Changchai Company, Limited Annual Report 2021
CHANGCHAI COMPANY, LIMITED
ANNUAL REPORT 2021
April 2022
1
Changchai Company, Limited Annual Report 2021
Table of Contents
Part I Important Notes, Table of Contents and Definitions........................................................... 3
Part II Corporate Information and Key Financial Information................................................... 6
Part III Management Discussion and Analysis..............................................................................11
Part IV Corporate Governance.......................................................................................................46
Part V Environmental and Social Responsibility.......................................................................... 67
Part VI Significant Events............................................................................................................... 68
Part VII Share Changes and Shareholder Information................................................................79
Part VIII Preferred Shares.............................................................................................................. 89
Part IX Bonds................................................................................................................................... 90
Part X Financial Statements............................................................................................................91
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Changchai Company, Limited Annual Report 2021
Part I Important Notes, Table of Contents and Definitions
The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors,
supervisors and senior management of Changchai Company, Limited (hereinafter referred to
as the “Company”) hereby guarantee the factuality, accuracy and completeness of the
contents of this Report and its summary, and shall be jointly and severally liable for any
misrepresentations, misleading statements or material omissions therein.
Shi Xinkun, the Company’s legal representative, Zhang Xin, the Company’s General Manager,
and Jiang He, head of the Company’s financial department (equivalent to financial manager)
hereby guarantee that the Financial Statements carried in this Report are factual, accurate
and complete.
All the Company’s directors have attended the Board meeting for the review of this Report
and its summary.
Any plans for the future and other forward-looking statements mentioned in this Report shall
NOT be considered as absolute promises of the Company to investors. Therefore, investors
are kindly reminded to pay attention to possible investment risks.
The Company has described in detail the risks it might face in “XI Prospects” in “Part III
Management Discussion and Analysis” herein.
The Board has approved a final dividend plan as follows: based on the 705,692,507 shares, a
cash dividend of RMB0.26 (tax inclusive) per 10 shares is to be distributed to the shareholders,
with no bonus issue from either profit or capital reserves.
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Changchai Company, Limited Annual Report 2021
Documents Available for Reference
1. The financial statements signed and sealed by the Company’s legal representative, General
Manager and head of the financial department.
2. The original copy of the Independent Auditor’s Report signed and sealed by the CPAs, as well as
sealed by the CPA firm.
3. The originals of all the Company’s documents and announcements which were disclosed on
Securities Time and Ta Kung Pao (HK) (newspapers designated by the CSRC for information
disclosure) during the Reporting Period.
4. The Annual Report disclosed in other securities markets.
The above-mentioned documents available for reference are all kept in the Secretariat of the Board
of Directors of the Company and the Shenzhen Stock Exchange.
This Report has been prepared in both Chinese and English. Should there be any discrepancies or
misunderstandings between the two versions, the Chinese version shall prevail.
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Changchai Company, Limited Annual Report 2021
Definitions
Term Definition
“Changchai”, the “Company” or Changchai Company, Limited and its consolidated
“we” subsidiaries, except where the context otherwise requires
Changzhou Changchai Benniu Diesel Engine Fittings Co.,
Changchai Benniu
Ltd.
Changchai Wanzhou Changchai Wanzhou Diesel Engine Co., Ltd.
Horizon Investment Changzhou Horizon Investment Co., Ltd.
Changzhou Changchai Horizon Agricultural Equipment
Horizon Agricultural Equipment
Co., Ltd.
Changzhou Fuji Changchai Robin Gasoline Engine Co.,
Changchai Robin
Ltd.
Xingsheng Real Estate Management Changzhou Xingsheng Real Estate Management Co., Ltd.
Changchai Machinery Jiangsu Changchai Machinery Co., Ltd.
Expressed in the Chinese currency of Renminbi, expressed
RMB, RMB’0,000
in tens of thousands of Renminbi
The “Reporting Period” or “Current
The period from 1 January 2021 to 31 December 2021
Period”
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Changchai Company, Limited Annual Report 2021
Part II Corporate Information and Key Financial Information
I Corporate Information
Changchai,
Stock name Stock code 000570, 200570
Changchai-B
Stock exchange for stock listing Shenzhen Stock Exchange
Company name in Chinese 常柴股份有限公司
Abbr. 苏常柴
Company name in English (if any) CHANGCHAI COMPANY,LIMITED
Abbr. (if any) CHANGCAHI CO.,LTD.
Legal representative Shi Xinkun
Registered address 123 Huaide Middle Road, Changzhou, Jiangsu, China
Zip code 213002
Office address 123 Huaide Middle Road, Changzhou, Jiangsu, China
Zip code 213002
Company website http://www.changchai.com.cn
Email address cctqm@public.cz.js.cn
II Contact Information
Board Secretary Securities Representative
Name He Jianjiang
123 Huaide Middle Road,
Address
Changzhou, Jiangsu, China
Tel. （86）519-68683155
Fax （86）519-86630954
Email address cchjj@changchai.com
III Media for Information Disclosure and Place where this Report Is Lodged
Newspapers designated by the Company for
Securities Times, Ta Kung Pao (HK)
information disclosure
Website designated by CSRC for publication of
http://www.cninfo.com.cn
this Report
Board Secretariat of the Company and the Shenzhen
Place where this Report is lodged
Stock Exchange
IV Change to Company Registered Information
Unified social credit code 91320400134792410W
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Changchai Company, Limited Annual Report 2021
Change to principal activity of the
No change
Company since going public
On 22 November 2018, the State-owned Assets Supervision and
Administration Commission of Changzhou Municipal People’s
Every change of controlling
Government transferred its entire holdings of 170,845,236 shares in the
shareholder since incorporation
Company (a stake of 30.43%) to Changzhou Investment Group Co.,
Ltd. for no compensation. These shares are non-restricted public shares.
V Other Information
The independent audit firm hired by the Company:
Name Gongzheng Tianye Certified Public Accountants LLP
Office address Yingtong Commerce Building, Changzhou, Jiangsu, China
Accountants writing signatures Wang Wenkai, Qin Zhijun
The independent sponsor hired by the Company to exercise constant supervision over the Company in the
Reporting Period:
√ Applicable □ Not applicable
Name Office address Representatives Supervision period
10/F, China Industrial
China Industrial Securities Plaza, 36 Wang Lingxiao, Li 5 July 2021-31
Securities Co., Ltd. Changliu Road, Pudong Lihong December 2022
New District, Shanghai
6/F, Donghai Securities
Donghai Securities Co., Plaza, 1928 Dongfang 5 July 2021-31
Wang Jiangqin, Xu Qin
Ltd. Road, Pudong New District, December 2022
Shanghai
The independent financial advisor hired by the Company to exercise constant supervision over the Company in
the Reporting Period:
□ Applicable √ Not applicable
VI Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √ No
2021-over-2020
2021 2020 2019
change (%)
Operating revenue (RMB) 2,452,430,515.60 2,296,464,711.24 6.79% 2,045,820,801.10
Net profit attributable to
the listed company’s 103,006,232.54 52,432,443.05 96.46% 24,966,526.85
shareholders (RMB)
Net profit attributable to
the listed company’s
5,329,092.87 25,483,147.57 -79.09% 14,405,485.64
shareholders before
exceptional gains and
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Changchai Company, Limited Annual Report 2021
losses (RMB)
Net cash generated
from/used in operating -266,323,779.30 251,796,654.53 -- -20,325,189.56
activities (RMB)
Basic earnings per share
0.1657 0.0934 77.41% 0.0445
(RMB/share)
Diluted earnings per share
0.1657 0.0934 77.41% 0.0445
(RMB/share)
Weighted average return
3.86% 2.40% 1.46% 1.21%
on equity (%)
Change of 31
December 2021
31 December 31 December
31 December 2021 over 31
2020 2019
December 2020
(%)
Total assets (RMB) 4,860,382,961.26 3,952,954,464.45 22.96% 3,488,820,324.60
Equity attributable to the
listed company’s 3,077,550,018.33 2,273,349,347.02 35.38% 2,110,892,767.58
shareholders (RMB)
Indicate by tick mark whether the lower of the net profit attributable to the listed company’s shareholders before
and after exceptional gains and losses was negative for the last three accounting years, and the latest independent
auditor’s report indicated that there was uncertainty about the Company’s ability to continue as a going concern.
□ Yes √ No
Indicate by tick mark whether the lower of the net profit attributable to the listed company’s shareholders before
and after exceptional gains and losses was negative.
□ Yes √ No
VII Accounting Data Differences under China’s Accounting Standards for Business
Enterprises (CAS) and International Financial Reporting Standards (IFRS) and Foreign
Accounting Standards
1. Net Profit and Equity under CAS and IFRS
□ Applicable √ Not applicable
No difference for the Reporting Period.
2. Net Profit and Equity under CAS and Foreign Accounting Standards
□ Applicable √ Not applicable
No difference for the Reporting Period.
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Changchai Company, Limited Annual Report 2021
3. Reasons for Accounting Data Differences Above
□ Applicable √ Not applicable
VIII Key Financial Information by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Operating revenue 774,218,489.69 722,951,966.11 484,183,670.58 471,076,389.22
Net profit attributable to the
24,571,254.83 104,617,810.77 -23,478,352.18 -2,704,480.88
listed company’s shareholders
Net profit attributable to the
listed company’s shareholders
23,604,960.00 3,555,454.58 -9,073,885.20 -12,757,436.51
before exceptional gains and
losses
Net cash generated from/used in
-184,484,392.45 91,930,272.39 -223,631,620.05 49,861,960.81
operating activities
Indicate by tick mark whether any of the quarterly financial data in the table above or their summations differs
materially from what have been disclosed in the Company’s quarterly or interim reports.
□ Yes √ No
IX Exceptional Gains and Losses
√ Applicable □ Not applicable
Unit: RMB
Item 2021 2020 2019 Note
Gain or loss on disposal of
non-current assets (inclusive
155,515.49 263,408.53 1,914,137.47
of impairment allowance
write-offs)
Government grants through
profit or loss (exclusive of
government grants
consistently given in the
4,268,950.18 7,763,215.65 5,312,295.51
Company’s ordinary course of
business at fixed quotas or
amounts as per governmental
policies or standards)
Capital occupation charges on
non-financial enterprises that 344,842.86 536,504.84
are recognized in profit or loss
Gain or loss on fair-value Increase in the fair
changes on held-for-trading 114,738,153.54 27,526,935.85 -49,255.00 value of wholly-owned
financial assets and liabilities subsidiary Horizon
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Changchai Company, Limited Annual Report 2021
& income from disposal of Investment’s interests
held-for-trading financial in Jiangsu Liance
assets and liabilities and Electromechanical
available-for-sale financial Technology Co., Ltd.,
assets (exclusive of the and Guilin Stars
effective portion of hedges Science and
that arise in the Company’s Technology Co., Ltd.,
ordinary course of business) as well as of the
Company’s interest in
Jiangsu Horizon New
Energy Technology
Co., Ltd.
Impairment of receivables
tested separately is ready to be 147,611.25
rolled back
Non-operating income and
2,400,863.71 -1,571,453.49 375,943.68
expense other than the above
Reversed portions of
impairment allowances for
entrustment loans which are 4,000,000.00
tested individually for
impairment
Less: Income tax effects 24,027,164.56 7,122,148.63 1,521,028.42
Non-controlling
6,789.94 255,505.29 7,556.87
interests effects (net of tax)
Total 97,677,139.67 26,949,295.48 10,561,041.21 --
Particulars about other items that meet the definition of exceptional gain/loss:
□ Applicable √ Not applicable
No such cases for the Reporting Period.
Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item listed in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the
Public—Exceptional Gain/Loss Items:
□ Applicable √ Not applicable
No such cases for the Reporting Period.
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Changchai Company, Limited Annual Report 2021
Part III Management Discussion and Analysis
I Industry Overview for the Reporting Period
We are a manufacturer of internal combustion engines and fittings in general equipment manufacturing. According
to the classification of fuel used, internal combustion engines are mainly divided into diesel engines and gasoline
engines. Our diesel engines and gasoline engines are mainly used in non-road mobile machinery fields such as
agriculture and engineering represented by tractors, plant protection machinery, and small construction machinery.
(1) Basic information on the industry
The internal combustion engine is an important support for China's manufacturing industry security, energy
security and national defense security, and an important basic industry of national economy and national defense
construction. The internal combustion engine is the most power-dense, thermally efficient and widely used heat
engine power unit. For some time to come, the internal combustion engine will still be the dominant power for
automobiles, construction machinery, agricultural machinery, ships and generator sets, motorcycles, garden
machinery, and military equipment.
In order to implement the national overall development strategy of energy conservation, emission reduction,
transformation, and upgrading, the internal combustion engine industry and agricultural machinery industry will
strengthen independent innovation and research and development, accelerate the construction of a common basic
technology platform, optimize the construction of the upstream and downstream industry chain, implement
intelligent manufacturing, and actively carry out international exchange and cooperation to accelerate the
realization of industrial technology upgrading.
(2) Development pattern and trend of the industry
China's diesel engine and gasoline engine industries present a pattern of multiple competitions. As the state adopts
increasingly strict environmental protection policy and the emission standards continue to upgrade, especially as
China VI emission regulations for gasoline engines and China IV emission regulations for non-road mobile
machinery diesel engines are or will be implemented, the core technology and key parts of internal combustion
engines will be rapidly developed and applied, and the research, development, promoting and application of
environmentally friendly and efficient diesel engines and gasoline engines will become the mainstream trend,
which promotes the wide use of the fuel injection system, high-efficiency supercharger and high-efficiency
after-treatment. In the new normal, the internal combustion engine industry and agricultural machinery industry
will improve the industry's capability of independent innovation, support the whole machine development, and
organize and implement green manufacturing and intelligent manufacturing, so as to improve the overall strength
of the industry. The market share of diesel and gasoline engines is gradually concentrated in a few large-scale
enterprises with technical and capital strength.
The present development trend of internal combustion engine industry is as follows: (1) energy saving and
emission reduction; (2) intelligent manufacturing; (3) lightweight. Medium- and low-end internal combustion
engines with low technical content and low added value will be gradually squeezed out of the market. The
upgrade of emission standards and the market's demand for high-end products will eliminate those small
enterprises with low level of research and development or less technology reserves. The industry leaders will
show the trend of increasing market share and rising gross profit margin center, and have the power to fix the
market price of core products.
(3) Sales of internal combustion engine industry in 2021
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Changchai Company, Limited Annual Report 2021
The total sales of internal combustion engines in 2021 were 50,473,600 units, an increase of 7.82% compared to
2020 and 6.97% compared to 2019. The total power for the year was 2,752,177,900 kilowatts, up 5.71%
year-on-year. The total sales of diesel engines for the year were 6,108,400 units, down 3.67% year-on-year.
Specifically, 1,048,100 engines for construction machinery, 1,464,800 engines for agricultural machinery, 40,200
engines for shipborne machinery, and 317,500 engines for electricity generation were sold. The sales of gasoline
internal combustion engines were 44,350,600, an increase of 9.67% year-on-year. The overall situation of gasoline
engines was good. Since September, the automotive market which accounts for a larger proportion has gradually
rebounded, leading to an overall improvement in the industry. However, due to the contradiction between supply
and demand of raw materials, recurrent epidemics and other factors, the market demand was still suppressed. Also,
diesel engines have decreased year-on-year for eight consecutive months.
In terms of the segments of the internal combustion engine market, in 2021, 1,135,800 units for construction
machinery were sold, up 12.64% year-on-year; 5,369,200 units for agricultural machinery were sold, up 27.44%
year-on-year; 40,200 units for shipborne machinery were sold, up 19.69% year-on-year; 1,547,300 units for
generator sets were sold, up 30.24% year-on-year; 2,498,800 units for garden machinery were sold, up 18.35%
year-on-year. Engines for generator sets and agricultural machinery performed well, both with an increase of
around 30%. Construction, shipborne, and garden machinery also grew by 10-20%.
II Principal Activity of the Company in the Reporting Period
1. Principal Operations of the Company
We mainly specialize in the R&D, manufacture and sales of diesel engines under the brand "Changchai" and
gasoline engines under the brand "Robin". Our products are mainly used in agricultural machinery, small
construction machinery, light commercial vehicles, generator sets and shipborne machinery and other fields
closely related to people's livelihood.
In the Reporting Period, there were no major changes in the Company's core business and main products.
2. Main Products of the Company
Our main products are divided into two categories: diesel engines and gasoline engines. The details are as follows:
Main Product Application
Graphic display Product description
products features fields
Our diesel engine products include
single-cylinder diesel engines and
High power, low Agricultural
multi-cylinder engines, covering
oil consumption, machinery,
power range from 1.62kW to
low noise, construction
Diesel 117.6kW, and cylinder diameters from
compact machinery,
engine 65mm to 135mm, with one or more
structure, low generator sets,
cylinders. Besides sale in domestic
emission, good shipborne
market, our diesel engines are sold to
reliability machinery
Southeast Asia, South America, the
Middle East and Africa.
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Changchai Company, Limited Annual Report 2021
Our gasoline engines are mainly
general-purpose small gasoline
engines, covering the power range Simple structure, Agricultural
Gasoline from 1.5kW to 7.0kW. Besides sale in good reliability, machinery, small
engine domestic market, our gasoline engines easy construction
are sold to Southeast Asia, the Middle maintenance machinery
East, Europe and America, Africa,
Japan and other countries and regions.
3. Major Business Models
(1) R&D model
We have established an innovative technology management system for internal combustion engine based on
market demand and forward-looking technologies. Prior to the new products or new technologies development,
the marketing department first conducts market assessment and customer research, and then initiates a project
according to the forecasted market demand; the technology center conducts development according to the project
materials, and collects feedback information from the market and customers in real time during the development
process to ensure technology leadership and product suitability.
(2) Purchasing model
We adopt the "purchase-to-order" purchasing model. The ERP system converts the sales orders, the sales plan
developed by the sales department and the production plan drawn up by the production department into the
demand of parts needed, and the purchasing department organizes the purchase according to such demand.
Meanwhile, the purchasing department makes a plan to guide parts procurement according to the sales
department's sales plan, and provide it to the supplier, and urge the supplier to prepare for the goods.
(3) Production model
We adopt the "make-to-order" production management model. The sales department makes sales plans for
different stages according to the orders in hand, sales data in previous years, market demand judgment and
feedback of existing customers' purchasing intentions. The Company's production department makes the
production plan according to the sales orders displayed in the ERP system, the sales plan made by the sales
department and the reserve inventory demand, and organizes the production task in strict accordance with the plan.
During the production process, the quality assurance department arranges regular inspection to ensure the product
quality.
(4) Sale model
We adopt the sales model of "direct selling + distribution", i.e. the direct selling model for the main engine factory,
and the distribution model for the individual circulation market represented by farmers and overseas market.
4. The Company's position in the market
We mainly specialize in the R&D, manufacture and sales of diesel engines under the brand "Changchai" and
gasoline engines under the brand "Changchai Robin". Up to now, we have successfully developed a number of
advanced core technologies with independent intellectual property rights. In terms of diesel engine, according to
the statistics of China Internal Combustion Engine Industry Association (CICEIA), as the largest small- and
medium-sized single-cylinder diesel engine manufacturer in the agricultural machinery industry of China, we have
maintained a high market share of single-cylinder engines, and our market share of single-cylinder diesel engines
of some power ranges has ranked first in China. For many years, in the process of achieving steady economic
development of the enterprise, we developed in a sound manner and cultivated the "Changchai" brand, a famous
small diesel engine brand of China with independent intellectual property rights.
5. Key Performance Drivers
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Changchai Company, Limited Annual Report 2021
(1) National policy driver
In recent years, various departments of the state have introduced a series of preferential policies to encourage the
development of internal combustion engine industry. In terms of agricultural machinery, the central government
has taken solving the problems relating to "agriculture, rural areas and farmers" as the top priority of the work of
the Party and the government, and issued a series of policies to benefit farmers, creating a good atmosphere for
promoting the development of agriculture and economy and society in rural areas; in terms of construction
machinery, the strategy of "western development", the "eight vertical and eight horizontal" high-speed railway
network plan and the policy of "new rural construction" have all created a good policy environment for the
application of internal combustion engine in downstream construction machinery.
(2) Industrial chain synergy empowers the sustainable development of the Company
We have built our own casting manufacturing and processing plants to meet the use requirements of some diesel
engine parts. In terms of production and quality, we have formed a significant synergy with its own internal
combustion engine assembly team. Our casting manufacturing team and internal combustion engine assembly
team work together to form a mutually reinforcing positive feedback loop to assist the Company in integrating the
internal combustion engine industry chain and building differentiated industry barriers. In terms of collaborative
production, the reduction of external purchase is of great significance for the Company to reduce process flow,
reduce intermediate loss, improve production efficiency, shorten delivery time and increase purchasing bargaining
power. In terms of quality coordination, the self-built foundry can improve our quality control of parts to improve
the yield and reliability of internal combustion engines.
(3) Stable and efficient R&D team
We have experienced technical management team and perfect technical support team. Our key technical personnel
and R&D management personnel have been engaged in internal combustion engine R&D design, production and
manufacturing for a long time. With profound professional knowledge and rich practical experience, they can
make strong forward-looking and scientific judgment in the market direction and technical route. Also, we have
established an effective training mechanism to foster talented persons for the follow-up R&D.
(4) Well-known brand with many well-known customers
The Company, formerly known as Changzhou Diesel Engine Factory, is a national industrial enterprise with a
history of a hundred years and one of the earliest professional internal combustion engine manufacturers in China.
Our diesel and gasoline engines, as power sources of agricultural machinery, construction machinery and
commercial vehicles, show excellent performance in power range, reliability, power per litre, noise control and
emission standards, and have been recognized by customers. We maintained a long-term partnership with major
customers, with cumulative partnership time exceeding 15 years. Many main engine plant customers of the
Company are well-known enterprises in the agricultural machinery industry, with their market shares being at the
forefront of the market.
