Changchai Company, Limited Interim Report 2021
CHANGCHAI COMPANY, LIMITED
SEMI-Financial Report 2021
I Independent Auditor’s Report
Are these interim financial statements audited by an independent auditor?
□ Yes √ No
These interim financial statements have not been audited by an independent auditor.
II Financial Statements
Currency unit for the financial statements and the notes thereto: RMB
1. Consolidated Balance Sheet
Prepared by Changchai Company, Limited
30 June 2021
Unit: RMB
Item 30 June 2021 31 December 2020
Current assets:
Monetary assets 1,232,476,897.46 760,728,222.85
Settlement reserve
Interbank loans granted
Held-for-trading financial assets 34,994,390.00 11,500,272.00
Derivative financial assets
Notes receivable 341,957,460.75 600,140,938.05
Accounts receivable 934,930,406.83 397,154,016.49
Accounts receivable financing
Prepayments 9,702,974.05 9,357,840.75
Premiums receivable
Reinsurance receivables
Receivable reinsurance contract reserve
Other receivables 2,537,634.11 6,212,062.80
Including: Interest receivable
Dividends receivable
Financial assets purchased under resale agreements
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Changchai Company, Limited Interim Report 2021
Inventories 560,554,921.08 606,680,340.55
Contract assets
Assets held for sale
Current portion of non-current assets
Other current assets 23,854,335.78 27,299,362.72
Total current assets 3,141,009,020.06 2,419,073,056.21
Non-current assets:
Loans and advances to customers
Investments in debt obligations
Investments in other debt obligations
Long-term receivables
Long-term equity investments
Investments in other equity instruments 810,589,691.82 685,137,950.87
Other non-current financial assets 250,651,641.20 98,732,938.63
Investment property 45,135,155.63 46,239,326.03
Fixed assets 427,241,110.69 454,181,555.68
Construction in progress 107,315,205.76 66,502,432.41
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets 156,529,478.36 158,870,631.71
Development costs
Goodwill
Long-term prepaid expense 51,372.94 13,693.20
Deferred income tax assets 4,231,873.15 4,231,873.15
Other non-current assets 48,860,427.66 19,971,006.56
Total non-current assets 1,850,605,957.21 1,533,881,408.24
Total assets 4,991,614,977.27 3,952,954,464.45
Current liabilities:
Short-term borrowings 17,000,000.00 22,000,000.00
Borrowings from the central bank
Interbank loans obtained
Held-for-trading financial liabilities
Derivative financial liabilities
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Changchai Company, Limited Interim Report 2021
Notes payable 697,664,500.00 595,346,000.00
Accounts payable 636,843,860.83 612,757,392.46
Advances from customers 661,612.17
Contract liabilities 43,385,577.76 35,944,517.15
Financial assets sold under repurchase agreements
Customer deposits and interbank deposits
Payables for acting trading of securities
Payables for underwriting of securities
Employee benefits payable 14,763,552.71 50,127,161.47
Taxes payable 4,567,958.40 2,869,485.41
Other payables 237,746,198.81 197,545,076.08
Including: Interest payable
Dividends payable 3,891,433.83 3,891,433.83
Handling charges and commissions payable
Reinsurance payables
Liabilities directly associated with assets held for
sale
Current portion of non-current liabilities
Other current liabilities 6,438,607.72 5,233,947.12
Total current liabilities 1,658,410,256.23 1,522,485,191.86
Non-current liabilities:
Insurance contract reserve
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income 56,949,737.60 56,949,737.60
Deferred income tax liabilities 126,752,882.96 80,671,598.82
Other non-current liabilities
Total non-current liabilities 183,702,620.56 137,621,336.42
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Changchai Company, Limited Interim Report 2021
Total liabilities 1,842,112,876.79 1,660,106,528.28
Owners’ equity:
Share capital 705,692,507.00 561,374,326.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 640,676,218.40 164,328,665.43
Less: Treasury stock
Other comprehensive income 532,116,738.05 425,482,758.24
Specific reserve 18,812,986.55 18,812,986.55
Surplus reserves 325,451,531.14 325,451,531.14
General reserve
Retained earnings 907,088,145.26 777,899,079.66
Total equity attributable to owners of the Company as
3,129,838,126.40 2,273,349,347.02
the parent
Non-controlling interests 19,663,974.08 19,498,589.15
Total owners’ equity 3,149,502,100.48 2,292,847,936.17
Total liabilities and owners’ equity 4,991,614,977.27 3,952,954,464.45
Legal representative: Shi Xinkun General Manager: Zhang Xin
Head of the accounting department: Jiang He
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Changchai Company, Limited Interim Report 2021
2. Balance Sheet of the Company as the Parent
Unit: RMB
Item 30 June 2021 31 December 2020
Current assets:
Monetary assets 1,085,715,541.07 682,322,659.41
Held-for-trading financial assets 12,920,200.00
Derivative financial assets
Notes receivable 332,587,460.75 581,230,938.05
Accounts receivable 858,268,721.66 317,828,161.25
Accounts receivable financing
Prepayments 6,887,234.80 6,592,567.26
Other receivables 20,870,644.87 24,327,355.36
Including: Interest receivable
Dividends receivable
Inventories 435,993,673.39 475,688,026.57
Contract assets
Assets held for sale
Current portion of non-current assets
Other current assets 7,833,885.68 17,521,203.46
Total current assets 2,761,077,362.22 2,105,510,911.36
Non-current assets:
Investments in debt obligations
Investments in other debt obligations
Long-term receivables
Long-term equity investments 535,752,730.03 375,752,730.03
Investments in other equity instruments 810,589,691.82 685,137,950.87
Other non-current financial assets 112,500,000.00 52,500,000.00
Investment property 45,135,155.63 46,239,326.03
Fixed assets 346,477,083.14 369,194,314.03
Construction in progress 17,329,608.93 26,195,189.06
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets 67,142,576.87 68,088,982.37
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Changchai Company, Limited Interim Report 2021
Development costs
Goodwill
Long-term prepaid expense
Deferred income tax assets 4,179,544.86 4,179,544.86
Other non-current assets
Total non-current assets 1,939,106,391.28 1,627,288,037.25
Total assets 4,700,183,753.50 3,732,798,948.61
Current liabilities:
Short-term borrowings 5,000,000.00
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable 695,244,000.00 589,534,000.00
Accounts payable 591,767,177.12 550,360,564.07
Advances from customers 661,612.17
Contract liabilities 37,986,177.33 32,344,514.86
Employee benefits payable 6,631,467.46 42,455,158.67
Taxes payable 2,036,444.92 1,099,861.63
Other payables 212,857,500.24 184,513,545.20
Including: Interest payable
Dividends payable 3,243,179.97 3,243,179.97
Liabilities directly associated with assets held for
sale
Current portion of non-current liabilities
Other current liabilities 2,424,649.62 2,426,575.40
Total current liabilities 1,548,947,416.69 1,408,395,832.00
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits payable
Provisions
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Changchai Company, Limited Interim Report 2021
Deferred income 56,949,737.60 56,949,737.60
Deferred income tax liabilities 99,340,453.77 75,460,192.63
Other non-current liabilities
Total non-current liabilities 156,290,191.37 132,409,930.23
Total liabilities 1,705,237,608.06 1,540,805,762.23
Owners’ equity:
Share capital 705,692,507.00 561,374,326.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 659,418,700.67 183,071,147.70
Less: Treasury stock
Other comprehensive income 532,116,738.05 425,482,758.24
Specific reserve 18,812,986.55 18,812,986.55
Surplus reserves 325,451,531.14 325,451,531.14
Retained earnings 753,453,682.03 677,800,436.75
Total owners’ equity 2,994,946,145.44 2,191,993,186.38
Total liabilities and owners’ equity 4,700,183,753.50 3,732,798,948.61
Legal representative: Shi Xinkun General Manager: Zhang Xin
Head of the accounting department: Jiang He
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Changchai Company, Limited Interim Report 2021
3. Consolidated Income Statement
Unit: RMB
Item H1 2021 H1 2020
1. Revenue 1,497,170,455.80 1,167,455,782.30
Including: Operating revenue 1,497,170,455.80 1,167,455,782.30
Interest income
Insurance premium income
Handling charge and commission income
2. Costs and expenses 1,452,332,780.19 1,123,014,304.27
Including: Cost of sales 1,284,114,729.46 985,842,718.68
Interest expense
Handling charge and commission expense
Surrenders
Net insurance claims paid
Net amount provided as insurance contract
reserve
Expenditure on policy dividends
Reinsurance premium expense
Taxes and surcharges 6,255,278.20 6,551,605.53
Selling expense 66,174,807.84 63,392,358.52
Administrative expense 48,008,480.48 35,609,030.74
R&D expense 45,136,853.96 32,338,250.78
Finance costs 2,642,630.25 -719,659.98
Including: Interest expense 4,437,018.11 3,340,575.91
Interest income 4,502,088.58 2,792,152.75
Add: Other income 406,454.70 2,677,964.82
Return on investment (“-” for loss) 8,524,500.87 5,384,597.04
Including: Share of profit or loss of joint ventures
and associates
Income from the derecognition of financial assets
at amortized cost (“-” for loss)
Exchange gain (“-” for loss)
Net gain on exposure hedges (“-” for loss)
Gain on changes in fair value (“-” for loss) 122,554,092.00
Credit impairment loss (“-” for loss) -12,495,432.28 -5,979,021.29
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Changchai Company, Limited Interim Report 2021
Asset impairment loss (“-” for loss) -5,950,895.20 -16,343,805.00
Asset disposal income (“-” for loss) -751,441.20 10,977.61
3. Operating profit (“-” for loss) 157,124,954.50 30,192,191.21
Add: Non-operating income 850,183.59 468,290.78
Less: Non-operating expense 333,307.72 395,375.68
4. Profit before tax (“-” for loss) 157,641,830.37 30,265,106.31
Less: Income tax expense 28,287,379.84 2,397,311.58
5. Net profit (“-” for net loss) 129,354,450.53 27,867,794.73
5.1 By operating continuity
5.1.1 Net profit from continuing operations (“-” for net
129,354,450.53 27,867,794.73
loss)
5.1.2 Net profit from discontinued operations (“-” for
net loss)
5.2 By ownership
5.2.1 Net profit attributable to owners of the Company
129,189,065.60 27,690,311.06
as the parent
5.2.1 Net profit attributable to non-controlling interests 165,384.93 177,483.67
6. Other comprehensive income, net of tax 106,633,979.81 -59,691,806.33
Attributable to owners of the Company as the parent 106,633,979.81 -59,691,806.33
6.1 Items that will not be reclassified to profit or loss 106,633,979.81 -59,691,806.33
6.1.1 Changes caused by remeasurements on defined
benefit schemes
6.1.2 Other comprehensive income that will not be
reclassified to profit or loss under the equity method
6.1.3 Changes in the fair value of investments in
106,633,979.81 -59,691,806.33
other equity instruments
6.1.4 Changes in the fair value arising from changes
in own credit risk
6.1.5 Other
6.2 Items that will be reclassified to profit or loss
6.2.1 Other comprehensive income that will be
reclassified to profit or loss under the equity method
6.2.2 Changes in the fair value of investments in
other debt obligations
6.2.3 Other comprehensive income arising from the
reclassification of financial assets
6.2.4 Credit impairment allowance for investments in
other debt obligations
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Changchai Company, Limited Interim Report 2021
6.2.5 Reserve for cash flow hedges
6.2.6 Differences arising from the translation of
foreign currency-denominated financial statements
6.2.7 Other
Attributable to non-controlling interests
7. Total comprehensive income 235,988,430.34 -31,824,011.60
Attributable to owners of the Company as the parent 235,823,045.41 -32,001,495.27
Attributable to non-controlling interests 165,384.93 177,483.67
8. Earnings per share
8.1 Basic earnings per share 0.2301 0.0493
8.2 Diluted earnings per share 0.2301 0.0493
Legal representative: Shi Xinkun General Manager: Zhang Xin
Head of the accounting department: Jiang He
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Changchai Company, Limited Interim Report 2021
4. Income Statement of the Company as the Parent
Unit: RMB
Item H1 2021 H1 2020
1. Operating revenue 1,410,448,746.19 1,081,469,803.12
Less: Cost of sales 1,208,764,033.69 923,422,022.77
Taxes and surcharges 4,635,318.65 5,359,697.76
Selling expense 61,699,594.15 57,376,397.80
Administrative expense 39,946,732.13 26,796,437.18
R&D expense 44,159,551.96 31,647,738.36
Finance costs 879,974.12 -1,390,764.55
Including: Interest expense 3,961,226.02 2,303,571.52
Interest income 4,225,564.97 2,529,399.84
Add: Other income 324,000.00 1,931,604.92
Return on investment (“-” for loss) 8,191,724.76 4,983,988.73
Including: Share of profit or loss of joint ventures
and associates
Income from the derecognition of financial assets
at amortized cost (“-” for loss)
Net gain on exposure hedges (“-” for loss)
Gain on changes in fair value (“-” for loss) 33,750,000.00
Credit impairment loss (“-” for loss) -12,089,483.86 -5,440,782.47
Asset impairment loss (“-” for loss) 903,169.33 -15,816,298.12
Asset disposal income (“-” for loss) -751,441.20 10,781.75
2. Operating profit (“-” for loss) 80,691,510.52 23,927,568.61
Add: Non-operating income 155,765.48 238,948.92
Less: Non-operating expense 31,065.09 4,025.58
3. Profit before tax (“-” for loss) 80,816,210.91 24,162,491.95
Less: Income tax expense 5,162,965.63 609,572.51
4. Net profit (“-” for net loss) 75,653,245.28 23,552,919.44
4.1 Net profit from continuing operations (“-” for net loss) 75,653,245.28 23,552,919.44
4.2 Net profit from discontinued operations (“-” for net
loss)
5. Other comprehensive income, net of tax 106,633,979.81 -59,691,806.33
5.1 Items that will not be reclassified to profit or loss 106,633,979.81 -59,691,806.33
5.1.1 Changes caused by remeasurements on defined
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Changchai Company, Limited Interim Report 2021
benefit schemes
5.1.2 Other comprehensive income that will not be
reclassified to profit or loss under the equity method
5.1.3 Changes in the fair value of investments in other
106,633,979.81 -59,691,806.33
equity instruments
5.1.4 Changes in the fair value arising from changes in
own credit risk
5.1.5 Other
5.2 Items that will be reclassified to profit or loss
5.2.1 Other comprehensive income that will be
reclassified to profit or loss under the equity method
5.2.2 Changes in the fair value of investments in other
debt obligations
5.2.3 Other comprehensive income arising from the
reclassification of financial assets
5.2.4 Credit impairment allowance for investments in
other debt obligations
5.2.5 Reserve for cash flow hedges
5.2.6 Differences arising from the translation of foreign
currency-denominated financial statements
5.2.7 Other
6. Total comprehensive income 182,287,225.09 -36,138,886.89
7. Earnings per share
7.1 Basic earnings per share
7.2 Diluted earnings per share
Legal representative: Shi Xinkun General Manager: Zhang Xin
Head of the accounting department: Jiang He
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Changchai Company, Limited Interim Report 2021
5. Consolidated Cash Flow Statement
Unit: RMB
Item H1 2021 H1 2020
1. Cash flows from operating activities:
Proceeds from sale of commodities and rendering of services 981,576,052.47 860,915,528.67
Net increase in customer deposits and interbank deposits
Net increase in borrowings from the central bank
Net increase in loans from other financial institutions
Premiums received on original insurance contracts
Net proceeds from reinsurance
Net increase in deposits and investments of policy holders
Interest, handling charges and commissions received
Net increase in interbank loans obtained
Net increase in proceeds from repurchase transactions
Net proceeds from acting trading of securities
Tax rebates 22,968,063.81 13,166,033.29
Cash generated from other operating activities 8,267,240.80 7,744,404.19
Subtotal of cash generated from operating activities 1,012,811,357.08 881,825,966.15
Payments for commodities and services 817,182,988.13 657,759,091.59
Net increase in loans and advances to customers
Net increase in deposits in the central bank and in interbank
loans granted
Payments for claims on original insurance contracts
Net increase in interbank loans granted
Interest, handling charges and commissions paid
Policy dividends paid
Cash paid to and for employees 182,319,842.94 152,057,875.00
Taxes paid 23,836,429.52 19,245,929.17
Cash used in other operating activities 82,026,216.55 73,117,799.64
Subtotal of cash used in operating activities 1,105,365,477.14 902,180,695.40
Net cash generated from/used in operating activities -92,554,120.06 -20,354,729.25
2. Cash flows from investing activities:
Proceeds from disinvestment 20,900,000.00 3,550,487.00
Return on investment 8,666,039.34 5,384,597.04
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Changchai Company, Limited Interim Report 2021
Net proceeds from the disposal of fixed assets, intangible assets
544,953.88 108,370.88
and other long-lived assets
Net proceeds from the disposal of subsidiaries and other
business units
Cash generated from other investing activities 220,217.55 97,150.00
Subtotal of cash generated from investing activities 30,331,210.77 9,140,604.92
Payments for the acquisition of fixed assets, intangible assets
89,253,071.04 33,004,278.41
and other long-lived assets
Payments for investments 49,250,000.00 4,600,000.00
Net increase in pledged loans granted
Net payments for the acquisition of subsidiaries and other
business units
Cash used in other investing activities 50,000.00 930,300.00
Subtotal of cash used in investing activities 138,553,071.04 38,534,578.41
Net cash generated from/used in investing activities -108,221,860.27 -29,393,973.49
3. Cash flows from financing activities:
Capital contributions received 634,999,996.40
Including: Capital contributions by non-controlling interests
to subsidiaries
Borrowings raised 7,000,000.00 10,000,000.00
Cash generated from other financing activities 1,391,000.00
Subtotal of cash generated from financing activities 643,390,996.40 10,000,000.00
Repayment of borrowings 12,000,000.00 10,000,000.00
Interest and dividends paid 585,750.44 2,212,485.64
Including: Dividends paid by subsidiaries to non-controlling
interests
Cash used in other financing activities 12,694,718.67
Subtotal of cash used in financing activities 25,280,469.11 12,212,485.64
Net cash generated from/used in financing activities 618,110,527.29 -2,212,485.64
4. Effect of foreign exchange rates changes on cash and cash
-361,452.02
equivalents
5. Net increase in cash and cash equivalents 417,334,546.96 -52,322,640.40
Add: Cash and cash equivalents, beginning of the period 629,939,540.50 545,959,998.20
6. Cash and cash equivalents, end of the period 1,047,274,087.46 493,637,357.80
Legal representative: Shi Xinkun General Manager: Zhang Xin
Head of the accounting department: Jiang He
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Changchai Company, Limited Interim Report 2021
6. Cash Flow Statement of the Company as the Parent
Unit: RMB
Item H1 2021 H1 2020
1. Cash flows from operating activities:
Proceeds from sale of commodities and rendering of services 894,925,360.60 731,880,356.33
Tax rebates 17,264,845.63 8,380,462.40
Cash generated from other operating activities 6,892,535.60 6,294,839.20
Subtotal of cash generated from operating activities 919,082,741.83 746,555,657.93
Payments for commodities and services 781,316,544.81 566,778,723.71
Cash paid to and for employees 155,951,400.17 130,215,884.89
Taxes paid 17,244,260.55 12,974,529.61
Cash used in other operating activities 70,426,536.35 65,655,389.30
Subtotal of cash used in operating activities 1,024,938,741.88 775,624,527.51
Net cash generated from/used in operating activities -105,856,000.05 -29,068,869.58
2. Cash flows from investing activities:
Proceeds from disinvestment 500,487.00
Return on investment 8,191,724.76 4,983,988.73
Net proceeds from the disposal of fixed assets, intangible assets
43,495.14 107,470.88
and other long-lived assets
Net proceeds from the disposal of subsidiaries and other
business units
Cash generated from other investing activities
Subtotal of cash generated from investing activities 8,235,219.90 5,591,946.61
Payments for the acquisition of fixed assets, intangible assets
4,226,730.46 2,365,851.07
and other long-lived assets
Payments for investments 186,250,000.00 35,000,000.00
Net payments for the acquisition of subsidiaries and other
business units
Cash used in other investing activities
Subtotal of cash used in investing activities 190,476,730.46 37,365,851.07
Net cash generated from/used in investing activities -182,241,510.56 -31,773,904.46
3. Cash flows from financing activities:
Capital contributions received 634,999,996.40
Borrowings raised 5,000,000.00
Cash generated from other financing activities 1,391,000.00
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Changchai Company, Limited Interim Report 2021
Subtotal of cash generated from financing activities 636,390,996.40 5,000,000.00
Repayment of borrowings 5,000,000.00 5,000,000.00
Interest and dividends paid 109,958.35 914,216.00
Cash used in other financing activities 12,694,318.18
Subtotal of cash used in financing activities 17,804,276.53 5,914,216.00
Net cash generated from/used in financing activities 618,586,719.87 -914,216.00
4. Effect of foreign exchange rates changes on cash and cash
-491,932.82
equivalents
5. Net increase in cash and cash equivalents 330,489,209.26 -62,248,922.86
Add: Cash and cash equivalents, beginning of the period 559,573,331.81 497,777,104.81
6. Cash and cash equivalents, end of the period 890,062,541.07 435,528,181.95
Legal representative: Shi Xinkun General Manager: Zhang Xin
Head of the accounting department: Jiang He
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Changchai Company, Limited Interim Report 2021
7. Consolidated Statements of Changes in Owners’ Equity
H1 2021
Unit: RMB
H1 2021
Equity attributable to owners of the Company as the parent
Other L
equity e
instruments s
s:
T G
P r en
Pr Non-cont Total
Item er e Other er
ef rolling owners’
Share pe Capital a compreh Specific Surplus al Retained Ot
er Subtotal
capital tu Ot reserves s ensive reserve reserves re earnings her interests equity
re
al he u income se
d
b r r rv
sh
o y e
ar
n st
es
ds o
c
k
1. Balance as at the end of the 561,374,3 164,328 425,482, 18,812, 325,451, 777,899, 2,273,34 19,498,58 2,292,847
period of prior year 26.00 ,665.43 758.24 986.55 531.14 079.66 9,347.02 9.15 ,936.17
Add: Adjustment for change in
accounting policy
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Changchai Company, Limited Interim Report 2021
Adjustment for correction of
previous error
Adjustment for business
combination under common
control
Other adjustments
2. Balance as at the beginning of 561,374,3 164,328 425,482, 18,812, 325,451, 777,899, 2,273,34 19,498,58 2,292,847
the Reporting Period 26.00 ,665.43 758.24 986.55 531.14 079.66 9,347.02 9.15 ,936.17
3. Increase/ decrease in the period 144,318,1 476,347 106,633, 129,189, 856,488, 165,384.9 856,654,1
(“-” for decrease) 81.00 ,552.97 979.81 065.60 779.38 3 64.31
3.1 Total comprehensive 106,633, 129,189, 235,823, 165,384.9 235,988,4
income 979.81 065.60 045.41 3 30.34
3.2 Capital increased and 144,318,1 476,347 620,665, 620,665,7
reduced by owners 81.00 ,552.97 733.97 33.97
3.2.1 Ordinary shares 144,318,1 476,347 620,665, 620,665,7
increased by owners 81.00 ,552.97 733.97 33.97
3.2.2 Capital increased by
holders of other equity
instruments
3.2.3 Share-based payments
included in owners’ equity
3.2.4 Other
3.3 Profit distribution
3.3.1 Appropriation to
surplus reserves
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Changchai Company, Limited Interim Report 2021
3.3.2 Appropriation to
general reserve
3.3.3 Appropriation to
owners (or shareholders)
3.3.4 Other
3.4 Transfers within owners’
equity
3.4.1 Increase in capital (or
share capital) from capital
reserves
3.4.2 Increase in capital (or
share capital) from surplus
reserves
3.4.3 Loss offset by surplus
reserves
3.4.4 Changes in defined
benefit schemes transferred to
retained earnings
3.4.5 Other comprehensive
income transferred to retained
earnings
3.4.6 Other
3.5 Specific reserve
3.5.1 Increase in the period
3.5.2 Used in the period
3.6 Other
19
Changchai Company, Limited Interim Report 2021
4. Balance as at the end of the 705,692,5 640,676 532,116, 18,812, 325,451, 907,088, 3,129,83 19,663,97 3,149,502
Reporting Period 07.00 ,218.40 738.05 986.55 531.14 145.26 8,126.40 4.08 ,100.48
H1 2020
Unit: RMB
H1 2020
Equity attributable to owners of the Company as the parent
Other L
equity e
instruments s
s:
T G
P r en
Pr Non-cont Total
Item er e Other er
ef rolling owners’
Share pe Capital a compreh Specific Surplus al Retained Ot
er Subtotal
capital tu Ot reserves s ensive reserve reserves re earnings her interests equity
re
al he u income se
d
b r r rv
sh
o y e
ar
n st
es
ds o
c
k
1. Balance as at the end of the 561,374,3 164,328, 317,059, 17,560,2 322,226, 726,689, 2,109,23 19,636,28 2,128,875
period of prior year 26.00 665.43 775.00 02.07 700.34 929.10 9,597.94 1.01 ,878.95
Add: Adjustment for change in
accounting policy
20
Changchai Company, Limited Interim Report 2021
Adjustment for correction of 1,651,33 1,653,16 1,653,169
1,833.38
previous error 6.26 9.64 .64
Adjustment for business
combination under common
control
Other adjustments
2. Balance as at the beginning of 561,374,3 164,328, 317,059, 17,560,2 322,228, 728,341, 2,110,89 19,636,28 2,130,529
the Reporting Period 26.00 665.43 775.00 02.07 533.72 265.36 2,767.58 1.01 ,048.59
3. Increase/ decrease in the period -60,040, 878,448. 28,038,6 -31,123, 177,483.6 -30,945,5
(“-” for decrease) 175.00 44 79.73 046.83 7 63.16
3.1 Total comprehensive -59,691, 27,690,3 -32,001, 177,483.6 -31,824,0
income 806.33 11.06 495.27 7 11.60
3.2 Capital increased and
reduced by owners
3.2.1 Ordinary shares
increased by owners
3.2.2 Capital increased by
holders of other equity
instruments
3.2.3 Share-based payments
included in owners’ equity
3.2.4 Other
3.3 Profit distribution
3.3.1 Appropriation to
surplus reserves
3.3.2 Appropriation to
21
Changchai Company, Limited Interim Report 2021
general reserve
3.3.3 Appropriation to
owners (or shareholders)
