(1) Disposal
(2) Other transfer
4. Closing balance 29,247,370.71 29,247,370.71
III. Depreciation reserves
1.Opening balance
2. Increased amount of
the period
(1) Withdrawal
3. Decreased amount of
88
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
the period
(1) Disposal
(2) Other transfer
4. Closing balance
IV. Book value
1. Closing book value 58,385,200.43 58,385,200.43
2. Opening book value 59,489,370.83 59,489,370.83
(2) Investment property adopted fair value measurement mode
□ Applicable √ Inapplicable
12. Fixed assets
(1) List of fixed assets
Unit: RMB Yuan
Houses and Machinery Transportation
Item Other Total
buildings equipment equipment
I. Original book value
1. Opening balance 396,824,164.27 770,315,059.04 24,972,308.30 34,183,862.24 1,226,295,393.85
2. Increased amount of the period 21,536,116.22 14,354,832.68 657,945.85 2,111,328.87 38,660,223.62
(1) Purchase 452,518.33 851,265.33 5,810.20 375,621.66 1,685,215.52
(2) Transfer of project under
21,083,597.89 13,503,567.35 652,135.65 1,735,707.21 36,975,008.10
construction
(3) Increased from enterprise
merger
3. Decreased amount of the
5,059,347.20 4,740,431.32 675,815.36 1,305,625.88 11,781,219.76
period
(1) Disposal or scrap 5,059,347.20 4,740,431.32 675,815.36 1,305,625.88 11,781,219.76
4. Closing balance 413,300,933.29 779,929,460.40 24,954,438.79 34,989,565.23 1,253,174,397.71
II. Accumulative depreciation
1.Opening balance 193,412,968.17 414,074,319.32 15,860,361.40 26,128,345.76 649,475,994.65
2. Increased amount of the period 8,679,275.61 29,255,565.97 1,184,158.36 1,354,167.58 40,473,167.52
(1) Withdrawal 8,679,275.61 29,255,565.97 1,184,158.36 1,354,167.58 40,473,167.52
3. Decreased amount of the
2,953,621.58 5,022,516.35 452,631.96 1,850,231.24 9,279,001.13
period
(1) Disposal or scrap 2,953,621.58 5,022,516.35 452,631.96 1,850,231.24 9,279,001.13
89
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
4. Closing balance 199,138,622.20 438,307,368.94 16,591,887.80 25,632,282.10 679,670,161.04
III. Depreciation reserves
1.Opening balance 4,033,452.59 4,033,452.59
2. Increased amount of the period
(1) Withdrawal
3. Decreased amount of the
period
(1) Disposal or scrap
4. Closing balance 4,033,452.59 4,033,452.59
IV. Book value
1. Closing book value
2. Opening book value
13. Construction in progress
(1) List of construction in progress
Unit: RMB Yuan
Item Closing amount Opening amount
Book balance Bad debt Book value Book balance Bad debt Book value
provision provision
Trial production
workshop project 26,674,962.98 26,674,962.98 27,883,095.92 27,883,095.92
technology center
Casting
renovation 277,006.95 277,006.95 741,568.90 741,568.90
project
Expansion
capacity of
35,931,982.49 35,931,982.49 27,757,667.58 27,757,667.58
multi-cylinder
(The 2nd Period)
Base of land in
360,006.82 360,006.82 748,806.82 748,806.82
Hehai Road
Diesel Engine
Cylinder Body
Flexible 1,851,752.13 1,851,752.13 10,913,075.99 10,913,075.99
Manufacturing
Line
Equipment to be 53,105,820.36 53,105,820.36 66,904,102.66 66,904,102.66
90
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
installed and
payment for
projects
Total 118,201,531.73 118,201,531.73 134,948,317.87 134,948,317.87
(2) Changes of significant construction in progress
Unit: RMB Yuan
Of
Amount Proporti which:
Accumul
that on the Capitaliz
Other ative
Increase transferr estimate amount ation rate
Estimate decrease amount
Name o f Opening d amount ed to Closing d of the Project of the of the Capital
d d amount of
item balance of the fixed balance project progress capitaliz interests resources
number of the capitaliz
period assets of accumul ed of the
period ed
the ative interests period
interests
period input of the
period
Trial
producti
on
27,883,0 1,208,13 26,674,9
worksho 其他
95.92 2.94 62.98
p project
technolo
gy center
Casting
renovati 741,568. 277,006. 741,568. 277,006.
其他
on 90 95 90 95
project
Expansio
n
capacity
of 27,757,6 8,174,31 35,931,9
其他
multi-cyl 67.58 4.91 82.49
inder
(The 2nd
Period)
Base of
land in 748,806. 388,000. 360,006.