III Core Competitiveness Analysis
1. Advantages in Brand
Changchai is a national industrial enterprise with a history of over one hundred years. It is one of the earliest
professional manufacturers of internal combustion engines in China. The brand "Changchai" is the earliest
domestic trademark of production goods known as China's well-known trademarks. The diesel engine of
"Changchai" brand is China's brand-name product. The enterprise has been certified by ISO9001 and IATF16949
quality systems, ISO14001 environmental management system, IATF16949 automotive product quality
management system, and accessed to the national export-free enterprise qualification. Changchai was honorably
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Changchai Company, Limited Annual Report 2021
ranked among “the Top One Hundred Chinese Enterprises in Engineering Industry” and “China Pacesetter
Enterprise of Industrial Industry” for several times, and was awarded the honorary title of “State-level Enterprise
of Observing Contracts and Keeping Promise”, “China's Agricultural Machinery Parts and Components Leading
Enterprises”, “China's Agricultural Machinery AAA Credit Enterprise”, “Quality Management Excellence Award
of Jiangsu Province” and “Mayor Quality Award of Changzhou City”. The Company has been among the 10
users’ most satisfied leading brands in “Jing Geng” competition for many years. In 2021, the Company was
awarded honorary titles such as National Top 100 Enterprises of Machinery Industry, National Demonstration
Enterprise of Product and Service Quality Integrity, National Quality Leader of Internal Combustion Engine
Industry, National Quality Leading Brand of Internal Combustion Engine Industry, Top 100 Innovative
Enterprises of Jiangsu Province, Demonstration Institution of Intelligent Agricultural Machinery Manufacturing of
Jiangsu Province, "Five-star Enterprise in the Cloud" of Jiangsu Province. For many years, in the process of
achieving steady economic development of the enterprise, we developed in a sound manner and cultivated the
“Changchai” brand, a famous small diesel engine brand of China with independent intellectual property rights.
2. Advantages in Technology
The Company has a state-level technology center and post-doctoral research station, and a research center of small
and medium-power internal combustion engine engineering and technology in Jiangsu Province. Currently, it is
mainly engaged in production of small and medium-power single-cylinder and multi-cylinder diesel engine. It has
a complete product range, a wide power level coverage, a high reputation and intellectual property rights for its
main products. During the Reporting Period, two QC achievements won the first and second prizes of the
Achievements of 2021 Excellent National Quality Control Team's Activity of National Machinery Industry, the
4G33V16 diesel engine was awarded the title of National Machinery Industry Customer Satisfaction Product, the
project of Key Technology and Equipment for Design and Manufacture of Low Friction Functional Surface of
Power Assembly won the second prize of Science and Technology Award of Jiangsu Province, the 4G33T and
4G33V16 diesel engines were recognized as High-tech Products of Changzhou City, the project of Diesel
Outboard Engine Power and Assembly Development was listed in Science and Technology Plan of Changzhou
City in 2021, and the project of Development of Lightweight Low Emission Diesel Engine of Common Rail
Series won the third prize in the city's innovation and entrepreneurship competition in 2021. During the Reporting
Period, a total of 22 patents were declared and 19 patents were granted. Currently, the Company has a total of 152
patents granted by authorities at home and abroad, including 12 invention patents.
3. Advantages in Marketing
Changchai has built up a sales service network covering the whole country, with 5 sales business units, 26 sales
service centers, and 709 designated maintenance stations. In addition, in order to meet the National Emission
Standard IV for Non-Road Vehicles and provide better after-sales service for customers, a service monitoring
platform with Changchai characteristics has been put in place. With a perfect diesel sales service network system,
the Company is able to provide high quality, efficient and timely services for customers.
IV Core Business Analysis
1. Overview
In 2021, in face of complex and severe situations such as adjustments to the agricultural machinery subsidy policy,
recurrent domestic and overseas epidemics, price increase of raw materials, impact on the supply chain and
industry chain, and shrinking market demand, the Company focused on the implementation of annual policy and
target, and promoted work in all respects with the main line of "strengthening the main business, accelerating
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Changchai Company, Limited Annual Report 2021
transformation, expanding the areas, and improving quality and efficiency". The Company maintained good
economic operation, achieved good business performance, and won a series of honors by focusing on technology
innovation and quality improvement and adhering to the dual drive by main business and capital operation.
During the Reporting Period, the Company sold 749,300 diesel engines, gasoline engines and related generator
sets, including 153,000 gasoline engines, generating total sales revenue of RMB2,452 million, an increase of
6.79% year-on-year.
In terms of product development and support, the Company made efforts in segments, developed the CC12M
diesel engine for the motorcycle area, and met the emission requirements through the plan of common rail, EGR,
and DOC. Light power made a breakthrough in cold chain and construction machinery support, and multiple
varieties of diesel engines completed the performance tests and reliability verification, with orderly carrying and
supporting; in the area of shipborne generator sets, carrying of new products was conducted in small batches. For
advantageous products, adaptive quality improvement and optimization and development of supporting
components were carried out.
In terms of market services, the Company made multi-dimensional efforts in both internal and external markets,
continuously optimized the distribution network, actively responded to the foreign trade market environment, and
implemented a dual-brand and integrated sales strategy for whole machines and accessories, fully guaranteeing
the continuous growth of product sales. The market service satisfaction of 2021 was 85.36%, a steady increase
year-on-year. The service response and timeliness during the farming season were basically the same as last year.
A year-on-year increase in revenue from sales of accessories and oil was achieved.
In terms of quality management, the Company strictly enforced the quality responsibility system, strengthened the
quality control process management, and effectively reduced quality loss while improving product reliability. The
Company conducted quality improvement focusing on quality problems of key products and major market failure
problems, improved the rapid response mechanism and procedure for batch problems, and continuously reduced
the on-site zero-kilometer failure rate of the whole vehicle enterprise.
In terms of internal management, the Company continuously strengthened refined management and
comprehensively improved the efficiency of production, operation and management. The Company made solid
efforts to reduce costs and cut expenses, strengthened standardized, normalized and institutionalized safety
management, and continued to carry out the three-year action of special safety rectification of safety production,
with an overall stable safety production situation. The Company strengthened environmental protection
rectification work. The environmental management was effective, and the Company successfully passed the
ISO14001 environmental system supervision and review during the year.
During the Reporting Period, the Company's non-public share issuance project was successfully issued, the raised
funds were remitted to the Company's special account for fund raising and underwent capital verification, and the
additional shares were listed on July 5. Changchai Machinery, the implementation entity of the relocation project
of light engines and casting in the fund-raising project, is currently in the equipment installation and
commissioning stage, and is expected to have conditions for pilot production in May 2022. The development
project of the diesel outboard engine for the innovation capacity building project of the technical center is
progressing smoothly. The reliability verification of the outboard engine assembly has been implemented, and the
user carrying test of the prototype has been organized, which was recognized by users. Small batch production has
been arranged to expand the user test and further expand the market of diesel outboard engine.
16
Changchai Company, Limited Annual Report 2021
2. Revenue and Cost Analysis
(1) Breakdown of Operating Revenue
Unit: RMB
2021 2020
As % of total As % of total
Change (%)
Operating revenue operating Operating revenue operating
revenue (%) revenue (%)
Total 2,452,430,515.60 100% 2,296,464,711.24 100% 6.79%
By operating division
Internal
combustion 2,404,119,747.06 98.03% 2,252,479,553.51 98.08% 6.73%
engines
Other 48,310,768.54 1.97% 43,985,157.73 1.92% 9.83%
By product category
Diesel engines 2,241,032,641.05 91.38% 2,112,251,290.73 91.98% 6.10%
Gasoline
149,717,934.82 6.10% 132,735,777.75 5.78% 12.79%
engines
Other 61,679,939.73 2.52% 51,477,642.76 2.24% 19.82%
By operating segment
Domestic 2,038,317,678.97 83.11% 1,922,972,122.74 83.74% 6.00%
Overseas 414,112,836.63 16.89% 373,492,588.50 16.26% 10.88%
By marketing model
Distribution 689,413,386.97 28.11% 617,839,609.20 26.90% 11.58%
Direct sales 1,763,017,128.63 71.89% 1,678,625,102.04 73.10% 5.03%
(2) Operating Division, Product Category, Operating Segment or Marketing Model Contributing over 10%
of Operating Revenue or Operating Profit
√ Applicable □ Not applicable
Unit: RMB
YoY change
YoY change YoY change
Operating Gross profit in gross
Cost of sales in operating in cost of
revenue margin profit margin
revenue (%) sales (%)
(%)
By operating division
Internal
2,404,119,74 2,051,932,67
combustion 14.65% 6.73% 6.96% -0.18%
7.06 7.42
engines
By product category
Diesel 2,241,032,64 1,925,495,24
14.08% 6.10% 7.02% -0.74%
engines 1.05 5.19
17
Changchai Company, Limited Annual Report 2021
Gasoline 149,717,934. 128,977,618.
13.85% 12.79% 19.13% -4.58%
engines 82 86
By operating segment
2,038,317,67 1,685,403,46
Domestic 17.31% 6.00% 6.15% -0.12%
8.97 0.00
414,112,836. 402,517,677.
Overseas 2.80% 10.88% 10.93% -0.05%
63 20
By marketing model
689,413,386. 572,431,613.
Distribution 16.97% 11.58% 11.95% -0.27%
97 43
1,763,017,12 1,515,489,52
Direct sales 14.04% 5.03% 5.30% -0.22%
8.63 3.77
Core business data of the prior year restated according to the changed statistical caliber for the Reporting Period:
□ Applicable √ Not applicable
(3) Whether Revenue from Physical Sales Is Higher than Service Revenue
√ Yes □ No
Operating
Item Unit 2021 2020 Change (%)
division
Unit sales Unit 596,279 627,331 -4.95%
Diesel engines Output Unit 601,253 657,917 -8.61%
Inventory Unit 83,563 78,589 6.33%
Any over 30% YoY movements in the data above and why:
□ Applicable √ Not applicable
(4) Execution Progress of Major Signed Sales and Purchase Contracts in the Reporting Period
□ Applicable √ Not applicable
(5) Breakdown of Cost of Sales
Unit: RMB
2021 2020
As % of As % of
Product Change
Item total cost total cost
category Cost of sales Cost of sales (%)
of sales of sales
(%) (%)
Diesel Raw
1,659,710,451.07 79.61% 1,526,191,466.63 78.24% 8.75%
engines materials
Diesel
Labor cost 240,110,930.78 11.52% 222,248,951.31 11.39% 8.04%
engines
Diesel Depreciati
71,198,110.78 3.42% 71,562,851.51 3.67% -0.51%
engines on
18
Changchai Company, Limited Annual Report 2021
Diesel
Energy 30,044,125.27 1.44% 34,214,195.38 1.75% -12.19%
engines
(6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period
□ Yes √ No
(7) Major Changes to the Business Scope or Product or Service Range in the Reporting Period
□ Applicable √ Not applicable
(8) Major Customers and Suppliers
Major customers:
Total sales to top five customers (RMB) 1,163,820,018.04
Total sales to top five customers as % of total sales of the
47.46%
Reporting Period (%)
Total sales to related parties among top five customers as % of
0.00%
total sales of the Reporting Period (%)
Information about top five customers:
Sales revenue contributed
As % of total sales
No. Customer for the Reporting Period
revenue (%)
(RMB)
1 Customer 1 562,503,236.06 22.94%
2 Customer 2 233,708,017.39 9.53%
3 Customer 3 157,425,933.38 6.42%
4 Customer 4 105,465,470.21 4.30%
5 Customer 5 104,717,361.00 4.27%
Total -- 1,163,820,018.04 47.46%
Other information about major customers:
□ Applicable √ Not applicable
Major suppliers:
Total purchases from top five suppliers (RMB) 327,640,433.65
Total purchases from top five suppliers as % of total purchases
16.88%
of the Reporting Period (%)
Total purchases from related parties among top five suppliers
0.00%
as % of total purchases of the Reporting Period (%)
Information about top five suppliers:
Purchase in the Reporting As % of total purchases
No. Supplier
Period (RMB) (%)
1 Supplier 1 153,851,839.50 7.93%
2 Supplier 2 70,110,846.63 3.61%
3 Supplier 3 46,115,577.30 2.38%
19
Changchai Company, Limited Annual Report 2021
4 Supplier 4 29,257,550.55 1.51%
5 Supplier 5 28,304,619.67 1.46%
Total -- 327,640,433.65 16.88%
Other information about major suppliers:
□ Applicable √ Not applicable
3. Expense
Unit: RMB
Reason for any significant
2021 2020 Change (%)
change
Selling expense 117,242,290.32 128,372,278.62 -8.67%
Administrative
98,890,284.22 87,446,195.74 13.09%
expense
Finance costs 1,203,615.80 15,768,310.32 -92.37% Decreased exchange losses
R&D expenses 82,390,284.14 72,258,781.08 14.02%
4. R&D Investments
√ Applicable □ Not applicable
Major R&D Expected impact on the
Purpose Progress Specific objectives
project Company
Improving the
automation and
intelligence level of the
generator set, After the
Developing a
Development enhancing the implementation of the
higher-performance
of 12KW performance and project, the technology
silent inverter
diesel engine In progress reliability of the set, and market
generator set to
silent inverter and achieving set competitiveness of the
meet market
generator set operation with low product will be
demand
noise and low fuel enhanced.
consumption to meet
the emission
requirements.
After the
implementation of the
Developing a Conducting structural
project, the product will
higher-performance optimization of diesel
Development meet the requirements
light multi-cylinder engine components to
of V402 diesel In progress of non-road China IV
diesel engine that improve product
engine vehicle emission
meets the emission performance and
regulations, the
requirements reliability.
supporting
requirements of
20
Changchai Company, Limited Annual Report 2021
machinery, and market
demand.
Conducting major
design optimization of After the
Developing more the engine structure and implementation of the
efficient, performance to improve project, the product will
Development
environmentally the reliability, fuel meet the requirements
of D15 diesel
friendly and In progress consumption, emissions of non-road China IV
outboard
energy-saving and other indicators of vehicle emission
engine
diesel-powered the product, so as to regulations and open up
products reach the advanced the market of ship
level of similar foreign machinery.
products.
After the
implementation of the
Improving the emission project, the product
characteristics and meets the market
Developing
Development economic demand and makes the
efficient and
of characteristics of goods quality and
environmentally
diesel-electric In progress diesel-electric hybrid logistics efficiency of
friendly
hybrid diesel engines to the cold chain timely,
diesel-powered
products enhance the energy safe and efficient,
products
efficiency, endurance providing a
and reliability. whole-procedure
temperature and quality
management solution.
Conducting major
design optimization of
Development the structure and
Improving product
of a performance of the It meets the supporting
performance and
multi-cylinder diesel engine to requirements of various
developing
series of diesel improve the reliability, types of small
multi-cylinder Completed
engines that fuel consumption, agricultural machinery
diesel engines that
meet non-road emissions and other and broadens the
better meet
European V indicators of the market.
emission standards
standards product, so as to meet
the European V
emission standards.
Development Development of Optimizing components It enriches the product
of control technology related to emission series, meets the
single-cylinder of emission performance to improve supporting
Completed
air-cooled reduction and the reliability, fuel requirements of
diesel engines single-cylinder consumption, emissions non-road machinery,
that meet air-cooled diesel and other indicators of and further expands and
21
Changchai Company, Limited Annual Report 2021
non-road engines that are the product, so as to consolidates the market
European V more compliant meet the European V share.
standards with emission emission standards.
standards
Details about R&D personnel:
2021 2020 Change (%)
Number of R&D personnel 264 253 4.35%
R&D personnel as % of total employees 9.55% 8.84% 0.71%
Educational background of R&D personnel —— —— ——
Bachelor’s degree 117 117 0.00%
Master’s degree 13 13 0.00%
Age structure of R&D personnel —— —— ——
Below 30 34 32 6.25%
30~40 95 98 -3.06%
Details about R&D investments:
2021 2020 Change (%)
R&D investments (RMB) 82,390,284.14 72,258,781.08 14.02%
R&D investments as % of operating
3.36% 3.15% 0.21%
revenue
Capitalized R&D investments (RMB) 0.00 0.00 ---
Capitalized R&D investments as % of
0.00% 0.00% ---
total R&D investments
Reasons for any significant change in the composition of R&D personnel and the impact:
□ Applicable √ Not applicable
Reasons for any significant YoY change in the percentage of R&D expense in operating revenue:
□ Applicable √ Not applicable
Reasons for any sharp variation in the percentage of capitalized R&D expense and rationale:
□ Applicable √ Not applicable
5. Cash Flows
Unit: RMB
Item 2021 2020 Change (%)
Subtotal of cash generated from
1,878,728,640.47 2,281,623,334.91 -17.66%
operating activities
Subtotal of cash used in
2,145,052,419.77 2,029,826,680.38 5.68%
operating activities
Net cash generated from/used in
-266,323,779.30 251,796,654.53 --
operating activities
Subtotal of cash generated from
385,966,151.68 564,355,776.61 -31.75%
investing activities
Subtotal of cash used in
851,480,343.34 717,612,880.11 18.54%
investing activities
Net cash generated from/used in -465,514,191.66 -153,257,103.50 --
22
Changchai Company, Limited Annual Report 2021
investing activities
Subtotal of cash generated from
711,844,747.79 22,000,000.00 3,135.66%
financing activities
Subtotal of cash used in
45,328,892.65 27,732,890.38 63.45%
financing activities
Net cash generated from/used in
666,515,855.14 -5,732,890.38 --
financing activities
Net increase in cash and cash --
-67,537,318.91 83,979,542.30
equivalents
Explanation of why any of the data above varies significantly:
√Applicable Not applicable
The significant change in net cash flow from operating activities over the same period is mainly caused by the
increase in the proportion of bank acceptance bills in the payment for goods received by the company during the
reporting period, and the support of large purchase payment for suppliers due to the rising price of raw materials
and the impact of the epidemic
The significant year-on-year change in net cash generated from/used in investing activities was primarily due to
the input of the Company’s raised funds to Changchai Machinery’s construction in progress, and the use of certain
idle raised funds for cash management.
The significant year-on-year change in net cash generated from/used in financing activities was primarily because
the Company raised a gross amount of RMB634,999,936.40 (net amount: RMB620,665,733.97) in a private
placement of 144,318,181 RMB-denominated ordinary shares (A-stock) during the Reporting Period.
Reason for any big difference between the net operating cash flow and the net profit for this Reporting Period
√Applicable Not applicable
The significant difference between the net cash flow generated by the company's operating activities during the
reporting period and the annual net profit is mainly caused by the increase in the proportion of bank acceptance
bills and the increase of operating receivables in the payment for goods received by the company during the
reporting period.
V Analysis of Non-Core Businesses
□ Applicable √ Not applicable
VI Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB
31 December 2021 1 January 2021 Chang
e in
As % of As % Reason for any
percent
Amount total Amount of total significant change
age
assets assets
(%)
23
Changchai Company, Limited Annual Report 2021
Monetary
707,966,678.74 14.57% 760,728,222.85 19.24% -4.67%
assets
Accounts
375,209,126.48 7.72% 397,154,016.49 10.05% -2.33%
receivable
Inventories 651,083,758.18 13.40% 606,680,340.55 15.35% -1.95%
Investment
44,597,255.21 0.92% 46,239,326.03 1.17% -0.25%
property
Fixed assets 402,915,521.65 8.29% 454,181,555.68 11.49% -3.20%
Wholly-owned
subsidiary Changchai
Construction Machinery was in a
270,305,690.91 5.56% 66,502,432.41 1.68% 3.88%
in progress construction period
during the Reporting
Period.
Increased discounted
bank acceptance
Short-term
73,971,466.65 1.52% 22,000,000.00 0.56% 0.96% notes that were undue
borrowings
at the end of the
Reporting Period.
Contract
26,864,081.97 0.55% 35,944,517.15 0.91% -0.36%
liabilities
2. Assets and Liabilities at Fair Value
√ Applicable □ Not applicable
Unit: RMB
Gain/loss
Cumulati Impairme
on
ve nt Purchased Sold in
fair-value
Beginning fair-value allowance in the the Other Ending
Item changes
amount changes for the Reporting Reporting change amount
in the
charged Reporting Period Period
Reporting
to equity Period
Period
Financial
assets
1.
Held-for-t
rading
financial
11,500,27 74,810,41 844,889,9 572,790,2 45,642,8 404,053,
assets 0.00
2.00 1.81 44.71 16.71 49.76 261.57
(derivativ
e financial
assets
exclusive)
24
Changchai Company, Limited Annual Report 2021
2.
Derivativ
e financial
assets
3. Other
debt
investmen
t
4.
Investmen
t in other 685,137,9 595,307,6 779,877,
0.00 0.00 0.00 0.00
equity 50.87 46.53 646.53
instrumen
ts
Subtotal
of 696,638,2 74,810,41 595,307,6 844,889,9 572,790,2 45,642,8 1,183,93
0.00
financial 22.87 1.81 46.53 44.71 16.71 49.76 0,908.10
assets
Investmen
t property
Productiv
e living
assets
98,732,93 33,750,00 64,148,22 590,088.8 -45,642, 150,398,
Other 0.00 0.00
8.63 0.00 6.39 7 849.76 226.39
Total of 795,371,1 108,560,4 595,307,6 909,038,1 573,380,3 1,334,32
0.00 0.00
above 61.50 11.81 46.53 71.10 05.58 9,134.49
Financial
0.00 0.00
liabilities
Significant changes to the measurement attributes of the major assets in the Reporting Period:
□ Yes √ No
3. Restricted Asset Rights as at the Period-End
Item Ending carrying value Reasons
Security deposits associated with bank acceptance
Monetary assets 145,564,457.15
notes, environment, etc.