3.3.4 Other
3.4 Transfers within owners’ -348,368 348,368.
equity .67 67
3.4.1 Increase in capital (or
share capital) from capital
reserves
3.4.2 Increase in capital (or
share capital) from surplus
reserves
3.4.3 Loss offset by surplus
reserves
3.4.4 Changes in defined
benefit schemes transferred to
retained earnings
3.4.5 Other comprehensive
income transferred to retained
earnings
-348,368 348,368.
3.4.6 Other
.67 67
878,448. 878,448. 878,448.4
3.5 Specific reserve
44 44 4
1,883,14 1,883,14 1,883,145
3.5.1 Increase in the period
5.87 5.87 .87
22
Changchai Company, Limited Interim Report 2021
1,004,69 1,004,69 1,004,697
3.5.2 Used in the period
7.43 7.43 .43
3.6 Other
4. Balance as at the end of the 561,374,3 164,328, 257,019, 18,438,6 322,228, 756,379, 2,079,76 19,813,76 2,099,583
Reporting Period 26.00 665.43 600.00 50.51 533.72 945.09 9,720.75 4.68 ,485.43
Legal representative: Shi Xinkun General Manager: Zhang Xin Head of the accounting department: Jiang He
23
Changchai Company, Limited Interim Report 2021
8. Statements of Changes in Owners’ Equity of the Company as the Parent
H1 2021
Unit: RMB
H1 2021
Other equity
instruments
Le
Pe
ss:
rp Other
Pre Tre Ot Total
Item et Capital comprehen Specific Surplus Retained
Share capital fer Ot asu he owners’
ua reserves sive reserve reserves earnings
red he ry r equity
l income
sha r sto
bo
res ck
nd
s
1. Balance as at the end of the 561,374,326.0 183,071,14 425,482,75 18,812,986. 325,451,531. 677,800,436. 2,191,993,1
period of prior year 0 7.70 8.24 55 14 75 86.38
Add: Adjustment for change in
accounting policy
Adjustment for correction of
previous error
Other adjustments
2. Balance as at the beginning of 561,374,326.0 183,071,14 425,482,75 18,812,986. 325,451,531. 677,800,436. 2,191,993,1
the Reporting Period 0 7.70 8.24 55 14 75 86.38
3. Increase/ decrease in the period 144,318,181.0 476,347,55 106,633,97 75,653,245.2 802,952,959
(“-” for decrease) 0 2.97 9.81 8 .06
24
Changchai Company, Limited Interim Report 2021
3.1 Total comprehensive 106,633,97 75,653,245.2 182,287,225
income 9.81 8 .09
3.2 Capital increased and 144,318,181.0 476,347,55 620,665,733
reduced by owners 0 2.97 .97
3.2.1 Ordinary shares 144,318,181.0 476,347,55 620,665,733
increased by owners 0 2.97 .97
3.2.2 Capital increased by
holders of other equity instruments
3.2.3 Share-based payments
included in owners’ equity
3.2.4 Other
3.3 Profit distribution
3.3.1 Appropriation to
surplus reserves
3.3.2 Appropriation to
owners (or shareholders)
3.3.3 Other
3.4 Transfers within owners’
equity
3.4.1 Increase in capital (or
share capital) from capital reserves
3.4.2 Increase in capital (or
share capital) from surplus
reserves
3.4.3 Loss offset by surplus
reserves
25
Changchai Company, Limited Interim Report 2021
3.4.4 Changes in defined
benefit schemes transferred to
retained earnings
3.4.5 Other comprehensive
income transferred to retained
earnings
3.4.6 Other
3.5 Specific reserve
3.5.1 Increase in the period
3.5.2 Used in the period
3.6 Other
4. Balance as at the end of the 705,692,507.0 659,418,70 532,116,73 18,812,986. 325,451,531. 753,453,682. 2,994,946,1
Reporting Period 0 0.67 8.05 55 14 03 45.44
H1 2020
Unit: RMB
H1 2020
Other equity
instruments
Le
Pe
ss:
rp Other
Pre Tr O Total
Item et Capital comprehen Specific Surplus Retained
Share capital fer Ot eas th owners’
ua reserves sive reserve reserves earnings
red he ury er equity
l income
sha r sto
bo
res ck
nd
s
26
Changchai Company, Limited Interim Report 2021
1. Balance as at the end of the 561,374,326.0 183,071,147 317,059,77 17,560,202. 322,226,700. 648,776,959. 2,050,069,11
period of prior year 0 .70 5.00 07 34 53 0.64
Add: Adjustment for change in
accounting policy
Adjustment for correction of
1,833.38 16,500.44 18,333.82
previous error
Other adjustments
2. Balance as at the beginning of 561,374,326.0 183,071,147 317,059,77 17,560,202. 322,228,533. 648,793,459. 2,050,087,4
the Reporting Period 0 .70 5.00 07 72 97 44.46
3. Increase/ decrease in the period -60,040,17 23,901,288.1 -35,260,438.
878,448.44
(“-” for decrease) 5.00 1 45
-59,691,80 23,552,919.4 -36,138,886.
3.1 Total comprehensive income
6.33 4 89
3.2 Capital increased and
reduced by owners
3.2.1 Ordinary shares
increased by owners
3.2.2 Capital increased by
holders of other equity instruments
3.2.3 Share-based payments
included in owners’ equity
3.2.4 Other
3.3 Profit distribution
3.3.1 Appropriation to surplus
reserves
27
Changchai Company, Limited Interim Report 2021
3.3.2 Appropriation to owners
(or shareholders)
3.3.3 Other
3.4 Transfers within owners’ -348,368.6
348,368.67
equity 7
3.4.1 Increase in capital (or
share capital) from capital reserves
3.4.2 Increase in capital (or
share capital) from surplus
reserves
3.4.3 Loss offset by surplus
reserves
3.4.4 Changes in defined
benefit schemes transferred to
retained earnings
3.4.5 Other comprehensive
-348,368.6
income transferred to retained 348,368.67
7
earnings
3.4.6 Other
3.5 Specific reserve 878,448.44 878,448.44
1,883,145.8 1,883,145.8
3.5.1 Increase in the period
7 7
1,004,697.4 1,004,697.4
3.5.2 Used in the period
3 3
3.6 Other
28
Changchai Company, Limited Interim Report 2021
4. Balance as at the end of the 561,374,326.0 183,071,147 257,019,60 18,438,650. 322,228,533. 672,694,748. 2,014,827,0
Reporting Period 0 .70 0.00 51 72 08 06.01
Legal representative: Shi Xinkun General Manager: Zhang Xin Head of the accounting department: Jiang He
29
Changchai Company, Limited Interim Report 2019
III. Company Profile
Changchai Company, Limited (hereinafter referred to as “the Company”) was founded on 5 May 1994, which is a
company limited by shares promoted solely by Changzhou Diesel Engine Plant through the approval by the State
Commission for Restructuring the Economic Systems with document TGS [1993] No. 9 on 15 January 1993 by
way of public offering of shares. With the approved of the People’s Government of Jiangsu Province SZF [1993]
No. 67, as well as reexamined and approved by China Securities Regulatory Commission (“CSRC”) through
document ZJFSZ (1994) No. 9, the Company initially issued A shares to the public from 15 March 1994 to 30
March 1994. As approved by the Shenzhen Stock Exchange through document SZSFZ (1994) No. 15, such
tradable shares of the public got listing on 1 July 1994 at Shenzhen Stock Exchange with “Su Changchai A” for
short of stock, as well as “0570” as stock code (present stock code is “000570”).
In 1996, with the recommendation of the Office of the People’s Government of Jiangsu Province SZBH [1996]
No. 13, as well as first review by Shenzhen Municipal Securities Administration Office through SZBZ [1996] No.
24, and approval of the State Council Securities Commission ZWF [1996] No. 27, the Company issued 100
million B shares to qualified investors on 27 August 1996 to 30 August 1996, getting listed on 13 September
1996.
On 9 June 2006, the Company held a shareholders’ general meeting related to A shares market to examine and
approve share merger reform plan, and performed the share merger reform on 19 June 2006.
As examined and approved at the 2nd Extraordinary General Meeting of 2009 in September 2009, based on the
total share capital of 374,249,551 shares as at 30 June 2009, the Company implemented the profit distribution plan,
i.e. to distribute 5 bonus shares and cash of RMB0.80 for every 10 shares, with registered capital increased by
RMB187,124,775.00, as well as registered capital of RMB561,374,326.00 after change. As at 31 December 2020,
the total share capital of the Company is 561,374,326.00 shares, as well as registered capital of
RMB561,374,326.00, which verified by Jiangsu Gongzheng Tianye Certified Public Accountants Company
Limited with issuing Capital Verification Report SGC [2010] No. B002. And the unified social credit code of the
enterprise business license of the Company is 91320400134792410W.
On 9 April 2020, the Company held the 24th Meeting of the 8th Board of Directors, where the 2020 Proposal on
Changchai Co., Ltd. Non-public Issuance was deliberated and adopted. The Company intended to make a
non-public issuance of domestic listed RMB ordinary shares to specific targets, which was approved by the
controlling shareholder Changzhou Investment Group Co., Ltd., and deliberated and adopted by the 2019 annual
general meeting. On 18 September 2020, the Company's Board of Directors deliberated and adopted the
amendments related to the non-public issuance of shares at an Extraordinary General Meeting. The Company
supplemented and improved the foregoing proposal in accordance with the relevant amendments, and compiled
the 2020 Proposal on Changchai Co., Ltd. Non-public Issuance (Amendment), which was deliberated and adopted
by the second Extraordinary General Meeting in 2020. The Company offered 144,318,181 RMB ordinary shares
(A shares) in a non-public manner. The issuing price was RMB4.40 per share, the total amount raised was
RMB634,999,936.40, and the net amount raised was RMB622,499,996.40. After the capital verification by
Gongzheng Tianye Accounting Firm (Special General Partnership), the Capital Verification Report of the Funds
Raised by the Non-public Issuance of Changchai Co., Ltd. (S.G.W [2021] B062) was issued. The new shares
issued in a non-public manner were listed on the Shenzhen Stock Exchange on 5 July 2021.
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
30
Changchai Company, Limited Interim Report 2019
and sales of small and medium-sized single cylinders and multi-cylinder diesel engine with the label of Changchai
Brand. The diesel engine produced and sold by the Company were mainly used in tractors, combine harvest
models, light commercial vehicle, farm equipment, small-sized construction machinery, generating sets and
shipborne machinery and equipment, etc. The Company’s main business remained unchanged in the Reporting
Period.
The Company established the Shareholders’ General Meeting, the Board of Directors and the Supervisory
Committee, Corporate office, Financial Department, Political Department, Investment and Development
Department, Audit Department, Human Recourses Department, Production Department, Procurement Department,
Sales Company, Chief Engineer Office, Technology Center, QA Department, Foundry Branch, Machine
Processing Branch, Single-cylinder Engine branch, Multi-cylinder Engine Branch and Overseas Business
Department in the Company.
The financial report has been approved to be issued by the Board of Directors on 13 April 2021.
The consolidated scope of the Company of the Reporting Period includes the Company as the parent and 7
subsidiaries. For the details of the consolidated scope of the Reporting Period and the changes situation, please
refer to the changes of the consolidated scope of the notes to the financial report and the notes to the equities
among other entities.
IV. Basis for Preparation of the Financial Report
1. Basis for Preparation
With the going-concern assumption as the basis and based on transactions and other events that actually occurred,
the Group prepared financial statements in accordance with The Accounting Standards for Business
Enterprises—Basic Standard issued by the Ministry of Finance with Decree No. 33 and revised with Decree No.
76, the various specific accounting standards, the Application Guidance of Accounting Standards for Business
Enterprises, the Interpretation of Accounting Standards for Business Enterprises and other regulations issued and
revised from 15 February 2006 onwards (hereinafter jointly referred to as “the Accounting Standards for Business
Enterprises”, “China Accounting Standards” or “CAS”), as well as the Rules for Preparation Convention of
Disclosure of Public Offering Companies No.15 – General Regulations for Financial Reporting (revised in 2014)
by China Securities Regulatory Commission.
In accordance with relevant provisions of the Accounting Standards for Business Enterprises, the Group adopted
the accrual basis in accounting. Except for some financial instruments, where impairment occurred on an asset, an
impairment reserve was withdrawn accordingly pursuant to relevant requirements.
2. Continuation
The Company comprehensively evaluated the information acquired recently that there would be no such factors in
the 12 months from the end of the Reporting Period that would obviously influence the continuation capability of
the Company and predicted that the operating activities would continue in the future 12 months of the Company.
The financial statement compiled base on the continuous operation.
V. Important Accounting Policies and Estimations
Notification of specific accounting policies and accounting estimations:
31
Changchai Company, Limited Interim Report 2019
The Company and each subsidiary according to the actual production and operation characteristics and in accord
with the regulations of the relevant ASBE, formulated certain specific accounting policies and accounting
estimations, which mainly reflected in the financial instruments, withdrawal method of the bad debt provision of
the accounts receivable, the measurement of the inventory and the depreciation of the fixed assets etc.
1. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Group are in compliance with in compliance with the Accounting
Standards for Business Enterprises, which factually and completely present the Company’s and the Group’s
financial positions, business results and cash flows and other relevant information.
2. Fiscal Period
The fiscal periods are divided into fiscal year and metaphase, the fiscal year is from January 1 to December 31
and as the metaphase included monthly, quarterly and semi-yearly periods.
3. Operating Cycle
A normal operating cycle refers to a period from the Group purchasing assets for processing to realizing cash or
cash equivalents. An operating cycle for the Group is 12 months, which is also the classification criterion for the
liquidity of its assets and liabilities.
4. Currency Used in Bookkeeping
Renminbi is functional currency of the Company.
5. Accounting Methods for Business Combinations under the Same Control and Business Combinations not
under the Same Control
(1) Business combinations under the same control:
A business combination under the same control is a business combination in which all of the combining
enterprises are ultimately controlled by the same party or the same parties both before and after the business
combination and on which the control is not temporary.
For the merger of enterprises under the same control, if the consideration of the merging enterprise is that it makes
payment in cash, transfers non-cash assets or bear its debts, it shall, on the date of merger, regard the share of the
book value of the owner's equity of the merged enterprise as the initial cost of the long-term equity investment.
The difference between the initial cost of the long-term equity investment and the payment in cash, non-cash
assets transferred as well as the book value of the debts borne by the merging party shall offset against the capital
reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted.
If the consideration of the merging enterprise is that it issues equity securities, it shall, on the date of merger,
regard the share of the book value of the owner's equity of the merged enterprise as the initial cost of the
long-term equity investment. The total face value of the stocks issued shall be regarded as the capital stock, while
the difference between the initial cost of the long-term equity investment and total face value of the shares issued
shall offset against the capital reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be
adjusted.
32
Changchai Company, Limited Interim Report 2019
All direct costs for the business combination, including expenses for audit, evaluating and legal services shall be
recorded into the profits and losses at the current period. The expenses such as the handling charges and
commission etc, premium income of deducting the equity securities, and as for the premium income was
insufficient to dilute, the retained earnings shall be written down.
Owning to the reasons such as the additional investment, for the equity investment held before acquiring the
control right of the combined parties, the confirmed relevant gains and losses, other comprehensive income and
the changes of other net assets since the date of the earlier one between the date when acquiring the original equity
right and the date when the combine parties and combined ones were under the same control to the combination
date, should be respectively written down and compared with the beginning balance of retained earnings or the
current gains and losses during the statement period.
(2) Business combinations not under the same control
A business combination not under the same control is a business combination in which the combining enterprises
are not ultimately controlled by the same party or the same parties both before and after the business combination.
The combination costs of the acquirer and the identifiable net assets obtained by the acquirer in a business
combination shall be measured at the fair values. The acquirer shall recognize the positive balance between the
combination costs and the fair value of the identifiable net assets it obtains forms the acquiree as business
reputation. The direct relevant expenses occurred from the enterprise combination should be included in the
current gains and losses when occurred. The combination costs of the acquirer and the identifiable net assets
obtained by it in the combination shall be measured according to their fair values at the acquiring date. The
difference between the fair value of the assets paid out by the Company and its book value should be included in
the current gains and losses. The purchase date refers to the date that the purchaser acquires the control right of the
acquiree.
For the business combinations not under the same control realized through step by step multiple transaction, as for
the equity interests that the Group holds in the acquiree before the acquiring date, they shall be re-measured
according to their fair values at the acquiring date; the positive difference between their fair values and carrying
amounts shall be recorded into the investment gains for the period including the acquiring date. The equity holed
by the acquiree which involved with the other comprehensive income and the other owners’ equities changes
except for the net gains and losses, other comprehensive income and the profits distribution and other related
comprehensive gains and other owners’ equities which in relation to the equity interests that the Group holds in
the acquiree before the acquiring date should be transferred into the current investment income on the acquiring
date, except for the other comprehensive income occurred from the re-measurement of the net profits of the
defined benefit plans or the changes of the net assets of the investees.
6. Methods for Preparing Consolidated Financial Statements
The Company confirms the consolidated scope based on the control and includes the subsidiaries with actual
control right into the consolidated financial statement.
The consolidated financial statement of the Company is compiled according to the regulations of No. 33 of
ASBE-Consolidated Financial Statement and the relevant regulations and as for the whole significant
come-and-go balance, investment, transaction and the unrealized profits should be written off when compiling the
consolidated financial statement. The portion of a subsidiary’s shareholders’ equity and the portion of a
subsidiary’s net profits and losses for the period not held by the Group are recognized as minority interests and
minority shareholder profits and losses respectively and presented separately under shareholders’ equity and net
profits in the consolidation financial statements. The portion of a subsidiary’s net profits and losses for the period
33
Changchai Company, Limited Interim Report 2019
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 loss of control, when the Group
losing control on its subsidiary.
For the disposal of the equity investment not belongs to a package deal, should be executed accounting treatment
according to the relevant policies of partly disposing the equity investment of the subsidiaries under the situation
not lose the control right before losing the control right; when losing the control right, the former should be
executed accounting treatment according to the general disposing method of the disposal of the subsidiaries.
7. Classification of Joint Arrangements and Accounting Treatment of Joint Operations
The Group classifies joint arrangements into joint operations and joint ventures.