其他
Hehai 82 00 82
Road
Diesel 10,913,0 8,776,32 285,000. 1,851,75 其他
91
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Engine 75.99 3.86 00 2.13
Cylinder
Body
Flexible
Manufac
turing
Line
68,044,2 8,451,32 10,726,0 673,000. 65,095,7
Total -- -- --
15.21 1.86 25.70 00 11.37
14. Intangible assets
(1) List of intangible assets
Unit: RMB Yuan
Non-patented
Item Land use right Patent right Software Total
technology
I. Total original book
value
1. Opening balance 137,782,945.30 2,994,758.97 140,777,704.27
2. Increase in the
668,853.40 668,853.40
reporting period
(1) Purchase 668,853.40 668,853.40
(2) Internal R &D
(3) Increase from
enterprise combination
3. Decrease in the
reporting period
(1) Purchase
4. Closing balance 137,782,945.30 3,663,612.37 141,446,557.67
II. Total accrued
amortization
1. Opening balance 35,719,255.75 617,355.90 36,336,611.65
2. Increase in the
1,153,757.48 575,053.14 1,728,810.62
reporting period
(1) Withdrawal 1,153,757.48 575,053.14 1,728,810.62
3. Decrease in the
reporting period
(1) Disposal
92
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
4. Closing balance 36,873,013.23 1,192,409.04 38,065,422.27
III. Total impairment
provision
1. Opening balance
2. Increase in the
reporting period
(1) Withdrawal
3. Decrease in the
reporting period
(1) Disposal
4. Closing balance
IV. Total book value of
intangible assets
1. Book value of the
100,909,932.07 2,471,203.33 103,381,135.40
period-end
2. Book value of the
102,063,689.55 2,377,403.07 104,441,092.62
period-begin
15. Deferred income tax assets/deferred income tax liabilities
(1) Deferred income tax assets had not been off-set
Unit: RMB Yuan
Closing balance Opening balance
Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax
difference assets difference assets
Assets impairment
7,232,422.11 1,084,863.32 7,232,422.11 1,084,863.32
provision
Total 7,232,422.11 1,084,863.32 7,232,422.11 1,084,863.32
(2) Deferred income tax liabilities had not been off-set
Unit: RMB Yuan
Closing balance Opening balance
Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax
difference liabilities difference liabilities
Change in fair value of
596,577,000.00 89,486,550.00 410,775,500.00 61,616,325.00
available financial assets
Total 596,577,000.00 89,486,550.00 410,775,500.00 61,616,325.00
93
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
(3) Deferred income tax assets or liabilities listed by net amount after off-set
Unit: RMB Yuan
Mutual set-off amount of Amount of deferred Mutual set-off amount of Amount of deferred
deferred income tax income tax assets or deferred income tax income tax assets or
Item
assets and liabilities at liabilities after off-set at assets and liabilities at liabilities after off-set at
the period-end the period-end the period-begin the period-begin
Deferred income tax
1,084,863.32 1,084,863.32
assets
Deferred income tax
89,486,550.00 61,616,325.00
liabilities
(4) List of unrecognized deferred income tax assets
Unit: RMB Yuan
Item Closing balance Opening balance
Bad debt provision 266,274,668.96 256,274,709.39
Inventory falling price reserves 42,204,060.25 42,204,060.25
Total 308,478,729.21 298,478,769.64
16. Short-term loans
(1) Category of short-term loans
Unit: RMB Yuan
Category Closing balance Opening balance
Guaranteed loan 15,000,000.00 20,000,000.00
Total 15,000,000.00 20,000,000.00
17. Notes payable
Unit: RMB Yuan
Category Closing balance Opening balance
Bank acceptance bill 249,710,000.00 218,351,400.00
Total 249,710,000.00 218,351,400.00
18. Accounts payable
Unit: RMB Yuan
Category Closing balance Opening balance
94
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Payment for goods 535,114,777.12 550,858,517.60
Total 535,114,777.12 550,858,517.60
19. Advance from customers
Unit: RMB Yuan
Item Closing balance Opening balance
Payment for goods 37,751,020.98 29,364,756.16
Total 37,751,020.98 29,364,756.16
20. Payroll payable
(1) List of Payroll payable
Unit: RMB Yuan
Item Opening balance Increase Decrease Closing balance
I. Short-term salary 61,303,762.60 127,161,168.97 160,602,599.63 27,862,331.94
II. welfare after
departure- defined 19,891,214.29 19,891,214.29
contribution plan
Total 61,303,762.60 147,052,383.26 180,493,813.92 27,862,331.94
(2) List of Short-term salary
Unit: RMB Yuan
Item Opening balance Increase Decrease Closing balance
1. Salary, bonus,
55,397,399.62 103,070,401.19 136,423,623.14 22,044,177.67
allowance, subsidy
2. Employee welfare 2,906,792.95 2,906,792.95
3. Social insurance 10,103,925.44 10,103,925.44
Including: 1. Medical
7,584,920.82 7,584,920.82
insurance premiums
Work-related injury
1,701,769.83 1,701,769.83
insurance
Maternity insurance 817,234.79 817,234.79
4. Housing fund 9,014,654.00 9,014,654.00
5. Labor union budget
and employee education 5,906,362.98 2,065,395.39 2,153,604.10 5,818,154.27
budget
95
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Total 61,303,762.60 127,161,168.97 160,602,599.63 27,862,331.94
(3) List of drawing scheme
Unit: RMB Yuan
Item Opening balance Increase Decrease Closing balance
1. Basic endowment
18,339,120.50 18,339,120.50
insurance
2. Unemployment
1,552,093.79 1,552,093.79
insurance expense
Total 19,891,214.29 19,891,214.29
21. Taxes payable
Unit: RMB Yuan
Item Closing balance Opening balance
VAT 92,301.62 2,537.79
Corporate income tax 4,634,442.76 11,517,844.35
Personal income tax 411,791.70 211,204.93
Urban maintenance and construction tax 421,536.55 830,449.50
Property tax 356,430.48 343,204.46
Education Surcharge 5,035.35 136.60
The comprehensive fee 1,666,447.11 1,606,598.64
Total 7,587,985.57 14,511,976.27
22. Dividends payable
Unit: RMB Yuan
Item Closing balance Opening balance
Common stock dividends 3,243,179.97 3,243,179.97
Minority shareholder dividends 648,253.86 648,253.86
Total 3,891,433.83 3,891,433.83
23. Other accounts payable
(1) Other accounts payable listed by nature of the account
Unit: RMB Yuan
96
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Item Closing balance Opening balance
Margin and cash pledge 4,141,793.03 3,260,188.79
Unit current amount 11,141,793.05 10,133,775.91