House constructions 1,760,577.22 Collateral for bank loan
Land use right 911,388.42 Collateral for bank loan
Machinery equipment 30,560,526.26 Collateral for bank loan
Payment obligations in
61,971,466.65
relation to discounted notes
25
Changchai Company, Limited Annual Report 2021
that were undue
Undue transferred bill 72,391,302.15
payment obligation
Total 313,159,717.85 --
VII Investments Made
1. Total Investment Amount
√ Applicable □ Not applicable
Investments made in Reporting Investments made in same period
+/-%
Period (RMB) of last year (RMB)
160,000,000.00 154,786,000.00 3.37%
2. Major Equity Investments Made in the Reporting Period
√ Applicable □ Not applicable
Unit: RMB
Profi
ts or
Prog losse
ress s of Invo
Shar Disc Disc
Inve Inve Capi as of Esti inve lvin
ehol Inve Type losur losur
Inv Main stme stme tal the mate stme g in
ding Part stme of e e
este busin nt nt reso bala d nt in laws
perc ner nt prod date inde
e ess meth amo urce nce inco the uit
enta term ucts (if x (if
od unt s shee me Rep or
ge any) any)
t ortin not
date g
Peri
od
26
Changchai Company, Limited Annual Report 2021
Inter Inter
nal nal
Jian
comb com
gsu
ustio busti
Cha
n 160, on The
ngc Capi
engin 000, engi inpu -1,8 26
hai tal Self- Lon
e, 000. 100. Non ne, t has 68,3 Febr 2019
Ma cont fund g-ter 0.00 Not
relate 00 00% e relat been 43.8 uary -004
chi ribut ed m
d ed mad 0 2019
ner ion
gener gene e
y
ator rator
Co.,
sets sets
Ltd.
and and
parts parts
160, -1,8
Tot 000, 68,3
-- -- -- -- -- -- -- -- 0.00 -- -- --
al 000. 43.8
00 0
3. Major Non-Equity Investments Ongoing in the Reporting Period
□ Applicable √ Not applicable
4. Financial Investments
(1) Securities Investments
√ Applicable □ Not applicable
Unit: RMB
Gain
Accu
/loss
mula
on
Acco ted Purc Gain
Initia Begi fair Sold
untin fair hase /loss Endi
Varie Code Nam nnin value in Acco Fund
l g value d in in ng
ty of of e of g chan the untin ing
meas chan the the carry
inves carry ges Repo
secur secur secur urem ges Repo Repo ing g sourc
tmen ing in rting
ent recor rting rting amo
ity ity ity amo the Perio title e
t cost meth ded Perio Perio unt
unt Repo d
od in d d
rting
equit
Perio
y
d
Dom Inves
Foto 41,7 Fair 455, 455, 497,
estic/ tmen Self-
6001 n 84,0 value 175, 296, 080,
forei 0.00 0.00 0.00 0.00 t in fund
66 Moto 00.0 meth 000. 000. 000.
gn other ed
r 0 od 00 00 00
stock equit
27
Changchai Company, Limited Annual Report 2021
y
instr
ume
nts
Inves
tmen
Dom t in
Bank 42,7 Fair 127, 93,6 136,
estic/ other Self-
6009 of 86,0 value 764, 36,0 422,
forei 0.00 0.00 0.00 0.00 equit fund
19 Jiang 00.0 meth 000. 00.0 000.
gn y ed
su 0 od 00 0 00
stock instr
ume
nts
Held
Kailo -for-t
Dom
ng 20,0 Fair 38,2 -14,1 -14,1 24,1 radin
estic/ Self-
3009 High 01,2 value 82,1 45,7 45,7 36,3 g
forei 0.00 0.00 0.00 fund
12 Tech 68.0 meth 05.0 66.0 66.0 39.0 finan
gn ed
nolog 0 od 0 0 0 0 cial
stock
y asset
s
Held
-for-t
Dom Lianc
Fair 80,6 80,6 87,8 radin
estic/ e 7,20 7,20 Self-
6881 value 40,0 40,0 40,0 g
forei Tech 0,00 0,00 0.00 0.00 0.00 fund
13 meth 00.0 00.0 00.0 finan
gn nolog 0.00 0.00 ed
od 0 0 0 cial
stock y
asset
s
Held
-for-t
Dom
Fair radin
estic/ Lanti 160, 160, 128, 128, 289, Self-
6053 value g
forei an 744. 744. 255. 0.00 0.00 0.00 255. 000. fund
68 meth finan
gn Gas 76 76 24 24 00 ed
od cial
stock
asset
s
Stars Held
Dom Scien -for-t
Fair
estic/ ce 3,60 3,60 6,07 6,07 9,67 radin Self-
8328 value
forei and 0,00 0,00 5,00 0.00 0.00 0.00 5,00 5,00 g fund
85 meth
gn Tech 0.00 0.00 0.00 0.00 0.00 finan ed
od
stock nolog cial
y asset
28
Changchai Company, Limited Annual Report 2021
s
115,5 632, 72,6 548, 72,6 755,
32,0 181, 97,4 932, 97,4 442,
Total -- 0.00 0.00 -- --
12.7 849. 89.2 000. 89.2 339.
6 76 4 00 4 00
Disclosure date of the
announcement on the
board’s approval of N/A
the securities
investments
(2) Investments in Derivative Financial Instruments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
5. Use of Raised Funds
√ Applicable □ Not applicable
(1) Overall Use of Raised Funds
√ Applicable □ Not applicable
Unit: RMB’0,000
rais
ed
Total
fun
raised
Proporti ds
funds Use
Total Total on of that
Total with and
raised accumu total hav
raised altere Total owner
funds lative accumu e
Year Metho funds d raised ship
Total that have raised lative bee
for d of that have purpo funds chang
raised been funds raised n
fund-ra fund-ra been ses that have e of
funds used in with funds left
ising ising used durin not been unuse
the altered with unu
accumula g the used yet d
current purpose altered sed
tively Repor raised
period s purpose for
ting funds
s over
Perio
two
d
year
s
Non-pu Speci
634,999, 257,383, 257,383, 377,616,
2021 blic 0.00 0.00 0.00 al 0.00
996.40 601.02 601.02 395.38
offerin accou
29
Changchai Company, Limited Annual Report 2021
g nt for
deposi
ting
raised
funds
634,999, 257,383, 257,383, 377,616,
Total -- 0.00 0.00 0.00 -- 0.00
996.40 601.02 601.02 395.38
Explanation of the overall use of raised funds
On 17 December 2020, the Company received the Reply Concerning the Approval of the Non-public Offering of
Shares of Changchai Co., Ltd. (CSRC Permit [2020] No. 3374) from the China Securities Regulatory
Commission, which approved the non-public offering of up to 168,412,297 shares of the Company. On June 11,
2021, the subscribers of this non-public offering have fully remitted the subscription funds to the bank account
designated by the sponsor institution, and the total amount of funds raised was RMB634,999,996.40. 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] B061) was issued.
With the issuance expenses deducted, the actual net funds raised were RMB620,665,733.97. On June 15, 2021,
the aforementioned raised funds were remitted to the special account set up by the Company for raised funds from
the non-public offering of shares. 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 raised funds have all been deposited in the special
account for the raised funds and a tripartite supervision agreement has been signed with the sponsor institution
and the account opening bank for the funds raised. There is no material difference between the tripartite
supervision agreement and the model tripartite supervision agreement of Shenzhen Stock Exchange, and the
Company strictly complies with it when using the raised funds.
(2) Committed Projects of Raised Funds
√ Applicable □ Not applicable
Unit: RMB’0,000
Whet
Invest
Committ Wheth her
ment Date Benef
ed er Whet there
Accumul progre when its
investme project Total The her are
ative ss as the recor
nt s have committe Adjusted investme the mater
investme of the projec ded
projects been d total nt amount estim ial
nt amount end of ts are durin
and altered investme investme during ated chang
as of the the ready g the
investme (inclu nt with nt amount the benefi es in
end of the Report for Repor
nt of ding raised (1) Reporting ts are the
Reporting ing their ting
excessive partial funds Period reach proje
Period (2) Period intend Perio
raised alterna ed ct
(3) = ed use d
funds tion) feasib
(2)/(1)
ility
Committed investment projects
Relocatio No 547,667, 547,667, 241,071, 241,071, 44.02 May Not Not No
30
Changchai Company, Limited Annual Report 2021
n project 100.00 100.00 542.28 542.28 % 2022 applic applic
of light able able
engines
and
casting
Innovatio
n
capacity
Dece Not Not
building 87,332,9 72,998,6 1,259,250 1,259,250
No 1.73% mber applic applic No
project of 00.00 00.00 .00 .00
2023 able able
the
technical
center
Subtotal
of
committe
635,000, 620,665, 242,330,7 242,330,7
d -- -- -- - -- --
000.00 700.00 92.28 92.28
investme
nt
projects
Investment of excessive raised funds
Not applicable
635,000, 620,665, 242,330,7 242,330,7
Total -- -- -- - -- --
000.00 700.00 92.28 92.28
Cases
and
reasons
for
failing to
reach the
planned
Not applicable
progress
or
predicted
return
(by
specific
projects)
Explanati
ons of
the
Not applicable
material
changes
in the
31
Changchai Company, Limited Annual Report 2021
project
feasibilit
y
Amount, Not applicable
use, and
use
progress
of
excessive
raised
funds
Impleme Not applicable
ntation of
location
changes
in the
investme
nt
projects
with the
raised
funds
Impleme Not applicable
ntation of
method
adjustme
nts to the
investme
nt
projects
with the
raised
funds
Early Applicable
investme Prior to the availability of the raised funds, in order to ensure the smooth implementation of the
nt and investment projects with raised funds, the Company used its own funds to invest in part of the
placemen investment projects with raised funds and paid part of the issuance expenses. As of June 17, 2021, the
t cumulative amount of the Company's self-financing funds pre-invested in the investment projects
concerni with raised funds was RMB181,803,327.94, the amount of issuance expenses advanced was
ng the RMB2,358,490.56, totaling RMB184,161,818.50, and the proposed replacement amount was
investme RMB184,161,818.50. The capitals were verified by the Gongzheng Tianye Accounting Firm (Special
nt General Partnership), and the Verification Report on the Pre-investment of Self-financing Funds into
projects the Investment Project with Raised Funds and the Payment of Issuance Expenses by Self-financing
with the Funds of Changchai Co., Ltd. (S.G.W [2021] E1347) was issued on June 25, 2021. On June 28, 2021,
32
Changchai Company, Limited Annual Report 2021
raised the Third Interim Meeting of the Board of Directors of the Company in 2021 deliberated and
funds approved the Proposal on Replacing the Funds Pre-invested in the Project and Advanced Issuance
Expenses with the Raised Funds, agreeing to use the raised funds from the non-public offering of
shares to replace the self-financing funds totaling RMB184,161,818.50 that had been pre-invested in
the project prior to the availability of the raised funds. In addition, Xingye Securities Co., Ltd. and
Donghai Securities Co., Ltd. issued a verification opinion on the use of raised funds to replace
self-financing funds that had been invested in advance in the projects with raised funds. For details,
see the Announcement on the Use of Raised Funds to Replace Pre-invested Project Funds and
Advanced Issue Expenses (Announcement No. 2021-036) published on Cninfo
(http://www.cninfo.com.cn) on June 30, 2021.
Temporar Not applicable
y
replenish
ment of
working
capital
with the
idle
raised
funds
Surplus Not applicable
raised
funds for
project
impleme
ntation
and
reasons
for the
surplus
Use and
ownershi
p change
of Deposited in the special account for raised funds
unused
raised
funds
Problems On July 13, 2021, the Fourth Interim Meeting of the Board of Directors of the Company in 2021
in the use deliberated and approved the Proposal on Changing the Implementation Entity of Some Investment
of raised Projects with Raised Funds, agreeing to change the implementation entity of the Company's
funds investment projects with funds raised through non-public offering of shares, the "relocation project of
and light engines and casting", from Changchai Machinery, a wholly-owned subsidiary of the Company,
disclosur to the parent company of Changchai Co., Ltd. The matter did not change the use and implementation
e, or of the funds raised and was not a significant change in the investment projects with raised funds.
33
Changchai Company, Limited Annual Report 2021
other The "relocation project of light engines and casting" was originally independently constructed by
cases Changchai Machinery and operated independently after the construction was completed. Currently,
the main project of Changchai Machinery has been completed, and some of the equipment will be
relocated from the current light engine and casting base to Changchai Machinery successively. After
the equipment invested by Changchai Machinery is installed, commissioned and formally put into
operation, the implementation entity of the project will change to Changchai's parent company. Based
on the scale and brand effect of the listed company, the aforementioned changes will be more
beneficial to the actual operation of the project in the future and will not have a significant impact on
the consolidated statements of the listed company.
(3) Altered Projects of Raised Funds
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VIII Sale of Major Assets and Equity Interests
1. Sale of Major Assets
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Sale of Major Equity Interests
□ Applicable √ Not applicable
IX Major Subsidiaries
√ Applicable □ Not applicable
Major fully/majority-owned subsidiaries and those minority-owned subsidiaries with an over 10% effect on the
Company’s net profit:
Unit: RMB
Relation
ship with Principal Register
Total Net Operatin Operatin
Name the activity ed Net profit
assets assets g revenue g profit
Compan capital
y
Productio
n of diesel
Changchai Subsidia 55,063,0 189,600, 88,373,6 229,098, 2,312,36 2,318,94
engine
Benniu ry 00.00 396.86 37.91 137.33 4.88 5.21
accessorie
s
Changchai Subsidia Diesel 85,000,0 72,342,2 49,916,2 42,629,3 491,150. 386,567.
Wanzhou ry engine 00.00 32.67 15.92 79.24 73 27
34
Changchai Company, Limited Annual Report 2021
assembly
External
Horizon Subsidia investmen 40,000,0 137,604, 111,368, 68,830,8 51,654,3
0.00
Investment ry t and 00.00 313.27 910.56 21.65 76.43
consulting
agricultur
al
Horizon machinery
Subsidia 10,000,0 14,830,1 -10,845,1 14,362,8 -4,579,70 -4,579,70
Agricultural product of
ry 00.00 91.37 07.80 72.77 1.60 1.60
Equipment rice
transplant
er etc.
Gasoline
Changchai Subsidia 37,250,0 119,883, 99,931,4 149,717, 3,035,83 3,228,90
engines
Robin ry 00.00 552.55 61.70 934.82 5.66 6.53
assembly
Internal
combustio
n engine
Changchai Subsidia 300,000, 362,508, 296,143, -2,428,70 -1,868,34
and 0.00
Machinery ry 000.00 931.98 655.39 7.63 3.80
related
accessorie
s
Real
Xingsheng
estate
Real Estate Subsidia 1000,00 6,356,17 4,217,44 5,858,83 894,857. 808,767.
managem
Managemen ry 0.00 5.89 0.40 5.76 18 74
ent
t
service
Subsidiaries obtained or disposed in the Reporting Period:
□ Applicable √ Not applicable
Other information about principal subsidiaries and joint stock companies:
Changzhou Horizon Investment Co., Ltd. (Horizon Investment), a wholly-owned subsidiary of the Company,
reported a net profit of RMB51.6544 million in 2021, up 342.06% year on year. This is mainly because Jiangsu
Liance Electromechanical Technology Co., Ltd. (Liance Technology), where Horizon Investment owns a stake,
went public on the SSE STAR Market in May 2021, and the Company’s interest in Liance Technology is
recognized as “financial assets at fair value through profit or loss”. It is also a result of the increased fair value of
equity interests held in Liance Technology, and Guilin Stars Science and Technology Co., Ltd. during the
Reporting Period.
X Structured Bodies Controlled by the Company
□ Applicable √ Not applicable
35
Changchai Company, Limited Annual Report 2021
XI Prospects
1. Development strategy of the Company
The Company’s development strategy is to base on farm machinery, become stronger in the engine business,
explore more markets and develop in a scientific way.
The Company will make full use of the policy-based dividend of strong national support for agricultural
production and development of agricultural machinery to accelerate the technological upgrade of traditional
power products, and also to achieve diversified development of the industry. The Company will accelerate the
technological upgrade of traditional power products and also achieve diversified development of the industry. The
Company will start refinancing projects in due course based on the capital demand and product planning. The
main development directions are as follows:
(1) Accelerating technological upgrading and area expansion for traditional products
First, traditional products will be developed in the direction of intelligent and networked high-end products. Based
on the three characteristics of agricultural machinery products will have, namely electronic, networked and
intelligent, the Company will promote the application of advanced technologies such as the Internet, big data,
artificial intelligence and new materials to product development, and make the products with intelligent control,
real-time monitoring and big data collection and analysis functions while pursuing energy saving and emission
reduction, so as to not only enhance the technical strength of products and strengthen the existing advantageous
products, but also pursue user satisfaction and make Changchai products appreciate in value.
Second, traditional products will be developed in the terminal direction. The diesel engine is an intermediate
product and a core product to develop in the terminal direction. At present, the Company's main products are small
and medium power diesel engines and general gasoline engines, the market of supporting facilities is mainly
distributed in agricultural machinery, plant protection machinery, ships and other non-road areas, and also in the
automobile area. The upstream and downstream of the industry chain contain greater development space and
opportunities. Currently, Changchai is focusing on generator sets, outboard engines, cold chains, fishing boats,
towers and other terminal areas, with broad prospects. The Company can make full use of the capital platform of
the listed company to cut in at the right time through joint venture cooperation, mergers and acquisitions,
restructuring, etc., to accelerate the extension of the industrial chain and build new competitive advantages.
(2) Promoting industrial transformation and development in the direction of combination with new energy
The unstoppable development of new energy has impacted internal combustion engine products, but the
opportunity exists for a long time. While tapping the advantages of traditional industries, internal combustion
engines should develop with the development of new energy as well. At present, the Company has invested in
Jiangsu Horizon New Energy Technology Co., Ltd. through equity participation and invested in a project of
wet-process separator film for lithium batteries. In the future, the Company will increase its efforts to explore new
energy areas such as lithium battery and hydrogen fuel, and promote the development of the enterprise toward the
new energy industry through capital operation.
2. Operation plan for the Year 2022:
The Company will consolidate the traditional market of agricultural machinery, explore the emerging area of
power, pay close attention to quality to create fine products, innovate management to highlight efficiency, promote
the sound operation of the park, and leverage capital to promote development. In 2022, sales revenue is expected
to be RMB2.3 billion, and the Company will ensure that new products sales will exceed 10,000 units.
The above operation plan does not represent the profit forecast of Y2022 by the listed company, and whether can
be realized depends on various factors on the changes of market conditions and the effort level of the management
team. There is a lot of uncertainty, and investors should pay special attention on it.
36
Changchai Company, Limited Annual Report 2021
3. Possible future risks and countermeasures of the Company
(1) Market risk:
In recent years, the agricultural industry has still been in a period of deep adjustment, subject to continued low
food prices, market demand saturation, upgrades of China IV vehicle emission standards and other uncertainties.
The user purchase demand is also changing, from the original rigid demand to a stock-based renewal, while the
reduction in user revenue has lengthened the renewal cycle. Meanwhile, the prevalence of global trade
protectionism, the spread of COVID-19, abnormal fluctuations in international financial markets and other factors
have brought some uncertainty to the global macroeconomic outlook, which has an impact on the area of non-road
mobile machinery.
Countermeasures: First, the Company solidifies the traditional supporting fields and further expands the
Company's advantages in the field of agricultural machinery. Second, the Company expands more possibilities for
applications in shipborne generator sets, high-speed rice transplanters, cold chain vehicles, excavators and other
small construction machinery, conducts in-depth research and development in new areas and development and
supporting of key products. Third, the Company makes active use of the capital platform to push ahead capital
operation projects in a steady and orderly manner to serve the Company's development.
(2) Industrial risk:
In recent years, the state advocates energy conservation and emission reduction. New energy power represented
by pure electric, hybrid power and hydrogen fuel power has grabbed the market share of diesel engine to a certain
extent. At present, new energy power is mainly used in vehicles. Its use in agricultural machinery is still facing
problems such as high cost and complex operating environment. However, as breakthroughs have been made in
new energy battery technology, the local application scenario of diesel engine may be replaced by new energy
power.
Countermeasures: With regard to the layout of new energy industry, the Company intensifies efforts in exploring
the new energy area and actively promotes project construction and development. Meanwhile, the Company
makes proper efforts in product R&D and expands new development directions and supporting areas.
(3) The risk of raw material price fluctuations
The Company's raw material purchase price is mainly affected by factors such as macroeconomic cycle, industrial
policy adjustment, market supply and demand changes. Price fluctuations of raw materials may affect Company's
business performance.
Countermeasures: By strengthening inventory and plan management, cost control and other measures, the
Company further improves our operating efficiency and reduce the upward pressure on costs.
(4) Foreign trade risk
Against the backgrounds of complex and changeable global economic environment, the epidemic brings more
tough challenges to the operation of foreign trades. The export of products could be affected to some extent due to
unstable factors.
Countermeasures: The Company actively responds to the foreign trade market environment, implements the
dual-brand and integrated sales strategy for whole machines and accessories, and seeks progress while
maintaining stability; the Company strengthens the maintenance and management of overseas key markets and
customers, intensifies efforts in the development of emerging markets and new users, and strives to improve the
sales of high value-added products.
(5) Talent risk:
The Company needs high-level talents, highly skilled talents and lacks talents to help the Company improve its
operational efficiency and strengthen technological innovation to cope with the increasingly fierce market
competition and industry development trend. Therefore, the demand for professional talents and senior
37
Changchai Company, Limited Annual Report 2021
management talents has increased significantly.
Countermeasures: First, the Company insists on taking the initiative to promote the implementation and
effectiveness of staff training and talent introduction. Second, the Company strengthens the management of
compensation and benefits, and improves the performance appraisal policy and compensation and benefits policy.
Third, the Company increases the training of talents and improves the career management system of employees.
Fourth, the Company promotes the informationization of human resource management and further improves the
efficiency of human resource management.