34
Changchai Company, Limited Interim Report 2019
A joint operation refers to a joint arrangement where the Group is the joint operations party of the joint
arrangement and enjoys assets and has to bear liabilities related to the arrangement. The Company confirms the
following items related to the interests share among the joint operations and executes accounting treatment
according to the regulations of the relevant ASBE:
(1) Recognizes the assets that it holds and bears in the joint operation and recognizes the jointly-held assets
according to the Group’s stake in the joint operation;
(2) Recognizes the liabilities that it holds and bears in the joint operation and recognizes the jointly-held liabilities
according to the Group’s stake in the joint operation;
(3) Recognizes the income from sale of the Group’s share in the output of the joint operation
(4) Recognizes the income from sale of the joint operation’s outputs according to the Group’s stake in it
(5) Recognizes the expense solely incurred to the Group and the expense incurred to the joint operation according
to the Group’s stake in it.
8. Recognition Standard for Cash and Cash Equivalents
In the Group’s understanding, cash and cash equivalents include cash on hand, any deposit that can be used for
cover, and short-term (usually due within 3 months since the day of purchase) and high circulating investments,
which are easily convertible into known amount of cash and whose risks in change of value are minimal.
9. Foreign Currency Businesses and Translation of Foreign Currency Financial Statements
(1) Foreign currency business
Concerning the foreign-currency transactions that occurred, the foreign currency shall be converted into the
recording currency according to the middle price of the market exchange rate disclosed by the People’s Bank of
China on the date of the transaction. Among the said transactions that occurred, those involving foreign exchanges
shall be converted according to the exchange rates adopted in the actual transactions.
On the balance sheet date, the foreign-currency monetary assets and the balance of the liability account shall be
converted into the recoding currency according to the middle price of the market exchange rates disclosed by the
People’s Bank of China on the Balance Sheet Date. The difference between the recording-currency amount
converted according to the exchange rate on the Balance Sheet Date and the original book recording-currency
amount shall be recognized as gains/losses from foreign exchange. And the exchange gain/loss caused by the
foreign-currency borrowings related to purchasing fixed assets shall be handled according to the principle of
capitalizing borrowing expenses; the exchange gain/loss incurred in the establishment period shall be recorded
into the establishment expense; others shall be recorded into the financial expenses for the current period.
On the balance sheet date, the foreign-currency non-monetary items measured by historical cost shall be converted
according to the middle price of the market exchange disclosed by the People’s Bank of China on the date of the
transaction, with no changes in the original recording-currency amount; while the foreign-currency non-monetary
items measured by fair value shall be converted according to the middle price of the market exchange disclosed by
the People’s Bank of China on the date when the fair value is recognized, and the exchange gain/loss caused
thereof shall be recognized as the gain/loss from fair value changes and recorded into the gain/loss of the current
period.
(2) Translation of foreign currency
The assets and liabilities items among the balance sheet of the foreign operation shall be translated at a spot
exchange rate on the balance sheet date. Among the owner’s equity items, except for the items as “undistributed
35
Changchai Company, Limited Interim Report 2019
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) Classification of Financial Instruments
The Company classifies the financial assets when initially recognized into the following three categories based on
the business model for financial assets management and characteristics of contractual cash flow of financial assets:
financial assets measured at amortized cost, financial assets at fair value through other comprehensive income
(debt instruments) and financial assets at fair value through profit or loss
Financial liabilities were classifies when initially recognized into financial liabilities at fair value through profit or
loss and financial liabilities measured at amortized cost.
(2) Recognition Basis and Measurement Method for Financial Instruments
① Financial assets measured at amortized cost
Financial assets at amortized cost include notes receivable, accounts receivable, other receivables, long-term
receivables, and investment in debt obligations which are initially measured at fair value and related transaction
cost shall be recorded into the initial recognized amount. For accounts receivable excluding significant financing
and accounts receivable that the Company decides not to consider financing components less than one year, the
initial measurement shall be made at the contract transaction price. The interest calculated with actual rates for the
holding period shall be recorded into the current profit or loss. When recovered or disposed, the difference
between the price obtained and the carrying value of the financial assets shall be recorded into the current profit or
loss.
② Financial assets at fair value through other comprehensive income (debt instruments)
Financial assets at fair value through other comprehensive income (debt instruments) include accounts receivable
financing and investment in other debt obligations which are initially measured at fair value and related
transaction cost shall be recorded into the initial recognized amount. The subsequent measurement of the financial
assets shall be at fair value and changes of fair value except for interest calculated with actual rates, impairment
losses or gains and exchange gains or losses shall be recorded into other comprehensive income. When
derecognized, the accumulated gains or losses originally recorded into other comprehensive income shall be
transferred into the current profit or loss.
③ Financial assets at fair value through other comprehensive income (equity instruments)
Financial assets at fair value through other comprehensive income (equity instruments) include investment in
other equity instruments, etc. which are initially measured at fair value and related transaction cost shall be
recorded into the initial recognized amount. The subsequent measurement of the financial assets shall be at fair
value and changes of fair value shall be recorded into other comprehensive income. The dividends obtained shall
be recorded into the current profit or loss. When derecognized, the accumulated gains or losses originally recorded
into other comprehensive income shall be transferred into retained earnings.
④ Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include held-for-trading financial assets, derivative financial
assets and other non-current financial assets which are initially measured at fair value and the related transaction
cost shall be recorded into the current profit or loss. The subsequent measurement of the financial assets shall be
at fair value and the changes of fair value shall be recorded into the current profit or loss.
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Changchai Company, Limited Interim Report 2019
⑤ Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include held-for-trading financial liabilities and derivative
financial liabilities which are initially measured at fair value and the related transaction cost shall be recorded into
the current profit or loss. The subsequent measurement of the financial liabilities shall be at fair value and the
changes of fair value shall be recorded into the current profit or loss. When derecognized, the difference between
the carrying value and the paid consideration shall be recorded into the current profit or loss.
⑥ Financial liabilities at amortized cost
Financial liabilities at amortized cost include short-term borrowings, notes payable, accounts payable, other
payables, long-term borrowings, bonds payable and long-term payables which are initially measured at fair value
and the related transaction cost shall be recorded into the initial recognized amount. The interest calculated with
actual rates for the holding period shall be recorded into the current profit or loss. When derecognized, the
difference between the paid consideration and the carrying value of the financial liabilities shall be recorded into
the current profit or loss.
(3) Recognition Basis and Measurement of Transfer of Financial Assets
Where the Company has transferred nearly all of the risks and rewards related to the ownership of the financial
asset to the transferee, it shall stop recognizing the financial asset and separately recognize the rights and
obligations generated retained from the transfer as assets or liabilities. If it retained nearly all of the risks and
rewards related to the ownership of the financial asset, it shall continue to recognize the transferred financial asset.
Where the Company does not transfer or retain nearly all of the risks and rewards related to the ownership of a
financial asset, it shall deal with it according to the circumstances as follows, respectively: (1) If it gives up its
control over the financial asset, it shall stop recognizing the financial asset and separately recognize the rights and
obligations generated retained from the transfer as assets or liabilities; (2) If it does not give up its control over the
financial asset, it shall, according to the extent of its continuous involvement in the transferred financial asset,
recognize the related financial asset and recognize the relevant liability accordingly.
If the transfer of an entire financial asset satisfies the conditions for stopping recognition, the difference between
the amounts of the following 2 items shall be recorded in the profits and losses of the current period: (1) The
carrying value of the transferred financial asset on the derecognition date; (2) The sum of consideration received
from the transfer of financial assets, and derecognition amount among the accumulative amount of the changes of
the fair value originally recorded in the other comprehensive income (the financial assets involve transfer are
investments in debt instruments at fair value through other comprehensive income. If the transfer of partial
financial asset satisfies the conditions to stop the recognition, the entire carrying value of the transferred financial
asset shall, between the portion whose recognition has been stopped and the portion whose recognition has not
been stopped, be apportioned according to their respective relative fair value on the transfer date, and the
difference between the amounts of the following two items shall be included into the profits and losses of the
current period: (1)The carrying value of the portion whose recognition has been stopped; (2)The sum of
consideration of the portion whose recognition has been stopped, and derecognition amount among the
accumulative amount of the changes of the fair value originally recorded in the other comprehensive income (the
financial assets involve transfer are investments in debt instruments at fair value through other comprehensive
income.
(4) Derecognition Basis of Financial Liabilities
A financial liability or part of it can be derecognized after its current obligation has been relieved in full or in part.
(5) Recognition of Fair Value of Financial Assets and Financial Liabilities
The fair value of financial instruments with an active market is determined by the quoted price in the active
market. For financial instruments without active market, the fair value is determined by valuation techniques. The
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Company adopts the valuation techniques applicable to the current conditions which are supported by sufficient
data and other information for valuation, and selects the input values consistent with the characteristics of assets
or liabilities considered by market participants in asset or liability transactions, with priority to observable input
values. Unobservable input values are used only when relevant observable input values are not available or
practical.
(6) Impairment of financial instrument
① Impairment measurement and accounting handling of financial instrument
Based on expected credit loss, the Company conducts impairment handling and confirms credit impairment loss
for financial assets which is measured by amortized cost, debt instrument investment which is measured by fair
value and whose change is calculated into other comprehensive profits, financial guarantee contract.
Expected credit loss refers to weighted average of credit loss of financial instrument which takes the risk of
contract breach occurrence as the weight. Credit loss refers to the difference between all contract cash flow which
is converted into cash according to actual interest rate and receivable according to contract and all cash flow
which to be charged as expected, i.e. current value of all cash shortage. Among it, as for financial asset purchased
or original which has had credit impairment, it should be converted into cash according actual interest rate of this
financial asset after credit adjustment.
As for financial asset purchased or original which has had credit impairment, the Company only confirms
cumulative change of expected credit loss within the whole duration after initial confirmation on the balance sheet
date as loss reserve.
As for accounts receivable which don’t include major financing contents or the Company does not consider
financing contents in contract which is less than one year, the Company applies simplified measurement method,
and measures loss reserve according to amount of expected credit loss within the whole duration.
As for account receivable of rental and accounts receivable including major financing contents, the Company
applies simplified measurement method, and measure loss reserve according to amount of expected credit loss
within the whole duration.
As for financial asset beyond above mentioned measurement methods, the Company evaluates whether its credit
risk has increased obviously since the initial confirmation on each balance sheet date. In case credit risk has
increased obviously, the Company measures the loss reserve according to amount of expected credit loss within
the whole duration; in case the credit risk does not increase obviously, the Company measures loss reserve
according to the amount of expected credit loss in next 12 months.
By utilizing obtainable rational and well grounded information, including forward-looking information,
comparing the risk of contract breach on balance sheet date and risk of contract breach on initial confirmation date,
the Company confirms whether the credit risk of financial instrument has increased obviously from initial
confirmation.
On balance sheet date, in case the Company judges that the financial instrument just has relatively low credit risk,
then it will be assumed that credit risk of the financial instrument has not increased obviously.
Based on single financial instrument or financial portfolio, the Company evaluates expected credit risk and
measures expected credit loss. When based on financial instrument portfolio, the Company takes common risk
characteristics as the basis, and divides financial instruments into different portfolios.
The Company measures expected credit loss again on each balance sheet date, the increase of loss reserve or
amount which is transfer back generated by it is calculated into current profits and losses as impairment profits or
losses. As for financial asset which is measured by amortized cost, loss reserve offsets the carrying value of the
financial asset listed in the balance sheet; as for debt investment which is measured by fair value and whose
change is calculated into other comprehensive profits, the Company confirms its loss reserve in other
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Changchai Company, Limited Interim Report 2019
comprehensive profits and does not offset the carrying value of the financial asset.
② For notes receivable, accounts receivable, other receivables and long-term receivables with objective evidence
indicating impairment and those suitable for individual evaluation, the Company carries out impairment test
separately to confirm expected credit loss and prepare provision for impairment of single items. For notes
receivable, accounts receivable and other receivables without objective evidence of impairment, or a single
financial asset with expected credit loss impossible to be assessed at a reasonable cost, the Company divides the
receivables into groups according to the characteristics of credit risk, and calculates the expected credit loss based
on receivable groups.
Accounts receivable with expected credit losses measured by groups
Specific groups and method of measuring expected credit loss
Item Recognition basis Method of measuring expected credit losses
Bank’s acceptance bills Consulting historical experience in credit losses,
receivable combining current situation and prediction for
future economic situation, the expected credit
Bill type
Trade acceptance bills loss shall be accounted through exposure at
receivable default and the expected credit loss rate over the
entire life
Accounts Aging group Prepare the comparative list between aging of
receivable-credit risk accounts receivable and expected credit loss rate
characteristics group over the entire life and calculate the expected
credit loss by consulting historical experience in
credit losses, combining current situation and
prediction for future economic situation
Consulting historical experience in credit losses,
Accounts
combining current situation and prediction for
receivable-intercourse
Related party within the future economic situation, the expected credit
funds among related party
consolidation scope loss shall be accounted through exposure at
group within the
default and the expected credit loss rate over the
consolidation scope
entire life
Accounts receivable-the comparative list between aging of credit risk characteristic group and expected credit loss
rate over the entire life
Aging Withdrawal
proportion
Within 1 year 2.00%
1 to 2 years 5.00%
2 to 3 years 15.00%
3 to 4 years 30.00%
4 to 5 years 60.00%
Over 5 years 100.00%
Other receivables with expected credit losses measured by groups
Specific groups and method of measuring expected credit loss
Item Recognition basis Method of measuring expected credit losses
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Changchai Company, Limited Interim Report 2019
Consulting historical experience in credit
losses, combining current situation and
prediction for future economic situation, the
Other receivables-aging
Aging group expected credit loss shall be accounted through
analysis group
exposure at default and the expected credit loss
rate within the next 12 months or over the
entire life
Consulting historical experience in credit
Other
losses, combining current situation and
receivables-intercourse Related party within
prediction for future economic situation, the
funds among related party the consolidation
expected credit loss shall be accounted through
group within the scope
exposure at default and the expected credit loss
consolidation scope
rate over the entire life
For the measurement of impairment loss of other receivables, refer to the aforesaid measurement of impairment
loss of accounts receivable.
11. Notes Receivable
See “10. Financial Instruments”.
12. Accounts Receivable
See “10. Financial Instruments”.
13. Inventory
(1) Category of Inventory
Inventory refers to the held-for-sale finished products or commodities, goods in process, materials consumed in
the production process or the process providing the labor service etc. Inventory is mainly including the raw
materials, low priced and easily worn articles, unfinished products, inventories and work in process–outsourced
etc.
(2) Pricing method
Purchasing and storage of the various inventories should be valued according to the planed cost and the dispatch
be calculated according to the weighted average method; carried forward the cost of the finished products
according to the actual cost of the current period and the sales cost according to the weighted average method.
(3) Determination basis of the net realizable value of inventory and withdrawal method of the provision for falling
price of inventory
At the balance sheet date, inventories are measured at the lower of the costs and net realizable value. When all the
inventories are checked roundly, for those which were destroyed, outdated in all or in part, sold at a loss, etc, the
Company shall estimate the irrecoverable part of its cost and withdrawal the inventory falling price reserve at the
year-end. Where the cost of the single inventory item is higher than the net realizable value, the inventory falling
price reserve shall be withdrawn and recorded into profits and losses of the current period. Of which: in the
normal production and operating process, as for the commodities inventory directly for sales such as the finished
products, commodities and the materials for sales, should recognize the net realizable value according to the
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Changchai Company, Limited Interim Report 2019
amount of the estimated selling price of the inventory minuses the estimated selling expenses and the relevant
taxes; as for the materials inventory needs to be processed in the normal production and operating process, should
recognize its net realizable value according to the amount of the estimated selling price of the finished products
minuses the cost predicts to be occur when the production completes and the estimated selling expenses as well as
the relevant taxes; on the balance sheet date, for the same inventory with one part agreed by the contract price
and other parts not by the contract price, should be respectively recognized the net realizable value. For items of
inventories relating to a product line that are produced and marketed in the same geographical area, have the same
or similar end users or purposes, and cannot be practicably evaluated separately from other items in that product
line provision for decline in value is determined on an aggregate basis; for large quantity and low value items of
inventories, provision for decline in value is made based on categories of inventories.
(4) The perpetual inventory system is maintained for stock system.
(5) Amortization method of low-value consumables and packages
One time amortization method is adopted for low-value consumables and packages.
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14. Contract Assets
Contract Assets means that the Company is endowed with the right to charge the consideration through
transferring any commodity or service to the client, and such right depends on other factors except the passing of
time. The Company’s unconditional right (only depending on the passing of time) of charging the consideration
from the client shall be separately presented as receivables.
The recognition method and accounting treatment method of the estimated credit loss of contract assets are
consistent with that specified in Notes V.12.
15. Contract Costs
(1) Costs from Acquiring Contract
If the incremental cost resulting from the Company’s acquiring of contract (namely costs merely resulting from
the acquiring of contract) is predicted to be retrieved, it shall be recognized as an assets, amortized by adopting
the same basis with the recognition of commodities or service revenues related to the assets and included into the
current profit and loss. If the assets’ amortization period does not exceed one year, it shall be immediately
included into the current profit and loss. Other expenses resulting from the Company’s acquiring of contract shall
also be included into the current profit and loss unless it is explicitly borne by the client.
(2) Costs from Executing Contract
The Company’s costs from executing contract is not covered by other ASBE except for Revenue Standards, and
when the following situations are met, such costs can be recognized as an assets: ① the costs are directly related
to a current or predicted contract; ② the costs increase the Company’s resources applied to fulfill performance
obligations in the future; ③ the costs are predicted to be retrieved. The recognized assets shall be amortized by
adopting the same basis with the recognition of commodities or service revenues related to the assets and included
into the current profit and loss.
If the book value of contract costs is higher than the difference of the following two items, corresponding
depreciation reserves shall be counted and withdrawn and it shall be recognized as the assets depreciation loss: ①
the residual consideration predicted to be acquired by transferring commodities related to the assets; ② the costs
predicted to occur due to the transfer of related commodities.
If the difference between ① and ② is higher than the book value of contract costs due to any change in various
factors causing depreciation in previous periods, it shall be restituted to the withdrawn assets depreciation reserves
and included in the current profit and loss. However, the book value of restituted contract costs shall not exceed
the book value of the assets on the day of restitution based on the hypothesis that depreciation reserves are not
counted and withdrawn.
16. 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;
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(3) The Company had signed the irrevocable transformation agreement with the transferee;
(4) The transformation should be completed within 1 year.
17. Long-term Equity Investments
(1) Judgment standard of joint control and significant influences
Joint control, refers to the control jointly owned according to the relevant agreement on an arrangement by the
Company and the relevant activities of the arrangement should be decided only after the participants which share
the control right make consensus. Significant influence refers to the power of the Company which could anticipate
in the finance and the operation polices of the investees, but could not control or jointly control the formulation of
the policies with the other parties.
(2) Recognition for initial investment cost
The initial investment cost of the long-term equity investment shall be recognized by adopting the following ways
in accordance with different methods of acquisition:
1) As for those forms under the same control of the enterprise combine, if the combine party takes the cash
payment, non-cash assets transformation, liabilities assumption or equity securities issuance as the combination
consideration, should take the shares of the book value by the ultimate control party in the consolidate financial
statement of the owners’ equities of the combiners acquired on the merger date as the initial investment cost. The
difference between the initial investment cost and the book value of the paid combination consideration or the
total amount of the issued shares of the long-term equity investment should be adjusted the capital reserve; If the
capital reserve is insufficient to dilute, the retained earnings shall be adjusted. To include each direct relevant
expense occurred when executing the enterprise merger into the current gains and losses; while the handling
charges and commission occurs from the issuing the equity securities or the bonds for the enterprise merger
should be included in the initial measurement amount of the shareholders’ equities or the liabilities.
2) As for long-term equity investment acquired through the merger of enterprises not under the same control, its
initial investment cost shall regard as the combination cost calculated by the fair value of the assets, equity
instrument issued and liabilities incurred or undertaken on the purchase date adding the direct cost related with the
acquisition. The identifiable assets of the combined party and the liabilities (including contingent liability)
undertaken on the combining date shall be measured at the fair value without considering the amount of minority
interest. The acquirer shall recognize the positive balance between the combination costs and the fair value of the
identifiable net assets it obtains from the acquiree as business reputation. The acquirer shall record the negative
balance between the combination costs and the fair value of the identifiable net assets it obtains from the acquiree
into the consolidated income statement directly. The agent expense and other relevant management expenses such
as the audit, legal service and evaluation consultation occurs from the enterprise merger, should be included in the
current gains and losses when occur; while the handling charges and commission occurs from the issuing the
equity securities or the bonds for the enterprise merger should be included in the initial measurement amount of
the shareholders’ equities or the liabilities.
3) Long-term equity investment obtained by other means
The initial cost of a long-term equity investment obtained by making payment in cash shall be the purchase cost
which is actually paid.
The initial cost of a long-term equity investment obtained on the basis of issuing equity securities shall be the fair
value of the equity securities issued.
The initial cost of a long-term equity investment of an investor shall be the value stipulated in the investment
contract or agreement, the unfair value stipulated in the contract or agreement shall be measured at fair value.
As for long-term investment obtained by the exchange of non-monetary assets, where it is commercial in nature,
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Changchai Company, Limited Interim Report 2019
the fair value of the assets surrendered shall be recognized as the initial cost of the long-term equity investment
received; where it is not commercial in nature, the book value of the assets surrendered shall be recognized as the
initial cost of the long-term equity investment received.
The initial cost of a long-term equity investment obtained by recombination of liabilities shall be recognized at
fair value of long-term equity investment.
(3) Subsequent measurement and recognition of profits and losses
1) An investment in the subsidiary company shall be measured by employing the cost method
Where the Company hold, and is able to do equity investment with control over an invested entity, the invested
entity shall be its subsidiary company. Where the Company holds the shares of an entity over 50%, or, while the
Company holds the shares of an entity below 50%, but has a real control to the said entity, then the said entity
shall be its subsidiary company.
2) An investment in the joint enterprise or associated enterprise shall be measured by employing the equity
method
Where the Company hold, and is able to do equity investment with joint control with other parties over an
invested entity, the invested entity shall be its joint enterprise. Where the Company hold, and is able to have
equity investment with significant influences on an invested entity, the invested entity shall be its associated
entity.