Personal amount payable 752,016.93 965,413.51
Sales discount and promotion 163,374,232.01 141,620,797.47
Three guarantees 53,446,981.78 40,580,689.64
Other 232,856,816.80 196,560,865.32
24. Other current-liabilities
Unit: RMB Yuan
Item Closing balance Opening balance
Sewage charge 95,000.00 200,000.00
Electric charge 2,231,960.70 2,214,092.24
Other 218,092.41 578,904.50
Total 2,545,053.11 2,992,996.74
25. Deferred income
Unit: RMB Yuan
Item Opening balance Increase Decrease Closing balance Formation reasons
Government Government
54,185,979.32 332,986.81 53,852,992.51
subsidies allocations
Total 54,185,979.32 332,986.81 53,852,992.51 --
Items involved in government subsidies:
Unit: RMB Yuan
Amount accrued
Amount of newly Related to the
Item Opening balance in non-business Other changes Closing balance
subsidy assets/ income
income
Electric control of
diesel engine
research and
2,240,400.00 2,240,400.00
development and
industrialization
allocations
National major
Related to the
project special 28,770,000.00 28,770,000.00
assets
allocations
Remove Related to the
23,175,579.32 332,986.81 22,842,592.51
compensation assets
97
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Total 54,185,979.32 332,986.81 53,852,992.51 --
26. Share capital
Unit: RMB Yuan
Increase/decrease (+/-)
Opening Capitalization Closing
Newly issue
balance Bonus shares of public Other Subtotal balance
share
reserves
The sum of
561,374,326.00 561,374,326.00
shares
27. Capital reserves
Unit: RMB Yuan
Item Opening balance Increase Decrease Closing balance
Capital surplus (Capital
143,990,690.24 143,990,690.24
premium)
Other capital reserves 20,337,975.19 20,337,975.19
Total 164,328,665.43 164,328,665.43
28. Other comprehensive income
Unit: RMB Yuan
Reporting period
Less: Amount
transferred
into profit and
loss in the
Amount After-tax After-tax
Opening current period Less: Closing
Item incurred attribute to attribute to
balance that income tax balance
before the parent minority
recognized expense
income tax company shareholder
into other
comprehensive
income in
prior period
II. Other comprehensive income
349,159,175. 185,801,50 27,870,225. 157,931,27 507,090,4
reclassify into profits and losses in
00 0.00 00 5.00 50.00
future
Changes of fair value of available for 349,159,175. 185,801,50 27,870,225. 157,931,27 507,090,4
98
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
sale financial assets 00 0.00 00 5.00 50.00
Total of other comprehensive income 349,159,175. 185,801,50 27,870,225. 157,931,27 507,090,4
00 0.00 00 5.00 50.00
29. Specific reserves
Unit: RMB Yuan
Item Opening balance Increase Decrease Closing balance
Safety production cost 8,332,077.21 8,332,077.21
Total 8,332,077.21 8,332,077.21
30. Specific reserves
Unit: RMB Yuan
Item Opening balance Increase Decrease Closing balance
Statutory surplus
284,994,839.06 284,994,839.06
reserves
Discretional surplus
13,156,857.90 13,156,857.90
reserves
Total 298,151,696.96 298,151,696.96
31. Retained profits
Unit: RMB Yuan
Item 2015 2014
Opening balance of retained profits before
555,590,894.67 502,779,906.92
adjustments
Opening balance of retained profits after
555,590,894.67 502,779,906.92
adjustments
Add: Net profit attributable to owners of the
37,563,399.18 64,202,144.29
Company
Less: Withdrawal of statutory surplus reserves 8,522,122.57
Dividend of common stock payable 11,227,486.52 8,420,614.89
Other transformation(Minority shareholders
accumulated excess losses born by the parent 5,551,580.92
Company)
Closing retained profits 581,593,820.52 555,590,894.67
99
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
32. Revenue and Cost of Sales
(1) Revenue, Cost of Sales
Unit: RMB Yuan
2015 2014
Item
Revenue Cost Revenue Cost
Main operation 1,350,510,775.34 1,173,357,978.37 1,326,898,748.16 1,158,502,245.27
Other operation 9,385,125.35 5,715,124.36 12,977,453.56 6,982,513.36
Total 1,359,895,900.69 1,179,073,102.73 1,339,876,201.72 1,165,484,758.63
33. Business tax and surcharges
Unit: RMB Yuan
Item 2015 2014
Business tax 120,612.60 135,203.48
Urban maintenance and construction tax 1,255,742.07 110,125.57
Education surtax 903,657.76 69,958.35
Total 2,280,012.43 315,287.40
34. Sales expenses
Unit: RMB Yuan
Item 2015 2014
Office expenses 8,713,283.05 9,908,567.84
Employee’s remuneration 12,430,572.11 12,241,733.45
Sales promotional expense 6,919,526.51 5,815,563.78
three guarantees 24,877,205.63 24,972,079.19
Transportation 4,383,942.37 4,940,346.63
Other 734,569.25 645,523.18
Total 58,059,098.92 58,523,814.07
35. Administrative expenses
Unit: RMB Yuan
Item 2015 2014
Office expenses 12,135,083.25 11,300,320.13
Employee’s remuneration 30,279,507.54 25,662,412.41
100
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Depreciation and amortization 8,657,938.02 6,611,090.07
Research and development expense 22,045,157.07 27,575,838.28
Transportation 2,218,091.89 2,782,316.02
Repair charge 2,101,559.99 1,862,698.02
Taxation expense 3,785,315.92 3,899,516.70
Safety expenses 951,236.54 1,061,524.68
Other 2,227,133.96 2,126,860.53
Total 84,401,024.18 82,882,576.84
36. Financial expenses
Unit: RMB Yuan
Item 2015 2014
Interest expenses 1,317,324.03 1,508,536.32
Less: Interest income 3,247,570.12 3,755,081.76
Exchange net profit or loss -1,609,657.81 936,130.45
Other -3,133,799.84 -5,822,147.79
Total -6,673,703.74 -7,132,562.78
37. Asset impairment loss
Unit: RMB Yuan
Item 2015 2014
I. Bad debt loss 2,767,537.46 643,782.35
Total 2,767,537.46 643,782.35
38. Investment income
Unit: RMB Yuan
Item 2015 2014
Income of long term equity investment
397,632.47 613,793.67
measured by equity method
Investment income obtained from the disposal
of financial assets measured by fair value and 1,390,730.97 858,876.50
changes recorded into current profit and losses
Investment income achieved during the period
3,112,240.00
of holding transactional financial assets
Total 4,900,603.44 1,472,670.17
101
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
39. Non-operating gains
Unit: RMB Yuan
Recorded in the amount of the
Item 2015 2014
non-recurring gains and losses