XII Communications with the Investment Community such as Researches, Inquiries and
Interviews during the Reporting Period
√ Applicable □ Not applicable
Index to
Place of Way of Type of Contents and materials main
Date of visit Visitor
visit visit visitor provided inquiry
information
Individual Customers and operation of
2021-12-29 EasyIR Other Individual EasyIR
investor Horizon New Energy
Individual Capacity of Horizon New
2021-12-29 EasyIR Other Individual EasyIR
investor Energy
Individual Zhenjiang Siyang equity
2021-12-27 EasyIR Other Individual EasyIR
investor bidding transaction follow-up
Individual Investment of the Company in
2021-12-27 EasyIR Other Individual EasyIR
investor the new energy industry
R&D progress of the hybrid
Individual
2021-12-26 EasyIR Other Individual power platform of the EasyIR
investor
Company
Individual Development plan of Horizon
2021-12-24 EasyIR Other Individual EasyIR
investor New Energy
Suggestions for synergistic
Individual development between the
2021-12-23 EasyIR Other Individual EasyIR
investor Company and the controlling
shareholder
Progress of the Company's
Individual
2021-12-23 EasyIR Other Individual participation in the equity EasyIR
investor
auction of Zhenjiang Siyang
Individual Capacity of Horizon New
2021-12-09 EasyIR Other Individual EasyIR
investor Energy
Individual
2021-12-01 EasyIR Other Individual Product R&D of the Company EasyIR
investor
Individual
2021-11-30 EasyIR Other Individual Product R&D of the Company EasyIR
investor
Individual
2021-11-23 EasyIR Other Individual Segment of the Company EasyIR
investor
38
Changchai Company, Limited Annual Report 2021
Individual Progress of the relocation
2021-11-22 EasyIR Other Individual EasyIR
investor project of the Company
Individual Customers of Horizon New
2021-11-22 EasyIR Other Individual EasyIR
investor Energy
Individual Application of products of the
2021-11-09 EasyIR Other Individual EasyIR
investor Company
Individual Construction progress of
2021-11-02 EasyIR Other Individual EasyIR
investor Horizon New Energy
Individual Capacity planning of Horizon
2021-11-01 EasyIR Other Individual EasyIR
investor New Energy
Capacity and construction
Individual
2021-10-28 EasyIR Other Individual progress of Horizon New EasyIR
investor
Energy
Individual Shareholders' shareholding of
2021-10-26 EasyIR Other Individual EasyIR
investor Horizon New Energy
Individual Shareholders' shareholding of
2021-10-25 EasyIR Other Individual EasyIR
investor Horizon New Energy
Development trend of the
Individual
2021-10-20 EasyIR Other Individual industry and development plan EasyIR
investor
of the Company
Company's participation in
Individual China International Exhibition
2021-10-20 EasyIR Other Individual EasyIR
investor on Internal Combustion
Engines and Parts
Capacity of Horizon New
Energy, progress of the
Individual
2021-10-19 EasyIR Other Individual relocation project of the EasyIR
investor
Company, and suggestions of
the official website
Capacity of Horizon New
Individual Energy, progress of the
2021-10-19 EasyIR Other Individual EasyIR
investor relocation project of the
Company
Impact of climate and
Individual
2021-10-18 EasyIR Other Individual environment on the Company's EasyIR
investor
business development
Individual R&D of new energy
2021-10-15 EasyIR Other Individual EasyIR
investor agricultural machinery
Individual Applicability of new energy to
2021-10-14 EasyIR Other Individual EasyIR
investor the Company's products
Individual Results forecast release of the
2021-10-13 EasyIR Other Individual EasyIR
investor Company
Individual Suggestions for interaction
2021-10-13 EasyIR Other Individual EasyIR
investor between the secretary of the
39
Changchai Company, Limited Annual Report 2021
Board of Directors and
investors
Individual
2021-10-09 EasyIR Other Individual Company's products EasyIR
investor
Individual Suggestions for expansion of
2021-10-04 EasyIR Other Individual EasyIR
investor the Company's products
Suggestions for investment and
Individual cooperation in the agricultural
2021-09-30 EasyIR Other Individual EasyIR
investor machinery industry chain of the
Company
Development of the Company
Individual after the strategic
2021-09-30 EasyIR Other Individual EasyIR
investor reorganization of state-owned
capital and subsequent planning
Individual Company's generator set
2021-09-27 EasyIR Other Individual EasyIR
investor business
Individual Company's generator set
2021-09-27 EasyIR Other Individual EasyIR
investor business
Individual Company's generator set
2021-09-27 EasyIR Other Individual EasyIR
investor business
Individual Company's generator set
2021-09-24 EasyIR Other Individual EasyIR
investor business
Construction progress of the
Individual
2021-09-22 EasyIR Other Individual separator film project of EasyIR
investor
Horizon New Energy
Individual Suggestions for Company's
2021-09-13 EasyIR Other Individual EasyIR
investor development
Construction of the separator
Individual
2021-09-13 EasyIR Other Individual film project of Horizon New EasyIR
investor
Energy
Individual Suggestions for Company's
2021-09-09 EasyIR Other Individual EasyIR
investor development
Suggestions for Company
Individual
2021-09-09 EasyIR Other Individual transformation and EasyIR
investor
development
Individual Suggestions for Company's
2021-09-09 EasyIR Other Individual EasyIR
investor development
Construction and capacity of
Individual the product line of the separator
2021-09-09 EasyIR Other Individual EasyIR
investor film project of Horizon New
Energy
Individual Issuance time of A and B
2021-08-27 EasyIR Other Individual EasyIR
investor Shares of the Company
2021-08-18 EasyIR Other Individual Individual Suggestions for development of EasyIR
40
Changchai Company, Limited Annual Report 2021
investor the new energy industry
Operation status of the
Individual
2021-08-17 EasyIR Other Individual subsidiary Changchai EasyIR
investor
Machinery
Individual Technology reserve of the
2021-08-11 EasyIR Other Individual EasyIR
investor Company
Progress of the Company's
Individual
2021-07-28 EasyIR Other Individual relocation project and the EasyIR
investor
impact on the Company
Follow-up planning on the
Individual
2021-07-27 EasyIR Other Individual original base of the Company's EasyIR
investor
relocation project
Capital increase plan and
Individual capacity and product
2021-07-26 EasyIR Other Individual EasyIR
investor technology of the separator film
project of Horizon New Energy
Individual Equity structure of Horizon
2021-07-20 EasyIR Other Individual EasyIR
investor New Energy
Individual Application of the separator
2021-07-20 EasyIR Other Individual EasyIR
investor film of Horizon New Energy
Individual Investment of the Company in
2021-07-18 EasyIR Other Individual EasyIR
investor the new energy industry
Individual Customers of the separator film
2021-07-13 EasyIR Other Individual EasyIR
investor project of Horizon New Energy
Main businesses of the
Individual
2021-07-13 EasyIR Other Individual subsidiary Horizon Agricultural EasyIR
investor
Equipment
Reasons and progress of the
Individual
2021-07-02 EasyIR Other Individual relocation project of light EasyIR
investor
engines and casting
Individual Project results of the non-public
2021-06-29 EasyIR Other Individual EasyIR
investor offering of shares
Individual
2021-06-29 EasyIR Other Individual Number of shareholders EasyIR
investor
Individual Project of the separator film for
2021-06-27 EasyIR Other Individual EasyIR
investor lithium batteries
Individual Company's shareholding in
2021-06-27 EasyIR Other Individual EasyIR
investor Horizon New Energy
Individual Company's external
2021-06-21 EasyIR Other Individual EasyIR
investor cooperation
Individual Project of the separator film for
2021-06-17 EasyIR Other Individual EasyIR
investor lithium batteries
Individual Capacity and shareholders'
2021-06-12 EasyIR Other Individual EasyIR
investor shareholding of Horizon New
41
Changchai Company, Limited Annual Report 2021
Energy
Individual Operation status of Horizon
2021-06-11 EasyIR Other Individual EasyIR
investor New Energy
Individual Related relationship of the
2021-06-07 EasyIR Other Individual EasyIR
investor Company
Individual Project of the separator film for
2021-06-05 EasyIR Other Individual EasyIR
investor lithium batteries in operation
Progress of the project of the
Individual
2021-06-04 EasyIR Other Individual separator film for lithium EasyIR
investor
batteries
Individual Number of shareholders of the
2021-06-02 EasyIR Other Individual EasyIR
investor Company
Reasons for the Company's net
Individual
2021-05-30 EasyIR Other Individual income growth in the first EasyIR
investor
quarter of 2020 and 2021
Project of the non-public
Individual
2021-05-28 EasyIR Other Individual offering of shares of the EasyIR
investor
Company
Individual
2021-05-27 EasyIR Other Individual Investment of the Company EasyIR
investor
Individual Impact of raw material price
2021-05-27 EasyIR Other Individual EasyIR
investor increase
Issuance of the project of the
Individual
2021-05-27 EasyIR Other Individual non-public offering of shares of EasyIR
investor
the Company
Individual Company's shareholding in
2021-05-25 EasyIR Other Individual EasyIR
investor Horizon New Energy
Applicability of the separator
Individual
2021-05-24 EasyIR Other Individual film for lithium batteries to EasyIR
investor
sodium batteries
Individual
2021-05-19 EasyIR Other Individual Company's generator business EasyIR
investor
Individual Development of the Company's
2021-05-12 EasyIR Other Individual EasyIR
investor product electrification
Reasons for the location choice
Individual
2021-05-11 EasyIR Other Individual of Horizon New Energy's EasyIR
investor
subsidiary
Individual Mixed-ownership reform of the
2021-05-11 EasyIR Other Individual EasyIR
investor Company
Countermeasures of the
Individual
2021-05-11 EasyIR Other Individual Company for the price increase EasyIR
investor
of raw materials
Individual
2021-04-25 EasyIR Other Individual Company sales overview EasyIR
investor
42
Changchai Company, Limited Annual Report 2021
Individual
2021-04-21 EasyIR Other Individual Company's objectives EasyIR
investor
Support and help of Changzhou
Individual
2021-04-21 EasyIR Other Individual Investment Group to the EasyIR
investor
Company
Individual
2021-04-21 EasyIR Other Individual Company's objectives EasyIR
investor
Individual Company's purchase and
2021-04-21 EasyIR Other Individual EasyIR
investor storage of land plots
Individual
2021-04-15 EasyIR Other Individual Company's dividends EasyIR
investor
Investment and R&D of the
Individual
2021-04-08 EasyIR Other Individual Company in the new energy EasyIR
investor
industry
Individual Transformation and upgrading
2021-04-08 EasyIR Other Individual EasyIR
investor of the Company
Individual Company's purchase and
2021-04-08 EasyIR Other Individual EasyIR
investor storage of plants
Individual Company's production and
2021-04-08 EasyIR Other Individual EasyIR
investor operation status
Individual Q1 results forecast of the
2021-04-08 EasyIR Other Individual EasyIR
investor Company
Individual Project of the separator film for
2021-04-08 EasyIR Other Individual EasyIR
investor lithium batteries in operation
Individual Company's plan for disposal of
2021-04-08 EasyIR Other Individual EasyIR
investor Bank of Jiangsu shares
Individual Company's operation and
2021-03-30 EasyIR Other Individual EasyIR
investor dividends
Project progress of the
Individual
2021-03-12 EasyIR Other Individual non-public offering of shares of EasyIR
investor
the Company
Individual Supporting of agricultural
2021-03-05 EasyIR Other Individual EasyIR
investor products of the Company
Individual Agricultural products of the
2021-03-05 EasyIR Other Individual EasyIR
investor Company
Individual Investment of the Company in
2021-03-04 EasyIR Other Individual EasyIR
investor the new energy industry
Individual Investment of the Company in
2021-03-02 EasyIR Other Individual EasyIR
investor the new energy industry
Individual Operation measures of the
2021-03-01 EasyIR Other Individual EasyIR
investor Company
Individual Compensation and bonuses for
2021-02-25 EasyIR Other Individual EasyIR
investor Company's employees
2021-02-24 EasyIR Other Individual Individual Suggestions for Company's EasyIR
43
Changchai Company, Limited Annual Report 2021
investor development
Individual Suggestions for investment of
2021-02-22 EasyIR Other Individual EasyIR
investor the Company
Project progress of the
Individual
2021-02-22 EasyIR Other Individual non-public offering of shares of EasyIR
investor
the Company
Individual Impact of policies on products
2021-02-22 EasyIR Other Individual EasyIR
investor of the Company
Individual
2021-02-22 EasyIR Other Individual Company's profits in 2020 EasyIR
investor
Individual Impact of policies on the
2021-02-21 EasyIR Other Individual EasyIR
investor Company
Individual Sales of agricultural machinery
2021-02-21 EasyIR Other Individual EasyIR
investor of the Company
Individual Sales of diesel generator sets of
2021-02-21 EasyIR Other Individual EasyIR
investor the Company
Individual Number of shareholders of the
2021-02-19 EasyIR Other Individual EasyIR
investor Company
Individual Project of the separator film for
2021-02-18 EasyIR Other Individual EasyIR
investor lithium batteries in operation
Individual Company's external
2021-02-18 EasyIR Other Individual EasyIR
investor cooperation
Suggestions for the Company's
Individual
2021-02-03 EasyIR Other Individual external cooperation and EasyIR
investor
development
Individual Compensation and bonuses for
2021-02-03 EasyIR Other Individual EasyIR
investor Company's employees
Individual Information disclosure of the
2021-02-03 EasyIR Other Individual EasyIR
investor Company
Individual
2021-02-02 EasyIR Other Individual Business scope of the Company EasyIR
investor
Individual Suggestions for Company's
2021-01-25 EasyIR Other Individual EasyIR
investor development
Individual Investment of the Company in
2021-01-25 EasyIR Other Individual EasyIR
investor the new energy industry
Customers of the project of the
Individual
2021-01-22 EasyIR Other Individual separator film for lithium EasyIR
investor
batteries
Individual Number of employees of the
2021-01-22 EasyIR Other Individual EasyIR
investor Company
Operation and profits of the
Individual
2021-01-18 EasyIR Other Individual project of the separator film for EasyIR
investor
lithium batteries
2021-01-06 EasyIR Other Individual Individual Company's external EasyIR
44
Changchai Company, Limited Annual Report 2021
investor cooperation
Phase II Construction of the
Individual
2021-01-05 EasyIR Other Individual project of the separator film for EasyIR
investor
lithium batteries
Investment and equity
Individual
2021-01-05 EasyIR Other Individual participation of the Company in EasyIR
investor
Kailong High-tech
Individual Investment of the Company in
2021-01-05 EasyIR Other Individual EasyIR
investor the new energy industry
Phase II Construction of the
Individual
2021-01-05 EasyIR Other Individual project of the separator film for EasyIR
investor
lithium batteries
45
Changchai Company, Limited Annual Report 2021
Part IV Corporate Governance
I General Information of Corporate Governance
In the Reporting Period, the Company was strictly in line with laws, statutes such as Company Law, Securities
Laws, Code of Corporate Governance of Listed Companies, Guide Opinion on Establishment of Independent
Director System by Listed Companies and Guidelines on Internal Controls of Listed Companies and so on,
continuously perfected corporate governance, established and accomplished internal management and control
system, consistently and deeply put forward corporate governance activities, so as to further normalized operation
of the Company, raising corporate governance level, laying a guard for steady and healthy development of the
Company, protect legal rights and interests of the Company and all shareholders.
The Company promulgated or revised a series of internal control system through all aspects of normal operation
and management activities in accordance with each national laws and regulations, characteristics of the industry,
operation and self-managing business, and improved it continuously, and finally formed a normative management
system. And formulated a series of management system, process and standard covered each operation link and
level of the financial assets control, human resources management, quality environment management and internal
audit supervisor etc., which ensured all the work had rules to follow.
Indicate by tick market whether there is any material incompliance with the applicable laws, administrative
regulations and regulations issued by the CSRC governing the governance of listed companies.
□ Yes √ No
No such cases in the Reporting Period.
II The Company’s Independence from Its Controlling Shareholder and Actual Controller in
Asset, Personnel, Financial Affairs, Organization and Business
The Company was independent from the controlling shareholder Changzhou Investment Group Co., Ltd in terms
of assets, business, personnel, organization and financing, with independent & complete business and capability to
operate independently.
1. Assets: The property rights relationship between the Company and the controlling shareholder is clear, assets
are clearly defined, and there are no funds, assets and other resources being occupied or used without
compensation between them.
2. Personnel: The Company and the controlling shareholder are independent of each other in terms of labor,
personnel and salary management, and each has an independent management organization, a sound management
policy, and an independent personnel appraisal and assessment system.
3. Finance: The Company has set up a special finance department, established an independent accounting system
and financial management policy, opened an independent bank account, and implemented independent accounting
and independent tax payments. There is no interference in the financial activities of the Company by the
controlling shareholder.
4. Institution: The Company has a complete and independent corporate governance structure and has established a
sound organizational system that meets its own production and operation needs, which operates independently and
well, and there is no subordinate relationship with the functional departments of the controlling shareholder.
5. Business: The Company has an independent and complete business system with independent and autonomous
46
Changchai Company, Limited Annual Report 2021
production and operational capability. The Company conducts related transactions reasonably on the principle of
independence.
III Horizontal Competition
□ Applicable √ Not applicable
IV Annual and Special General Meetings Convened during the Reporting Period
1. General Meeting Convened during the Reporting Period
Investor
Date of the Disclosure
Meeting Type participation Resolution
meeting date
ratio
All proposals were approved.
The 2020
Annual See Announcement No.
Annual
General 32.04% 7 May 2021 8 May 2021 2021-028 on Resolutions of
General
Meeting the 2020 Annual General
Meeting
Meeting.
The 1st All proposals were approved.
Extraordinar Extraordina See Announcement No.
2 September 3 September
y General ry General 32.26% 2021-061 on Resolutions of
2021 2021
Meeting of Meeting the 1st Extraordinary General
2021 Meeting of 2021.
2. Special General Meetings Convened at the Request of Preferred Shareholders with Resumed Voting
Rights
□ Applicable √ Not applicable
V Directors, Supervisors and Senior Management
1. General Information
Ending
Incumbent
Name Office title Gender Age Start of tenure End of tenure shareholding
/Former
(share)
Shi Chairman of the
Incumbent Male 58 18 October 2016 Up to now 0
Xinkun Board
Zhang Director,
Incumbent Male 56 18 October 2016 Up to now 0
Xin General Manager
Lin Tian Director Incumbent Male 59 17 December 2018 Up to now 0
47
Changchai Company, Limited Annual Report 2021
Director,
Xu Yi Vice-general Incumbent Male 58 16 April 2020 Up to now 0
Manager
Director, Chief
Jiang He Incumbent Male 50 16 April 2020 Up to now 0
Accountant
Yang
Director Incumbent Male 50 16 April 2020 Up to now 0
Feng
Wang Independent
Incumbent Male 59 16 April 2020 Up to now 0
Mancang director
Xing Independent
Incumbent Male 68 16 April 2020 Up to now 0
Min director
Zhang Independent
Incumbent Female 52 16 April 2020 Up to now 0
Yan director
Yin Vice-general
Incumbent Male 58 18 October 2016 Up to now 0
Lihou Manager
Xie
Vice-general
Guozhon Incumbent Male 53 16 April 2020 Up to now 0
Manager
g
Sun
Vice-general
Jianzhon Incumbent Male 50 16 April 2020 Up to now 0
Manager
g
Vice-general
He Manager and
Incumbent Male 43 18 October 2016 Up to now 0
Jianjiang Secretary of the
Board
He Chairman of the
Jianguan Supervisory Incumbent Male 58 17 December 2020 Up to now 0
g Committee
Lu
Zhonggu Supervisor Incumbent Male 55 18 October 2016 Up to now 0
i
Liu Yi Supervisor Incumbent Male 53 18 October 2016 Up to now 0
48
Changchai Company, Limited Annual Report 2021
Chen
Supervisor Incumbent Female 39 16 April 2020 Up to now 0
Lijia
Ge
Supervisor Incumbent Female 52 16 April 2020 Up to now 0
Jiangli
Total -- -- -- -- -- -- 0
Indicate whether any director, supervisor or senior management resigned before the expiry of their tenure during
the Reporting Period.
□ Yes √ No
Change of directors, supervisors and senior management:
√ Applicable □ Not applicable
Type of
Name Office title Date of change Reason for change
change
Vice-general Appointed by the
He Jianjiang Appointed 13 December 2021
Manager Board
2. Biographical Information
Professional backgrounds, major work experience and current duties in the Company of the incumbent directors,
supervisors and senior management:
Shi Xinkun: Now he acts as vice-president of Changzhou Investment Group Co., Ltd., the Chairman of the Board
and Party Secretary in the Company and the Chairman of the Board in Jiangsu Horizon New Energy Technology
Co., Ltd.
Zhang Xin: He successively took the posts of Sales Manager, General Manager Assistant, and vice-general
manager in our company. Now, he acts as Director, General Manager, deputy Party Secretary of the Company and
executive director of Jiangsu Changchai Machinery Co., Ltd.
Lin Tian: He successively worked as deputy director of enterprise development Dept., GM of investment
management Dept. II and I, assistant president in Changzhou Investment Group Co., Ltd. Now he is the vice
president, director of Changzhou Investment Group Co., Ltd., and the director of the Company.
Xu Yi: successively served as the director and assistant to the GM of the Company’s technology center, and
currently serves as the director and deputy GM of the Company.
Jiang He: successively served as the accountant, assistant to the minister, and vice minister of the financial
department of the Company. He is currently a director, chief accountant and minister of the financial department
of the Company.
Yang Feng: successively served as the business manager of the Shanghai Investment Banking Department of
China Economic Development Trust and Investment Co., Ltd., business director of the investment banking
department of Orient Securities Co., Ltd., GM of and assistant chairman of AJ Securities’ investment banking
department, operation management headquarters, worked in the development finance department and investment
banking department, and served as the EGM in the equipment group, investment recommendation group, NEEQ
business department and comprehensive group of CITIC Securities Co., Ltd. Currently serving as the director and
GM of Shanghai Linghe Asset Management Partnership (LP), Daiwa Securities China Co., Ltd., and the director
49
Changchai Company, Limited Annual Report 2021
of the Company.
Wang Mancang: successively served as a teacher, lecturer, lecturer and professor in the Department of Finance of
the School of Economics and Management of Northwest University, and currently serves as the director of the
Department of Finance of the School of Economics and Management of Northwest University, and the director of
Institute of Public Economics, counselor of Xi'an municipal government, expert of the "financial group" of the
government decision advisory committee, independent director of Xi'an Chenxi Aviation Technology Corp., Ltd.,
Shaanxi Construction Machinery Co., Ltd, Chang'an International Trust Co., Ltd., Focuslight Technologies Inc.
and the Company.
Xing Min: successively served as secretary of the Party Committee and administrative assistant general manager
(AGM) of China National Heavy Machinery Corporation; secretary of the Party Committee and GM of China
National Machine Tool Sales and Technical Service Corporation (CNMTC); currently Secretary-General of China
Internal Combustion Engine Industry Association (CICEIA), director of ActBlue Co., Ltd., Independent Director
of Zhejiang Zhongjian Technology Co., Ltd., Jiangsu Yunyi Electric Co., Ltd., Weifu High-Technology Group
Co., Ltd., Zhejiang Xinchai Co., Ltd., and the Company.