After the Company acquired the long-term equity investment, should respectively recognize investment income
and other comprehensive income according to the net gains and losses as well as the portion of other
comprehensive income which should be enjoyed or be shared, and at the same time adjust the book value of the
long-term equity investment; corresponding reduce the book value of the long-term equity investment according
to profits which be declared to distribute by the investees or the portion of the calculation of cash dividends which
should be enjoyed; for the other changes except for the net gains and losses, other comprehensive income and the
owners’ equity except for the profits distribution of the investees, should adjust the book value of the long-term
equity investment as well as include in the owners’ equity .
The investing enterprise shall, on the ground of the fair value of all identifiable assets of the invested entity when
it obtains the investment, recognize the attributable share of the net profits and losses of the invested entity after it
adjusts the net profits of the invested entity.
If the accounting policy adopted by the investees is not accord with that of the Company, should be adjusted
according to the accounting policies of the Company and the financial statement of the investees during the
accounting period and according which to recognize the investment income as well as other comprehensive
income.
For the transaction happened between the Company and associated enterprises as well as joint ventures, if the
assets launched or sold not form into business, the portion of the unrealized gains and losses of the internal
transaction, which belongs to the Company according to the calculation of the enjoyed proportion, should
recognize the investment gains and losses on the basis. But the losses of the unrealized internal transaction
happened between the Company and the investees which belongs to the impairment losses of the transferred assets,
should not be neutralized.
The Company shall recognize the net losses of the invested enterprise according to the following sequence: first of
all, to write down the book value of the long-term equity investment. Secondly, if the book value of the long-term
equity investment is insufficient for written down, should be continued to recognized the investment losses limited
to the book value of other long-term equity which forms of the net investment of the investees and to written
down the book value of the long-term accounts receivable etc. Lastly, through the above handling, for those
should still undertake the additional obligations according to the investment contracts or the agreements, it shall
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Changchai Company, Limited Interim Report 2019
be recognized as the estimated liabilities in accordance with the estimated duties and then recorded into
investment losses at current period. If the invested entity realizes any net profits later, the Company shall, after the
amount of its attributable share of profits offsets against its attributable share of the un-recognized losses, resume
recognizing its attributable share of profits.
In the preparation for the financial statements, the balance existed between the long-term equity investment
increased by acquiring shares of minority interest and the attributable net assets on the subsidiary calculated by
the increased shares held since the purchase date (or combination date), the capital reserves shall be adjusted, if
the capital reserves are not sufficient to offset, the retained profits shall be adjusted; the Company disposed part of
the long-term equity investment on subsidiaries without losing its controlling right on them, the balance between
the disposed price and attributable net assets of subsidiaries by disposing the long-term equity investment shall be
recorded into owners’ equity.
For other ways on disposal of long-term equity investment, the balance between the book value of the disposed
equity and its actual payment gained shall be recorded into current profits and losses.
For the long-term equity investment measured by adopting equity method, if the remained equity after disposal
still adopts the equity method for measurement, the other comprehensive income originally recorded into owners’
equity should adopt the same basis of the accounting disposal of the relevant assets or liabilities directly disposed
by the investees according to the corresponding proportion. The owners’ equity recognized owning to the changes
of the other owners’ equity except for the net gains and losses, other comprehensive income and the profits
distribution of the investees, should be transferred into the current gains and losses according to the proportion.
For the long-term equity investment which adopts the cost method of measurement, if the remained equity still
adopt the cost method, the other comprehensive income recognized owning to adopting the equity method for
measurement or the recognition and measurement standards of financial instrument before acquiring the control of
the investees, should adopt the same basis of the accounting disposal of the relevant assets or liabilities directly
disposed by the investees and should be carried forward into the current gains and losses according to the
proportion; the changes of the other owners’ equity except for the net gains and losses, other comprehensive
income and the profits distribution among the net assets of the investees which recognized by adopting the equity
method for measurement, should be carried forward into the current gains and losses according to the proportion.
For those the Company lost the control of the investees by disposing part of the equity investment as well as the
remained equity after disposal could execute joint control or significant influences on the investees, should change
to measure by equity method when compiling the individual financial statement and should adjust the
measurement of the remained equity to equity method as adopted since the time acquired; if the remained equity
after disposal could not execute joint control or significant influences on the investees, should change the
accounting disposal according to the relevant regulations of the recognition and measurement standards of
financial instrument, and its difference between the fair value and book value on the date lose the control right
should be included in the current gains and losses. For the other comprehensive income recognized by adopting
equity method for measurement or the recognition and measurement standards of financial instrument before the
Company acquired the control of the investees, should execute the accounting disposal by adopting the same basis
of the accounting disposal of the relevant assets or liabilities directly disposed by the investees when lose the
control of them, while the changes of the other owners’ equity except for the net gains and losses, other
comprehensive income and the profits distribution among the net assets of the investees which recognized by
adopting the equity method for measurement, should be carried forward into the current gains and losses
according to the proportion. Of which, for the disposed remained equity which adopted the equity method for
measurement, the other comprehensive income and the other owners’ equity should be carried forward according
to the proportion; for the disposed remained equity which changed to execute the accounting disposal according to
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Changchai Company, Limited Interim Report 2019
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.
18. Investment Real Estate
Measurement mode of investment real estate:
Measurement of cost method
Depreciation or amortization method
The investment real estate shall be measured at its cost. Of which, the cost of an investment real estate by
acquisition consists of the acquisition price, relevant taxes, and other expense directly relegated to the asset; the
cost of a self-built investment real estate composes of the necessary expenses for building the asset to the hoped
condition for use. The investment real estate invested by investors shall be recorded at the value stipulated in the
investment contracts or agreements, but the unfair value appointed in the contract or agreement shall be entered
into the account book at the fair value.
As for withdrawal basis of provision for impairment of investment real estates, please refer to withdrawal method
for provision for impairment of fixed assets.
19. Fixed Assets
(1) Recognition Conditions
Fixed assets refers to the tangible assets that simultaneously possess the features as follows: (a) they are held for
the sake of producing commodities, rendering labor service, renting or business management; and (b) their useful
life is in excess of one fiscal year. The fixed assets are only recognized when the relevant economic benefits
probably flow in the Company and its cost could be reliable measured.
(2) Depreciation Method
Category of fixed assets Method Useful life Annual deprecation
Housing and building Average method of
20-40 2.50%-5%
useful life
Machinery 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
Other equipment 5-10 10%-20%
useful life
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20. Construction in Progress
(1) Valuation of the progress in construction
Construction in progress shall be measured at actual cost. Self-operating projects shall be measured at direct
materials, direct wages and direct construction fees; construction contract shall be measured at project price
payable; project cost for plant engineering shall be recognized at value of equipments installed, cost of installation,
trail run of projects. Costs of construction in process also include borrowing costs and exchange gains and losses,
which should be capitalized.
(2) Standardization on construction in process transferred into fixed assets and time point
The construction in process, of which the fixed assets reach to the predicted condition for use, shall carry forward
fixed assets on schedule. The one that has not audited the final accounting shall recognize the cost and make
depreciation in line with valuation value. The construction in process shall adjust the original valuation value at its
historical cost but not adjust the depreciation that has been made after auditing the final accounting.
21. Borrowing Costs
(1) Recognition principle of capitalization of borrowing costs
The borrowing costs shall include the interest on borrowings, amortization of discounts or premiums on
borrowings, ancillary expenses, and exchange balance on foreign currency borrowings. Where the borrowing
costs occurred belong to specifically borrowed loan or general borrowing used for the acquisition and construction
of investment real estates and inventories over one year (including one year) shall be capitalized, and record into
relevant assets cost. Other borrowing costs shall be recognized as expenses on the basis of the actual amount
incurred, and shall be recorded into the current profits and losses. The borrowing costs shall not be capitalized
unless they simultaneously meet the following three requirements: (1) The asset disbursements have already
incurred; (2) The borrowing costs have already incurred; and (3) The acquisition and construction or production
activities which are necessary to prepare the asset for its intended use or sale have already started.
(2) The period of capitalization of borrowing costs
The borrowing costs arising from acquisition and construction of fixed assets, investment real estates and
inventories, if they meet the above-mentioned capitalization conditions, the capitalization of the borrowing costs
shall be measured into asset cost before such assets reach to the intended use or sale, Where acquisition and
construction of fixed assets, investment real estates and inventories is interrupted abnormally and the interruption
period lasts for more than 3 months, the capitalization of the borrowing costs shall be suspended, and recorded
into the current expense, till the acquisition and construction of the assets restarts. When the qualified asset is
ready for the intended use or sale, the capitalization of the borrowing costs shall be ceased, the borrowing costs
occurred later shall be included into the financial expense directly at the current period.
(3) Measurement method of capitalization amount of borrowing costs
As for specifically borrowed loans for the acquisition and construction or production of assets eligible for
capitalization, the to-be-capitalized amount of interests shall be determined in light of the actual cost incurred of
the specially borrowed loan at the present period minus the income of interests earned on the unused borrowing
loans as a deposit in the bank or as a temporary investment.
Where a general borrowing is used for the acquisition and construction or production of assets eligible for
capitalization, the enterprise shall calculate and determine the to-be-capitalized amount of interests on the general
borrowing by multiplying the weighted average asset disbursement of the part of the accumulative asset
disbursements minus the general borrowing by the capitalization rate of the general borrowing used. The
capitalization rate shall be calculated and determined in light of the weighted average interest rate of the general
borrowing.
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Changchai Company, Limited Interim Report 2019
22. Intangible Assets
(1) Pricing Method, Service Life, and Impairment Test
(1) Pricing method of intangible assets
Intangible assets purchased should take the actual payment and the relevant other expenses as the actual cost.
For the intangible assets invested by the investors should be recognized the actual cost according to the value of
the investment contracts or agreements, however, for the value of the contracts or agreements is not fair, the actual
cost should be recognized according to the fair value.
For the intangible assets acquires from the exchange of the non-currency assets, if own the commercial nature,
should be recorded according to the fair value of the swap-out assets; for those not own the commercial nature,
should be recorded according to the book value of the swap-out assets.
For the intangible assets acquires from the debts reorganization should be recognized by the fair value.
(2) Amortization method and term of intangible assets
As for the intangible assets with limited service life, which are amortized by straight-line method when it is
available for use within the service period, shall be recorded into the current profits and losses. The Company
shall, at least at the end of each year, check the service life and the amortization method of intangible assets with
limited service life. When the service life and the amortization method of intangible assets are different from those
before, the years and method of the amortization shall be changed.
Intangible assets with uncertain service life may not be amortized. However, the Company shall check the service
life of intangible assets with uncertain service life during each accounting period. Where there are evidences to
prove the intangible assets have limited service life, it shall be estimated of its service life, and be amortized
according to the above method mentioned.
The rights to use land of the Company shall be amortized according to the rest service life.
(2) Accounting Polices of Internal R & D Costs
The internal research and development projects of an enterprise shall be classified into research phase and
development phase: the term “research” refers to the creative and planned investigation to acquire and understand
new scientific or technological knowledge; the term “development” refers to the application of research
achievements and other knowledge to a certain plan or design, prior to the commercial production or use, so as to
produce any new material, device or product, or substantially improved material, device and product.
The Company collects the costs of the corresponding phases according to the above standard of classifying the
research phase and the development phase. The research expenditures for its internal research and development
projects of an enterprise shall be recorded into the profit or loss for the current period. The development costs for
its internal research and development projects of an enterprise may be capitalized when they satisfy the following
conditions simultaneously: it is feasible technically to finish intangible assets for use or sale; it is intended to
finish and use or sell the intangible assets; the usefulness of methods for intangible assets to generate economic
benefits shall be proved, including being able to prove that there is a potential market for the products
manufactured by applying the intangible assets or there is a potential market for the intangible assets itself or the
intangible assets will be used internally; it is able to finish the development of the intangible assets, and able to
use or sell the intangible assets, with the support of sufficient technologies, financial resources and other resources;
the development costs of the intangible assets can be reliably measured.
23. Impairment of Long-term Assets
For non-current financial Assets of fixed Assets, projects under construction, intangible Assets with limited
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Changchai Company, Limited Interim Report 2019
service life, investing real estate with cost model, long-term equity investment of subsidiaries, cooperative
enterprises and joint ventures, the Company should judge whether decrease in value exists on the date of balance
sheet. Recoverable amounts should be tested for decrease in value if it exists. Other intangible Assets of reputation
and uncertain service life and other non-accessible intangible assets should be tested for decrease in value no
matter whether it exists.
If the recoverable amount is less than book value in impairment test results, the provision for impairment of
differences should include in impairment loss. Recoverable amounts would be the higher of net value of asset fair
value deducting disposal charges or present value of predicted cash flow. Asset fair value should be determined
according to negotiated sales price of fair trade. If no sales agreement exists but with asset active market, fair
value should be determined according to the Buyer’s price of the asset. If no sales agreement or asset active
market exists, asset fair value could be acquired on the basis of best information available. Disposal expenses
include legal fees, taxes, cartage or other direct expenses of merchantable Assets related to asset disposal. Present
value of predicted asset cash flow should be determined by the proper discount rate according to Assets in service
and predicted cash flow of final disposal. Asset depreciation reserves should be calculated on the basis of single
Assets. If it is difficult to predict the recoverable amounts for single Assets, recoverable amounts should be
determined according to the belonging asset group. Asset group is the minimum asset combination producing cash
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.
24. 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.
25. Contract Liabilities
Contract liabilities refer to the Company’s obligations in transferring commodities or services to the client for the
received or predicted consideration. Contract assets and contract liabilities under the same contract shall be
presented based on the net amount.
26. Employee Benefits
(1) Accounting Treatment of Short-term Compensation
Short-term compensation mainly including salary, bonus, allowances and subsidies, employee services and
benefits, medical insurance premiums, birth insurance premium, industrial injury insurance premium, housing
fund, labor union expenditure and personnel education fund, non-monetary benefits etc. The short-term
compensation actually happened during the accounting period when the active staff offering the service for the
Company should be recognized as liabilities and is included in the current gains and losses or relevant assets cost.
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Changchai Company, Limited Interim Report 2019
Of which the non-monetary benefits should be measured according to the fair value.
(2) Accounting Treatment of the Welfare after Demission
The Company classifies the welfare plans after demission into defined contribution plans and defined benefit
plans. Welfare plans after demission refers to the agreement on the welfare after demission reaches between the
Company and the employees, or the regulations or methods formulated by the Company for providing the welfare
after demission for the employees. Of which, defined contribution plans refers to the welfare plans after demission
that the Company no more undertake the further payment obligations after the payment of the fixed expenses for
the independent funds; defined benefit plans, refers to the welfare plans after demission except for the defined
contribution plans.
Defined contribution plans
During the accounting period that the Company providing the service for the employees, the Company should
recognize the liabilities according to the deposited amount calculated by defined contribution plans, and should be
included in the current gains and losses or the relevant assets cost.
(3) Accounting Treatment of the Demission Welfare
The Company should recognize the payroll payment liabilities occur from the demission welfare according to the
earlier date between the following two conditions and include which in the current gains and losses when
providing the demission welfare for the employees: the Company could not unilaterally withdraw the demission
welfare owning to the relieve plans of the labor relationship or reduction; when the Company recognizing the
costs or expenses related to the reorganization involves with the demission welfare payments.
27. Provisions
(1) Criteria of provisions
Only if the obligation pertinent to a contingencies shall be recognized as an estimated debts when the following
conditions are satisfied simultaneously:
1) That obligation is a current obligation of the Company;
2) It is likely to cause any economic benefit to flow out of the Company as a result of performance of the
obligation;
3) The amount of the obligation can be measured in a reliable way.
(2) Measurement of provisions
The Company shall measure the provisions in accordance with the best estimate of the necessary expenses for the
performance of the current obligation.
The Company shall check the book value of the provisions on the Balance Sheet Date. If there is any conclusive
evidence proving that the said book value can’t truly reflect the current best estimate, the Company shall, subject
to change, make adjustment to carrying value to reflect the current best estimate.
28. Revenue
Accounting policies for recognition and measurement of revenue:
When the Company fulfills its due performance obligations (namely when the client obtains the control over
related commodities or services), revenues shall be recognized based on the obligation’s amortized transaction
price. Performance Obligation refers to the Company’s promise of transferring commodities or services that can
be clearly defined to the client. Transaction Price refers to the consideration amount duly charged by the Company
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Changchai Company, Limited Interim Report 2019
for transferring commodities or services to the client, excluding any amount charged by the third party and any
amount predicted to be returned to the client. Control Over Relevant Commodities means that the use of
commodities can be controlled and almost all economic interests can be obtained.
On the contract commencement day, the Company shall evaluate the contract, recognize individual performance
obligation and confirm that individual performance obligation is fulfilled in a certain period. When one of the
following conditions is met, such performance obligation shall be deemed as fulfilled in a certain period, and the
Company shall recognize it as revenue within a certain period according to the performance schedule: (1) the
client obtains and consumes the economic interests resulting from the Company’s performance of contract while
performing the contract; (2) the client is able to control the commodities under construction during the
performance; (3) commodities produced by the Company during the performance possess the irreplaceable
purpose, and the Company has the right to charge all finished parts during the contract period; otherwise, the
Company shall recognize the revenue when the client obtains the control over relevant commodities or services.
The Company shall adopt the Input Method to determine the Performance Schedule. Namely, the Performance
Schedule shall be determined according to the Company’s input for fulfilling performance obligations. When the
Performance Schedule cannot be reasonably determined and all resulting costs are predicted to be compensated,
the Company shall recognize the revenue based on the resulting cost amount till the Performance Schedule can be
reasonably determined.
When the contract involves two or more than two performance obligations, the transaction price shall be
amortized to each single performance obligation on the contract commencement day according to the relative
proportion of the independent selling price of commodities or services under each single performance obligation.
If any solid evidence proves that the contract discount or variable consideration only relates to one or more than
one (not all) performance obligation under the contract, the Company shall amortize the contract discount or
variable consideration to one or more than one related performance obligations. Independent selling price refers to
the price adopted by the Company to independently sell commodities or services to the client. However,
independent selling price cannot be directly observed. The Company shall estimate the independent selling price
by comprehensively considering all related information that can be reasonably obtained and maximally adopting
the observable input value.
Variable Consideration
If any variable consideration exists in the contract, the Company shall determine the optimal estimation of the
variable consideration based on the expected values or the most possible amount. The variable consideration’s
transaction price shall be included without exceeding the total revenue amount recognized without the risk of
significant restitution when all uncertainties are eliminated. On each balance sheet day, the Company shall
re-estimate the variable consideration amount to be included in the transaction price.
Consideration Payable to the Client
If any consideration payable to the client exists in the contract, the Company shall use such consideration to offset
the transaction price unless such consideration is paid for acquiring other clearly-defined commodities or services
from the client, and write down the current revenue at the later time between the time of recognizing relevant
revenues and the time of paying (or promising the payment) the consideration to the client.
Sales with the Quality Assurance
For sales with the Quality Assurance, if the Quality Assurance involves another separate service except for the
guarantee of all sold commodities or services meeting all established standards, the Quality Assurance shall
constitute a single Performance Obligation; otherwise, the Company shall make corresponding accounting
treatment to the Quality Assurance according to ASBE No.13--Contingency.
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Changchai Company, Limited Interim Report 2019
Main Responsibility Person/Agent
According to whether the control over commodities or services is obtained before they are transferred to the client,
the Company can judge whether it is Main Responsibility Person or Agent based on its status during the
transaction. If the Company can control commodities or services before they are transferred to the client, the
Company shall be Main Responsibility Person, and revenues shall be recognized according to the total
consideration amount received or to be received; otherwise, the Company shall be Agent, and revenues shall be
recognized according to the commission or service fees predicted to be duly charged. However, such amount shall
be determined based on the net amount after deducting other amounts payable to other related parties from the
total consideration received or to be duly received or the fixed commission amount or proportion.
Interest Revenue
Interest Revenue shall be determined according to the time of the Company’s use of monetary capital and the
actual interest rate.
Rental Income
The rental income from operating lease shall be recognized during each lease period according to the straight-line
method, and the contingent rent shall be included into the current profit and loss without delay.
29. Government Grants
(1) Type
A government grant means the monetary or non-monetary assets obtained free by an enterprise from the
government. Government grants consist of the government grants pertinent to assets and government grants
pertinent to income according to the relevant government documents.
For those the government documents not definite stipulate the assistance object, the judgment basis of the
Company classifies the government grants pertinent to assets and government subsidies pertinent to income is:
whether are used for purchasing or constructing or for forming the long-term assets by other methods.
(2) Recognition of Government Subsidies
The government subsidies should be recognized only when meet with the attached conditions of the government
grants as well as could be acquired.
If the government grants are the monetary assets, should be measured according to the received or receivable
amount; and for the government grants are the non-monetary assets, should be measured by fair value.
(3) Accounting Treatment
The government grants pertinent to assets shall be recognized as deferred income, and included in the current
gains and losses or offset the book value of related assets within the useful lives of the relevant assets with a
reasonable and systematic method. Government grants pertinent to income used to compensate the relevant costs,
expenses or losses of the Company in the subsequent period shall be recognized as deferred income, and shall be
included in the current profit and loss during the period of confirming the relevant costs, expenses or losses; those
used to compensate the relevant costs, expenses or losses of the Company already happened shall be included in
the current gains and losses or used to offset relevant costs directly.
For government grants that include both assets-related and income-related parts, they should be distinguished
separately for accounting treatment; for government subsidies that are difficult to be distinguished, they should be
classified as income-related.
Government grants related to the daily activities of the Company shall be included into other income or used to
offset relevant costs by the nature of economic business; those unrelated shall be included into non-operating
income.
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Changchai Company, Limited Interim Report 2019
The government grants recognized with relevant deferred income balance but need to return shall be used to offset
the book balance of relevant deferred income, the excessive part shall be included in the current gains and losses
or adjusting the book value of assets for the government grants assets-related that offset the book value of relevant
assets when they are initially recognized; those belong to other cases shall be directly included in the current gains
and losses.
30. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Basis of recognizing the deferred income tax assets
According to the difference between the book value of the assets and liabilities and their tax basis, a deferred tax
asset shall be measured in accord with the tax rates that are expected to apply to the period when the asset is
realized or the liability is settled.
The recognition of the deferred income tax assets is limited by the income tax payable that the Company probably
gains for deducting the deductible temporary differences. At the balance sheet date, where there is strong evidence
showing that sufficient taxable profit will be available against which the deductible temporary difference can be
utilized, the deferred tax asset unrecognized in prior period shall be recognized.