Including: Gains from disposal
106,674.56 158,173.02 106,674.56
of fixed assets
Government grants 2,573,286.81 5,516,500.00 2,573,286.81
Insurance compensation 604,260.63 603,385.33 604,260.63
Confiscated income 36,121.36 86,891.25 36,121.36
Income from disposal of current
185,478.91 297,738.00 185,478.91
assets
Account payable no need to pay 85,655.38 219,251.33 85,655.38
Other 72,634.25 336,523.69 72,634.25
Total 3,664,111.90 7,218,462.62 3,664,111.90
Government subsidies recorded into current profits and losses
Unit: RMB Yuan
Item 2015 2014 Related to the assets/ income
The mayor award 500,000.00 Related to the income
Special fund for trine 1,600,300.00 Related to the assets/ income
Science and Technology
30,000.00 Related to the income
Progress Award
The special national high
technology research and 2,720,000.00 Related to the assets/ income
development plan
R & D and industrialization of
2,463,513.19 Related to the income
electric non-road diesel engine
Talent development funds 110,000.00 Related to the assets/ income
Compensation for demolition 332,986.81 332,986.81 Related to the assets/
Total 2,573,286.81 5,516,500.00 --
40. Non-operating expenses
Unit: RMB Yuan
The amount included in the
Item 2015 2014 current non-recurring gains and
losses
Loss on disposal of non-current 14,758.29 61,479.60
102
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
assets
Including: Loss on disposal of
14,758.29 61,479.60 14,758.29
fixed assets
Donation 100,000.00 130,000.00 100,000.00
Penalty expense 100,000.00 20,000.00 100,000.00
The flood control security fund 1,359,895.90 1,339,876.20 1,359,895.90
Loss on disposal of current
1,242,677.62 4,036,328.10 1,242,677.62
assets
Other 15,326.35 27,763.70 15,326.35
Total 2,832,658.16 5,605,447.60 2,832,658.16
41. Income tax expense
(1) Lists of income tax expense
Unit: RMB Yuan
Item 2015 2014
Current income tax expense 7,503,443.33 7,094,145.06
Total 7,503,443.33 7,094,145.06
(2) Adjustment process of accounting profit and income tax expense
Unit: RMB Yuan
Item 2015
Total profits 45,387,899.08
Current income tax expense accounted by tax and relevant
6,858,132.88
regulations
Influence of different tax rate suitable to subsidiary 61,029.89
Influence of income tax before adjustment 13,565.39
Influence of not deductable costs, expenses and losses 904,136.05
Influence of deductable losses of deferred income tax assets
3,522,579.12
derecognized used in previous period
Influence of deductible temporary difference or deductible losses
-3,856,000.00
of deferred income tax assets derecognized in reporting period
Income tax expense 7,503,443.33
103
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
42. Supplementary information to cash flow statement
(1) Other cash received relevant to operating activities
Unit: RMB Yuan
Item 2015 2014
Subsidies and grants 2,240,300.00 2,034,000.00
Cash received from other current account 5,874,363.25 12,225,876.71
Interest income 3,247,570.12 3,755,081.76
Total 11,362,233.37 18,014,958.47
(2) Other cash paid relevant to operating activities
Unit: RMB Yuan
Item 2015 2014
Sale expense paid into cash 14,343,363.07 19,612,069.29
Management expense paid into cash 19,150,193.53 17,316,833.94
Commission Expenses 242,529.32 291,567.35
Other 321,536.23 260,072.16
Total 34,057,622.15 37,480,542.74
43. Supplementary information to cash flow statement
(1) Information of net profit to net cash flows generated from operating activities
Unit: RMB Yuan
Item 2015 2014
1. Information about converting net profits
-- --
into cash for operating activities:
Net income 38,217,442.56 35,150,085.34
Add: Asset impairment reserves 2,767,537.46 643,782.35
Depreciation of fixed assets, oil and gases
40,473,167.52 39,750,825.98
and productive biological assets
Amortization of intangible assets 1,728,810.62 1,312,826.92
Losses on disposal of fixed assets, intangible
assets and other -106,674.56 -135,455.08
long-term assets (gains: negative)
Financial cost (gains: negative) 1,350,365.56 1,508,536.32
104
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Investment losses (gains: negative) -4,900,603.44 -1,472,670.17
Increase of deferred income tax liabilities
27,870,225.00 -300.00
(gains: negative)
Decrease in inventories (gains: negative) 87,405,953.65 34,056,086.30
Decrease in accounts receivable from
-109,506,857.89 -112,067,072.47
operating activities (gains: negative)
Increase in payables from operating
-38,571,625.36 -29,102,433.34
activities (decrease: negative)
Net cash flows generated from operating
46,727,741.12 -30,355,787.85
activities
2. Investing and financing activities that do
-- --
not involving cash receipts and payment:
3. Net increase in cash and cash equivalents -- --
Closing balance of cash 429,123,417.14 476,397,562.50
Less: Opening balance of cash 464,761,820.50 610,882,216.18
Net increase in cash and cash equivalents -35,638,403.36 -134,484,653.68
(2) Cash and cash equivalents
Unit: RMB Yuan
Item 2015 2014
1.Cash 429,123,417.14 464,761,820.50
Of which: cash in hand 581,259.89 344,615.56
Bank deposits available for payment at any
428,542,157.25 476,052,946.94
time
3. Balance of cash and cash equivalents at
429,123,417.14 464,761,820.50
the period-end
44. The assets with the ownership or use right restricted
Unit: RMB Yuan
Item Closing book value Restricted reason
Bank acceptance draft deposited in the
Monetary capital 74,293,795.48
margin
Total 74,293,795.48 --
45. Foreign currency monetary items
Unit: RMB Yuan
105
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Closing foreign currency Closing convert to RMB
Item Exchange rate
balance balance
Of which: USD 395,940.57 6.1181 2,422,404.00
HKD 1,380,790.93 0.7892 1,089,720.20
Of which: USD 9,194,311.75 6.1181 56,251,718.72
VIII. Equity in other entities
1. Equity in subsidiary
(1) The structure of the enterprise group
Name of the Main operating Registration Nature of Proportion of shareholding
Way of gaining
subsidiary place place business Directly Indirectly
Changchai
Wanzhou Diesel Chongqing City Chongqing City Industry 60.00% Set-up
Engine Co., Ltd.