Zhang Yan: successively served as chief accountant of Changzhou Zhengda Certified Public Accountants Co.,
Ltd., executive deputy chief accountant of Jiangsu Gongzheng Certified Public Accountants Co., Ltd., currently
associate professor of Business School of Jiangsu University of Technology, independent non-executive director
of S-Enjoy Service Group Co., Limited, independent director of Jiangsu Changhai Composite Materials Co., Ltd.,
Wuxi SAHAT Electric Technology Co., Ltd., Jiangsu Tianmu Lake Tourism Co., Ltd., and the Company.
Yin Lihou: He worked as Minister of Human Resources Department and General Manager Assistant. Now he acts
as Deputy General Manager of the Company, and the Chairman of the Board of Changchai Robin.
Xie Guozhong: successively acts as General Manager Assistant of the Company, Supervisor and Secretary of
Party General Branch.Now he is Deputy GM of the Company,General Manager of the Sales Companyand
Chairman of the Board of Changchai Wanzhou.
Sun Jianzhong: successively served as the director of the technical center and assistant to the general manager of
the Company. He is currently the deputy general manager of the Company.
He Jianjiang: He successively acted as the Staff Member, Assistant to the Chief, and Deputy Chief of the
Investment and Development Department, and Securities Representative of the Company. Now he is Deputy
General Manager, Secretary of the Board, and Chief of the Investment and Development Department of the
Company, as well as Director & GM of Horizon Investment, Director of Horizon Agricultural Equipment and
Changchai Wanzhou.
He Jianguang: successively served as deputy chief of Design Section of Changzhou Diesel Engine Factory,
engineer of Product Development Department, deputy director of the Company’s Joint Venture Office, deputy
director of Technology Center, chief engineer, director, general manager, vice chairman of Changzhou Diesel
Engine Factory, a member of the Party committee, secretary of the Discipline Inspection Commission and
supervisor of Changzhou Investment Group Co., Ltd., currently a member of the Party Committee of Changzhou
Investment Group Co., Ltd., and chairman of the board of supervisors of the Company.
Chen Lijia: vice president and general manager of risk control legal department of Changzhou Investment Group
50
Changchai Company, Limited Annual Report 2021
Co., Ltd. and supervisor of the Company.
Ge Jiangli: director and supervisor of Human Resources Department of the Company.
Lu Zhonggui: Now he acts as Minister of political Department of the Company, Office Director, Secretary of
Organ Party General Branch as well as employee supervisor of the Company and Director of Xingsheng Real
Estate Management.
Liu Yi: He successively took the posts of Assistant Minister of Enterprise Management Department. Now he acts
as Director of Audit Department and Employee Supervisor of the Company, Supervisor of Changchai Wanzhou,
Changchai Benniu, Horizon Investment, Horizon Agricultural Equipment, Changchai Robin, Changchai
Machinery and Xingsheng Real Estate Management.
Offices held concurrently in shareholding entities:
√ Applicable □ Not applicable
Remuneration
or allowance
Office held in the End of
Name Shareholding entity Start of tenure from the
shareholding entity tenure
shareholding
entity
Changzhou Investment Vice president, December
Lin Tian Yes
Group Co., Ltd. director 2017
Vice President,
Changzhou Investment GM of Risk
Chen Lijia March 2018 Yes
Group Co., Ltd. Control Legal
Department
Changzhou Investment
Shi Xinkun Vice president No
Group Co., Ltd.
He Changzhou Investment Member of the
January 2019 Yes
Jianguang Group Co., Ltd. Party Committee
Notes N/A
Offices held concurrently in other entities:
√ Applicable □ Not applicable
Remuneration or
Office held in the End of
Name Other entity Start of tenure allowance from
entity tenure
the entity
Shi Jiangsu Horizon New Energy Chairman of the 19 November 2021
No
Xinkun Technology Co., Ltd. Board
Yang Feng Daiwa Securities (China) Co.Ltd. Managing Director 1 January 2021 Yes
Finance Department of School of
Wang Economics & Management Teacher 1 October 1996
Northwest University Yes
Mancang
Xi’an Government Consultant 1 October 2015
51
Changchai Company, Limited Annual Report 2021
Decision-making Advisory Finance group
1 April 2017
Committee of Xi’an Government leader
Shaanxi Securities Research
President 1 October 2017
Association
Chang'an International Trust Independent
1 July 2018
Co.,Ltd. Director
Shaanxi Construction Machinery Independent
16 November 2018
Co., Ltd. Director
Xi’an Focuslight Technology Co., Independent
1 October 2018
Ltd. Director
Standing Vice
China Internal Combustion Engine
Chairman and 1 August 2008
Industry Association
Secretary-general
Full-time April
Tianjin University 1 June 2019
professor 2021
Independent 21 May
ZYNP Corporation 29 January 2016
Director 2021
Independent
Zhongjian Technology Co.,Ltd 20 June 2017
Xing Min Director Yes
Independent
Jiangsu Yunyi Electronic Co.,Ltd. 15 July 2019
Director
Weifu High-Technology Group Co., Independent
20 May 2021
Ltd. Director
Independent
Zhejiang Xinchai Co., Ltd. 6 December 2019
Director
ActBlue Co., Ltd. Director 22 November 2021
Associate
Jiangsu University of Technology 1 August 2008
professor
Jiangsu Changhai Composite Independent
16 February 2016
Materials Co., Ltd. Director
Independent
S-Enjoy Service Group Co.,
Zhang Yan non-executive 20 October 2018 Yes
Limited
director
Wuxi SAHAT Electric Technology Independent
2 November 2020
Co., Ltd. Director
Jiangsu Tianmu Lake Tourism Co., Independent
8 February 2021
Ltd. Director
Notes None
Punishments imposed in the recent three years by the securities regulator on the incumbent directors, supervisors
and senior management as well as those who left in the Reporting Period:
□ Applicable √ Not applicable
52
Changchai Company, Limited Annual Report 2021
3. Remuneration of Directors, Supervisors and Senior Management
Decision-making procedure, determination basis and actual payments of remuneration for directors, supervisors
and senior management:
In 2021, the monthly salaries of directors, supervisors and senior executives in the Company were in line with the
stipulations of relevant salary management and grade standards, and the benefits of the Company and assessment
results. Director Lin Tian and Supervisors He Jianguang and Chen Lijia obtained salaries in shareholders' entities.
Remuneration of directors, supervisors and senior management for the Reporting Period
Unit: RMB’0,000
Total
Any
before-tax
Incumbent/For remuneration
Name Office title Gender Age remuneration
mer from related
from the
party
Company
Chairman of the
Shi Xinkun Male 58 Incumbent 93.46 No
Board
Director, 93.46
Zhang Xin Male 56 Incumbent No
General Manager
Lin Tian Director Male 59 Incumbent 0 Yes
Director,
Xu Yi Vice-general Male 58 Incumbent 82.19 No
Manager
Director, Chief
Jiang He Male 50 Incumbent 81.28 No
Accountant
Yang Feng Director Male 50 Incumbent 0 No
Wang Independent
Male 59 Incumbent 10 No
Mancang director
Independent
Xing Min Male 68 Incumbent 10 No
director
Independent
Zhang Yan Female 52 Incumbent 10 No
director
Vice-general
Yin Lihou Male 58 Incumbent 80.98 No
Manager
Vice-general
Xie Guozhong Male 53 Incumbent 81.89 No
Manager
Vice-general
Sun Jianzhong Male 50 Incumbent 81.58 No
Manager
Vice-general
He Jianjiang Manager and Male 43 Incumbent 80.87 No
Secretary of the
53
Changchai Company, Limited Annual Report 2021
Board
Chairman of the
He Jianguang Supervisory Male 58 Incumbent 0 Yes
Committee
Chen Lijia Supervisor Female 39 Incumbent 0 Yes
Lu Zhonggui Supervisor Male 55 Incumbent 20.45 No
Ge Jiangli Supervisor Female 52 Incumbent 20.20 No
Liu Yi Supervisor Male 53 Incumbent 20.37 No
Total -- -- -- -- 766.73 --
VI Performance of Duty by Directors in the Reporting Period
1. Board Meetings Convened in the Reporting Period
Date of Disclosure
Meeting Resolution
meeting date
The 1st
Extraordinary The meeting deliberated on and approved the
Meeting of the 2021-01-20 2021-01-21 Obligations on Conducting Forward Foreign Exchange
Board of Directors Settlement
in 2021
The meeting deliberated on and approved the Report on
the Work of the General Manager for the Year 2020, the
Business Policy Objectives of the Company for the Year
The 7th Meeting of
2021, the Results of the Performance Appraisal of the
the 9th Board of 2021-01-29 --
Senior Management of the Company for the Year 2020,
Directors
the Contract on the Performance Appraisal of the Senior
Management of the Company for the Year 2021, and the
Proposal on Application for Bank Credit Line
The meeting deliberated on and approved the Annual
Report for 2020 and Its Summary, the Annual Work
Report of the Board of Directors for 2020, the Annual
Self-Evaluation Report on Internal Control for 2020, the
Proposal on the Provision of Reserves for Asset
The 8th Meeting of Impairment, the Proposal on the Provision of Guarantees
the 9th Board of 2021-04-13 2021-04-15 for Bank Credit for Subsidiaries, the Proposal on
Directors Extending the Validity Period of Resolutions of the
Company's Non-public Offering of Shares at the General
Meeting, the Proposal on the Request for the General
Meeting to Extend the Validity Period of Resolutions of
the Company's Non-public Offering of Shares at the
General Meeting, the Proposal on Amending the Articles
54
Changchai Company, Limited Annual Report 2021
of Association of the Company, the Proposal on
Amending the Rules of Procedure of the General
Meeting, the Proposal on Amending the Policy of
Independent Directors, and the Proposal on Convening
the Annual General Meeting of the Company for 2020.
The meeting deliberated on and approved the Report for
the First Quarter of 2021, the Proposal on Amending the
Rules of Implementation of the Audit Committee of the
Board of Directors, the Proposal to Amend the
Implementation Rules of the Remuneration and
Evaluation Committee, the Proposal on Amending the
The 9th Meeting of 2021-04-27 Work Policy of the Secretary of the Board of Directors,
2021-04-28
the 9th Board of the Proposal on Amending the Management Policy of
Directors Information Disclosure Matters, the Proposal on
Amending the Registration Policy of Inside Information
Insider, the Proposal on Amending the Management
Policy of External Information Users, the Proposal on
Amending the Internal Audit Policy, and the Proposal on
Amending the Decision-making Policy of Related
Transactions.
The 2nd The meeting deliberated on and approved the Proposal
Extraordinary on the Proposed Opening of a Special Account for the
Meeting of the 2021-05-18 2021-05-19 Funds Raised from the Non-public Offering of Shares
Board of Directors and Authorization to Enter into a Supervision Agreement
in 2021 for the Funds Raised
The 3rd
Extraordinary The meeting deliberated on and approved the Proposal
Meeting of the 2021-06-28 2021-06-30 on Using Raised Funds to Replace Pre-invested Project
Board of Directors Funds and Advanced Issue Expenses
in 2021
The meeting deliberated on and approved the Proposal
on Amending the Articles of , Proposal on Amending the , Proposal on
Meeting of the 2021-07-13 2021-07-15 Using Own Idle Funds to Purchase Wealth Management
Board of Directors Products, Proposal on Using Idle Funds to Purchase
in 2021 Wealth Management Products, and Proposal on
Changing the Implementation Entity of Some
Investment Projects with Raised Funds
The 5th
The meeting deliberated on and approved the Proposal
Extraordinary
on Related-Party Transaction regarding the Use of Idle
Meeting of the 2021-07-26 2021-07-28
Raised Funds for Purchase of Return Certificate of
Board of Directors
Donghai Securities
in 2021
55
Changchai Company, Limited Annual Report 2021
The meeting deliberated on and approved the
Semi-annual Report for 2021 and Its Summary, Proposal
on Change of Accounting Policy, Proposal on Provision
of Reserves for Asset Impairment, Proposal on Write-off
of Certain Accounts Receivable, Special Report on the
The 10th Meeting of
Deposit and Use of Raised Funds for the Semi-annual
the 9th Board of 2021-08-16 2021-08-18
Period of 2021, Proposal on the Re-appointment of the
Directors
Financial Audit Institution for 2021 and Its Audit
Expenses, Proposal on the Re-appointment of the
Internal Control Audit Institution for 2021, and Proposal
on Convening the First Extraordinary General Meeting
of Shareholders for 2021
The 6th The meeting deliberated on and approved the Report of
Extraordinary the Third Quarter of 2021 and Proposal on Participating
Meeting of the 2021-10-28 2021-10-29 in the Public Listed Transfer of 41.5% Equity Interests in
Board of Directors Zhenjiang Siyang Diesel Engine Manufacturing Co.,
in 2021 Ltd.
The 7th
Extraordinary The meeting deliberated on and approved the Proposal
Meeting of the 2021-12-13 2021-12-14 on the Proposed Appointment of Mr. He Jianjiang as
Board of Directors Deputy General Manager of the Company
in 2021
2. Attendance of Directors at Board Meetings and General Meetings
Attendance of directors at board meetings and general meetings
Total
The
number of
Board Board director
board Board
Board meetings meetings failed to
meetings meetings General
meetings attended the attend two
Director the attended meetings
attended by way of director consecutiv
director through a attended
on site telecommu failed to e board
was proxy
nication attend meetings
eligible to
(yes/no)
attend
Shi Xinkun 11 5 6 0 0 No 2
Zhang Xin 11 5 6 0 0 No 2
Lin Tian 11 5 6 0 0 No 2
Jiang He 11 5 6 0 0 No 2
Yang Feng 11 5 6 0 0 No 2
Wang
11 5 6 0 0 No 2
Mancang
Xing Min 11 4 6 1 0 No 2
Zhang Yan 11 5 6 0 0 No 2
56
Changchai Company, Limited Annual Report 2021
Explanation of why any director failed to attend two consecutive board meetings:
N/A
3. Objections Raised by Directors on Matters of the Company
Indicate by tick mark whether any directors raised any objections on any matter of the Company.
□ Yes √ No
No such cases in the Reporting Period.
4. Other Information about the Performance of Duty by Directors
Indicate by tick mark whether any suggestions from directors were adopted by the Company.
√ Yes □ No
Suggestions from directors adopted or not adopted by the Company:
The independent directors of the Company in line with the law, rules, normative documents and obligations given
by the Company of the Company law, Article of Associations and Independent Directors Work Rules,
comprehensively focused on the development and operation of the Company, actively attended the general
meeting of shareholder and meeting of board of directors, and given independent opinions for the significant
events of the Company, and effectively maintained the profits of the Company and all the shareholders. The
Company actively listened to the suggestions from the independent directors upon the significant events and
adopted them.
VII Special Committees under the Board of Directors during the Reporting Period
Number Important Specific
Other
Name of of Date of comments disputed
Members Contents performance
committee meetings meeting and matters
of duties
convened suggestions (if any)
The
The meeting Company's
discussed and financial
approved the statements
Report on have been
Financial prepared in
Zhang
Pre-audit in 2020, accordance
Audit Yan, 18
Report on Audit with the new
Committee Wang 3 January
Plan Arrangement Accounting
Mancang, 2021
for 2020, and Standards for
Lin Tian
Report on Business
Internal Audit Enterprises
Work in 2020 and and the
Internal Audit provisions of
Plan for 2021 the
Company's
57
Changchai Company, Limited Annual Report 2021
relevant
financial
policies and
presented
fairly, in all
material
respects, the
financial
status of the
Company as
of 31
December
2020 and the
operating
results and
cash flows
for 2020. The
Company's
financial and
accounting
statements
are authentic
and accurate.
The
Company's
statements
presented
fairly, in all
material
respects, the
The meeting
financial
reviewed and
status of the
approved the
Company as
6 April audited annual
of 31
2021 financial
December
statements of the
2020 and the
Company for
operating
2020
results and
cash flows
for 2020. It
was
consented
that they
shall be
58
Changchai Company, Limited Annual Report 2021
submitted to
the Board of
Directors for
review and
approval
The meeting
deliberated on
and approved the
Semi-annual
Work Summary
of the Audit
Department for
2021, Proposal on
Provision of
Reserves for
Asset
Impairment,
Proposal on the
Write-off of It was
Certain Accounts consented
Receivable, that both the
13 Special Report on proposals
August the Deposit and shall be
2021 Use of Raised submitted to
Funds for the the Board of
Semi-annual Directors for
Period of 2021, discussion
Proposal on the
Re-appointment
of the Financial
Audit Institution
for 2021 and Its
Audit Expenses,
and Proposal on
the
Re-appointment
of the Internal
Control Audit
Institution for
2021
Shi The meeting It was
29
Strategy Xinkun, deliberated on consented
1 January
Committee Xing and approved the that both the
2021
Min, Operation Policy proposals
59
Changchai Company, Limited Annual Report 2021
Yang and Objectives shall be
Feng for 2021 submitted to
the Board of
Directors for
discussion
The meeting
deliberated on
and approved the It was
Encashment of consented
Xing
Appraisal of the that both the
Remuneration Min,
20 Senior proposals
and Wang
1 January Management in shall be
Evaluation Mancang,
2021 2020 and submitted to
Committee Shi
Appraisal the Board of
Xinkun
Contract of the Directors for
Senior discussion
Management for
2021
VIII Performance of Duty by the Supervisory Committee
Indicate by tick mark whether the Supervisory Committee found any risk to the Company during its supervision in
the Reporting Period.
□ Yes √ No
The Supervisory Committee raised no objections in the Reporting Period.
IX Employees
1. Number, Functions and Educational Backgrounds of Employees
Number of in-service employees of the Company as
2240
the parent at the period-end
Number of in-service employees of major subsidiaries
524
at the period-end
Total number of in-service employees at the
2764
period-end
Total number of paid employees in the Reporting
2764
Period
Number of retirees to whom the Company as the
parent or its major subsidiaries need to pay retirement 0
pensions
Functions
Function Employees
Production 1845
60
Changchai Company, Limited Annual Report 2021
Sales 205
Technical 362
Financial 37
Administrative 294
Other 21
Total 2764
Educational backgrounds
Educational background Employees
Junior high school graduates and below 1198
High school graduates 776
College graduates and technical secondary school
508
graduates
Bachelors 263
Masters and above 19
Total 2764
2. Employee Remuneration Policy
The Company always adhered to the principle of tilting the remuneration incentive mechanism towards excellent
talents, so as to display the roles of various professional technicians, management staffs and skilled backbones.
Besides, it adhered to the principle of increasing the employee’s income integrated with increasing labor
production efficiency and production & operation efficiency, so as to perfect the salary structure and further
increase employees’ income steadily.
3. Employee Training Plans
The Company established the Management Rules on the Education & Training for Employees, aiming to enhance
employees’ quality and try its best to cultivate a team of faithful and highly professional talents. Besides, it
innovated the training mechanism, optimized the training environment, and reinforced to encourage employees to
attend various training, so as to inspire the employees’ potential to the maximum extent and further promote the
sustainable development of the Company.
4. Labor Outsourcing
□ Applicable √ Not applicable
X Profit Distributions (in the Form of Cash and/or Stock)
How the profit distribution policy, especially the cash dividend policy, was formulated, executed or revised in the
Reporting Period:
√ Applicable □ Not applicable
In Articles of Association, which had confirmed the specific profits distribution and cleared out the conditions,
standards and proportion of the cash bonus, stipulated the decision-making progress of the formulation and
61
Changchai Company, Limited Annual Report 2021
alternation of the profits distribution policies and the chapters as well as the regulations fully ensure the
opportunities for the medium and small shareholders to exert the functions and to provide advices as well as
appeals. The cash bonus of recent 3 years of the Company met with the regulations of the Articles of Association
and during the decision-making process of the profits distribution proposal, the Independent Directors stated the
independent advices and fully respected the advices from the medium and small shareholders. The profits
distribution preplan and the turning capital reserve into share capital preplan of the Company were both met with
the relevant regulations of the Articles of Association and so on.
Special statement about the cash dividend policy
In compliance with the Company’s Articles of Association and resolution of general
Yes
meeting
Specific and clear dividend standard and ratio Yes
Complete decision-making procedure and mechanism Yes
Independent directors faithfully performed their duties and played their due role Yes
Non-controlling interests are able to fully express their opinion and desire and their
Yes
legal rights and interests are fully protected
In case of adjusting or changing the cash dividend policy, the conditions and
N/A
procedures involved are in compliance with applicable regulations and transparent
Indicate by tick mark whether the Company fails to put forward a cash dividend proposal despite the facts that the
Company has made profits in the Reporting Period and the profits of the Company as the parent distributable to
shareholders are positive.
□ Applicable √ Not applicable
Final dividend plan for the Reporting Period:
√ Applicable □ Not applicable
Bonus shares for every 10 shares (share) 0
Dividend for every 10 shares (RMB) (tax inclusive) 0.26
Additional shares to be converted from capital reserve for every 10 shares
0
(share)
Total shares as the basis for the profit distribution proposal (share) 705,692,507
Cash dividends (RMB) (tax inclusive) 18,348,005.18
Cash dividends in other forms (such as share repurchase) (RMB) 0
Total cash dividends (including those in other forms) (RMB) 18,348,005.18
Distributable profit (RMB) 756,037,052.58
Total cash dividends (including those in other forms) as % of total profit
100%
distribution
Cash dividend policy
Other
Particulars about the dividend plan
The Board has approved a final dividend plan as follows: based on the total share capital of the Company at 31
December 2021, a cash dividend of RMB0.26 (tax inclusive) per 10 shares is to be distributed to the
shareholders, with no bonus issue from either profit or capital reserves.
62
Changchai Company, Limited Annual Report 2021
XI Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures for
Employees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XII Formulation and Implementation of Internal Control System during the Reporting
Period
1. Internal Control Formulation and Implementation
During the Reporting Period, the Company strictly complied with national laws and regulations and relevant
regulations such as the Basic Code for Internal Control of Enterprises and the Guidelines for Application of
Enterprise Internal Control, as well as the provisions and requirements of the Company's internal control standards,
and optimized important business processes and improved and perfected the internal control system through
continuous supervision and effective evaluation of the operation of the Company's internal control, so as to adapt
to the changing external environment and internal management requirements and improve the efficiency of the
Company's operation and management. By doing so, the Company effectively prevented risks in operation and
management, and promoted the achievement of internal control objectives. The Company's internal control system
can cover the major aspects of the Company's operation and management, and the internal control design is sound
and reasonable, with no material omissions.