The Company assesses the carrying amount of deferred tax asset at the balance sheet date. If it’s probable that
sufficient taxable profit will not be available against which the deductible temporary difference can be utilized, the
Company shall write down the carrying amount of deferred tax asset, or reverse the amount written down later
when it’s probable that sufficient taxable profit will be available.
(2) Basis of recognizing the deferred income tax liabilities
According to the difference between the book value of the assets and liabilities and their tax basis, A deferred tax
liability shall be measured in accord with the tax rates that are expected to apply to the period when the asset is
realized or the liability is settled.
31. Lease
(1) Accounting Treatment of Operating Lease
1) Operating leased assets
The Company apportions the rental costs for rented assets on a straight-line basis over the entire lease term
without deducting the rent-free period, and includes them in the current costs. The initial direct costs paid by the
Company in connection with the lease transaction are included in the current costs. If the lessor of the assets bears
any lease-related costs that should be borne by the Company, the Company shall deduct such costs from the total
rent costs and apportion them in accordance with the rental costs after deduction during the lease term and include
them into the current costs.
The company chooses not to recognize the right to use assets and lease liabilities for short-term leases and
low-value asset leases, and the relevant lease payments are included in the current profits and losses or relevant
asset costs according to the straight-line method in each period of the lease term. Short term lease refers to a lease
with a lease term of no more than 12 months and excluding the purchase option on the beginning date of the lease
term. Low value asset lease refers to the lease with lower value when the single leased asset is a new asset. Where
the company sublets or expects to sublet the leased assets, the original lease is not a low value asset lease.
2) Operating leased assets
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Changchai Company, Limited Interim Report 2019
The Company apportions the rental costs charged by the Company for renting assets on a straight-line basis over
the entire lease term without deducting the rent-free period, and recognizes them as rental receipts. The initial
direct costs paid by the Company related to the lease transaction shall be included in the current costs; larger
amounts are capitalized and recognized in current profit on the same basis as rental receipt throughout the term of
the operating lease. If the Company bears the lease-related costs that should be borne by the lessee, the Company
shall deduct this part of the costs from the total rent costs, and apportion the deducted rental costs during the lease
term.
(2) Accounting Treatments of Financial Lease
1) Financing leased assets: On the beginning date of the lease, the Company takes the lower one between the fair
value of the leasehold property and the present value of the minimum lease payment as the entry value of the
leased asset, takes the minimum lease payment as the entry value of the long-term account payable, and the
difference as the unrecognized financing costs. The recognition basis, valuation and depreciation method of
financing leased assets are described in 19. Fixed Assets of IV. Preparation Basis of Financial Statements of
Section 10 Financial Report. The Company adopts the effective interest method to amortize unrecognized
financing costs during the asset lease period and includes them in financial costs.
2) Financing leased assets: On the beginning date of lease, the Company recognizes the finance lease receivables,
the difference between the sum of unguaranteed residual value and its present value as unrealized financing
income, which is recognized as rental receipt during each period when the rent is received in the future. The initial
direct costs arising from the Company in connection with the lease transaction shall be included in the initial
measurement of finance lease receivables, and the amount of income recognized during the lease term shall be
deducted.
32. Changes in Main Accounting Policies and Estimates
(1) Change of Accounting Policies
√ Applicable □ Not applicable
Changes to the accounting policies and why Approval process
On 16 August 2021, the 10th Meeting of the 9th
The Ministry of Finance revised and issued the
Board of Directors and the 10th Meeting of the 9th
Accounting Standards for Business Enterprises
Supervisory Committee were held by the
No.21-leases (hereinafter referred to as the “New
Company on which the Proposal on Changes of
Standards governing Leases”) in December 2018 and
Accounting Policies was approved and the
required all domestically listed companies to implement it
Company was allowed to implement the new
since 1 January 2021.
standards governing leases since 1 January 2021.
(2) Changes in Accounting Estimates
□ Applicable √ Not applicable
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Changchai Company, Limited Interim Report 2019
(3) Adjustments to the Financial Statements at the Beginning of the First Execution Year of any New
Standards Governing Leases since 2021
□ Applicable √ Not applicable
Opening leases are mainly short-term leases or low value asset leases, which do not involve adjusting the accounts
of the balance sheet at the beginning of the year.
(4) Retroactive Adjustments to Comparative Data of Prior Years when First Execution of any New
Standards Governing Leases since 2021
□ Applicable √ Not applicable
VI. Taxation
1. Main Taxes and Tax Rate
Category of taxes Tax basis Tax rate
VAT Payable to sales revenue 13%, 9%, 6%
Urban maintenance and Tax paid in accordance with the tax
Taxable turnover amount
construction tax regulations of tax units location
Enterprise income tax Taxable income 25%、15%、5%
Education surcharge Taxable turnover amount 5%
Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate
Name Income tax rate
Changchai Company, Limited 15%
Changchai Wanzhou Diesel Engine Co., Ltd. 15%
Changzhou Changchai Benniu Diesel Engine Fittings Co., Ltd. 25%
Changzhou Housheng Investment Co., Ltd. 25%
Changzhou Changchai Housheng Agricultural Equipment Co., Ltd. 25%
Changzhou Fuji Changchai Robin Gasoline Engine Co., Ltd. 15%
Jiangsu Changchai Machinery Co., Ltd. 25%
Changzhou Xingsheng Real Estate Management Co., Ltd. 5%
2. Tax Preference
On 24 October 2018, the Company obtained the Certificates for High-tech Enterprises again, and it still enjoys
15-percent preferential rate for corporate income tax during the Reporting Period; the Company’s controlling
subsidiary-Changchai Wanzhou Diesel Engine Co., Ltd., the controlling subsidiary company, shall pay the
corporate income tax at tax rate 15% from 1 January 2011 to 31 December 2030 in accordance with the Notice of
the Ministry of Finance, the General Administration of Customs of PRC and the National Administration of
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Changchai Company, Limited Interim Report 2019
Taxation about the Preferential Tax Policies for the Western Development. On 2 December 2020, the
wholly-owned subsidiary Changzhou Fuji Changchai Robin Gasoline Engine Co., Ltd. obtained the "High-tech
Enterprise Certificate" and enjoyed a 15% preferential corporate income tax rate during the Reporting Period; The
wholly-owned subsidiary Changzhou Xingsheng Real Estate Management Co., Ltd. is eligible small enterprise
with low profits and shall pay the corporate income tax at tax rate 2.5% for small enterprises with low profits
during the Reporting Period.
VII. Notes to Major Items in the Consolidated Financial Statements of the Company
1. Monetary Assets
Unit: RMB
Item Ending balance Beginning balance
Cash on hand 194,231.28 287,505.91
Bank deposits 1,010,488,713.41 620,966,786.57
Other monetary assets 221,793,952.77 139,473,930.37
Total 1,232,476,897.46 760,728,222.85
Of which: Total amount deposited overseas
Total amount of restriction in use by
guaranteed, pledged or frozen
At the period-end, the restricted monetary assets of the Company was RMB213,108,704.75, of which
RMB209,299,350.00 was the cash deposit for bank acceptance bills, RMB2,993,220.00 was cash deposit for L/G,
and RMB816,134.75 was cash deposit for environment.
2. Trading Financial Assets
Unit: RMB
Item Ending balance Beginning balance
Financial assets at fair value through profit or loss 34,994,390.00 11,500,272.00
Of which: Forward settlement 25,194,390.00 200,272.00
Financial products 9,800,000.00 11,300,000.00
Total 34,994,390.00 11,500,272.00
3. Notes Receivable
(1) Notes Receivable Listed by Category
Unit: RMB
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Changchai Company, Limited Interim Report 2019
Item Ending balance Beginning balance
Bank acceptance bill 341,957,460.75 600,140,938.05
Total 341,957,460.75 600,140,938.05
If the bad debt provision for notes receivable was withdrawn in accordance with the general model of expected
credit losses, information related to bad debt provision shall be disclosed by reference to the disclosure method of
other receivables:
□ Applicable √ Not applicable
(2) There Were No Notes Receivable Pledged by the Company at the Period-end
(3) Notes Receivable which Had Endorsed by the Company or had Discounted but had not Due on the
Balance Sheet Date at the Period-end
Unit: RMB
Amount of recognition termination Amount of not terminated
Item
at the period-end recognition at the period-end
Bank acceptance bill 706,793,170.52
Total 706,793,170.52
(4) There Were No Notes Transferred to Accounts Receivable because Drawer of the Notes Failed to
Execute the Contract or Agreement at the Period-end
4. Accounts Receivable
(1) Accounts Receivable Classified by Category
Unit: RMB
Ending balance Beginning balance
Carrying Bad debt Carrying Bad debt
amount provision amount provision
Carryi
Category Withd Withd Carryin
ng
Amou Propo Amou rawal Amou Propor Amou rawal g value
value
nt rtion nt propo nt tion nt propor
rtion tion
Accounts
receivable for
33,71 31,81 1,895, 33,70 31,807
which bad debt 94.38 94.38 1,895,5
0,363. 3.03% 4,776. 586.8 3,039 5.98% ,452.8
provision % % 86.83
72 89 3 .72 9
separately
accrued
Of which:
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Changchai Company, Limited Interim Report 2019
Accounts
receivable with
significant
29,87 27,97 1,895, 29,87 27,974
amount for 93.65 93.65 1,895,5
0,525. 2.68% 4,938. 586.8 0,525 5.30% ,938.2
which bad debt % % 86.83
05 22 3 .05 2
provision
separately
accrued
Accounts
receivable with
insignificant
3,839, 3,839, 3,832
amount for 3,832, 100.0
838.6 0.35% 838.6 100% ,514. 0.68% 0.00
which bad debt 514.67 0%
7 7 67
provision
separately
accrued
Accounts
receivable for
1,079, 146,7 933,0 529,4 134,22
which bad debt 96.97 13.59 94.02 25.35 395,258
815,0 80,25 34,82 86,38 7,952.
provision % % % % ,429.66
75.58 5.58 0.00 2.09 43
accrued by
group
Of which:
Accounts
receivable for
which bad debt 1,079, 146,7 933,0 529,4 134,22
96.97 13.59 94.02 25.35 395,258
provision 815,0 80,25 34,82 86,38 7,952.
% % % % ,429.66
accrued by 75.58 5.58 0.00 2.09 43
credit risk
features group
1,113, 178,5 934,9 563,1 166,03
16.04 100.00 29.48 397,154
Total 525,4 100% 95,03 30,40 89,42 5,405.
% % % ,016.49
39.30 2.47 6.83 1.81 32
Account receivables withdrawn bad debt provision separately with significant amount at the period end:
Unit: RMB
Ending balance
Name Withdrawal
Carrying amount Bad debt provision Reason of withdrawal
proportion
Customer 1 1,470,110.64 1,470,110.64 100.00% Difficult to recover
Customer 2 1,902,326.58 1,902,326.58 100.00% Difficult to recover
Customer 3 6,215,662.64 6,215,662.64 100.00% Difficult to recover
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Changchai Company, Limited Interim Report 2019
Customer 4 2,254,860.60 2,175,814.38 96.49% Expected to difficultly recover
Customer 5 3,633,081.23 1,816,540.62 50.00% Expected to difficultly recover
Customer 6 3,279,100.00 3,279,100.00 100.00% Difficult to recover
Customer 7 1,617,988.01 1,617,988.01 100.00% Difficult to recover
Customer 8 5,359,381.00 5,359,381.00 100.00% Difficult to recover
Customer 9 2,584,805.83 2,584,805.83 100.00% Difficult to recover
Customer 10 1,553,208.52 1,553,208.52 100.00% Difficult to recover
Total 29,870,525.05 27,974,938.22 -- --
Accounts receivable for which bad debt provision accrued by credit risk features group:
Unit: RMB
Ending balance
Aging
Carrying amount Bad debt provision Withdrawal proportion
Within 1 year 929,291,594.72 18,585,831.89 2%
1 to 2 years 13,163,708.26 658,185.41 5%
2 to 3 years 5,757,387.04 863,608.06 15%
3 to 4 years 5,977,789.55 1,793,336.87 30%
4 to 5 years 1,863,256.65 1,117,953.99 60%
Over 5 years 123,761,339.36 123,761,339.36 100%
Total 1,079,815,075.58 146,780,255.58 --
Notes of the basis of determining the group:
The accounts receivable was adopted the aging analysis based on the months when the accounts incurred actually,
among which the accounts incurred earlier will be priority to be settled in terms of the capital turnover.
Explanation of the input value and assumption adopted to determine the withdrawal amount of bad debt provision
on the Current Period: With reference to the experience of the historical credit loss, combining with the prediction
of the present status and future financial situation, the comparison table was prepared between the aging of the
accounts receivable and estimated credit loss rate in the duration and to calculate the estimated credit loss.
Please refer to the relevant information of disclosure of bad debt provision of other accounts receivable if
adopting the general mode of expected credit loss to withdraw bad debt provision of accounts receivable.
□ Applicable √ Not applicable
Disclosure by aging
Unit: RMB
Aging Carrying amount
Within 1 year (including 1 year) 930,506,222.09
1 to 2 years 12,383,657.51
2 to 3 years 7,707,136.60
Over 3 years 162,928,423.10
59
Changchai Company, Limited Interim Report 2019
3 to 4 years 8,514,079.30
4 to 5 years 4,948,995.83
Over 5 years 149,465,347.97
Total 1,113,525,439.30
(2) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
Information of bad debt provision withdrawn:
Unit: RMB
Changes in the Reporting Period
Beginning
Category Reversal or Ending balance
balance Withdrawal Write-off
recovery
Bad debt provision
31,807,452.89 64,251.53 56,927.53 31,814,776.89
withdrawn separately
Bad debt provision
134,227,952.43 12,552,303.15 146,780,255.58
withdrawn by group
Total 166,035,405.32 12,616,554.68 56,927.53 0.00 178,595,032.47
Of which bad debt provision reversed or recovered with significant amount in the Reporting Period: No.
(3) There Were No Accounts Receivable with Actual Verification during the Reporting Period.
(4) Top 5 of the Ending Balance of the Accounts Receivable Collected according to the Arrears Party
Unit: RMB
Proportion to total ending
Ending balance of Ending balance of bad
Name of the entity balance of accounts
accounts receivable debt provision
receivable
Customer 1 559,214,901.98 50.22% 11,184,298.04
Customer 2 56,638,430.22 5.09% 1,132,768.60
Customer 3 40,930,712.14 3.68% 818,614.24
Customer 4 26,775,895.61 2.40% 535,517.91
Customer 5 19,053,675.15 1.71% 381,073.50
Total 702,613,615.10 63.10%
5. Prepayments
(1) List by Aging Analysis
Unit: RMB
60
Changchai Company, Limited Interim Report 2019
Ending balance Beginning balance
Aging
Amount Proportion Amount Proportion
Within 1 year 7,305,834.42 75.29% 7,039,656.05 75.23%
1 to 2 years 693,826.41 7.15% 641,762.79 6.86%
2 to 3 years 699,453.91 7.215 673,819.29 7.20%
Over 3 years 1,003,859.31 10.35% 1,002,602.62 10.71%
Total 9,702,974.05 -- 9,357,840.75 --
There was no prepayment with significant amount aging over one year as of the period-end.
(2) Top 5 of the Ending Balance of the Prepayments Collected according to the Prepayment Target
At the period-end, the total top 5 of the ending balance of the prepayments collected according to the prepayment
target was RMB5,538,728.83 accounting for 57.08% of the total ending balance of prepayments.
6. Other Receivables
Unit: RMB
Item Ending balance Beginning balance
Interest receivable 0.00 0.00
Dividend receivable 0.00 0.00
Other receivables 2,537,634.11 6,212,062.80
Total 2,537,634.11 6,212,062.80
(1) Other Receivables
1) Other Receivables Classified by Accounts Nature
Unit: RMB
Nature Ending carrying value Beginning carrying value
Margin and cash pledge 4,200.00 4,200.00
Intercourse funds 20,767,909.49 22,967,220.99
Petty cash and borrowings by employees 1,346,523.65 1,359,483.08
Other 12,280,426.56 13,806,779.19
Total 34,399,059.70 38,137,683.26
2) Withdrawal of Bad Debt Provision
Unit: RMB
61
Changchai Company, Limited Interim Report 2019
First stage Second stage Third stage
Expected loss in the
Expected credit Expected loss in the
Bad debt provision duration (credit Total
loss of the next duration (credit
impairment not
12 months impairment occurred)
occurred)
Balance of 1
31,925,620.46 31,925,620.46
January 2021
Balance of 1
January 2021 in the —— ——
Current Period
--Transfer to
Second stage
-- Transfer to Third
stage
-- Reverse to
Second stage
-- Reverse to First
stage
Withdrawal of the 7,761.56 7,761.56
Current Period
Reversal of the 71,956.43 71,956.43
Current Period
Write-offs of the
Current Period
Verification of the
Current Period
Other changes
Balance of 30 June
31,861,425.59 31,861,425.59
2021
Changes of carrying amount with significant amount changed of loss provision in the current period
□ Applicable √ Not applicable
Disclosure by aging
Unit: RMB
Aging Ending balance
Within 1 year (including 1 year) 827,728.98
1 to 2 years 476,523.23
2 to 3 years 451,265.69
62
Changchai Company, Limited Interim Report 2019
Over 3 years 32,643,541.80
3 to 4 years 1,152,265.74
4 to 5 years 215,623.67
Over 5 years 31,275,652.39
Total 34,399,059.70
3) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
Information of withdrawal of bad debt provision:
Unit: RMB
Changes in the Reporting Period
Beginning
Category Reversal or Write- Ending balance
balance Withdrawal Other
recovery off
Bad debt provision
for which accrued 5,039,368.41 5,039,368.41
separately
Bad debt provision
for which accrued by 26,886,252.05 7,761.56 71,956.43 26,822,057.18
group
Total 31,925,620.46 7,761.56 71,956.43 31,861,425.59
4) There Was No Particulars of the Actual Verification of Other Receivables during the Reporting Period
5) Top 5 of the Ending Balance of Other Receivables Collected according to the Arrears Party
Unit: RMB
Proportion to
Ending balance
ending balance
Name of the entity Nature Ending balance Aging of bad debt
of other
provision
receivables%
Changzhou Compressor Intercourse Over 5
2,940,000.00 8.55% 2,940,000.00
Factory funds years
Changchai Group Imp. Intercourse Over 5
2,853,188.02 8.29% 2,853,188.02
& Exp. Co., Ltd. funds years
Changzhou New
Intercourse Over 5
District Accounting 1,626,483.25 4.73% 1,626,483.25
funds years
Center
Changchai Group Intercourse Over 5
1,140,722.16 3.32% 1,140,722.16
Settlement Center funds years
63
Changchai Company, Limited Interim Report 2019
Changzhou Huadi
Intercourse Within 1
Engineering Guarantee 624,000.00 1.81% 12,480.00
funds year
Co., Ltd.
Total -- 9,184,393.43 -- 26.70% 8,572,873.43
7. Inventory
Whether the Company needs to comply with the requirements of real estate industry
No
(1) Category of Inventory
Unit: RMB
Ending balance Beginning balance
Item Carrying Falling price Carrying Carrying Falling price Carrying
amount reserves value amount reserves value
Raw 135,917,741. 130,350,437. 134,712,519. 5,559,513.66 129,084,129.
5,567,303.76
materials 48 72 83 60
Materials 68,876.57
14,693,980.0 14,622,027.8 14,065,866.5 14,065,866.5
processed on 71,952.26
7 1 2 2
commission
Goods in 180,629,930. 25,366,513.6 155,263,417. 134,454,109. 18,512,449.0 115,941,660.
process 97 1 36 88 8 80
Finished 273,895,475. 14,223,733.6 259,671,741. 361,975,004. 15,261,416.1 346,713,588.
goods 17 3 54 89 7 72
Low priced
and easily 1,802,652.69 1,155,356.04 647,296.65 1,906,803.53 1,031,708.62 875,094.91
worn articles
606,939,780. 46,384,859.3 560,554,921. 647,114,304. 40,433,964.1 606,680,340.
Total
38 0 08 65 0 55
(2) Falling Price Reserves
Unit: RMB
Increase Decrease
Beginning
Item Reversal or Ending balance
balance Withdrawal Other Other
write-off
Raw materials 5,559,513.66 150,326.35 142,536.25 5,567,303.76
Materials
68,876.57 65,088.17 62,012.48 71,952.26
processed on
64
Changchai Company, Limited Interim Report 2019
commission
Goods in
18,512,449.08 6,956,428.76 102,364.23 25,366,513.61
process
Finished goods 15,261,416.17 333,390.12 1,371,072.66 14,223,733.63
Low priced and
easily worn 1,031,708.62 351,329.62 227,682.20 1,155,356.04
articles
Total 40,433,964.10 7,856,563.02 1,905,667.82 46,384,859.30
(3) There Was No Capitalized Borrowing Expense in the Ending Balance of Inventories
8. Other Current Assets
Unit: RMB
Item Ending balance Beginning balance
The VAT tax credits 23,689,000.10 22,534,134.72
Private placement of intermediary 2,358,490.56
agency fees
Prepaid corporate income tax 2,240,396.88
Prepaid expense 76,507.64 80,070.32
Other 88,828.04 86,270.24
Total 23,854,335.78 27,299,362.72
9. Long-term Equity Investment
Unit: RMB
Increase/decrease
Gain Adjust Endin
Begin Cash Endin
or loss ment Withd g
ning bonus g
recogn of rawal balanc
balanc Additi Reduc Chang or balanc
Invest ized other of e of
e onal ed es in profit e
ees under compr deprec Other deprec
(carryi invest invest other annou (carryi
the ehensi iation iation
ng ment ment equity nced ng
equity ve reserv reserv
value) to value)
metho incom es es
issue
d e
Associated enterprises
Beijin
0 0 44,182
g
65
Changchai Company, Limited Interim Report 2019
Tsingh .50
ua
Indust
rial
Invest
ment
Mana
gemen
t Co.,
Ltd.