Changzhou
Changchai
Benniu Diesel Changzhou City Changzhou City Industry 99.00% 1.00% Set-up
Engine Fittings
Co., Ltd.
Changzhou
Housheng
Changzhou City Changzhou City Service 100.00% Set-up
Investment Co.,
Ltd.
Changzhou
Changchai
Housheng
Changzhou City Changzhou City Industry 70.00% 25.00% Set-up
Agricultural
Equipment Co.,
Ltd.
(2) Significant not wholly owned subsidiary
Unit: RMB Yuan
Shareholding The profits and losses Declaring dividends Balance of minority
Name proportion of minority arbitrate to the minority distribute to minority shareholder at closing
shareholder shareholders shareholder period
CHANGCHAI
40.00% 699,338.94 16,519,187.82
WANZHOU DIESEL
106
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
ENGINE CO., LTD.
Changzhou Changchai
Housheng Agricultural 5.00% -45,295.56 343,765.63
Equipment Co., Ltd.
(3) The main financial information of significant not wholly owned subsidiary
Unit: RMB Yuan
Closing balance Opening balance
Non-curr Non-curr Non-curr Non-curr
Name Current Total Current Total current Total Current Total
ent ent ent ent
assets assets liabilities liability assets assets liabilities liability
assets liability assets liability
CHANG
CHAI
WANZH
OU 55,024,6 29,118,4 84,143,1 42,845,1 42,845,1 55,203,4 29,640,2 84,843,7 45,294,0 45,294,0
DIESEL 59.66 59.13 18.79 49.26 49.26 67.86 45.55 13.41 91.22 91.22
ENGIN
E CO.,
LTD.
Changzh
ou
Changch
ai
Houshen
8,610,63 469,720. 9,080,36 2,205,04 2,205,04 10,348,7 491,333. 10,840,0 3,058,84 3,058,84
g
9.50 86 0.36 7.87 7.87 39.81 07 72.88 9.18 9.18
Agricult
ural
Equipme
nt Co.,
Ltd.
Unit: RMB Yuan
2015 2014
Total Total
Name Operation Operating Operation Operating
Net profit comprehensi Net profit comprehensi
revenue cash flow revenue cash flow
ve income ve income
CHANGCH
AI
46,604,607.8 53,566,101.7
WANZHOU 1,748,347.34 1,748,347.34 6,600,149.69 2,219,040.58 2,219,040.58 -9,526,891.35
7 7
DIESEL
ENGINE
107
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
CO., LTD.
Changzhou
Changchai
Housheng
897,928.98 -905,911.21 -905,911.21 -1,075,236.54 -567,537.47 -567,537.47 -1,896,321.54
Agricultural
Equipment
Co., Ltd.
2. Equity in joint venture arrangement or associated enterprise
(1) Significant joint venture arrangement or associated enterprise
Proportion (%) Accounting
treatment of the
Main operating Registration investment of
Name Business nature
place place Directly Indirectly joint venture or
associated
enterprise
Changzhou Fuji
Changchai Robin
Changzhou Changzhou Industrial 33.00% Equity method
Gasoline Engine
Co., Ltd.
(2) Main financial information of significant joint venture
Unit: RMB Yuan
Closing balance /2015 Opening balance/2014
Changzhou Fuji Changchai Robin Changzhou Fuji Changchai Robin
Gasoline Engine Co., Ltd. Gasoline Engine Co., Ltd.
Current assets 72,903,887.60 86,901,570.38
Non-current assets 12,354,962.58 13,200,248.78
Total assets 85,258,850.18 100,101,819.16
Current liabilities 22,053,975.43 38,101,891.30
Total liabilities 22,053,975.43 38,101,891.30
Equity attributable to owners of the
63,204,874.75 61,999,927.86
Company
Net assets proportion calculated by
20,857,608.67 20,459,975.99
shareholding ratio
108
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Book value of investment to associated
20,857,608.67 20,459,975.99
enterprise
Operating income 76,175,353.71 107,292,423.90
Net profits 1,204,946.89 1,859,980.81
Total comprehensive income 1,204,946.89 1,859,980.81
IX. 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 analyse 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 that the financial instruments of the Company faced 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 is referred to the one party of financial instrument fail to perform its obligation lead to the financial losses 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 capital shortage when performing the obligation of cash or other financial assets settlement.
The policy o f the Company was to ensure sufficient cash to pay the due liabilities.
109
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Liquidity risk was centrally controlled by the financial department of the Company, the financial department through supervising the
balance of cash and securities that can be converted into cash at any time and roll forecast of cash flow in future 12 months, ensured
the Company own sufficient cash to pay the maturity loan under the condition of reasonable forecast.
(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 referred to risk of the fair value or future cash flow of financial instrument changed due to the change of market
interest risk.