2. Material Internal Control Weaknesses Identified for the Reporting Period
□ Yes √ No
XIII Management of Subsidiaries by the Company during the Reporting Period
Problems
Integration Progress on Solutions Solution Subsequent
Subsidiary found in
plan integration taken progress solution
integration
N/A N/A N/A N/A N/A N/A N/A
XIV Self-Evaluation Report or Independent Auditor’s Report on Internal Control
1. Internal Control Self-Evaluation Report
Disclosure date of the internal
13 April 2022
control self-evaluation report
Index to the disclosed internal
2022-019
control self-evaluation report
Evaluated entities’ combined assets
100.00%
as % of consolidated total assets
Evaluated entities’ combined 100.00%
63
Changchai Company, Limited Annual Report 2021
operating revenue as % of
consolidated operating revenue
Identification standards for internal control weaknesses
Weaknesses in internal control over Weaknesses in internal control
Type
financial reporting not related to financial reporting
The Company classified the defects
as serious defect, important defect
and general defect according to the
influence degree from the internal
control:
(1) Serious defect: refers to one or
multiple groups with control defect
Defects with the following
which may lead the enterprise
random characteristics should be
seriously deviates the control target;
recognized as serious defect:
(2) Important defect: refers to one or
1) Seriously violated the national
multiple groups with control defect
laws and administrative
with the severity and the economic
regulations and the normative
results lower than the great defect
documents;
but may still lead the enterprise
2) “three significant one great”
seriously deviates the control target;
event had not been through the
(3) General defect: refers to other
collective decision-making
defect except for the great defect
process;
and significant defect.
3) the significant events involved
Nature standard Nature standards:
with the production and
defects with the following random
operation of the Company lacked
characteristics should be recognized
of systematic control or the
as serious defect:
institutional system was invalid;
1) the defect involves with the
4) the internal control of the
malpractice of the Directors,
information disclosure was
Supervisors and Senior Executives;
invalid, which led the Company
2) revised the disclosed financial
be open condemned by the
report;
supervision department;
3) CPAs discovered the great
5) the serious defect from the
misstatement among the current
assessment results of the internal
financial statement while which
control had not been revised.
could not be found during the
operating process of the internal
control;
4) the supervision from the Audit
Committee and the internal audit
institution of the enterprise was
invalid.
Quantitative standards: Refer to the quantitative criteria
The quantitative standards of of the internal control defect of
recognizing the significant degree of the financial report, to recognize
the misstatement (including the false the quantitative criteria of the
negatives) of the consolidated significant degree of the internal
Quantitative standard
financial report of the Company control defect of the
based on the data from the 2020 non-financial report of the
consolidated statements was as: Company as:
Serious defect: misstatement≥5% of Serious defect: possibly caused
the annual profits directly losses≥0.1% of the net
64
Changchai Company, Limited Annual Report 2021
Important defect: 2.5% of the annual assets
profits≤ misstatement ＜ 5% of the Important defect: 0.05% of the
annual profits net assets≤ possibly caused
General defect＜2.5% of the annual directly losses ＜ 0.1% of the net
profits assets
General defect: possibly caused
directly losses＜0.05% of the net
assets
Number of material weaknesses in
internal control over financial 0
reporting
Number of material weaknesses in
internal control not related to 0
financial reporting
Number of serious weaknesses in
internal control over financial 0
reporting
Number of serious weaknesses in
internal control not related to 0
financial reporting
2. Independent Auditor’s Report on Internal Control
√ Applicable □ Not applicable
Opinion paragraph in the independent auditor’s report on internal control
We believed that Changchai Company, Limited maintained effective internal control of the financial report in
significant aspects according to the Basic Norms of Internal Control and relevant regulations on 31 December
2021.
Independent auditor’s report on
Disclosed
internal control disclosed or not
Disclosure date 13 April 2022
Index to such report disclosed SGW[2022]ENo.1139
Type of the auditor’s opinion Unmodified unqualified opinion
Material weaknesses in internal
control not related to financial None
reporting
Indicate by tick mark whether any modified opinion is expressed in the independent auditor’s report on the
Company’s internal control.
□ Yes √ No
Indicate by tick mark whether the independent auditor’s report on the Company’s internal control is consistent
with the internal control self-evaluation report issued by the Company’s Board.
√ Yes □ No
65
Changchai Company, Limited Annual Report 2021
XV Remediation of Problems Identified by Self-inspection in the Special Action on the
Governance of Listed Companies
According to the deployment of China Securities Regulatory Commission, the Company organized a
self-inspection of the special action of governance of listed companies, in which it was identified that: Regarding
the Board of Directors, the Supervisory Committee, and the general meeting of the Company, the term of office of
the Eighth Board of Directors expired on 17 October 2019 without re-election, and the re-election was completed
on 16 April 2020.
66
Changchai Company, Limited Annual Report 2021
Part V Environmental and Social Responsibility
I Major Environmental Issues
Indicate by tick mark whether the Company or any of its subsidiaries was identified as a key polluter by the
environment authorities.
□ Yes √ No
Administrative punishments received in the Reporting Period due to environmental issues:
Rectification
Company or Reason for Impact on the
Violation Punishment measures of the
subsidiary punishment Company
Company
N/A N/A N/A N/A N/A N/A
Actions taken during the Reporting Period to reduce carbon emissions and the impact:
√ Applicable □ Not applicable
See the 2021 Social Responsibility Report of Changchai Company, Limited disclosed on
http://www.cninfo.com.cn dated 13 April 2022.
Reasons for not disclosing other environment-related information:
N/A
II Social Responsibility
See the 2021 Social Responsibility Report of Changchai Company, Limited disclosed on
http://www.cninfo.com.cn dated 13 April 2022.
III Efforts in Poverty Alleviation and Rural Revitalization
The Fifth Plenum of the 17th CPC Central Committee listed “consolidating poverty alleviation result and overall
implementation of rural revitalization strategy” the major targets of the economic and social development in the
“fourteenth five-year plan”.
The Company will actively participate in poverty alleviation work according to the call of the Communist Party of
China and the governmental planning and make its own contribution for realizing common prosperity in China.
67
Changchai Company, Limited Annual Report 2021
Part VI Significant Events
I Fulfillment of Commitments
1. Commitments of the Company’s De Facto Controller, Shareholders, Related Parties and Acquirers, as
well as the Company Itself and Other Entities Fulfilled in the Reporting Period or Ongoing at the
Period-End
√ Applicable □ Not applicable
Da
te
Ty
of
pe Fu
co
of Term lfi
m
co of ll
Commitment Promisor Details of commitment mit
m comm m
me
mi itment en
nt
tm t
ma
ent
kin
g
1. The company and its controlled
related parties have not reduced their
holdings of shares of Changchai
Company from the six months prior to
Ab the announcement of the decision of
out the Board of Directors of Changchai
29 10
sh Company, Limited ("Changchai
Se Octob
are Company") concerning the proposal to O
Changzhou pte er
hol consider the non-public offering of ng
Investment Group mb 2019
din shares to the date of issuance of this oi
Co., Ltd. er -30
Commitments g Letter of Commitment. ng
20 June
made in red 2. The company and its controlled
20 2022
refinancing uct related parties have no plan to reduce
ion their holdings of shares of Changchai
Company from the date of issuance of
this Letter of Commitment to six
months after the completion of this
issuance.
1. The company's funds for subscribing 29 21
Changzhou for the shares privately offered by Se Septe Ex
Ot
Investment Group Changchai Company, Limited pte mber pir
her
Co., Ltd. (Changchai Company) are the mb 2020 ed
company's own funds or funds raised er -21
68
Changchai Company, Limited Annual Report 2021
by the company in legal forms. The 20 Septe
sources of the funds are legal and the 20 mber
company has full and effective disposal 2021
rights. There is no public offering,
proxy holding, structured arrangement
or direct or indirect use of funds of
Changchai Company and its affiliates
for this subscription. There is no
violation of the relevant provisions of
the Detailed Implementing Rules for
the Non-public Offering of Stocks of
Listed Companies or the Measures for
the Administration of the Offering and
Underwriting of Securities.
2. The company is responsible for the
authenticity of the foregoing
commitments and guarantees to bear
the losses caused to Changchai
Company due to the breach of the
foregoing commitments.
Ab
out
sh
It will not transfer the shares it has
are 5
obtained in the private placement of 5 July O
Changzhou tra Jul
Changchai within 36 months starting 2021 ng
Investment Group din y
from the date when the private -5 July oi
Co., Ltd. g 20
placement of A-shares is allowed for 2024 ng
res 21
public trading.
tri
cti
on
1. It undertakes not to interfere in the
Company's operation and management
activities beyond its authority and not
to encroach on the Company's 11
interests; 11 April
O
Changzhou 2. It undertakes not to transfer benefits Ap 2020
Ot ng
Investment Group to other entities or individuals free of ril -31
her oi
Co., Ltd. charge or on unfair terms, nor to impair 20 Dece
ng
the interests of the Company by any 20 mber
other means; 9999
3. After the issuance of this Letter of
Commitment and before the
completion of the Company's
69
Changchai Company, Limited Annual Report 2021
non-public offering of shares, if the
China Securities Regulatory
Commission (CSRC) makes other new
regulatory provisions on the return
filling measures and commitments, and
the aforesaid commitments cannot
meet such provisions of the CSRC, it
undertakes to issue supplementary
commitments in accordance with the
latest provisions of the CSRC;
4. It undertakes to effectively
implement the Company's measures to
fill the return and any commitments
made thereon. If the Company
breaches such commitments and causes
losses to the Company or the investors,
the Company is willing to compensate
the Company or the investors
according to law.
UBS AG, Caitong
Fund Management
Co., Ltd., Changzhou
Traffic Construction
Investment
Development General
Company, Chen
Beiwen, Guotai Asset Ab
Management Co., out
Ltd., Jiangxi Jintou sh
I/We undertake that I/we will not C
Industrial are 5 5 July
transfer the shares I/we have obtained o
Development Co., tra Jul 2021-
in the private placement of Changchai m
Ltd., Li Xueqin, din y 5
within 6 months starting from the date pl
Nanhua Fund Co., g 20 Januar
when the private placement of A-shares et
Ltd., Enjoy (Ningbo) res 21 y 2022
is allowed for public trading. ed
Asset Management tri
L.P., Nuode Asset cti
Management Co., on
Ltd., Sun Meichun,
Minmetals Securities
Co., Ltd., Yao
Jianquan, China
National Gold Group
Asset Management
Co., Ltd., and Zhou
70
Changchai Company, Limited Annual Report 2021
Zhiheng
Rewards Plan for Shareholders in Next
Three Years(2020-2022)
Under the premise of positive
distributive profit (remaining after-tax
profits after making up for the loss and
extracting for the common reserves) in
this year or half year and abundant
Other Ab 8
out money flow and no influence on the O
commitments Ma Year
Changchai Company, div following-up going concern after cash ng
made to y 2020-
Limited ide bonus, the profits allocated by cash oi
minority nd 20 2022
every year shouldn’t be lower than ng
shareholders s 20
10% of the allocable profits from
parent company. Meanwhile, the
accumulated allocable profits by cash
in the arbitrary continuous three
accounting years should not be lower
than 30% of the annual average
allocable profits in those three years.
Fulfilled on time
Yes
or not
Specific reasons
for failing to
fulfill
commitments on N/A
time and plans
for next step
(if any)
2. Where there had been an earnings forecast for an asset or project and the Reporting Period was still
within the forecast period, explain why the forecast has been reached for the Reporting Period.
□ Applicable √ Not applicable
II Occupation of the Company’s Capital by the Controlling Shareholder or any of Its Related
Parties for Non-Operating Purposes
□ Applicable √ Not applicable
During the reporting period of the company, there was no non operating occupation of funds by the controlling
shareholders and other related parties of the listed company.
III Irregularities in the Provision of Guarantees
□ Applicable √ Not applicable
71
Changchai Company, Limited Annual Report 2021
No such cases in the Reporting Period.
IV Explanations Given by the Board of Directors Regarding the Independent Auditor's
“Modified Opinion” on the Financial Statements of the Latest Period
□ Applicable √ Not applicable
V Explanations Given by the Board of Directors, the Supervisory Board and the Independent
Directors (if any) Regarding the Independent Auditor's “Modified Opinion” on the Financial
Statements of the Reporting Period
□ Applicable √ Not applicable
VI YoY Changes to Accounting Policies, Estimates and Correction of Material Accounting
Errors
√Applicable □ Not applicable
Changes to the accounting policies and why Approval process
The Ministry of Finance issued the Accounting StandardsOn 16 August 2021, the 10th Meeting of the 9th Board
for Business Enterprises No.21-Leases (Revised) in 2018,of Directors and the 10th Meeting of the 9th Supervisory
requiring that enterprises listed both domestically andCommittee were held by the Company on which the
abroad and overseas listed enterprises preparing financialProposal on Changes of Accounting Policies was
statements in accordance with the International Financialapproved and the Company was allowed to implement
Reporting Standards or the Accounting Standards forthe new standards governing leases since 1 January
Business Enterprises shall implement it since 1 January2021.
2019 and that others carry it out since 1 January 2021.
VII YoY Changes to the Scope of the Consolidated Financial Statements
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VIII Engagement and Disengagement of Independent Auditor
Current independent auditor:
Gongzheng Tianye Certified Public Accountants
Name of the domestic independent auditor
(Special General Partnership)
The Company’s payment to the domestic independent
60
auditor (RMB’0,000)
How many consecutive years the domestic
independent auditor has provided audit service for the 20
Company
Names of the certified public accountants from the
Wang Wenkai, Qin Zhijun
domestic independent auditor writing signatures on
72
Changchai Company, Limited Annual Report 2021
the auditor’s report
How many consecutive years the certified public
accountants have provided audit service for the One year for Wang Wenkai, one year for Qin Zhijun
Company
Indicate by tick mark whether the independent auditor was changed for the Reporting Period.
□ Yes √ No
Independent auditor, financial advisor or sponsor engaged for the audit of internal controls:
√Applicable □ Not applicable
In this year, the Company retained Gongzheng Tianye Certified Public Accountants (Special General Partnership)
as the audit institution for its internal control at the audit fees of RMB120,000
IX Possibility of Delisting after Disclosure of this Report
□ Applicable √ Not applicable
X Insolvency and Reorganization
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XI Major Legal Matters
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XII Punishments and Rectifications
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XIII Credit Quality of the Company as well as Its Controlling Shareholder and Actual
Controller
√ Applicable □ Not applicable
The de facto controller of the Company is SASAC of Changzhou People’s Government and the controlling
shareholder of it is Changzhou Investment Group Co., Ltd. There is no such case that the controlling shareholder
fails to perform any legally effective judgment of courts or to pay off matured debts with a large amount.
XIV Major Related-Party Transactions
1. Continuing Related-Party Transactions
□ Applicable √ Not applicable
No such cases in the Reporting Period.
73
Changchai Company, Limited Annual Report 2021
2. Related-Party Transactions Regarding Purchase or Disposal of Assets or Equity Investments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Related-Party Transactions Regarding Joint Investments in Third Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Amounts Due to and from Related Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
5. Transactions with Related Finance Companies
□ Applicable √ Not applicable
The Company did not make deposits in, receive loans or credit from and was not involved in any other finance
business with any related finance company or any other related parties.
6. Transactions with Related Parties by Finance Companies Controlled by the Company
□ Applicable √ Not applicable
The finance company controlled by the Company did not make deposits, receive loans or credit from and was not
involved in any other finance business with any related parties.
7. Other Major Related-Party Transactions
√Applicable □ Not applicable
The Proposal on Using Idle Funds to Purchase Wealth Management Products was deliberated and approved at the
Fourth Interim Meeting of the Board of Directors in 2021 and the Second Interim Meeting of the Board of
Supervisors in 2021 held by the Company on 13 July 2021, allowing the Company and its wholly-owned
subsidiaries to use no more than RMB350 million of idle raised funds to purchase wealth management products
for cash management on the premise that the investment projects with raised funds are carried out normally and
the use of raised funds is not affected.
On 27 July 2021, the Company entered into a subscription agreement with Donghai Securities Co., Ltd. for the
product "Donghai Securities Long Gain Return Certificate June Type Customized Issue No. 13". The subscription
amount is RMB50 million, and the source of funds is idle raised funds. The return certificate matured on 25
January 2022, with a total of RMB50,949,300 in principal and return received.
Index to the public announcements about the said related-party transactions disclosed
Title of public announcement Disclosure date Disclosure website
Announcement on Progress of Using Idle Funds to Purchase 28 July 2021 www.cninfo.com.cn
74
Changchai Company, Limited Annual Report 2021
Donghai Securities Return Certificate and Related-party
Transactions
XV Major Contracts and Execution thereof
1. Entrustment, Contracting and Leases
(1) Entrustment
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Contracting
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(3) Leases
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Major Guarantees
√ Applicable □ Not applicable
Unit: RMB'0,000
Guarantees provided by the Company for external parties (exclusive of those for subsidiaries)
Disclos Guara
ure date Actual Havin ntee
Actual
of the Line of occurrence g for a
Guarantee-receiv guarante Type of Term of
guarant guarant date expire relate
ing entity e guarantee guarantee
ee line ee (agreement d or d
amount
announc signing date) not party
ement or not
Guarantees provided by the Company as the parent for its subsidiaries
Disclos Guara
ure date Actual Havin ntee
Actual
of the Line of occurrence g for a
Guarantee-receiv guarante Type of Term of
guarant guarant date expire relate
ing entity e guarantee guarantee
ee line ee (agreement d or d
amount
announ signing date) not party
cement or not
Changzhou 15 April Joint
2,000 7 May 2021 2,000 1 year No No
Changchai 2021 liability
75
Changchai Company, Limited Annual Report 2021
Horizon
Agricultural
Equipment Co.,
Ltd.
Total actual amount
Total approved line for such
of such guarantees in
guarantees in the Reporting 2,000 2,000
the Reporting Period
Period (B1)
(B2)
Total actual balance
Total approved line for such of such guarantees at
guarantees at the end of the 2,000 the end of the 500
Reporting Period (B3) Reporting Period
(B4)
Guarantees between subsidiaries
Disclos
Guara
ure date Actual Havin
Actual ntee
of the Line of occurrence g
Guarantee-receiv guarante Type of Term of for a
guarant guarant date expire
ing entity e guarantee guarantee related
ee line ee (agreement d or
amount party
announ signing date) not
or not
cement
Total guarantee amount (total of the three kinds of guarantees above)
Total actual
Total guarantee line
guarantee amount in
approved in the Reporting 2,000 2,000
the Reporting Period
Period (A1+B1+C1)
(A2+B2+C2)
Total actual
Total approved guarantee
guarantee balance at
line at the end of the
2,000 the end of the 500
Reporting Period
Reporting Period
(A3+B3+C3)
(A4+B4+C4)
Total actual guarantee amount (A4+B4+C4) as % of the
0.16%
Company’s net assets
Of which:
Balance of guarantees provided for shareholders, the de
0
facto controller and their related parties (D)
Balance of debt guarantees provided directly or
indirectly for entities with an over 70% debt/asset ratio 500
(E)
Amount by which the total guarantee amount exceeds
0
50% of the Company’s net assets (F)
Total of the three amounts above (D+E+F) 500
Possibility of having to execute joint liability on
N/A
outstanding guarantees (if any)
76
Changchai Company, Limited Annual Report 2021
Irregularities in the provision of guarantees to external
N/A
parties (if any)
3. Cash Entrusted for Wealth Management
(1) Cash Entrusted for Wealth Management
√ Applicable □ Not applicable
Overviews of cash entrusted for wealth management during the Reporting Period
Unit: RMB’0,000
Unrecovered
Unrecovered overdue
Capital
Specific type Amount incurred Undue balance overdue amount with
resources
amount provision for
impairment
Broker
financial Self-funded 980 0 0 0
products
Bank financial
Self-funded 2,300 2,000 0 0
products
Broker
financial Raised-funded 5,000 5,000 0 0
products
Bank financial
Raised-funded 41,000 21,000 0 0
products
Total 49,280 28,000 0 0
Details of high-risk entrusted financial management with significant single amount or low security and poor
liquidity
□ Applicable √ Not applicable
The principal of entrusted financial management is expected to be unable to be recovered or there are other
situations that may lead to impairment
□ Applicable √ Not applicable
(2) Entrusted Loans
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Other Major Contracts
□ Applicable √ Not applicable
No such cases in the Reporting Period.
77
Changchai Company, Limited Annual Report 2021
XVI Other Significant Events
√ Applicable □ Not applicable
1. Accomplishment of non-public offering of shares
On 17 December 2020, the Company received the Reply concerning the Approval of the Non-public Offering of
Shares of Changchai Company, Limited (ZJXK [2020] No. 3374) from the China Securities Regulatory
Commission, which approved the non-public offering of up to 168,412,297 shares of the Company. The
Company's 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 actually raised was
RMB620,665,733.97 after deducting various issuance expenses. The new shares issued in a non-public manner
were listed on the Shenzhen Stock Exchange on 5 July 2021. Except for the shares subscribed by the Investment
Group, the restriction has been lifted on 5 January 2022. For details, please refer to the Report on Non-public
Offering by Changchai Company, Limited and Listing Bulletin disclosed by the Company on www.cninfo.com.cn
on 1 July 2021.
2. Participating in the Public Listed Transfer of 41.5% Equity Interests in Zhenjiang Siyang Diesel Engine
Manufacturing Co., Ltd.
The Sixth Interim Meeting of the Board of Directors in 2021 held by the Company on 28 October 2021
deliberated on and approved the Proposal on Participating in the Public Listed Transfer of 41.5% Equity Interests
in Zhenjiang Siyang Diesel Engine Manufacturing Co., Ltd., authorizing the Management of the Company to
participate in the bidding of the public listed transfer by Jiangsu University of Science and Technology Assets
Management Co., Ltd. (hereinafter referred to as "Science University Assets") of its 41.5% equity interest in
Zhenjiang Siyang Diesel Engine Manufacturing Co., Ltd. (hereinafter referred to as "Zhenjiang Siyang"). On 12
January 2022, Zhenjiang Siyang Diesel Engine Manufacturing Co., Ltd. issued the Confirmation of Transaction
on the Transfer of 41.5% Equity Interest (Corresponding to Capital Contribution of RMB830,000).The Company
won the 41.5% equity interest in Zhenjiang Siyang at a price of RMB33,520,800.00. On 23 February 2022, the
Company signed the Contract on Transfer of State-owned Property Rights with Science University Assets. On 9
March 2022, Zhenjiang Siyang has completed the relevant registration alteration formalities with the competent
industrial and commercial administration.