Subtot 44,182
0 0
al .50
44,182
Total 0 0
.50
10. Other Equity Instrument Investment
Unit: RMB
Item Ending balance Beginning balance
Changzhou Synergetic Innovation Private Equity
145,924,691.82 102,198,950.87
Fund (Limited Partnership)
Other equity instrument investment measured by
664,665,000.00 582,939,000.00
fair value
Total 810,589,691.82 685,137,950.87
Non-trading equity instrument investment disclosed by category
Unit: RMB
Reason for
Amount of Reason for assigning
other
Accu other to measure by fair
Dividend comprehensi
Accumulative mulat comprehensiv value of which
Item income ve income
gains ive e transferred changes be included to
recognized transferred to
losses to retained other comprehensive
retained
earnings income
earnings
Foton Motor Co., Non-trading equity
229,032,500.00
Ltd. investment
Non-trading equity
Bank of Jiangsu 7,394,400.00 33,141,600.00
investment
Changzhou Non-trading equity
45,924,691.82
Synergetic investment
66
Changchai Company, Limited Interim Report 2019
Innovation
Private Equity
Fund (Limited
Partnership)
Total 7,394,400.00 308,098,791.82
Other notes:
The corporate securities of accommodation business still on lending at the period-end: 6,900,000 shares of Foton
Motor Co., Ltd.
12. Other Non-current Financial Assets
Unit: RMB
Item Ending balance Beginning balance
Jiangsu Liance Electromechanical Technology Co., Ltd. 94,752,000.00 7,200,000.00
Kailong High Technology Co., Ltd. 39,408,900.00 38,282,105.00
Guizhou Weimen Pharmaceutical Co., Ltd. 200,104.80
Guizhou Anda Technology Energy Co., Ltd. 195,297.49
Henan Lantian Gas Co., Ltd. 286,041.76 160,744.76
Hebei Songhe Renewable Resources Co., Ltd. 104,699.44 104,699.44
Anhui Haofang Electromechanical Co., Ltd. 89,987.14
Jiangsu Hosun New Energy Technology Co., Ltd. 112,500,000.00 52,500,000.00
Guilin Stars Science And Technology Co.,Ltd. 3,600,000.00
Total 250,651,641.20 98,732,938.63
12. Investment Property
(1) Investment Property Adopting the Cost Measurement Mode
√ Applicable □ Not applicable
Unit: RMB
Item Houses and buildings Total
I. Original carrying value
1.Beginning balance 87,632,571.14 87,632,571.14
2.Increased amount of the period
(1) Outsourcing
(2) Transfer from inventories/fixed
assets/construction in progress
67
Changchai Company, Limited Interim Report 2019
(3) Enterprise combination increase
3.Decreased amount of the period
(1) Disposal
(2) Other transfer
4. Ending balance 87,632,571.14 87,632,571.14
II. Accumulative depreciation and
accumulative amortization
1.Beginning balance 41,393,245.11 41,393,245.11
2.Increased amount of the period 1,104,170.40 1,104,170.40
(1) Withdrawal or amortization 1,104,170.40 1,104,170.40
3.Decreased amount of the period
(1) Disposal
(2) Other transfer
4. Ending balance 42,497,415.51 42,497,415.51
III. Depreciation reserves
1.Beginning balance
2.Increased amount of the period
(1) Withdrawal
3.Decreased amount of the period
(1) Disposal
(2) Other transfer
4. Ending balance
IV. Carrying value
1.Ending carrying value 45,135,155.63 45,135,155.63
2.Beginning carrying value 46,239,326.03 46,239,326.03
13. Fixed Assets
Unit: RMB
Item Ending balance Beginning balance
Fixed assets 427,241,110.69 454,181,555.68
Disposal of fixed assets
Total 427,241,110.69 454,181,555.68
68
Changchai Company, Limited Interim Report 2019
(1) List of Fixed Assets
Unit: RMB
Houses and Machinery Transportation Other
Item Total
buildings equipment equipment equipment
I. Original
carrying value
1. Beginning
465,428,975.71 996,970,879.65 16,939,308.01 42,124,393.11 1,521,463,556.48
balance
2. Increased
amount of the 0.00 15,884,743.80 367,395.61 306,526.65 16,558,666.06
period
(1) Purchase 4,791,943.04 367,395.61 306,526.65 5,465,865.30
(2) Transfer
from
11,092,800.76 0.00 0.00 11,092,800.76
construction in
progress
(3) Enterprise
combination
increase
3. Decreased
amount of the 0.00 2,640,642.55 1,609,285.56 1,920,409.32 6,170,337.43
period
(1) Disposal or
2,640,642.55 1,609,285.56 1,920,409.32 6,170,337.43
scrap
4. Ending 1,010,214,980.9
465,428,975.71 15,697,418.06 40,510,510.44 1,531,851,885.11
balance 0
II.Accumulative
depreciation
1. Beginning
298,167,122.41 718,498,347.70 13,464,995.78 36,670,860.66 1,066,801,326.55
balance
2. Increased
amount of the 8,161,561.59 29,723,533.18 549,419.23 1,492,918.35 39,927,432.35
period
(1) Withdrawal 8,161,561.59 29,723,533.18 549,419.23 1,492,918.35 39,927,432.35
3. Decreased
amount of the
period 0.00 1,112,115.65 677,756.12 808,786.96 2,598,658.73
(1) Disposal or 1,112,115.65 677,756.12 808,786.96 2,598,658.73
69
Changchai Company, Limited Interim Report 2019
scrap
4. Ending
balance 306,328,684.00 747,109,765.23 13,336,658.89 37,354,992.05 1,104,130,100.17
III.Depreciation
reserves
1. Beginning
480,674.25 480,674.25
balance
2. Increased
amount of the 0.00
period
(1) Withdrawal 0.00
3. Decreased
amount of the 0.00
period
(1) Disposal or
0.00
scrap
4. Ending
480,674.25 480,674.25
balance
IV. Carrying
value
1. Ending
159,100,291.71 262,624,541.42 2,360,759.17 3,155,518.39 427,241,110.69
carrying value
2. Beginning
167,261,853.30 277,991,857.70 3,474,312.23 5,453,532.45 454,181,555.68
carrying value
14. Construction in Progress
Unit: RMB
Item Ending balance Beginning balance
Construction in progress 99,529,334.27 44,844,896.77
Engineering materials 7,785,871.49 21,657,535.64
Total 107,315,205.76 66,502,432.41
(1) List of Construction in Progress
Unit: RMB
Item Ending balance Beginning balance
70
Changchai Company, Limited Interim Report 2019
Carrying Depreciatio Carrying Carrying Depreciati Carrying
amount n reserves value amount on reserves value
Expansion
capacity of
multi-cylinde 1,128,887.90 1,128,887.90 1,128,887.90 1,128,887.90
r (The 2nd
Period)
Relocation
project of
89,825,596.83 89,825,596.83 40,307,243.35 40,307,243.35
light engine
and casting
Equipment to
be installed
8,574,849.54 8,574,849.54 3,408,765.52 3,408,765.52
and payment
for projects
Total 99,529,334.27 99,529,334.27 44,844,896.77 44,844,896.77
(2) Changes in Significant Construction in Progress during the Reporting Period
Unit: RMB
Propo Of
rtion which Capit
of Accu : alizati
accu mulat Amo on
mulat ed unt of rate
Trans Other
Begin Incre Endin ed amou capita of Capit
ferred decre Job
Budg ning ased g invest nt of lized intere al
Item in ased sched
et balan amou balan ment intere intere sts for resou
fixed amou ule
ce nt ce in st sts for the rces
assets nt
constr capita the Repor
uctio lizati Repor ting
ns to on ting Perio
budge Perio d
t d
Expa
nsion
capac
79,00 1,128 1,128 Unco
ity of Self-f
0,000 ,887. ,887. mplet
multi- unded
.00 90 90 ed
cylin
der
(The
71
Changchai Company, Limited Interim Report 2019
2nd
Perio
d)
Reloc
ation
proje
ct of 474,7 40,30 49,51 89,82 Unco Raise
18.92
light 06,00 7,243 8,353 5,596 mplet d
%
engin 0.00 .35 .48 .83 ed funds
e and
castin
g
553,7 41,43 49,51 90,95
Total 06,00 6,131 8,353 4,484 -- -- --
0.00 .25 .48 .73
(3) Engineering Materials
Unit: RMB
Ending balance Beginning balance
Depreciati
Item Carrying Carrying Carrying Depreciation Carrying
on
amount value amount reserves value
reserves
Engineerin
7,785,871.49 7,785,871.49 21,657,535.64 21,657,535.64
g materials
Total 7,785,871.49 7,785,871.49 21,657,535.64 21,657,535.64
15. Intangible Assets
(1) List of Intangible Assets
Unit: RMB
Trademark
Item Land use right Software License fee Total
use right
I. Original carrying
value
1. Beginning balance 206,783,546.68 14,067,915.16 5,488,000.00 1,087,042.79 227,426,504.63
2. Increased amount of
the period 0.00 800,856.32 0.00 0.00 800,856.32
(1) Purchase 800,856.32 800,856.32
72
Changchai Company, Limited Interim Report 2019
(2) Internal R&D
(3) Business
combination increase
3. Decreased amount of
the period
(1) Disposal
4. Ending balance 206,783,546.68 14,868,771.48 5,488,000.00 1,087,042.79 228,227,360.95
II. Accumulated
amortization
1. Beginning balance 54,545,676.02 11,879,287.65 2,103,733.18 27,176.07 68,555,872.92
2. Increased amount of
the period 2,282,064.18 571,957.47 274,399.98 13,588.04 3,142,009.67
(1) Withdrawal 2,282,064.18 571,957.47 274,399.98 13,588.04 3,142,009.67
3. Decreased amount of
the period
(1) Disposal
4. Ending balance 56,827,740.20 12,451,245.12 2,378,133.16 40,764.11 71,697,882.59
III. Depreciation
reserves
1. Beginning balance
2. Increased amount of
the period
(1) Withdrawal
3. Decreased amount of
the period
(1) Disposal
4. Ending balance
IV. Carrying value
1. Ending carrying
value 149,955,806.48 2,417,526.36 3,109,866.84 1,046,278.68 156,529,478.36
2. Beginning carrying
value 152,237,870.66 2,188,627.51 3,384,266.82 1,059,866.72 158,870,631.71
16. Long-term Prepaid Expenses
Item Beginning Increase Amortized Decrease Ending balance
balance amount
73
Changchai Company, Limited Interim Report 2019
Furniture of
employee 13,693.20 53,941.59 16,261.85 51,372.94
dormitory, etc.
Total 13,693.20 53,941.59 16,261.85 51,372.94
17. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Deferred Income Tax Assets that Had not Been Off-set
Unit: RMB
Ending balance Beginning balance
Deductible Deductible
Item Deferred income Deferred income
temporary temporary
tax assets tax assets
difference difference
Bad debt provision 6,544,083.47 981,314.04 6,544,083.47 981,314.04
Deductible loss 21,670,394.08 3,250,559.11 21,670,394.08 3,250,559.11
Total 28,214,477.55 4,231,873.15 28,214,477.55 4,231,873.15
(2) Deferred Income Tax Liabilities Had Not Been Off-set
Unit: RMB
Ending balance Beginning balance
Item Taxable temporary Deferred income Taxable temporary Deferred income
difference tax liabilities difference tax liabilities
Changes in fair
value of other
626,019,691.80 93,902,953.77 500,567,950.87 75,085,192.63
equity instrument
investment
Changes in fair
value of trading 18,481,109.00 4,600,250.05 18,481,109.00 4,600,250.05
financial assets
Changes in fair
value of other
142,054,092.00 27,638,523.00 2,500,000.00 375,000.00
non-current
financial assets
74
Changchai Company, Limited Interim Report 2019
Assets evaluation
appreciation for
business
4,074,374.26 611,156.14 4,074,374.26 611,156.14
combination not
under the same
control
Total 790,629,267.06 126,752,882.96 525,623,434.13 80,671,598.82
(3) List of Unrecognized Deferred Income Tax Assets
Unit: RMB
Item Ending balance Beginning balance
Bad debt provision 210,056,859.88 191,416,942.31
Falling price reserves of inventories 46,384,859.30 40,433,964.10
Total 256,441,719.18 231,850,906.41
18. Other Non-current Assets
Unit: RMB
Ending balance Beginning balance
Depreciati
Item Carrying Carrying Carrying Depreciatio
on Carrying value
amount value amount n reserves
reserves
Advances
payment of 48,860,427.66 48,860,427.66 19,971,006.56 19,971,006.56
equipments
Total 48,860,427.66 48,860,427.66 19,971,006.56 19,971,006.56
19. Short-term Borrowings
(1) Category of Short-term Borrowings
Unit: RMB
Item Ending balance Beginning balance
Mortgage loans 7,000,000.00 7,000,000.00
Guaranteed loans 10,000,000.00 10,000,000.00
Credit loans 5,000,000.00
Total 17,000,000.00 22,000,000.00
75
Changchai Company, Limited Interim Report 2019
(2) There Was No Short-term Borrowings Overdue but Unpaid.
20. Notes Payable
Unit: RMB
Category Ending balance Beginning balance
Bank acceptance bill 697,664,500.00 595,346,000.00
Total 697,664,500.00 595,346,000.00
At the end of the current period, there were no notes payable due and not paid.
21. Accounts Payable
(1) List of Accounts Payable
Unit: RMB
Item Ending balance Beginning balance
Payment for goods 636,843,860.83 612,757,392.46
Total 636,843,860.83 612,757,392.46
(2) There Was No Significant Accounts Payable Aging over One Year
22. Advances from Customers
Unit: RMB
Item Ending balance Beginning balance
Payment for goods 0.00 661,612.17
Total 0.00 661,612.17
23. Contract Liabilities
Unit: RMB
Item Ending balance Beginning balance
Contract liabilities 43,385,577.76 35,944,517.15
Total 43,385,577.76 35,944,517.15
24. Payroll Payable
(1) List of Payroll Payable
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
76
Changchai Company, Limited Interim Report 2019
I. Short-term salary 50,127,161.47 133,595,897.09 168,959,505.85 14,763,552.71
II.Post-employment
benefit-defined 13,309,768.09 13,309,768.09
contribution plans
III. Termination
50,569.00 50,569.00
benefits
Total 50,127,161.47 146,956,234.18 182,319,842.94 14,763,552.71
(2) List of Short-term Salary
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
1. Salary, bonus,
41,908,627.17 111,725,426.48 147,070,044.24 6,564,009.41
allowance, subsidy
2.Employee welfare 1,592.74 1,599,478.57 1,599,478.57 1,592.74
3. Social insurance 7,734,560.48 7,734,560.48
Of which: Medical
insurance 6,379,795.10 6,379,795.10
premiums
Work-related injury
717,233.37 717,233.37
insurance
Maternity insurance 637,532.01 637,532.01
4. Housing fund 9,972,779.56 9,972,779.56
5.Labor union
budget and
8,216,941.56 2,563,652.00 2,582,643.00 8,197,950.56
employee education
budget
Total 50,127,161.47 133,595,897.09 168,959,505.85 14,763,552.71
(3) List of Defined Contribution Plans
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
1. Basic pension benefits 12,905,516.52 12,905,516.52
2. Unemployment insurance 404,251.57 404,251.57
3. Enterprise annuities
Total 13,309,768.09 13,309,768.09
77
Changchai Company, Limited Interim Report 2019
25. Taxes Payable
Unit: RMB
Item Ending balance Beginning balance
VAT 844,372.51 461.22
Corporate income tax 836,755.28 531,557.38
Personal income tax 133,337.31 114,208.40
Urban maintenance and construction tax 1,012,349.35 879,346.31
Property tax 190,780.68 94,863.50
Land use tax 202,491.42 100,135.19
Stamp duty 82,653.54 6,851.35
Education Surcharge 203,892.57 35,023.81
Comprehensive fees 1,029,422.25 1,075,134.76
Environmental protection tax 31,903.49 31,903.49
Total 4,567,958.40 2,869,485.41
26. Other Payables
Unit: RMB
Item Ending balance Beginning balance
Interest payable
Dividends payable 3,891,433.83 3,891,433.83
Other payables 233,854,764.98 193,653,642.25
Total 237,746,198.81 197,545,076.08
(1) Dividends Payable
Unit: RMB
Item Ending balance Beginning balance
Ordinary share dividends 3,243,179.97 3,243,179.97
Interest of preferred shares/
perpetual bond classified as equity
instrument
Dividends for non-controlling
648,253.86 648,253.86
shareholders
Other
78
Changchai Company, Limited Interim Report 2019
Total 3,891,433.83 3,891,433.83
The reason for non-payment for over one year: Not gotten by shareholders yet.
(2) Other Payables
1) Other Payables Listed by Nature of Account
Unit: RMB
Item Ending balance Beginning balance
Margin & cash pledged 4,009,371.60 3,406,041.83
Intercourse funds among units 12,532,244.46 9,309,617.95
Intercourse funds among individuals 1,472,274.84 1,256,848.49
Sales discount and three guarantees 173,475,705.45 147,739,746.71
Other 42,365,168.63 31,941,387.27
Total 233,854,764.98 193,653,642.25
2) Significant Other Payables Aging over One Year
The significant other payables aging over one year at the period-end mainly referred to the unsettled temporary
credits and charges owned.
27. Other Current Liabilities
Unit: RMB
Item Ending balance Beginning balance
Sale service fee 352,652.58 365,047.65
Transportation storage fee 254,652.69 260,055.33
Electric charge 3,421,417.25 1,972,314.61
Tax to be transferred 2,409,885.20 2,636,529.53
Total 6,438,607.72 5,233,947.12
28. Deferred Income
Unit: RMB
Beginning Reason for
Item Increase Decrease Ending balance
balance formation
Government Government
56,949,737.60 56,949,737.60
grants appropriation
79
Changchai Company, Limited Interim Report 2019
Total 56,949,737.60 56,949,737.60 --
Item involving government grants:
Unit: RMB
Amount
Amount
recorded
recorded Amount
into Related
into offset
Amount non-oper to
Beginning other cost in Other Ending
Item of new ating assets/rel
balance income the changes balance
subsidy income ated
in the Reportin
in the income
Reportin g Period
Reportin
g Period
g Period
National
major
project 28,770,000. 28,770,000. Related
special 00 00 to assets
allocatio
ns
Remove
19,179,737. 19,179,737. Related
compens
60 60 to assets
ation
Research
and
develop
ment and
industrial
ization
allocatio
ns of
national
9,000,000.0 9,000,000.0 Related
III/IV
0 0 to assets
standard
high-po
wered
efficient
diesel
engine
for
agricultu
ral use
56,949,737. 56,949,737.
Total
60 60
80
Changchai Company, Limited Interim Report 2019
29. Share Capital
Unit: RMB
Increase/decrease (+/-)
Beginning Bonus Ending
New shares Bonus
balance issue from Other Subtotal balance
issued shares
profit
The sum of 561,374,32 144,318,18 144,318,18 705,692,50
shares 6.00 1.00 1.00 7.00
30. Capital Reserves
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Capital premium
143,990,690.24 476,347,552.97 620,338,243.21
(premium on stock)
Other capital reserves 20,337,975.19 20,337,975.19
Total 164,328,665.43 476,347,552.97 640,676,218.40
Reasons for changes:
On 17 December 2020, the Company received Approval of Changchai Co., Ltd. Non-public Issuance of Shares
(Z.J.X.K [2020] No. 3374) from the China Securities Regulatory Commission, which approved the Company's
non-public issuance of no more than 168,412,297 new shares. The Company offered 144,318,181 RMB ordinary
shares (A shares) in a non-public manner. The issuing price was RMB4.40 per share, total amount raised was
RMB634,999,936.40, and the net amount raised was RMB620,665,733.97, of which, the newly-added registered
capital was RMB144,318,181.00 and the capital reserve was RMB476,347,552.97. The new shares issued in a
non-public manner were listed on the Shenzhen Stock Exchange on 5 July 2021. For details, please refer to the
Report on Non-public Issuance by Changchai Co., Ltd. Non-public Issuance Report and Listing Declaration
disclosed by the Company on www.cninfo.com.cn on 1 July 2021.
31. Other Comprehensive Income
Unit: RMB
Reporting Period
Less: Less: Attribu Attribu
Income Endin
Recorded Record Less: table to table to
Beginni before
in other ed in Income owners non-co g
Item ng taxatio
comprehe other tax of the ntrollin balan
balance n in the
nsive compre expens Compa g ce
Curren
income in hensiv e ny as interest
t
prior e the s after
81
Changchai Company, Limited Interim Report 2019
Period period income parent tax
and in prior after
transferre period tax
d in and
profit or transfe
loss in rred in
the retaine
Current d
Period earning
s in the
Curren
t
Period
I. Other comprehensive 125,45 106,63 532,1
425,482, 18,817,
income that will not be 1,740.9 3,979.8 16,73
758.24 761.14
reclassified to profit or loss 5 1 8.05
Of which: Changes caused
by re-measurements on
defined benefit pension
schemes
Share of other
comprehensive income of
investees that will not be
reclassified to profit or loss
under equity method
Changes in fair value of 125,45 106,63 532,1
425,482, 18,817,
other equity instrument 1,740.9 3,979.8 16,73
758.24 761.14
investment 5 1 8.05
Changes in fair value of
corporate credit risk
II. Other comprehensive
income that may
subsequently be
reclassified to profit or loss
Of which: Share of other
comprehensive income of
investees that will be
reclassified to profit or loss
under equity method
Changes in fair value of
investment in other debt
obligations
82
Changchai Company, Limited Interim Report 2019
Amount of financial assets
reclassified to other
comprehensive income
Credit depreciation
reserves of investment in
other debt obligations
Reserves for cash flow
hedges
Differences arising from
translation of foreign
currency-denominated
financial statements
125,45 106,63 532,1
Total of other 425,482, 18,817,
1,740.9 3,979.8 16,73
comprehensive income 758.24 761.14
5 1 8.05
32. Specific Reserve
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Safety production
18,812,986.55 18,812,986.55
cost
Total 18,812,986.55 18,812,986.55
33. Surplus Reserves
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Statutory surplus
312,294,673.24 312,294,673.24
reserves
Discretional surplus
13,156,857.90 13,156,857.90
reserves
Total 325,451,531.14 325,451,531.14
34. Retained Earnings
Unit: RMB
Item Reporting Period Same period of last year
Beginning balance of retained earnings before
777,899,079.66 726,689,929.10
adjustments
83
Changchai Company, Limited Interim Report 2019
Total retained earnings at the beginning of the
adjustment period (“+” means up, “-” means 1,651,336.26
down)
Beginning balance of retained earnings after
777,899,079.66 728,341,265.36
adjustments
Add: Net profit attributable to owners of the
129,189,065.60 27,690,311.06
Company as the parent
Less: Withdrawal of statutory surplus reserves 3,222,997.42
Withdrawal of discretional surplus
reserves
Withdrawal of general reserve
Dividend of ordinary shares payable
Dividends of ordinary shares transferred as
share capital
Recorded in other comprehensive income in
prior period and transferred in retained profits in 348,368.67
the Current Period
Ending retained earnings 907,088,145.26 756,379,945.09
35. Operating Revenue and Cost of Sales
Unit: RMB
Reporting Period Same period of last year
Item
Operating revenue Cost of sales Operating revenue Cost of sales
Main operations 1,475,253,150.96 1,265,262,684.42 1,149,231,063.13 974,846,243.01
Other operations 21,917,304.84 18,852,045.04 18,224,719.17 10,996,475.67
Total 1,497,170,455.80 1,284,114,729.46 1,167,455,782.30 985,842,718.68
Information related to performance obligations: performing according to the contract offer
Information related to transaction value assigned to residual performance obligations:
The amount of revenue corresponding to performance obligations of contracts signed but not performed or not
fully performed yet was RMB0 at the period-end.