2. Foreign exchange rate risk
Foreign exchange rate risk is referred to the risk incurred form the change of exchange rate. The export sales of the Company mainly
was market of Southeast Asia region which settled by USD. Though the Company’s export business receiving part of payment for
goods in advance, but the balance had a certain credit term, if the RMB appreciates against the dollar, the company's accounts
receivable will incur foreign currency exchange loss.
X. The disclosure of the fair value
1. Closing fair value of assets and liabilities calculated by fair value
Unit: RMB Yuan
Closing fair value
Item Fair value measurement Fair value measurement Fair value measurement
Total
items at level 1 items at level 2 items at level 3
I. Consistent fair value
-- -- -- --
measurement
(I) Financial assets
measured by fair value
9,000,000.00 9,000,000.00
and changes recorded into
current profits and losses
1. Tradable financial 9,000,000.00 9,000,000.00
110
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
assets
(2) Equity instrument
9,000,000.00 9,000,000.00
investment
(II) Available for sale
638,451,500.00 638,451,500.00
financial assets
(2) Equity instrument
638,451,500.00 638,451,500.00
investment
Total assets inconsistently
647,451,500.00 647,451,500.00
calculated by fair value
I. inconsistent fair value
-- -- -- --
measurement
2. Market price recognition basis for consistent and inconsistent fair value measurement items at level 1
Tradable financial assets and available for sale financial assets of the Company were funds and shares with the closing price as the
basis of fair value calculation at period-end.
XI. Related party and related Transaction
1. Information related to parent company of the Company
Proportion of voting
Proportion of share
rights owned by
Name of parent held by parent
Registered place Business scope Registered capital parent company
company company against the
against the Company
Company (%)
(%)
Changzhou
Government
State-owned Assets
Changzhou 30.02% 30.02%
Supervision and
Administration
Commission
The final controller of the Company is Changzhou Government State-owned Assets Supervision and Administration Commission.
2. Subsidiaries of the Company
The details of subsidiaries of the Company please refer to equity in other entities in note to financial statements.
111
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
3. Information on the joint ventures and associated enterprises of the Company
The details of the joint ventures and associated enterprises of the Company please refer to equity in other entities in note to financial
statements.
XII. Commitments and contingency
1. Significant commitments
Significant commitments on balance sheet date:
As of 30 Jun. 2015, there was no significant commitment or contingency in the Company.
2. Contingency
(1) Significant contingency on balance sheet date:
In the reporting period, the litigation the Company involved in from previous year continuing to the reporting period：
Name of the litigation or Amount involved
Name of the entity Date of accepted Remark
arbitration institutions (RMB ten thousand)
Shandong Hongli Group Co., Ltd. 2001.6.27 1,436.00 Under the
Changzhou Intermediate
bankruptcy and
People's Court
liquidation
Beijing Beiqi Changsheng Automobile 2013.8.12 Beijing Shunyi District 806.36
Enforcing conduct
Co., Ltd. People's Court
Total 2,242.36
Note to the case:
(1) As the litigation of Shandong Hongli Group Co., Ltd. the company owned our Company RMB of 14.36 million payments for
good. In 2001, the Company instituted litigation from Changzhou Intermediate People's Court, in Apr. 2002, applied to the court for
compulsory execution, so far, the company has entered bankruptcy proceedings, the aforesaid payment has arranged for the full
provision for bad debts.
(2) As the litigation of Beijing Beiqi Changsheng Automobile Co., Ltd., the company owned our Company 8.0636 million; Beijing
Shunyi District People's Court accepted the case on Aug. 12 2013. Under the auspices, two sides concluded mediation agreement.
Beiqi Changsheng pays RMB 8,063,600.00 to the Company by stage.
112
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Although the Company bombarded many times, Beijing Beiqi Changsheng Automobile Co., Ltd did not perform its obligation of
payment in line with mediation agreement. As of the end of reporting period, the Company had paid the payment of goods RMB 4.5
million, the Company had applied to the Court for compulsory execution.
(2) The Company have no significant contingency to disclose, also should be stated
There was no significant contingency in the Company.
XIII. Notes of main items in the financial statements of the Company
1. Accounts receivable
(1) Accounts receivable classified by category
Unit: RMB Yuan
Closing balance Opening balance
Provision for bad
Book balance Book balance Provision for bad debts
debts
Category Withdra Book
Withdrawal Book value
Proportio wal value Proportio
Amount Amount Amount Amount Proportion
n (%) Proportio n (%)
(%)
n (%)
Accounts receivable
with significant
single amount and 42,376,0 31,291,5 11,084,47 43,791, 31,949,28 11,842,191.