XVII Significant Events of Subsidiaries
□ Applicable √ Not applicable
78
Changchai Company, Limited Annual Report 2021
Part VII Share Changes and Shareholder Information
I Share Changes
1. Share Changes
Unit: share
Increase/decrease in the Reporting Period
Before After
(+/-)
Shares
Shares as
as divide
divide nd
Percen Percen
Numb New nd conver Subtot Numb
tage Other tage
er issues conver ted al er
(%) (%)
ted from
from capital
profit reserv
es
144,31 144,31 144,31 20.45
1. Restricted shares 0 0.00%
8,181 8,181 8,181 %
1.1 Shares held by
0 0.00% 0 0 0 0.00%
government
1.2 Shares held by
72,045 72,045 72,045 10.21
state-owned legal 0 0.00%
,453 ,453 ,453 %
persons
1.3 Shares held by
68,863 68,863 68,863
other domestic 0 0.00% 9.76%
,638 ,638 ,638
investors
Among which: Shares
48,818 48,818 48,818
held by domestic legal 0 0.00% 6.92%
,178 ,178 ,178
persons
Shares
20,045 20,045 20,045
held by domestic 0 0.00% 2.84%
,460 ,460 ,460
natural persons
1.4 Shares held by 3,409, 3,409, 3,409,
0 0.00% 0.48%
foreign investors 090 090 090
Among which: Shares
3,409, 3,409, 3,409,
held by foreign legal 0 0.00% 0.48%
090 090 090
persons
Shares
0 0.00% 0 0 0 0.00%
held by foreign natural
79
Changchai Company, Limited Annual Report 2021
persons
561,37 100.00 561,37 79.55
2. Unrestricted shares 0 0
4,326 % 4,326 %
2.1 RMB-denominated 411,37 73.28 411,37 58.29
0 0
ordinary shares 4,326 % 4,326 %
2.2 Domestically listed 150,00 26.72 150,00 21.26
0 0
foreign shares 0,000 % 0,000 %
2.3 Oversea listed
0 0.00% 0 0 0 0.00%
foreign shares
2.4 Other 0 0.00% 0 0 0 0.00%
561,37 100.00 144,31 144,31 705,69 100.00
3. Total shares
4,326 % 8,181 8,181 2,507 %
Reasons for the share changes:
√ Applicable □ Not applicable
On 17 December 2020, the Company received the Reply concerning the Approval of the Non-public Offering of
Shares of Changchai Company, Limited (ZJXK [2020] No. 3374) from the China Securities Regulatory
Commission, which approved the non-public offering of up to 168,412,297 shares of the Company. The
Company's offered 144,318,181 RMB ordinary shares (A shares) in a non-public manner. 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 Offering by Changchai Company, Limited and Listing Bulletin disclosed by the
Company on www.cninfo.com.cn on 1 July 2021.
Approval of share changes:
√ Applicable □ Not applicable
On 17 December 2020, the Company received the Reply concerning the Approval of the Non-public Offering of
Shares of Changchai Company, Limited (ZJXK [2020] No. 3374) from the China Securities Regulatory
Commission, which approved the non-public offering of up to 168,412,297 shares of the Company. The
Company's offered 144,318,181 RMB ordinary shares (A shares) in a non-public manner. The new shares issued
in a non-public manner were listed on the Shenzhen Stock Exchange on 5 July 2021.
Transfer of share ownership:
□ Applicable √ Not applicable
Effects of share changes on the basic and diluted earnings per share, equity per share attributable to the
Company’s ordinary shareholders and other financial indicators of the prior year and the prior accounting period,
respectively:
√ Applicable □ Not applicable
During the Reporting Period, the Company completed the private placement of stocks. And the share capital of the
Company changed into 705,692,507 shares from 561,374,326 shares. Based on the weighted average share capital,
on 31 December 2021, the basic earnings per share will be RMB0.1657 per share, the diluted earnings per share
will be RMB0.1657 per share, and the net assets per share will be RMB4.3610 per share.
Other information that the Company considers necessary or is required by the securities regulator to be disclosed:
□ Applicable √ Not applicable
2. Changes in Restricted Shares
√ Applicable □ Not applicable
80
Changchai Company, Limited Annual Report 2021
Unit: share
Restricte Restrict
d shares Restricted ed Restricted
Restricted
Name of the amount shares shares shares
Restricted reasons shares
shareholders at the increased of relieved amount at the
relieved date
period-b the period of the period-end
egin period
Changzhou Additional issuance of
Investment 56,818,181 shares
0 56,818,181 0 56,818,181 2024-7-5
Group Co., through the private
Ltd. placement of shares
Additional issuance of
3,409,090 shares
UBS AG 0 3,409,090 0 3,409,090 2022-1-5
through the private
placement of shares
Additional issuance of
Caitong Fund
7,909,090 shares
Management 0 7,909,090 0 7,909,090 2022-1-5
through the private
Co., Ltd.
placement of shares
Jiangxi Jintou Additional issuance of
Industrial 4,545,454 shares
0 4,545,454 0 4,545,454 2022-1-5
Development through the private
Co., Ltd. placement of shares
Additional issuance of
Guotai Asset
8,181,818 shares
Management 0 8,181,818 0 8,181,818 2022-1-5
through the private
Co., Ltd.
placement of shares
Enjoy
Additional issuance of
(Ningbo)
6,818,181 shares
Asset 0 6,818,181 0 6,818,181 2022-1-5
through the private
Management
placement of shares
L.P.
Additional issuance of
3,409,090 shares
Zhou Zhiheng 0 3,409,090 0 3,409,090 2022-1-5
through the private
placement of shares
China
Additional issuance of
National Gold
10,681,818 shares
Group Asset 0 10,681,818 0 10,681,818 2022-1-5
through the private
Management
placement of shares
Co., Ltd.
Additional issuance of
Sun Meichun 0 4,545,454 0 4,545,454 4,545,454 shares 2022-1-5
through the private
81
Changchai Company, Limited Annual Report 2021
placement of shares
Additional issuance of
Nuode Asset
11,363,636 shares
Management 0 11,363,636 0 11,363,636 2022-1-5
through the private
Co., Ltd.
placement of shares
Additional issuance of
Minmetals
4,545,454 shares
Securities Co., 0 4,545,454 0 4,545,454 2022-1-5
through the private
Ltd.
placement of shares
Additional issuance of
7,272,727 shares
Chen Beiwen 0 7,272,727 0 7,272,727 2022-1-5
through the private
placement of shares
Additional issuance of
Nanhua Fund 5,454,545 shares
0 5,454,545 0 5,454,545 2022-1-5
Co., Ltd. through the private
placement of shares
Additional issuance of
4,545,454 shares
Yao Jianquan 0 4,545,454 0 4,545,454 2022-1-5
through the private
placement of shares
Changzhou
Transportation Additional issuance of
Construction 4,545,454 shares
0 4,545,454 0 4,545,454 2022-1-5
Investment through the private
Development placement of shares
Co., Ltd.
Additional issuance of
272,735 shares
Li Xueqin 0 272,735 0 272,735 2022-1-5
through the private
placement of shares
Total 0 144,318,181 0 144,318,181 -- --
II. Issuance and Listing of Securities
1. Securities (Exclusive of Preferred Shares) Issued in the Reporting Period
√ Applicable □ Not applicable
Termi
Name of
issue nation
Stock and Approved Disclo
Issue price Issue Listing date
derivative amount Disclosure index sure
date (interes amount date for
securities for listing date
t) tradin
thereof
g
82
Changchai Company, Limited Annual Report 2021
Stock
For details, please
refer to the Report on
Non-public Offering
RMB
by Changchai
Changcha 3 June 4.40 144,318,1 5 July 144,318,1 1 July
--- Company, Limited
i 2021 per 81 2021 81 2021
and Listing Bulletin
share
disclosed by the
Company on
www.cninfo.com.cn
Convertible corporate bonds, convertible corporate bonds separately traded and corporate bonds
Other derivative securities
Notes:
On 17 December 2020, the Company received the Reply concerning the Approval of the Non-public Offering of
Shares of Changchai Company, Limited (ZJXK [2020] No. 3374) from the China Securities Regulatory
Commission, which approved the non-public offering of up to 168,412,297 shares of the Company. The
Company's 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 actually raised was
RMB620,665,733.97 after deducting various issuance expenses. The new shares issued in a non-public manner
were listed on the Shenzhen Stock Exchange on 5 July 2021.
2. Changes to Total Shares, Shareholder Structure and Asset and Liability Structures
√ Applicable □ Not applicable
During the Reporting Period, the Company completed a non-public offering of 144,318,181 RMB ordinary shares
(A shares), changing the total number of shares of the Company from 561,374,326 shares to 705,692,507 shares,
including 561,374,326 shares not subject to trading moratorium and 144,318,181 shares subject to trading
moratorium.
At the end of the Reporting Period, the Company's total assets increased by RMB907,428,496.81, or 22.96%, and
equity attributable to owners of the Company as the parent increased by RMB804,200,671.31, or 35.38%,
compared with the beginning of the year. The scale of the Company's total assets and equity attributable to owners
of the Company as the parent has increased, which is conducive to further enhancing the capital strength. At the
same time, the asset-liability ratio decreased, which is conducive to enhancing the Company's stability of capital
structure and risk resistance.
3. Existing Staff-Held Shares
□ Applicable √ Not applicable
III Shareholders and Actual Controller
Unit: share
83
Changchai Company, Limited Annual Report 2021
Number of
Number of
preferred
ordinary Number of
shareholders with
Number of shareholders at preferred
resumed voting
ordinary 49,947 the month-end 53,650 shareholders 0 0
rights at the
shareholders prior to the with resumed
month-end prior
disclosure of this voting rights
to the disclosure
Report
of this Report
5% or greater shareholders or top 10 shareholders
Increase/d Shares in pledge
Shareho
Total shares ecrease in or frozen
Name of Nature of lding Restricted Unrestricted
held at the the
shareholder shareholder percent shares held shares held
period-end Reporting Status Shares
age
Period
Changzhou
State-owned 56,818,18 56,818,18
Investment Group 32.26% 227,663,417 170,845,236
corporation 1 1
Co., Ltd
Nuode Fund-
Huazhang Tiandi
Media Investment
11,363,63
Co., Ltd.-Nuode Other 1.61% 11,363,636 11,363,636 0
6
Fund Pujiang
No.64 Single Asset
Management Plan
China National
Gold Group Asset State-owned 10,681,81 10,681,81
1.51% 10,681,818 0
Management Co., corporation 8 8
Ltd.
Domestic
Chen Beiwen 1.03% 7,272,727 7,272,727 7,272,727 0
individual
Enjoy(Ningbo)Ass
et Management
L.P.-Enjoy
Yingshanhong Other 0.97% 6,818,181 6,818,181 6,818,181 0
No.9 Private
Securities
Investment Fund
Foreign
UBS AG 0.66% 4,631,555 3,409,090 3,409,090 1,222,465
corporation
Changzhou
Transportation
State-owned
Construction 0.65% 4,595,454 4,545,454 4,545,454 50,000
corporation
Investment
Development Co.,
84
Changchai Company, Limited Annual Report 2021
Ltd.
Domestic
Yao Jianquan 0.64% 4,545,454 4,545,454 4,545,454 0
individual
Domestic
Sun Meichun 0.64% 4,545,454 4,545,454 4,545,454 0
individual
Jiangxi Jintou Domestic
Industrial non-state-ow
0.64% 4,545,454 4,545,454 4,545,454 0
Development Co., ned
Ltd. corporation
Strategic investor or general legal
person becoming a top-10
N/A
ordinary shareholder due to rights
issue (if any)
It is unknown whether there is among the top 10 public shareholders and the
Related or acting-in-concert
top 10 unrestricted public shareholders any related parties or acting-in-concert
parties among the shareholders
parties as defined in the Administrative Measures for Information Regarding
above
Shareholding Alteration.
Above shareholders involved in
entrusting/being entrusted with
N/A
voting rights and giving up voting
rights
Special account for share
repurchases (if any) among the N/A
top 10 shareholders
Top 10 unrestricted shareholders
Unrestricted shares held at the Shares by type
Name of shareholder
period-end Type Shares
Changzhou Investment Group RMB-denominated
170,845,236 170,845,236
Co., Ltd ordinary share
RMB-denominated
Chen Jian 3,999,400 3,999,400
ordinary share
Domestically listed
KGI ASIA LIMITED 3,101,695 3,101,695
foreign share
Domestically listed
Li Suinan 1,548,100 1,548,100
foreign share
Domestically listed
Huang Guoliang 1,528,891 1,528,891
foreign share
RMB-denominated
Chen Xiaojing 1,423,700 1,423,700
ordinary share
Domestically listed
Lu Zhang 1,409,512 1,409,512
foreign share
RMB-denominated
Tao Xiaofang 1,240,000 1,240,000
ordinary share
Xue Hong 1,240,000 Domestically listed 1,240,000
85
Changchai Company, Limited Annual Report 2021
foreign share
RMB-denominated
UBS AG 1,222,465 1,222,465
ordinary share
Related or acting-in-concert
parties among top 10 unrestricted It is unknown whether there is among the top 10 public shareholders and the
public shareholders, as well as top 10 unrestricted public shareholders any related parties or acting-in-concert
between top 10 unrestricted parties as defined in the Administrative Measures for Information Regarding
public shareholders and top 10 Shareholding Alteration.
shareholders
Top 10 ordinary shareholders
Shareholders Chen Jian and Chen Xiaojing respectively held 2,473,000 shares
involved in securities margin
and 1,194,000 shares of the Company through their credit accounts.
trading (if any)
Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary
shareholders of the Company conducted any promissory repo during the Reporting Period.
□ Yes √ No
No such cases in the Reporting Period.
2. Controlling Shareholder
Nature of the controlling shareholder: Controlled by a local state-owned legal person
Type of the controlling shareholder: Legal person
Legal
Name of controlling representative/ Date of Unified social
Principal activity
shareholder person in establishment credit code
charge
Changzhou Investment 913204004672839 Property investment
Chen Limin 20 June 2002
Group Co., Ltd 80X and management
Controlling shareholder’s
holdings in other listed
companies at home or None
abroad in the Reporting
Period
Change of the controlling shareholder in the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Actual Controller and Its Acting-in-Concert Parties
Nature of the actual controller: Local institution for state-owned assets management
Type of the actual controller: Legal person
Legal
Date of Unified social
Name of actual controller representativ Principal activity
establishment credit code
e/person in
86
Changchai Company, Limited Annual Report 2021
charge
State-owned Assets
Supervision and
Administration Wang
01411025-1 Not applicable
Commission of Wenzhuo
Changzhou Municipal
People’s Government
Other listed companies at
home or abroad
controlled by the actual None
controller in the
Reporting Period
Change of the actual controller during the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Ownership and control relations between the actual controller and the Company:
Indicate by tick mark whether the actual controller controls the Company via trust or other ways of asset
management.
□ Applicable √ Not applicable
4. Number of Accumulative Pledged Shares held by the Company’s Controlling Shareholder or the Largest
Shareholder as well as Its Acting-in-Concert Parties Accounts for 80% of all shares of the Company held
by Them
□ Applicable √ Not applicable
5. Other 10% or Greater Corporate Shareholders
□ Applicable √ Not applicable
6. Limitations on Shareholding Decrease by the Company’s Controlling Shareholder, Actual Controller,
Reorganizer and Other Commitment Makers
√ Applicable □ Not applicable
Changzhou Investment Group Co., Ltd., the controlling shareholder of the Company, participated in the
non-public offering of shares of the Company and was allotted 56,818,181 shares with a subscription amount of
87
Changchai Company, Limited Annual Report 2021
RMB249,999,996.40. The shares were listed on 5 July 2021, with a 36-month lock-up period and a release date of
5 July 2024.
IV Specific Implementation of Share Repurchase during the Reporting Period
Progress on any share repurchase
□ Applicable √ Not applicable
Progress on reducing the repurchased shares by means of centralized bidding
□ Applicable √ Not applicable
88
Changchai Company, Limited Annual Report 2021
Part VIII Preference Shares
□ Applicable √ Not applicable
No preference shares in the Reporting Period.
89
Changchai Company, Limited Annual Report 2021
Part IX Bonds
□ Applicable √ Not applicable
90
Changchai Company, Limited Annual Report 2021
Part X Financial Statements
I Independent Auditor’s Report
Type of the independent auditor’s opinion Unmodified unqualified opinion
Date of signing this report 11 April 2022
Gongzheng Tianye Certified Public Accountants
Name of the independent auditor
(Special General Partnership)
No. of the auditor’s report SGW[2022]ANo.315
Name of the certified public accountants Wang Wenkai, Qin Zhijun
Text of the Independent Auditor’s Report
To the Shareholders of Changchai Company, Limited,
I Opinion
We have audited the accompanying financial statements of Changchai Company, Limited. (together with its
consolidated subsidiaries included in the consolidated financial statements, the “Company”), which comprise the
parent’s and consolidated balance sheets as at 31 December 2021, the parent’s and consolidated income statements,
the parent’s and consolidated cash flow statements, the parent’s and consolidated statements of changes in owners’
equity for the year then ended, as well as the notes to the financial statements.
In our opinion, the financial statements attached were prepared in line with the regulations of Accounting
Standards for Business Enterprises in all significant aspects which gave a true and fair view of the consolidated
and parent financial position of Changchai Company, Limited. As at 31 December 2021 and the consolidated and
parent business performance and cash flow for 2021.
II Basis for Opinion
We conducted our audits in accordance with the Audit Standards for Chinese Registered Accountants. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for Audit of Financial
Statements section of our report. We are independent of the Company in accordance with the China Code of
Ethics for Certified Public Accountants, and we have fulfilled our other ethical responsibilities in accordance with
the said Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
III Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial statements of the current period. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters. And key audit matter identified in our audit is summarized as follows:
(I) Recognition of revenue
1. Description of the item
For details and analysis of the accounting policies for revenue recognition, please refer to the accounting policies
described in notes 3, 30, Revenue and 5, 37, Operating Revenue and Operating costs to the financial statements.
In 2021, the operating revenue of Changchai Stock is RMB 2,452,430,500.
Since the operating revenue is one of key performance indicators of the Company, and there is the inherent risk
that the management may manipulate the timing of revenue recognition for the purpose of achieving certain goals
or expectations, so we identify the revenue recognition as a key audit item.
91
Changchai Company, Limited Annual Report 2021
2. Response for audit
(1) Know the key internal control related to revenue recognition, evaluate whether its design and execution are
valid or not, and test the operation effectiveness of the related internal control.
(2) Interview the management, know about the recognition policies regarding revenue of the Company, get and
check contracts or agreements of the Company signed with customers, identify contract terms related to the
recognition of sales revenue of products and evaluate whether the revenue recognition of the Company meets the
requirements of accounting standards for business enterprises.
(3) Apply sampling test for sales revenue, check the supporting documents related to revenue recognition, check
the provision of goods transfer control to the sales contract and supporting manufacturers recipients and confirm
the receiving of documents and other supporting documents (including but not limited to sales contracts, orders,
sales invoices, invoices, export customs declaration).
(4) Check the operating revenue recognized before and after the balance sheet date to the supporting documents,
such as shipping order, declaration for exportation, and etc by sampling method to assess whether the operating
revenue is recognized within appropriate period.
(5) Implement the confirmation by drawing sample to recognize the balance of accounts receivable and the
amount of sales revenue according to the features and natures of customer transaction.
(II) Bad debt provision for accounts receivable
1. Description of the item
As described in the accounting policies described in "3, 10, Impairment of financial instruments" and "5, 4,
Accounts receivable" in the notes to the financial statements. On December 31, 2021, the book balance of
accounts receivable of Changchai Stock was 554,530,200 yuan, the allowance for bad debts was 179,321,100
yuan, and the book value was 375,209,100 yuan, accounting for 7.72% of the total assets at the end of the period.
Because the accounts receivable balance is significant and the provision for doubtful accounts receivable takes
management's judgment in consideration, we identified it as a key audit item.
2. Response for audit
(1) Access Changchai’s internal control systems of sales and accounts receivable management to understand and
evaluate the design of internal control, and carry out walk-through test to confirm the implementation of internal
control systems.
(2) Analyze and confirm the reasonableness of Changchai’s accounting estimates of bad debt provision for
accounts receivable, including the basis for determining the combination of accounts receivable, the expected
credit loss rate and the judgment of impairment test of accounts receivable evaluated individually.
(3) Combined with the policy of accounts receivable bad debt provision, review to determine whether the basis of
accounts receivable combination is accurate, and whether the judgment of individual bad debt provision is
reasonable;
(4)Access and check the account receivable details, aging schedule, statement of provisions for bad debts, and
confirm the reasonableness of bad debt provision for accounts receivable by combining with the request of
confirmation of balance and subsequent collection inspection;
(5) For the accounts receivable divided into individual provision for bad debt, refer to the corresponding contract
and other information, understand its sales and payment collection, and judge whether the provision for bad debt
is sufficient;
(6)Send request for confirmation of balance, and confirm the authenticity and accuracy of the amount of accounts
receivable on the balance sheet date by combining with subsequent inspection and other procedures.
IV Other Information
The Company’s management (hereinafter referred to as “management”) is responsible for the other information.
92
Changchai Company, Limited Annual Report 2021
The other information comprises all of the information included in the Company’s 2020 Annual Report other than
the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information; we are required to report
that fact. We have nothing to report in this regard.
V Responsibilities of Management and Those Charged with Governance for Financial Statements
The management is responsible for the preparation of the financial statements that give a fair view in accordance
with CAS, and for designing, implementing and maintaining such internal control as the management determines
is necessary to enable the preparation of financial statements that are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, the management is responsible for assessing the Company’s ability to
continue as a going concern, disclosing, matters related to going concern (if applicable) and using the going
concern basis of accounting unless the management either intends to liquidate the Company or to cease operations,
or have no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
VI Auditor’s Responsibilities for Audit of Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with CAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with CAS, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the management.