36. Taxes and Surtaxes
Unit: RMB
Item Reporting Period Same period of last year
Urban maintenance and
1,026,604.02 1,188,616.29
construction tax
84
Changchai Company, Limited Interim Report 2019
Education surcharge 733,288.56 849,011.61
Property tax 1,887,353.62 2,212,278.84
Land use tax 1,817,778.95 1,804,439.63
Vehicle and vessel use tax 270,741.50 300.00
Stamp duty 402,556.65 394,779.95
Environment tax 60,179.21 60,179.21
Other 56,775.69 42,000.00
Total 6,255,278.20 6,551,605.53
37. Selling Expense
Unit: RMB
Item Reporting Period Same period of last year
Office expenses 4,736,523.65 4,629,025.89
Employee benefits 17,526,685.96 13,886,073.89
Sales promotional expense 6,212,342.60 5,545,750.00
Three guarantees 28,141,207.55 27,893,180.55
Other 9,558,048.08 11,438,328.19
Total 66,174,807.84 63,392,358.52
38. Administrative Expense
Unit: RMB
Item Reporting Period Same period of last year
Office expenses 7,630,682.21 6,035,491.45
Employee benefits 25,708,439.30 17,294,526.56
Depreciation and amortization 5,279,293.31 5,263,681.34
Repair charge 928,742.39 138,950.52
Other 8,461,323.27 4,993,235.00
Total 48,008,480.48 35,609,030.74
39. Development Costs
Unit: RMB
Item Reporting Period Same period of last year
Direct input expense 25,574,380.45 19,721,929.05
85
Changchai Company, Limited Interim Report 2019
Employee benefits 11,406,908.14 9,551,798.98
Depreciation and amortization 1,944,857.24 2,063,723.78
Entrusted development charges 4,716,981.13 32,231.13
Other 1,493,727.00 968,567.84
Total 45,136,853.96 32,338,250.78
40. Finance Costs
Unit: RMB
Item Reporting Period Same period of last year
Interest expense 4,437,018.11 3,340,575.91
Interest income 4,502,088.58 2,792,152.75
Net foreign exchange gains or losses 1,608,275.04 -1,097,813.30
Other 1,099,425.68 -170,269.84
Total 2,642,630.25 -719,659.98
41. Other Income
Unit: RMB
Sources Reporting Period Same period of last year
Government grants 406,454.70 2,657,218.07
Other (Additional deduction of input tax) 20,746.75
42. Investment Income
Unit: RMB
Item Reporting Period Same period of last year
Long-term equity investment income accounted by
equity method
Investment income from disposal of long-term
equity investment
Investment income from holding of trading
financial assets
Investment income from disposal of trading
250,514.11
financial assets
Dividend income from holding of other equity
7,394,400.00 4,983,988.73
instrument investment
Investment income from holding of held-to
86
Changchai Company, Limited Interim Report 2019
–maturity investment
Investment income from holding of
available-for-sale financial assets
Investment income from disposal of
available-for-sale financial assets
Investment income from disposal of held-to
–maturity investment
Income from re-measurement of residual stock
rights at fair value after losing control power
Interest income from holding of investment in debt
obligations
Interest income from holding of investment in
other debt obligations
Investment income from disposal of investment in
other debt obligations
Investment income from holding of other
149,121.58
non-current financial assets
Investment income from disposal of financial
251,486.73
products of securities company
Other income from holding of other equity
instrument investments 797,324.76
Forward income from foreign exchange settlement 82,262.00
Total 8,524,500.87 5,384,597.04
43. Gain on Changes in Fair Value
Unit: RMB
Item Reporting Period Same period of last year
Other non-current financial assets 122,554,092.00
Total 122,554,092.00 0.00
44. Credit Impairment Loss
Unit: RMB
Item Reporting Period Same period of last year
Bad debt loss of other receivables 64,194.87 622,346.72
Bad debt loss of accounts receivable -12,559,627.15 -6,601,368.01
Total -12,495,432.28 -5,979,021.29
87
Changchai Company, Limited Interim Report 2019
45. Asset Impairment Loss
Unit: RMB
Item Reporting Period Same period of last year
I. Bad debt loss
II. Loss on inventory valuation and contract
-5,950,895.20 -16,343,805.00
performance cost
III. Impairment loss on long-term equity
investment
IV. Impairment loss on investment property
V. Impairment loss on fixed assets
VI. Impairment loss on engineering materials
VII. Impairment loss on construction in progress
VIII. Impairment loss on productive living assets
IX. Impairment loss on oil and gas assets
X. Impairment loss on intangible assets
XI. Impairment loss on goodwill
XII. Other
Total -5,950,895.20 -16,343,805.00
46. Asset Disposal Income
Unit: RMB
Sources Reporting Period Same period of last year
Disposal income of fixed assets -751,441.20 10,977.61
47. Non-operating Income
Unit: RMB
Amount recorded in the
Item Reporting Period Same period of last year current non-recurring
profit or loss
Income from penalty 246,187.33 181,076.00 246,187.33
Insurance indemnity 115,000.00 115,000.00
Other 488,996.26 287,214.78 488,996.26
Total 850,183.59 468,290.78 850,183.59
88
Changchai Company, Limited Interim Report 2019
48. Non-operating Expense
Unit: RMB
Amount recorded in the
Item Reporting Period Same period of last year current non-recurring
profit or loss
Retirement loss of
41,983.82 1,725.58 41,983.82
non-current assets
Other 291,323.90 393,650.10 291,323.90
Total 333,307.72 395,375.68 333,307.72
49. Income Tax Expense
(1) List of Income Tax Expense
Unit: RMB
Item Reporting Period Same period of last year
Current income tax expense 1,023,856.84 3,442,263.52
Deferred income tax expense 27,263,523.00 -1,044,951.94
Total 28,287,379.84 2,397,311.58
(2) Adjustment Process of Accounting Profit and Income Tax Expense
Unit: RMB
Item Reporting Period
Profit before taxation 157,641,830.37
Current income tax expense accounted at statutory/applicable tax rate 23,646,274.56
Influence of applying different tax rates by subsidiaries 10,948,598.36
Influence of income tax before adjustment -6,307,493.08
Influence of non-taxable income
Influence of non-deductable costs, expenses and losses
Influence of deductable losses of unrecognized deferred income tax at the
beginning of the Reporting Period
Influence of deductable temporary difference or deductable losses of
unrecognized deferred income tax assets in the Reporting Period
Income tax expense 28,287,379.84
89
Changchai Company, Limited Interim Report 2019
50. Cash Flow Statement
(1) Cash Generated from Other Operating Activities
Unit: RMB
Item Reporting Period Same period of last year
Subsidy and appropriation 406,454.70 2,125,031.26
Other intercourses in cash 2,956,131.54 2,450,124.78
Interest income 4,502,088.58 2,792,152.75
Other 402,565.98 377,095.40
Total 8,267,240.80 7,744,404.19
(2) Cash Used in Other Operating Activities
Unit: RMB
Item Reporting Period Same period of last year
Selling and administrative expense paid in cash 79,257,764.77 71,425,919.05
Handling charges 1,776,237.12 850,745.30
Other 896,524.70 841,135.29
Other transactions 95,689.96 0.00
Total 82,026,216.55 73,117,799.64
(3) Cash Generated from Other Investing Activities
Unit: RMB
Item Reporting Period Same period of last year
Deposit of construction unit 220,217.55 97,150.00
Total 220,217.55 97,150.00
(4) Cash Used in Other Investing Activities
Unit: RMB
Item Reporting Period Same period of last year
Project margin 50,000.00 930,300.00
Total 50,000.00 930,300.00
(5) Cash Generated from Other Financial Activities
Unit: RMB
90
Changchai Company, Limited Interim Report 2019
Item Reporting Period Same period of last year
Subsidies for project loans 1,391,000.00
Total 1,391,000.00
(6) Cash Used in Other Financial Activities
Unit: RMB
Item Reporting Period Same period of last year
Private placement 12,694,718.67
Total 12,694,718.67
51. Supplemental Information for Cash Flow Statement
(1) Supplemental Information for Cash Flow Statement
Unit: RMB
Same period of last
Supplemental information Reporting Period
year
1. Reconciliation of net profit to net cash flows generated
-- --
from operating activities
Net profit 129,354,450.53 27,867,794.73
Add: Provision for impairment of assets 18,446,327.48 22,322,826.29
Depreciation of fixed assets, of oil and gas assets, of
39,921,116.37
productive living assets 39,927,432.35
Depreciation of right-of-use assets
Amortization of intangible assets 3,142,009.67 2,325,255.12
Amortization of long-term deferred expenses 16,261.85 19,902.30
Losses on disposal of fixed assets, intangible assets and other
751,441.20 -10,977.61
long-term assets (gains by “-”)
Losses on the scrapping of fixed assets (gains by “-”) 41,983.82 1,725.58
Losses on the changes in fair value (gains by “-”) -122,554,092.00
Financial expenses (gains by “-”) 2,642,630.25 3,702,027.93
Investment losses (gains by “-”) -824,500.87 -5,384,597.04
Decrease in deferred income tax assets (increase by “-”) 0 -956,111.39
Increase in deferred income tax liabilities (decrease by “-”) 45,768,261.14 -88,840.55
Decrease in inventory (increase by “-”) 46,125,419.47 28,810,293.38
Decrease in accounts receivable from operating activities -382,207,027.61 -219,167,832.28
91
Changchai Company, Limited Interim Report 2019
(increase by “-”)
Increase in payables from operating activities (decrease by
93,944,576.05
“-”) 145,278,539.35
Other -18,463,256.69 -13,661,888.13
Net cash flows generated from operating activities -92,554,120.06 -20,354,729.25
2. Investing and financing activities that do not involving cash
--
receipts and payment:
Debt transferred as capital
Convertible corporate bond due within one year
Fixed assets from financing lease
3. Net increase in cash and cash equivalents --
Ending balance of cash 1,047,274,087.46 493,637,357.80
Less: Beginning balance of cash 629,939,540.50 545,959,998.20
Add: Ending balance of cash equivalents
Less: Beginning balance of cash equivalents
Net increase in cash and cash equivalents 417,334,546.96 -52,322,640.40
(2) Cash and Cash Equivalents
Unit: RMB
Item Ending balance Beginning balance
I. Cash 1,047,274,087.46 629,939,540.50
Including: Cash on hand 194,231.28 287,505.91
Bank deposit on demand 1,037,937,290.68 620,966,786.57
Other monetary assets on demand 9,142,565.50 8,685,248.02
Accounts deposited in the central bank available for payment
Deposits in other banks
Accounts of interbank
II. Cash equivalents
Of which: Bond investment expired within three months
III. Ending balance of cash and cash equivalents 1,047,274,087.46 629,939,540.50
Of which: Cash and cash equivalents with restriction in use for the
Company as the parent or subsidiaries of the Group
52. Assets with Restricted Ownership or Right to Use
Unit: RMB
92
Changchai Company, Limited Interim Report 2019
Item Ending carrying value Reason for restriction
Monetary assets 213,108,704.75 As cash deposit for bank acceptance bill
Houses and buildings 1,551,119.26 Mortgaged for borrowings from banks
Land use right 946,766.81 Mortgaged for borrowings from banks
Machinery equipment 28,348,410.34 Mortgaged for borrowings from banks
Total 243,955,001.16 --
53. Foreign Currency Monetary Items
(1) Foreign Currency Monetary Items
Unit: RMB
Ending foreign currency Ending balance
Item Exchange rate
balance converted to RMB
Monetary assets -- -- 94,797,968.28
Of which: USD 14,597,155.42 6.4601 94,299,083.73
HKD 285,402.45 0.8321 237,483.38
SGD 54,427.95 4.8027 261,401.12
JPY 1 0.058428 0.06
Accounts receivable -- -- 54,390,616.40
Of which: USD 8,419,469.73 6.4601 54,390,616.40
Accounts payable -- -- 1,954.83
Of which: USD 302.6 6.4601 1,954.83
(2) Notes to Overseas Entities Including: for Significant Oversea Entities, Main Operating Place, Recording
Currency and Selection Basis Shall Be Disclosed; if there Are Changes in Recording Currency, Relevant
Reasons Shall Be Disclosed.
□ Applicable √ Not applicable
54. Government Grants
(1) Basic Information on Government Grants
Unit: RMB
Amount recorded in the
Category Amount Listed items
current profit or loss
Industrial and information industry
150,000.00 Other income 150,000.00
transformation and upgrading subsidies
93
Changchai Company, Limited Interim Report 2019
Invention grants from the Intellectual
4,000.00 Other income 4,000.00
Property Protection Center
Production subsidies 182,454.70 Other income 182,454.70
Comprehensive awards and subsidies
for technical transformation of 70,000.00 Other income 70,000.00
industrial enterprises
Return of Government Grants
□ Applicable √ Not applicable
VIII. Equity in Other Entities
1. Equity in Subsidiary
(1) Subsidiaries
Holding percentage
Main Registrat
Nature of (%) Way of
Name operatin ion
business Indirect gaining
g place place Directly
ly
Changchai Wanzhou Diesel Engine Chongq Chongqi
Industry 60.00% Set-up
Co., Ltd. ing ng
Changzhou Changchai Benniu Diesel Changz Changzh
Industry 99.00% 1.00% Set-up
Engine Fittings Co., Ltd. hou ou
Changzhou Housheng Investment Changz Changzh
Service 100.00% Set-up
Co., Ltd. hou ou
Changzhou Changchai Housheng Changz Changzh
Industry 70.00% 25.00% Set-up
Agricultural Equipment Co., Ltd. hou ou
Combinati
on not
Changzhou Fuji Changchai Robin Changz Changzh
Industry 100.00% under the
Gasoline Engine Co., Ltd. hou ou
same
control
Jiangsu Changchai Machinery Co., Changz Changzh
Industry 100.00% Set-up
Ltd. hou ou
Changzhou Xingsheng Property Changz Changzh
Service 100.00% Set-up
Management Co., Ltd. hou ou
94
Changchai Company, Limited Interim Report 2019
(2) Significant Non-wholly-owned Subsidiary
Unit: RMB
Declaring
Shareholding The profit or loss Balance of
dividends
proportion of attributable to the non-controlling
Name distributed to
non-controlling non-controlling interests at the
non-controlling
interests interests period-end
interests
Changchai
Wanzhou Diesel 40.00% 195,175.38 20,007,034.84
Engine Co., Ltd.
Changzhou
Changchai
Housheng
5.00% -29,790.45 -343,060.76
Agricultural
Equipment Co.,
Ltd.
Holding proportion of non-controlling interests in subsidiary different from voting proportion: Not applicable
(3) The Main Financial Information of Significant Not Wholly-owned Subsidiary
Unit: RMB
Ending balance Beginning balance
Non- Non-
Non- Curre Non- Curre
Curre curre Total Curre curre Total
Name curre Total nt curre Total nt
nt nt liabili nt nt liabili
nt assets liabili nt assets liabili
assets liabili ties assets liabili ties
assets ties assets ties
ty ty
Chan
gchai
Wanz
hou 52,50 24,62 77,12 27,10 27,10 49,26 25,04 74,31 24,78 24,78
Diese 2,609 1,111 3,720 6,133 0 6,133 7,159 4,012 1,171 1,522 0 1,522
l .07 .04 .11 .00 .00 .00 .17 .17 .52 .52
Engin
e Co.,
Ltd.
Chan
gzhou
24,46 24,83 31,69 31,69 26,35 26,77 33,04 33,04
Chan 367,7 0 423,4 0
9,563 7,314 8,529 8,529 6,205 9,698 5,105 5,105
gchai 50.30 93.77
.98 .28 .47 .47 .03 .80 .00 .00
Hous
95
Changchai Company, Limited Interim Report 2019
heng
Agric
ultura
l
Equip
ment
Co.,
Ltd.
Unit: RMB
Reporting Period Same period of last year
Cash Cash
Total Total
flows flows
Name Operating comprehe Operating comprehe
Net profit from Net profit from
revenue nsive revenue nsive
operating operating
income income
activities activities
Changcha
i
Wanzhou 30,436,07 487,938.4 487,938.4 -1,981,90 24,477,85 469,127.8 469,127.8 1,744,069
Diesel 9.88 6 6 1.87 0.44 7 7 .06
Engine
Co., Ltd.
Changzh
ou
Changcha
i
Houshen
9,618,584 -595,808. -595,808. 4,361,727 9,292,539 -203,349. -203,349. -784,927.
g
.31 99 99 .35 .79 52 52 87
Agricultu
ral
Equipme
nt Co.,
Ltd.
2. Equity in the Structured Entity Excluded in the Scope of Consolidated Financial Statements
Notes to the structured entity excluded in the scope of consolidated financial statements:
In 2017, the Company set up Changzhou Xietong Private Equity Fund (Limited Partnership) together with
Synergetic Innovation Fund Management Co., Ltd. through joint investment. On 18 October 2018 and 3
December 2020, new partners were added. In line with the revised Partnership Agreement, the general partner is
Synergetic Innovation Fund Management Co., Ltd., and the limited partners are Changchai Company, Limited,
Changzhou Zhongyou Petroleum Sales Co., Ltd., Changzhou Fuel Co., Ltd., Tong Yinzhu, Tong Yinxin and Anhui
Haiyunzhou Equity Investment Partnership Enterprise (Limited). In accordance with the Partnership Agreement,
the limited partner does not execute the partnership affairs. Thus, the Company does not control Changzhou
96
Changchai Company, Limited Interim Report 2019
Xietong Private Equity Fund (Limited Partnership) and did not include it into the scope of consolidated financial
statements.
IX. The Risk Related to Financial Instruments
The goal of the Company’s risk management was gaining the balance between the risk and income, and reduced
the negative impact to the operation performance of the Company in the lowest level and maximized the interests
of shareholders and other equity investors. Base on the risk management goal, the basis strategy of the Company’s
risk management was to recognized and analyze all kinds of risk that the Company faced, set up suitable risk
bottom line and conduct risk management, and supervised the risks timely and reliably and control the risk within
the limited scope.
The main risks of the Company due to financial instruments were credit risk, liquidity risk and market risk. The
management level had reviewed and approved the policies to manage the risks, which summarized as follows:
(I) Credit Risk
Credit risk was one party of the contract failed to fulfill the obligations and causes loss of financial assets of the
other party.
The credit of risk of the Company mainly was related to account receivable, in order to control the risk, the
Company conduct the following methods.
The Company only conducts related transaction with approved and reputable third party, in line with the policy of
the Company, the Company need to conduct credit-check for the clients adopting way of credit to conduct
transaction. In addition, the Company continuously monitors the balance of account receivable to ensure the
Company would not face the significant bad debt risk.
(II) Liquidity Risk
Liquidity risk is referred to the risk of incurring capital shortage when performing settlement obligation in the way
of cash payment or other financial assets. The policies of the Company are to ensure that there was sufficient cash
to pay the due liabilities.
The liquidity risk was centralized controlled by the financial department of the Company. The financial
departments through supervising the balance of the cash and securities can be convert to cash at any time and the
rolling prediction of cash flow in future 12 months to ensure the Company has sufficient cash to pay the liabilities
under the case of all reasonable prediction.
(III) Market Risk
Market risk is refer to risk of the fair value or future cash flow of financial instrument changed due to the change
of market price, including foreign exchange rate risk, interest rate risk.
1. Interest Rate Risk
Interest rate risk is refers to fluctuation risk of the fair value or future cash flow of financial instrument change due
to the change of market price.
2. Foreign Exchange Risk
Foreign exchange rate risk is referred to the risk incurred form the change of exchange rate. As for the Company’s
export business, customers will be given a certain credit term, if the RMB appreciates against the dollar, the
company's accounts receivable will incur foreign currency exchange loss.
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Changchai Company, Limited Interim Report 2019
X. The Disclosure of Fair Value
1. Ending Fair Value of Assets and Liabilities at Fair Value
Unit: RMB
Ending fair value
Fair value
Fair value Fair value
Item measurement
measurement measurement Total
items at level
items at level 1 items at level 3
2
I. Consistent fair value
-- -- -- --
measurement
1. Trading financial assets 134,446,937.00 126,004,704.16 260,451,641.16
(I) Financial assets at fair value
134,446,937.00 126,004,704.16 260,451,641.16
through profit or loss
(1) Debt instrument investment
(2) Equity instrument investment 134,446,937.00 126,004,704.16 260,451,641.16
(3) Derivative financial assets
2. Financial assets designated to be
measured at fair value and the
changes included into the current
profit or loss
(1) Debt instrument investment
(2) Equity instrument investment
(II) Other bond investment
(III)Other equity instrument
664,665,000.00 145,924,691.82 810,589,691.82
investment
(2) Equity instrument investment
(IV) Investment property
1. Land use right for lease
2. Buildings leased out
3. Land use right held and planned
to be transferred once appreciating
(V) Living assets
1. Consumptive living assets
2. Productive living assets
Total assets consistently measured 1,071,041,332.9
799,111,937.00 0.00 271,929,395.98
by fair value 8
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Changchai Company, Limited Interim Report 2019
(VI) Trading financial liabilities
Of which: Issued trading bonds
Derivative financial
liabilities
Other
(VII) Financial liabilities designated
to be measured at fair value and the
changes recorded into the current
profit or loss
Total liabilities consistently
measured by fair value
II. Inconsistent fair value
-- -- -- --
measurement
(1) Assets held for sale
Total assets inconsistently measured
by fair value
Total liabilities inconsistently
measured by fair value
2. Market Price Recognition Basis for Consistent and Inconsistent Fair Value Measurement Items at Level 1
For the listed company stocks held by the company in the investment of other equity instruments measured at fair
value, the closing price at the end of the period was the basis for the measurement of fair value.