5.56% 73.84% 7.96% 72.96%
26.91 54.11 2.80 478.96 7.94 02
individually
withdrawn bad debt
provision
Accounts receivable
withdrawal of bad
718,481, 189,213, 529,267,4 504,838 185,804,5 319,034,11
debt provision of by 94.21% 26.34% 91.72% 36.80%
335.74 851.88 83.86 ,706.00 94.53 1.47
credit risks
characteristics:
Accounts receivable
with insignificant 1,776,15 1,413,01 363,144.5 1,776,1 1,413,014
0.23% 79.55% 0.32% 79.55% 363,144.50
9.00 4.50 0 59.00 .50
single amount and
individually
113
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
withdrawn bad debt
provision
762,633, 221,918, 540,715,1 550,406 219,166,8 331,239,44
Total 100.00% 29.10% 100.00% 39.82%
521.65 420.49 01.16 ,343.96 96.97 6.99
Accounts receivable with significant single amount and individually withdrawn bad debt provision
√Applicable □ Inapplicable
Unit: RMB Yuan
Closing balance
Item
Accounts receivable Provision for bad debts Proportion (%) Withdrawal reason
Customer 1 Estimated difficult to
7,063,600.00 3,531,800.00 50.00%
recover
Customer 2 1,902,326.58 1,902,326.58 100.00% Difficult to recover
Customer 3 6,215,662.64 6,188,445.25 99.56% Difficult to recover
Customer 4 Estimated difficult to
3,456,675.80 2,199,465.49 63.63%
recover
Customer 5 1,035,446.35 1,035,446.35 100.00% Difficult to recover
Customer 6 5,359,381.00 5,359,381.00 100.00% Difficult to recover
Customer 7 2,584,805.83 2,584,805.83 100.00% Difficult to recover
Customer 8 Estimated difficult to
14,758,128.71 8,489,883.61 57.53%
recover
Total 42,376,026.91 31,291,554.11 -- --
In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
√Applicable □ Inapplicable
Unit: RMB Yuan
Closing balance
Aging
Accounts receivable Provision for bad debts Proportion (%)
Subentry within 1 year
Within 1 year 531,914,754.06 10,638,295.08 2.00%
Subtotal of within 1 year 531,914,754.06 10,638,295.08 2.00%
1-2 years 1,589,943.51 79,497.18 5.00%
2-3 years 6,785,426.52 1,017,813.98 15.00%
Over 3 years 178,191,211.65 177,478,245.64
3-4 years 745,388.31 223,616.49 30.00%
4-5 years 477,985.47 286,791.28 60.00%
Over 5 years 176,967,837.87 176,967,837.87 100.00%
114
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Total 718,481,335.74 189,213,851.88
In the groups, accounts receivable adopting balance percentage method to withdraw bad debt provision:
□ Applicable √ Inapplicable
(2) Bad debt provision withdrawal, reversed or recovered in the report period
The amount of bad debt provision was RMB12, 651,306.54; the amount of reversed or recovered bad debt provision in the report
period was of RMB 9,899,783.02.
(3) Top five of account receivable of closing balance collected by arrears party
At period-end, the total amount of top five of account receivable of closing balance collected by arrears party was of
RMB291,925,358.60 and 38.28% of relevant account receivable withdrawn bad debt provision, and the closing amount bad debt
provision was RMB 6,142,832.48.
2. Other account receivable
(1) Other account receivable classified by category
Unit: RMB Yuan
Closing balance Opening balance
Provision for bad
Book balance Book balance Provision for bad debts
debts
Category Withdra Book
Book value
Proportio wal value Proportio Withdrawal
Amount Amount Amount Amount
n (%) proportio n (%) proportion
n
Other accounts
receivable with
significant single
2,853,18 2,853,18 2,853,1 2,853,188
amount and 8.24% 100.00% 8.44% 100.00%
8.02 8.02 88.02 .02
individually
withdrawn bad debt
provision
Other accounts
receivable 29,854,7 23,359,5 6,495,179 29,055, 23,343,54 5,712,047.4
86.24% 78.24% 85.91% 80.34%
35.31 55.74 .57 589.24 1.80 4
withdrawal of bad
debt provision of by
115
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
credit risks
characteristics:
Other accounts
receivable with
insignificant single
1,910,73 1,910,73 1,910,7 1,910,737
amount and 5.52% 100.00% 5.65% 100.00%
7.23 7.23 37.23 .23
individually
withdrawn bad debt
provision
34,618,6 28,123,4 6,495,179 33,819, 28,107,46 5,712,047.4
Total 100.00% 83.11% 100.00% 83.11%
60.56 80.99 .57 514.49 7.05 4
Closing other accounts receivable with significant single amount and individually withdrawn bad debt provision
√Applicable □ Inapplicable
Unit: RMB Yuan
Closing balance
Other account receivable Other account Withdrawal proportion
Provision for bad debts Withdrawal reason
receivable (%)
Changchai Group Import
2,853,188.02 2,853,188.02 100.00% Difficult to recover
& Export Co., Ltd.
Total 2,853,188.02 2,853,188.02 -- --
In the groups, other accounts receivable adopting aging analysis method to withdraw bad debt provision:
√Applicable □ Inapplicable
Unit: RMB Yuan
Closing balance
Aging
Other account receivable Provision for bad debts Proportion (%)
Subentry within 1 year
Within 1 year 3,632,332.63 72,646.65 2.00%
Subtotal of within 1 year 3,632,332.63 72,646.65 2.00%
1-2 years 881,140.27 44,057.01 5.00%
2-3 years 624,399.76 93,659.96 15.00%
Over 3 years 24,462,561.65 23,149,192.11
3-4 years 1,452,599.48 435,779.84 30.00%
4-5 years 741,374.76 444,824.86 60.00%
Over 5 years 22,268,587.41 22,268,587.41 100.00%
116
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Total 29,854,735.31 23,359,555.74
In the groups, other accounts receivable adopting balance percentage method to withdraw bad debt provision:
□ Applicable √ Inapplicable
In the groups, other accounts receivable adopting other methods to withdraw bad debt provision:
□ Applicable √ Inapplicable
(2) Bad debt provision withdrawal, reversed or recovered in the report period
The amount of bad debt provision was RMB16, 013.94, the amount of reversed or recovered bad debt provision in the report period
RMB 000.
(3) Other account receivable classified by account nature
Unit: RMB Yuan
Nature Closing book value Opening book value
Guarantee and cash pledge a 4,200.00 4,200.00
Unit current amount 18,226,254.35 17,481,166.27
Employee borrowing 2,036,547.85 1,575,915.66
Other 14,351,658.36 14,758,232.56
Total 34,618,660.56 33,819,514.49
(4) The top five other account receivable classified by debtor at period end
Unit: RMB Yuan
Closing balance of
Entity Nature Closing balance Aging Proportion%
bad debt provision
Changzhou
Intercourse funds 2,940,000.00 Over 5 years 8.49% 2,940,000.00
Compressor Co., Ltd.