3. Valuation Technique Adopted and Nature and Amount Determination of Important Parameters for
Consistent and Inconsistent Fair Value Measurement Items at Level 3
(1) Among the trading financial assets, the basic assets invested in financial products include bond assets, deposit
assets, fund assets, etc. The portfolio of investment is managed dynamically, and the change in the fair value of
financial products is difficult to measure, so the cost amount is adopted to confirm its fair value.
For the unsettled forward settlement contract at the end of the period, its fair value was measured based on the
valuation of the bank.
(2) In terms of shares of NEEQ unlisted public companies held by the Company, as for the equity instrument
investment with inactive market transactions, due to the market value of shares cannot be reflected by the market
transaction price with the low volume of holding, so the appraisement to the invested companies by income or
market approach was unfeasible. Therefore, the investment cost shall be treated as reasonable estimation of fair
value to measure at the period-end.
Jiangsu Housheng New Energy Technology Co., Ltd. entrusted an appraisal agency to evaluate the value of all its
shareholders’ equity due to the need for capital increase and share expansion in 2021, and confirmed the premium
rate of capital increase based on the appreciation rate of the equity value (on 16 June 2021, the company’s
99
Changchai Company, Limited Interim Report 2019
investors signed an investment agreement). Therefore, at the end of the period, the fair value of the equity
investment had been adjusted and confirmed accordingly.
(3) Among other equity investment instruments, the total investment in Chengdu Changwan Diesel Engine
Distribution Co., Ltd., Chongqing Wanzhou Changwan Diesel Engine Parts Co., Ltd., Changzhou Economic and
Technological Development Company, Changzhou Tractor Company, Changzhou Economic Commission
Industrial Capital Mutual Aid Association, Beijing Engineering Machinery Agricultural Machinery Company was
RMB 1.21 million, and the fair value was RMB 0.00 due to the difficulty in recovering the investment.
Since its establishment in October 2017, Changzhou Synergetic Innovation Private Equity Fund (Limited
Partnership) has invested in Jiangsu Housheng New Energy Technology Co., Ltd., and the change in fair value of
the company's equity held by it had increased the equity of partners at the end of the year. In addition, the
company's business environment, operating conditions, and financial status had not undergone major changes.
Therefore, the company determined its fair value on the basis of the net book assets of the partnership at the end
of the period.
XI. Related Party and Related-party Transactions
1. Information Related to the Company as the Parent of the Company
Proportion of Proportion of
share held by voting rights
Registration Nature of Registered the Company as owned by the
Name
place business capital the parent Company as the
against the parent against
Company the Company
Investment and
operations of
state-owned
assets, assets
management
(excluding
Changzhou financial
Investment Changzhou business), RMB1.2 billion 30.43% 30.43%
Group Co., Ltd. investment
consulting
(excluding
consulting on
investment in
securities and
options), etc.
Notes: Information on the Company as the parent
On 22 November 2018, Changzhou Government State-owned Assets Supervision and Administration Commission
gratuitously transferred all the 170,845,236 shares of the Company held by it (accounting for 30.43% of the total
shares of the Company) to Changzhou Investment Group Co., Ltd. In accordance with Changzhou People’s
100
Changchai Company, Limited Interim Report 2019
Government Document (CZF [2006] No. 62), both the Company and Changzhou Investment Group Co., Ltd. are
enterprises which Changzhou People’s Government authorizes Changzhou Government State-owned Assets
Supervision and Administration Commission to perform duties of investors. Thus, after the share transfer,
Changzhou Investment Group Co., Ltd. is the controlling shareholder of the Company and Changzhou
Government State-owned Assets Supervision and Administration Commission is still the actual controller of the
Company. The final controller of the Company is Changzhou Government State-owned Assets Supervision and
Administration Commission.
On 6 May 2021, the Company received the Letter on the Free Transfer of State-owned Shares of Changzhou
Investment Group Co., Ltd. from its controlling shareholder, Changzhou Investment Group Co., Ltd. (hereinafter
referred to as the "Investment Group"). According to the guiding principle of the Notice of Provincial Government
on Issuing the Implementation Plan for Transferring Part of State-owned Capital to Boost Social Security Fund in
Jiangsu Province (SZF [2020] No. 27), the Notice on Transferring Part of State-owned Capital to Cities and
Counties to Boost Social Security Fund (SCGM [2020] No. 139) from the Department of Finance of Jiangsu
Province and other five departments and the Notice on Transferring Part of State-owned Capital at Urban
(District) Level to Boost Social Security Fund (CCGM [2020] No. 4) from Changzhou Finance Bureau and other
four departments, the 10% state-owned equity of the Investment Group held by Changzhou Municipal People's
Government is transferred to the Department of Finance of Jiangsu Province free of charge, and Department of
Finance of Jiangsu Province is entrusted with special account management of the transferred state-owned equity.
The alteration of state-owned ownership and the industrial and commercial registration of changes have been
completed. The above-mentioned transfer only affects the equity structure of the Investment Group and does not
affect the equity of the Investment Group in the Company. Changzhou Investment Group Co., Ltd. remains the
controlling shareholder of the Company and State-owned Assets Supervision and Administration Commission
(SASAC) of Changzhou Municipal People's Government remains the actual controller of the Company.
2. Subsidiaries of the Company
Refer to Note VIII for details.
3. Information on Other Related Parties
Name Relationship with the Company
Changzhou Synergetic Innovation Private Equity Participated in establishing the industrial investment
Fund (Limited Partnership) fund
Jiangsu Housheng New Energy Technology Co., Ltd. Shareholding enterprise of the Company
Donghai Securities Co., Ltd. Controlled by the same Company as the parent
XII. Commitments and Contingency
1. Significant Commitments
Significant commitments on balance sheet date
As of 30 June 2021, there was no significant commitment for the Company to disclose.
101
Changchai Company, Limited Interim Report 2019
2. Contingency
（1）Important Contingencies Existing on the BalanceSheet Date
As of 30 June 2021, there was no contingency for the Company to disclose.
（2）If the Company Has no Important Contingencies to be Disclosed, it Shall Also be Explained
The company has no important contingencies to be disclosed.
XIII. Events after Balance Sheet Date
1. Profit Distribution
Unit: RMB
Profits or dividends to be distributed 0
2. Notes to Other Events after Balance Sheet Date
As of the approval issue date of financial statements, there was no significant event after balance sheet date that
shall be disclosed.
XIV. Other Significant Events
1. Segment Information
(1) Determination Basis and Accounting Policies of Reportable Segment
Due to the operation scope of the Company and subsidiaries were similar, the Company conducts common
management, and did not divide business unit, so the Company only made single branch report.
2. Other Significant Transactions and Events with Influence on Investors’ Decision-making
No.
XVI. Notes of Main Items in the Financial Statements of the Company as the Parent
1. Accounts Receivable
(1) Accounts Receivable Classified by Category
Unit: RMB
Category Ending balance Beginning balance
102
Changchai Company, Limited Interim Report 2019
Carrying Bad debt Carrying Bad debt
amount provision amount provision
Carryi
Withd Withd Carryin
ng
Amou Propo Amou rawal Amou Propor Amou rawal g value
value
nt rtion nt propo nt tion nt propor
rtion tion
Accounts
receivable for
33,55 31,65 1,895, 33,54 31,647
which bad debt 94.35 94.35 1,895,5
0,765. 3.31% 5,179. 586.8 3,441. 7.29% ,855.0
provision % % 86.83
92 09 3 92 9
separately
accrued
Of which:
Accounts
receivable with
significant
29,87 27,97 1,895, 29,87 27,974
single amount 93.65 93.65 1,895,5
0,525. 2.95% 4,938. 586.8 0,525. 6.50% ,938.2
for which bad % % 86.83
05 22 3 05 2
debt provision
separately
accrued
Accounts
receivable with
insignificant
3,680, 3,680, 3,672,
single amount 100.0 3,672, 100.0
240.8 0.36% 240.8 0.00 916.8 0.80%
for which bad 0% 916.87 0%
7 7 7
debt provision
separately
accrued
Accounts
receivable for
978,8 122,5 856,3 426,3 110,36
which bad debt 96.69 12.52 92.71 25.89 315,932
93,54 20,40 73,13 00,27 7,704.
provision % % % % ,574.42
4.67 9.84 4.83 9.29 87
accrued by
group
Of which:
103
Changchai Company, Limited Interim Report 2019
Accounts
receivable for
which bad debt 978,8 122,5 856,3 426,3 110,36
96.69 12.52 92.71 25.89 315,932
provision 93,54 20,40 73,13 00,27 7,704.
% % % % ,574.42
accrued by 4.67 9.84 4.83 9.29 87
credit risk
features group
1,012, 154,1 858,2 459,8 142,01
15.23 100.00 30.88 317,828
Total 444,3 100% 75,58 68,72 43,72 5,559.
% % % ,161.25
10.59 8.93 1.66 1.21 96
Accounts receivable with significant single amount for which bad debt provision separately accrued at the end of
the period:
Unit: RMB
Ending balance
Name Carrying Bad debt Withdrawal
Withdrawal reason
amount provision proportion
Customer 1 1,470,110.64 1,470,110.64 100.00% Difficult to recover
Customer 2 1,902,326.58 1,902,326.58 100.00% Difficult to recover
Customer 3 6,215,662.64 6,215,662.64 100.00% Difficult to recover
Customer 4 2,254,860.60 2,175,814.38 96.49% Expected to difficultly recover
Customer 5 3,633,081.23 1,816,540.62 50.00% Expected to difficultly recover
Customer 6 3,279,100.00 3,279,100.00 100.00% Difficult to recover
Customer 7 1,617,988.01 1,617,988.01 100.00% Difficult to recover
Customer 8 5,359,381.00 5,359,381.00 100.00% Difficult to recover
Customer 9 2,584,805.83 2,584,805.83 100.00% Difficult to recover
Customer 10 1,553,208.52 1,553,208.52 100.00% Difficult to recover
Total 29,870,525.05 27,974,938.22 -- --
Accounts receivable for which bad debt provision accrued by credit risk features group
Unit: RMB
Ending balance
Name
Carrying amount Bad debt provision Withdrawal proportion
Within 1 year 856,992,523.68 17,139,850.47 2.00%
1 to 2 years 11,494,835.88 574,741.79 5.00%
2 to 3 years 2,248,492.74 337,273.91 15.00%
3 to 4 years 4,685,265.65 1,405,579.70 30.00%
104
Changchai Company, Limited Interim Report 2019
4 to 5 years 1,023,656.89 614,194.13 60.00%
Over 5 years 102,448,769.83 102,448,769.83 100.00%
Total 978,893,544.67 122,520,409.84 --
Notes to the basis for the determination of the groups:
The accounts receivable was adopted the aging analysis based on the months when the accounts occurred actually,
among which the accounts occurred earlier will be priority to be settled in terms of the capital turnover.
Explanation of the input value and assumption adopted to determine the withdrawal amount of bad debt provision
on the Current Period: With reference to the experience of the historical credit loss, combining with the prediction
of the present status and future financial situation, the comparison table was prepared between the aging of the
accounts receivable and estimated credit loss rate in the duration and to calculate the estimated credit loss.
Please refer to the relevant information of disclosure of bad debt provision of other accounts receivable if
adopting the general mode of expected credit loss to withdraw bad debt provision of accounts receivable.
□ Applicable √ Not applicable
Disclosure by aging
Unit: RMB
Aging Carrying amount
Within 1 year (including 1 year) 857,284,261.14
1 to 2 years 10,214,785.13
2 to 3 years 4,198,242.30
Over 3 years 140,747,022.02
3 to 4 years 7,664,472.30
4 to 5 years 4,185,761.74
Over 5 years 128,896,787.98
Total 1,012,444,310.59
(2) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
Unit: RMB
Changes in the Reporting Period
Beginning
Category Reversal or Write-o Ending balance
balance Withdrawal Other
recovery ff
Bad debt
provision
31,647,855.09 64,241.53 56,917.53 31,655,179.09
withdrawn
separately
105
Changchai Company, Limited Interim Report 2019
Bad debt
provision
110,367,704.87 12,152,704.97 122,520,409.84
withdrawn
by group
Total 142,015,559.96 12,216,946.50 56,917.53 154,175,588.93
Of which bad debt provision reversed or recovered with significant amount in the Reporting Period: No.
(3) There Was No Particulars of the Actual Verification of Accounts Receivable during the Reporting
Period
(4) Top 5 of the Ending Balance of Other Receivables Collected according to the Arrears Party
Unit: RMB
Ending balance of Proportion to total ending balance of Ending balance of
Name of the entity
accounts receivable accounts receivable bad debt provision
Customer 1 559,214,901.98 55.23% 11,184,298.04
Customer 2 56,638,430.22 5.59% 1,132,768.60
Customer 3 40,930,712.14 4.04% 818,614.24
Customer 4 26,775,895.61 2.64% 535,517.91
Customer 5 19,053,675.15 1.88% 381,073.50
Total 702,613,615.10 69.38%
2. Other Receivables
Unit: RMB
Item Ending balance Beginning balance
Other receivables 20,870,644.87 24,327,355.36
Total 20,870,644.87 24,327,355.36
(1) Other Receivable
1) Other Receivables Classified by Account Nature
Unit: RMB
Nature Ending carrying amount Beginning carrying amount
Cash deposit and Margin 4,200.00 4,200.00
Intercourse funds among units 37,507,793.73 39,857,085.87
Petty cash and borrowings by
1,016,523.69 673,198.96
employees
106
Changchai Company, Limited Interim Report 2019
Other 12,093,296.81 13,614,585.00
Total 50,621,814.23 54,149,069.83
2) Withdrawal of Bad Debt Provision
Unit: RMB
First stage Second stage Third stage
Expected loss in the
Expected credit Expected loss in the
Bad debt provision duration (credit Total
loss of the next duration (credit
impairment not
12 months impairment occurred)
occurred)
Balance of 1
29,821,714.47 29,821,714.47
January 2021
Balance of 1
January 2021 in the —— —— —— ——
Current Period
--Transfer to
Second stage
-- Transfer to Third
stage
-- Reverse to
Second stage
-- Reverse to First
stage
Withdrawal of the
Current Period
Reversal of the
70,545.11 70,545.11
Current Period
Write-offs of the
Current Period
Verification of the
Current Period
Other changes
Balance of 30 June
29,751,169.36 29,751,169.36
2021
Changes of carrying amount with significant amount changed of loss provision in the Current Period
□ Applicable √ Not applicable
Disclosure by aging
107
Changchai Company, Limited Interim Report 2019
Unit: RMB
Aging Carrying amount
Within 1 year (including 1 year) 10,593,552.12
1 to 2 years 8,658,952.63
2 to 3 years 1,496,325.48
Over 3 years 29,872,984.00
3 to 4 years 527,586.56
4 to 5 years 915,874.24
Over 5 years 28,429,523.20
Total 50,621,814.23
3) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
Information of bad debt provision withdrawn:
Unit: RMB
Changes in the Reporting Period
Beginning
Category Reversal or Write-of Ending balance
balance Withdrawal Other
recovery f
Bad debt
provision
5,039,368.41 5,039,368.41
withdrawn
separately
Bad debt
provision
24,782,346.06 70,545.11 24,711,800.95
withdrawn by
group
Total 29,821,714.47 70,545.11 29,751,169.36
4) Particulars of the Actual Verification of Other Receivables during the Reporting Period: No.
5) Top 5 of the Ending Balance of Other Receivables Collected according to the Arrears Party
Unit: RMB
Proportion to
total ending Ending balance
Name of the entity Nature Ending balance Aging balance of of bad debt
other provision
receivables
Changzhou Changchai Interco 10,576,394.98 Within 1 year 20.89% 597,635.547
108
Changchai Company, Limited Interim Report 2019
Housheng Agricultural urse with RMB
Equipment Co., Ltd. funds 1,161,229.20, 1-2
years with RMB
8,378,639.04, 2-3
years with RMB
1,036,526.74
Changzhou Changchai Interco
Benniu Diesel Engine urse 10,000,000.00 Within 1 year 19.75% 200,000.00
Fittings Co., Ltd. funds
Interco
Changzhou Compressors
urse 2,940,000.00 Over 5 years 5.81% 2,940,000.00
Factory
funds
Interco
Changchai Group Imp.
urse 2,853,188.02 Over 5 years 5.64% 2,853,188.02
& Exp. Co., Ltd.
funds
Interco
Changzhou New District
urse 1,626,483.25 Over 5 years 3.21% 1,626,483.25
Accounting Center
funds
Total -- 27,996,066.25 -- 55.30% 8,217,306.82
3. Long-term Equity Investment
Unit: RMB
Ending balance Beginning balance
Item Carrying Depreciation Carrying Carrying Depreciation Carrying
amount reserves value amount reserves value
Investment to 542,752,730. 535,752,730. 382,752,730. 375,752,730.
7,000,000.00 7,000,000.00
subsidiaries 03 03 03 03
Investment to
joint ventures
and 44,182.50 44,182.50 44,182.50 44,182.50
associated
enterprises
542,796,912. 535,752,730. 382,796,912. 375,752,730.
Total 7,044,182.50 7,044,182.50
53 03 53 03
(1) Investment to Subsidiaries
Unit: RMB
Investee Beginning Increase/decrease Ending Ending
109
Changchai Company, Limited Interim Report 2019
balance Withdrawa balance balance of
(carrying Additional Reduced l of (carrying depreciatio
Other
value) investment investment depreciatio value) n reserve
n reserve
Changchai
Wanzhou
51,000,000 51,000,000
Diesel
.00 .00
Engine Co.,
Ltd.
Changzhou
Changchai
Benniu
96,466,500 96,466,500
Diesel
.00 .00
Engine
Fittings Co.,
Ltd.
Changzhou
Housheng 40,000,000 40,000,000
Investment .00 .00
Co., Ltd.
Changzhou
Changchai
Housheng 7,000,000.
0.00 0.00
Agricultural 00
Equipment
Co., Ltd.
Changzhou
Fuji
Changchai
47,286,230 47,286,230
Robin
.03 .03
Gasoline
Engine Co.,
Ltd.
Jiangsu
Changchai 140,000,00 160，000， 300,000,00
Machinery 0.00 000.00 0.00
Co., Ltd.
Changzhou
Xingsheng
1,000,000. 1,000,000.
Property
00 00
Managemen
t Co., Ltd.
110
Changchai Company, Limited Interim Report 2019
375,752,73 160,000,00 535,752,73 7,000,000.
Total
0.03 0.00 0.03 00
(2) Investment to Joint Ventures and Associated Enterprises
Unit: RMB
Increase/decrease
Gains
Adjust Endin
Begin and Cash Endin
ment Withd g
ning losses bonus g
of rawal balanc
balanc Additi Reduc recogn Chang or balanc
Invest other of e of
e onal ed ized es of profits e
ee compr impair Other deprec
(carryi invest invest under other annou (carryi
ehensi ment iation
ng ment ment the equity nced ng
ve provis reserv
value) equity to value)
incom ion e
metho issue
e
d
II. Associated enterprises
Beijin
g
Tsingh
ua
Xingy
e
Indust 44,182
0.00 0.00
rial .50
Invest
ment
Mana
gemen
t Co.,
Ltd.
Subtot 44,182
0.00 0.00
al .50
44,182
Total 0.00 0.00
.50
4. Operating Revenue and Cost of Sales
Unit: RMB
Reporting Period Same period of last year
Item
Operating revenue Cost of sales Operating revenue Cost of sales
111
Changchai Company, Limited Interim Report 2019
Main operations 1,391,941,677.73 1,195,911,988.65 1,066,808,215.93 914,519,611.82
Other operations 18,507,068.46 12,852,045.04 14,661,587.19 8,902,410.95
Total 1,410,448,746.19 1,208,764,033.69 1,081,469,803.12 923,422,022.77
Information related to performance obligations: performing according to the contract offer
Information related to transaction value assigned to residual performance obligations:
The amount of revenue corresponding to performance obligations of contracts signed but not performed or not
fully performed yet was RMB0 at the period-end.
5. Investment Income
Unit: RMB
Item Reporting Period Same period of last year
Dividend income from holding of other equity
7,394,400.00 4,865,000.00
instrument investment
Income from transferring to accommodation
118,988.73
business 797,324.76
Total 8,191,724.76 4,983,988.73
XVII. Supplementary Materials
1. Items and Amounts of Non-recurring Profit or Loss
√ Applicable □ Not applicable
Unit: RMB
Item Amount Note
Gain or loss on disposal of non-current assets -751,441.20
Government subsidies charged to current profit or loss
(exclusive of government subsidies given in the
406,454.70
Company’s ordinary course of business at fixed quotas
or amounts as per the government’s uniform standards)
112
Changchai Company, Limited Interim Report 2019
Increase in the fair value of
the equity of Jiangsu Liance
Gain/loss from change of fair value of trading financial Electromechanical
assets and liabilities, and derivative financial assets and Technology Co., Ltd. held by
liabilities, and investment gains from disposal of trading the Company’s
financial assets and liabilities, and derivative financial 122,886,868.11 wholly-owned subsidiary
assets and liabilities, and investment in other debt Housheng Investment and the
obligations, other than valid hedging related to the equity of Jiangsu Hosun New
Company’s common businesses Energy Technology Co., Ltd.
held by the Company durint
the Reporting Period
Other non-operating income and expenses other than the
516,875.87
above
Income tax rebate 6,307,493.08
Less: Income tax effects 27,333,319.22
Non-controlling interests effects 4,280.32
Total 102,028,651.02 --
Explain the reasons if the Company classifies an item as an non-recurring gain/loss according to the definition in
the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the
Public—Non-recurring Gains and Losses, or classifies any extraordinary gain/loss item mentioned in the said
explanatory announcement as a recurrent gain/loss item.
□ Applicable √ Not applicable
2. Return on Equity and Earnings Per Share
Weighted average ROE EPS (Yuan/share)
Profit as of Reporting Period
(%) EPS-basic EPS-diluted
Net profit attributable to ordinary
5.51% 0.2301 0.2301
shareholders of the Company
Net profit attributable to ordinary
shareholders of the Company after
1.19% 0.0498 0.0498
deduction of non-recurring profit or
loss
Changchai Company, Limited
16 August 2021
113