Import and Export
Company of Intercourse funds 2,853,188.02 Over 5 years 8.24% 2,853,188.02
Changchai Group
Changzhou New
District Accounting Intercourse funds 1,626,483.25 Over 5 years 4.70% 1,626,483.25
Center
OEM Group
Intercourse funds 1,140,722.16 Over 5 years 3.30% 1,140,722.16
Settlement Center
Changzhou
Xingsheng Property Intercourse funds 1,311,930.22 Within 1 year 3.79% 31,567.25
Management Co., Ltd.
Total 9,872,323.65 -- 28.52% 8,591,960.68
117
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
3. Long term equity investment
Unit: RMB Yuan
Closing balance Opening balance
Item bad debt bad debt
Book balance Book value Book balance Book value
provision provision
Investment to the
184,466,500.00 184,466,500.00 184,466,500.00 184,466,500.00
subsidiary
Investment to
joint venture and
20,901,790.96 44,182.50 20,857,608.46 20,504,158.49 44,182.50 20,459,975.99
associated
enterprise
Total 205,368,290.96 44,182.50 205,324,108.46 204,970,658.49 44,182.50 204,926,475.99
(1) Investment to the subsidiary
Unit: RMB Yuan
Withdrawn
Closing balance
impairment
Entity Opening balance Increase Decrease Closing balance of impairment
provision in the
provision
reporting period
Changchai
Wanzhou Diesel 51,000,000.00 51,000,000.00
Engine Co., Ltd.
Changzhou
Changchai Benniu
96,466,500.00 96,466,500.00
Diesel Engine
Fittings Co., Ltd.
Changzhou
Housheng
30,000,000.00 30,000,000.00
Investment Co.,
Ltd.
Changzhou
Changchai
Housheng
7,000,000.00 7,000,000.00
Agricultural
Equipment Co.,
Ltd.
Total 184,466,500.00 184,466,500.00
118
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
(2) Investment to joint ventures and associated enterprises
Unit: RMB Yuan
Increase/decrease in reporting period
Investme Closing
Adjustme
nt profit Withdraw balance
Additiona nt of Declarati
Name of Opening Negative and loss Other n Closing of
l other on of cash
investee balance investmen recognize equity impairme Other balance impairme
investmen comprehe dividends
t d under changes nt nt
t nsive or profits
the equity provision provision
income
method
I. Joint ventures
II. Associated enterprises
Changzho
u Fuji
Changcha
20,459,97 397,632.4 20,857,60
i Robin
5.99 7 8.46
Diesel
Engine
Co., Ltd.
Beijing
Tsinghua
Xingye
Industrial
Investme 44,182.50 44,182.50 44,182.50
nt
Managem
ent Co.,
Ltd.
subtotal 20,504,15 397,632.4 20,901,79
44,182.50
8.49 7 0.96
20,504,15 397,632.4 20,901,79
Total 44,182.50
8.49 7 0.96
4. Revenues and operating costs
Unit: RMB Yuan
2015 2014
Item
Revenues Operating costs Revenues Operating costs
Main operations 1,361,846,639.00 1,194,625,911.46 1,342,020,060.55 1,206,065,510.97
Other operations 9,385,125.35 5,715,124.36 12,977,453.56 6,353,215.35
119
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Total 1,371,231,764.35 1,200,341,035.82 1,354,997,514.11 1,212,418,726.32
5. Investment income
Unit: RMB Yuan
Item 2015 2014
Long-term equity investment income
2,446,600.00
accounted by cost method
Long-term equity investment income
397,632.47 613,793.67
accounted by equity method
Investment income from available for sale
3,112,240.00
assets during holding period
Total 3,509,872.47 3,060,393.67
XV. Supplementary materials
1. Items and amounts of extraordinary gains and losses
√Applicable □ Inapplicable
Unit: RMB Yuan
Item Amount Note
Gains/losses on the disposal of non-current
106,674.56
assets
Government grants recognized in the current
period, except for those acquired in the
ordinary course of business or granted at 2,573,286.81
certain quotas or amounts according to the
government’s unified standards
Included in current profit and loss against the
non-financial enterprises occupation fee 981,088.78
funds collected
Gain/loss from change of fair value of
transactional assets and liabilities, and
investment gains from disposal of
transactional financial assets and liabilities 409,642.19
and available-for-sale financial assets, other
than valid hedging related to the Company’s
common businesses
Other non-business income and expenditures
-1,848,228.92
other than the above
Less: Influenced amount of income tax 380,667.93
Influenced amount of minor shareholders’
-10,984.41
gains and losses
120
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Total 1,852,779.90 --
Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Extraordinary Gains and
Losses, or classifies any extraordinary gain/loss item mentioned in the said explanatory announcement as a recurrent gain/loss item
□ Applicable √ Inapplicable
2. Return on equity (ROE) and earnings per share (EPS)
EPS（Yuan/share）
Profit as of reporting period Weighted average ROE (%)
EPS-basic EPS-diluted
Net profit attributable to common
1.85% 0.07 0.07
shareholders of the Company
Net profit attributable to common
shareholders of the Company after
1.76% 0.06 0.06
deduction of non-recurring profit
and loss
3. Differences between accounting data under domestic and overseas accounting standards
(1) Differences of net profit and net assets disclosed in financial reports prepared under international and
Chinese accounting standards
□ Applicable √ Inapplicable
(2) Differences of net profit and net assets disclosed in financial reports prepared under overseas and
Chinese accounting standards
□ Applicable √ Inapplicable
121
2015 Semi-annual Report of Hubei Sanonda Co., Ltd.
Section X. Documents Available For Reference
1. 2015 semi-annual report with signatures and seals of the Chairman.
2. Financial Statements carried with signatures and seals of responsible person of the Company,
Accounting Principal, as well as Head of the Accounting Organ;
3. In the reporting period, originals of all documents of the Company ever disclosed publicly in
media designated by China Securities Regulatory Commission such as the Securities Times and Ta
Kung Pao and the originals of all the public notices.
4. Articles of Association
Changchai Company, Limited
Board of Directors
20 August 2015
122