(4) Conclude on the appropriateness of the management’s use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required by CAS to draw users’ attention in our auditor’s report to the related
disclosures in the financial statements. If such disclosures are inadequate, we need to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events
or conditions may cause the Company to cease to continue as a going concern.
93
Changchai Company, Limited Annual Report 2021
(5) Evaluate the overall presentation, structure and content of the financial statements, and whether the financial
statements represent the underlying transactions and events in a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Company to express an opinion on the financial statements. We are responsible for the
direction, supervision and performance of the Company audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding the planned scope and timing of the audit and
significant audit findings, including any noteworthy deficiencies in internal control that we identify during our
audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
Gongzheng Tianye Certified Public Accountants Chinese CPA: Wang Wenkai
(Special General Partnership) (Engagement Partner)
Chinese CPA: Qin Zhijun
Wuxi China 11 April 2022
II Financial Statements
Currency unit for the financial statements and the notes thereto: RMB
1. Consolidated Balance Sheet
Prepared by Changchai Company, Limited
31 December 2021
Unit: RMB
Item 31 December 2021 31 December 2020
Current assets:
Monetary assets 707,966,678.74 760,728,222.85
Settlement reserve
Interbank loans granted
Held-for-trading financial
404,053,261.57 11,500,272.00
assets
Derivative financial assets
Notes receivable 334,311,236.78 600,140,938.05
Accounts receivable 375,209,126.48 397,154,016.49
Accounts receivable
497,388,826.02
financing
Prepayments 8,197,418.39 9,357,840.75
Premiums receivable
Reinsurance receivables
94
Changchai Company, Limited Annual Report 2021
Receivable reinsurance
contract reserve
Other receivables 19,515,350.52 6,212,062.80
Including: Interest
receivable
Dividends
receivable
Financial assets purchased
under resale agreements
Inventories 651,083,758.18 606,680,340.55
Contract assets
Assets held for sale
Current portion of
non-current assets
Other current assets 44,060,822.57 27,299,362.72
Total current assets 3,041,786,479.25 2,419,073,056.21
Non-current assets:
Loans and advances to
customers
Investments in debt
37,898,226.39
obligations
Investments in other debt
obligations
Long-term receivables
Long-term equity investments
Investments in other equity
779,877,646.53 685,137,950.87
instruments
Other non-current financial
112,500,000.00 98,732,938.63
assets
Investment property 44,597,255.21 46,239,326.03
Fixed assets 402,915,521.65 454,181,555.68
Construction in progress 270,305,690.91 66,502,432.41
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets 155,154,745.91 158,870,631.71
Development costs
Goodwill
Long-term prepaid expense 110,345.30 13,693.20
Deferred income tax assets 10,693,809.23 4,231,873.15
Other non-current assets 4,543,240.88 19,971,006.56
Total non-current assets 1,818,596,482.01 1,533,881,408.24
Total assets 4,860,382,961.26 3,952,954,464.45
95
Changchai Company, Limited Annual Report 2021
Current liabilities:
Short-term borrowings 73,971,466.65 22,000,000.00
Borrowings from the central
bank
Interbank loans obtained
Held-for-trading financial
liabilities
Derivative financial liabilities
Notes payable 550,774,400.00 595,346,000.00
Accounts payable 666,186,668.82 612,757,392.46
Advances from customers 660,965.62 661,612.17
Contract liabilities 26,864,081.97 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 45,385,667.48 50,127,161.47
Taxes payable 5,306,378.82 2,869,485.41
Other payables 148,361,373.29 197,545,076.08
Including: Interest payable
Dividends
3,891,433.83 3,891,433.83
payable
Handling charges and
commissions payable
Reinsurance payables
Liabilities directly associated
with assets held for sale
Current portion of
non-current liabilities
Other current liabilities 88,938,192.79 5,233,947.12
Total current liabilities 1,606,449,195.44 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
96
Changchai Company, Limited Annual Report 2021
Long-term employee benefits
payable
Provisions
Deferred income 39,615,355.40 56,949,737.60
Deferred income tax
117,344,161.11 80,671,598.82
liabilities
Other non-current liabilities
Total non-current liabilities 156,959,516.51 137,621,336.42
Total liabilities 1,763,408,711.95 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 506,011,499.55 425,482,758.24
Specific reserve 18,812,950.04 18,812,986.55
Surplus reserves 334,144,488.46 325,451,531.14
General reserve
Retained earnings 872,212,354.88 777,899,079.66
Total equity attributable to
owners of the Company as the 3,077,550,018.33 2,273,349,347.02
parent
Non-controlling interests 19,424,230.98 19,498,589.15
Total owners’ equity 3,096,974,249.31 2,292,847,936.17
Total liabilities and owners’
4,860,382,961.26 3,952,954,464.45
equity
Legal representative: Shi Xinkun General Manager: Zhang Xin
Head of the accounting department: Jiang He
97
Changchai Company, Limited Annual Report 2021
2. Balance Sheet of the Company as the Parent
Unit: RMB
Item 31 December 2021 31 December 2020
Current assets:
Monetary assets 615,184,387.01 682,322,659.41
Held-for-trading financial
262,004,030.14
assets
Derivative financial assets
Notes receivable 312,118,296.88 581,230,938.05
Accounts receivable 349,135,255.42 317,828,161.25
Accounts receivable
497,388,826.02
financing
Prepayments 2,727,652.23 6,592,567.26
Other receivables 26,497,081.34 24,327,355.36
Including: Interest
receivable
Dividends
receivable
Inventories 516,588,187.24 475,688,026.57
Contract assets
Assets held for sale
Current portion of
non-current assets
Other current assets 21,292,211.46 17,521,203.46
Total current assets 2,602,935,927.74 2,105,510,911.36
Non-current assets:
Investments in debt
37,898,226.39
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
779,877,646.53 685,137,950.87
instruments
Other non-current financial
112,500,000.00 52,500,000.00
assets
Investment property 44,597,255.21 46,239,326.03
Fixed assets 325,034,679.67 369,194,314.03
Construction in progress 15,557,418.76 26,195,189.06
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets 66,621,426.26 68,088,982.37
98
Changchai Company, Limited Annual Report 2021
Development costs
Goodwill
Long-term prepaid expense
Deferred income tax assets 9,613,375.32 4,179,544.86
Other non-current assets
Total non-current assets 1,927,452,758.17 1,627,288,037.25
Total assets 4,530,388,685.91 3,732,798,948.61
Current liabilities:
Short-term borrowings 58,971,466.65 5,000,000.00
Held-for-trading financial
liabilities
Derivative financial liabilities
Notes payable 544,444,400.00 589,534,000.00
Accounts payable 546,689,207.59 550,360,564.07
Advances from customers 660,965.62 661,612.17
Contract liabilities 24,730,270.44 32,344,514.86
Employee benefits payable 37,861,577.50 42,455,158.67
Taxes payable 2,955,053.82 1,099,861.63
Other payables 135,773,368.98 184,513,545.20
Including: Interest payable
Dividends
3,243,179.97 3,243,179.97
payable
Liabilities directly associated
with assets held for sale
Current portion of
non-current liabilities
Other current liabilities 63,535,570.11 2,426,575.40
Total current liabilities 1,415,621,880.71 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
Deferred income 39,615,355.40 56,949,737.60
Deferred income tax
95,034,251.50 75,460,192.63
liabilities
Other non-current liabilities
Total non-current liabilities 134,649,606.90 132,409,930.23
99
Changchai Company, Limited Annual Report 2021
Total liabilities 1,550,271,487.61 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 506,011,499.55 425,482,758.24
Specific reserve 18,812,950.04 18,812,986.55
Surplus reserves 334,144,488.46 325,451,531.14
Retained earnings 756,037,052.58 677,800,436.75
Total owners’ equity 2,980,117,198.30 2,191,993,186.38
Total liabilities and owners’
4,530,388,685.91 3,732,798,948.61
equity
100
Changchai Company, Limited Annual Report 2021
3. Consolidated Income Statement
Unit: RMB
Item 2021 2020
1. Revenue 2,452,430,515.60 2,296,464,711.24
Including: Operating revenue 2,452,430,515.60 2,296,464,711.24
Interest income
Insurance premium
income
Handling charge and
commission income
2. Costs and expenses 2,399,524,185.52 2,267,289,166.18
Including: Cost of sales 2,084,671,762.08 1,950,573,991.27
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 15,125,948.96 12,869,609.15
Selling expense 117,242,290.32 128,372,278.62
Administrative expense 98,890,284.22 87,446,195.74
R&D expense 82,390,284.14 72,258,781.08
Finance costs 1,203,615.80 15,768,310.32
Including: Interest
5,907,625.42 7,302,086.80
expense
Interest
7,921,535.62 5,467,634.76
income
Add: Other income 6,633,332.38 7,808,732.52
Return on investment (“-” for
9,327,296.95 6,545,826.85
loss)
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
101
Changchai Company, Limited Annual Report 2021
(“-” for loss)
Gain on changes in fair value
104,570,498.36 20,981,109.00
(“-” for loss)
Credit impairment loss (“-” for
-52,017,151.82 2,378,630.68
loss)
Asset impairment loss (“-” for
-8,676,024.20 -11,155,930.76
loss)
Asset disposal income (“-” for
155,515.49 229,121.29
loss)
3. Operating profit (“-” for loss) 112,899,797.24 55,963,034.64
Add: Non-operating income 4,037,896.76 1,047,114.21
Less: Non-operating expense 1,637,033.05 2,629,797.33
4. Profit before tax (“-” for loss) 115,300,660.95 54,380,351.52
Less: Income tax expense 12,368,786.58 2,085,600.33
5. Net profit (“-” for net loss) 102,931,874.37 52,294,751.19
5.1 By operating continuity
5.1.1 Net profit from continuing
102,931,874.37 52,294,751.19
operations (“-” for net loss)
5.1.2 Net profit from
discontinued operations (“-” for net
loss)
5.2 By ownership
5.2.1 Net profit attributable to
shareholders of the Company as the 103,006,232.54 52,432,443.05
parent
5.2.1 Net profit attributable to
-74,358.17 -137,691.86
non-controlling interests
6. Other comprehensive income, net
80,528,741.31 108,771,351.91
of tax
Attributable to owners of the
80,528,741.31 108,771,351.91
Company as the parent
6.1 Items that will not be
80,528,741.31 108,771,351.91
reclassified to profit or loss
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 other equity 80,528,741.31 108,771,351.91
instruments
6.1.4 Changes in the fair
102
Changchai Company, Limited Annual Report 2021
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
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 183,460,615.68 161,066,103.10
Attributable to owners of the
183,534,973.85 161,203,794.96
Company as the parent
Attributable to non-controlling
-74,358.17 -137,691.86
interests
8. Earnings per share
8.1 Basic earnings per share 0.1657 0.0934
8.2 Diluted earnings per share 0.1657 0.0934
Legal representative: Shi Xinkun General Manager: Zhang Xin
Head of the accounting department: Jiang He
103
Changchai Company, Limited Annual Report 2021
4. Income Statement of the Company as the Parent
Unit: RMB
Item 2021 2020
1. Operating revenue 2,267,232,119.78 2,123,200,238.11
Less: Cost of sales 1,944,820,462.59 1,823,443,404.79
Taxes and surcharges 11,893,439.38 10,349,672.15
Selling expense 106,770,873.83 110,774,087.06
Administrative expense 80,635,862.36 70,342,720.73
R&D expense 75,021,386.36 67,074,041.38
Finance costs -2,350,968.39 10,879,173.24
Including: Interest expense 3,932,469.12 5,197,914.71
Interest income 8,354,523.54 6,017,663.50
Add: Other income 5,810,480.10 5,478,200.87
Return on investment (“-” for loss) 8,352,714.26 5,437,925.05
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
35,754,030.14 2,500,000.00
loss)
Credit impairment loss (“-” for loss) -16,143,004.02 2,599,053.83
Asset impairment loss (“-” for loss) -3,866,890.01 -18,384,759.06
Asset disposal income (“-” for loss) 6,642.47 80,014.23
2. Operating profit (“-” for loss) 80,355,036.59 28,047,573.68
Add: Non-operating income 3,441,588.57 542,506.89
Less: Non-operating expense 1,086,173.24 262,488.62
3. Profit before tax (“-” for loss) 82,710,451.92 28,327,591.95
Less: Income tax expense -4,219,121.23 -3,554,013.58
4. Net profit (“-” for net loss) 86,929,573.15 31,881,605.53
4.1 Net profit from continuing operations (“-”
86,929,573.15 31,881,605.53
for net loss)
4.2 Net profit from discontinued operations
(“-” for net loss)
5. Other comprehensive income, net of tax 80,528,741.31 108,771,351.91
5.1 Items that will not be reclassified to profit
80,528,741.31 108,771,351.91
or loss
5.1.1 Changes caused by remeasurements
on defined benefit schemes
5.1.2 Other comprehensive income that
will not be reclassified to profit or loss under
104
Changchai Company, Limited Annual Report 2021
the equity method
5.1.3 Changes in the fair value of
80,528,741.31 108,771,351.91
investments in other 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 167,458,314.46 140,652,957.44
7. Earnings per share
7.1 Basic earnings per share
7.2 Diluted earnings per share
105
Changchai Company, Limited Annual Report 2021
5. Consolidated Cash Flow Statement
Unit: RMB
Item 2021 2020
1. Cash flows from operating activities:
Proceeds from sale of commodities
1,806,075,487.79 2,230,952,492.49
and rendering of services
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 50,016,426.49 33,693,741.46
Cash generated from other operating
22,636,726.19 16,977,100.96
activities
Subtotal of cash generated from
1,878,728,640.47 2,281,623,334.91
operating activities
Payments for commodities and
1,648,743,526.28 1,571,967,433.96
services
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
106
Changchai Company, Limited Annual Report 2021
Cash paid to and for employees 323,020,547.09 294,472,502.80
Taxes paid 31,276,348.44 39,853,712.33
Cash used in other operating activities 142,011,997.96 123,533,031.29
Subtotal of cash used in operating
2,145,052,419.77 2,029,826,680.38
activities
Net cash generated from/used in
-266,323,779.30 251,796,654.53
operating activities
2. Cash flows from investing activities:
Proceeds from disinvestment 373,180,033.58 557,198,253.76
Return on investment 11,396,891.86 6,545,826.85
Net proceeds from the disposal of
fixed assets, intangible assets and other 589,226.24 275,546.00
long-lived assets
Net proceeds from the disposal of
subsidiaries and other business units
Cash generated from other investing
336,150.00
activities
Subtotal of cash generated from
385,166,151.68 564,355,776.61
investing activities
Payments for the acquisition of fixed
assets, intangible assets and other 139,772,849.33 133,737,262.64
long-lived assets
Payments for investments 709,038,171.10 579,733,766.76
Net increase in pledged loans granted
Net payments for the acquisition of
subsidiaries and other business units
Cash used in other investing activities 1,869,322.91 4,141,850.71
Subtotal of cash used in investing
850,680,343.34 717,612,880.11
activities
Net cash generated from/used in
-465,514,191.66 -153,257,103.50
investing activities
3. Cash flows from financing activities:
Capital contributions received 633,873,281.14
Including: Capital contributions by
non-controlling interests to subsidiaries
Borrowings raised 19,000,000.00 22,000,000.00
Cash generated from other financing
58,971,466.65
activities
Subtotal of cash generated from
711,844,747.79 22,000,000.00
financing activities
Repayment of borrowings 29,000,000.00 22,000,000.00
Interest and dividends paid 1,707,729.02 3,232,890.38
Including: Dividends paid by
107
Changchai Company, Limited Annual Report 2021
subsidiaries to non-controlling interests
Cash used in other financing activities 14,621,163.63 2,500,000.00
Subtotal of cash used in financing
45,328,892.65 27,732,890.38
activities
Net cash generated from/used in
666,515,855.14 -5,732,890.38
financing activities
4. Effect of foreign exchange rates
-2,215,203.09 -8,827,118.35
changes on cash and cash equivalents
5. Net increase in cash and cash
-67,537,318.91 83,979,542.30
equivalents
Add: Cash and cash equivalents,
629,939,540.50 545,959,998.20
beginning of the period
6. Cash and cash equivalents, end of the
562,402,221.59 629,939,540.50
period
108
Changchai Company, Limited Annual Report 2021
6. Cash Flow Statement of the Company as the Parent
Unit: RMB
Item 2021 2020
1. Cash flows from operating activities:
Proceeds from sale of commodities and
1,721,407,332.48 1,963,288,154.66
rendering of services
Tax rebates 39,451,775.67 25,903,016.36
Cash generated from other operating
16,788,453.39 9,006,278.01
activities
Subtotal of cash generated from operating
1,777,647,561.54 1,998,197,449.03
activities
Payments for commodities and services 1,632,770,616.35 1,388,644,147.32
Cash paid to and for employees 267,953,154.75 247,717,051.40
Taxes paid 21,295,926.17 26,755,852.89
Cash used in other operating activities 129,115,999.33 110,744,198.57
Subtotal of cash used in operating activities 2,051,135,696.60 1,773,861,250.18
Net cash generated from/used in operating
-273,488,135.06 224,336,198.85
activities
2. Cash flows from investing activities:
Proceeds from disinvestment 500,487.00
Return on investment 10,222,037.17 5,437,925.05
Net proceeds from the disposal of fixed
assets, intangible assets and other long-lived 124,954.89 183,890.00
assets
Net proceeds from the disposal of
subsidiaries and other business units
Cash generated from other investing activities 9,718,669.72
Subtotal of cash generated from investing
10,346,992.06 15,840,971.77
activities
Payments for the acquisition of fixed assets,
5,665,400.94 4,071,225.07
intangible assets and other long-lived assets
Payments for investments 484,148,226.39 154,786,000.00
Net payments for the acquisition of
subsidiaries and other business units
Cash used in other investing activities 1,869,322.91 9,000,000.00
Subtotal of cash used in investing activities 491,682,950.24 167,857,225.07
Net cash generated from/used in investing
-481,335,958.18 -152,016,253.30
activities
3. Cash flows from financing activities:
Capital contributions received 633,873,281.14
Borrowings raised 5,000,000.00 5,000,000.00
Cash generated from other financing
58,971,466.65
activities
109
Changchai Company, Limited Annual Report 2021
Subtotal of cash generated from financing
697,844,747.79 5,000,000.00
activities
Repayment of borrowings 10,000,000.00 5,000,000.00
Interest and dividends paid 160,362.10 1,027,748.70
Cash used in other financing activities 14,621,163.63 2,500,000.00
Subtotal of cash used in financing activities 24,781,525.73 8,527,748.70
Net cash generated from/used in financing
673,063,222.06 -3,527,748.70
activities
4. Effect of foreign exchange rates changes on
-1,401,721.22 -6,995,969.85
cash and cash equivalents
5. Net increase in cash and cash equivalents -83,162,592.40 61,796,227.00
Add: Cash and cash equivalents, beginning of
559,573,331.81 497,777,104.81
the period
6. Cash and cash equivalents, end of the period 476,410,739.41 559,573,331.81
110
Changchai Company, Limited Annual Report 2021
7. Consolidated Statements of Changes in Owners’ Equity
2021
Unit: RMB
2021
Equity attributable to owners of the Company as the parent
Other L
equity e
instruments s
s
:
G
P T
P e
re r
er n
fe e Other Non-cont Total
Item p er Ot
Share rr Capital a compre Specific Surplus Retained rolling owners’
et al he Subtotal
capital e O reserves s hensive reserve reserves earnings interests equity
u re r
d th u income
al se
s er r
b rv
h y
o e
ar s
n
e t
ds
s o
c
k
1. Balance as at the end of the 561,374, 164,328 425,482 18,812, 325,451, 777,899, 2,273,34 19,498,5 2,292,84
prior year 326.00 ,665.43 ,758.24 986.55 531.14 079.66 9,347.02 89.15 7,936.17
Add: Adjustment for change in
accounting policy
Adjustment for correction of
previous error
111
Changchai Company, Limited Annual Report 2021
Adjustment for business
combination under common
control
Other adjustments
2. Balance as at the beginning 561,374, 164,328 425,482 18,812, 325,451, 777,899, 2,273,34 19,498,5 2,292,84
of the year 326.00 ,665.43 ,758.24 986.55 531.14 079.66 9,347.02 89.15 7,936.17
3. Increase/ decrease in the 144,318, 476,347 80,528, 8,692,95 94,313,2 804,200, -74,358. 804,126,
-36.51
period (“-” for decrease) 181.00 ,552.97 741.31 7.32 75.22 671.31 17 313.14
3.1 Total comprehensive 80,528, 103,006, 183,534, -74,358. 183,460,
income 741.31 232.54 973.85 17 615.68
3.2 Capital increased and 144,318, 476,347 620,665, 620,665,
reduced by owners 181.00 ,552.97 733.97 733.97
3.2.1 Ordinary shares 144,318, 476,347 620,665, 620,665,
increased by owners 181.00 ,552.97 733.97 733.97
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
8,692,95 -8,692,9
3.3 Profit distribution
7.32 57.32
3.3.1 Appropriation to 8,692,95 -8,692,9
surplus reserves 7.32 57.32
3.3.2 Appropriation to
general reserve
3.3.3 Appropriation to
owners (or shareholders)
3.3.4 Other
112
Changchai Company, Limited Annual Report 2021
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 -36.51 -36.51 -36.51
4,023,2 4,023,20 4,023,20
3.5.1 Increase in the period
00.24 0.24 0.24
4,023,2 4,023,23 4,023,23
3.5.2 Used in the period
36.75 6.75 6.75
3.6 Other
4. Balance as at the end of the 705,692, 640,676 506,011, 18,812, 334,144, 872,212, 3,077,55 19,424,2 3,096,97
period 507.00 ,218.40 499.55 950.04 488.46 354.88 0,018.33 30.98 4,249.31
2020
Unit: RMB
2020
Item
Equity attributable to owners of the Company as the parent Non-cont Total
113
Changchai Company, Limited Annual Report 2021
Other L rolling owners’
equity e interests equity
instruments s
s
:
T G
P
r en
Pr er
e Other er
ef p Specifi Ot
Share Capital a compre Surplus al Retained
er et c he Subtotal
capital O reserves s hensive reserves re earnings
re u reserve r
th u income se
d al
er r rv
sh b
y e
ar o
s
es n
t
ds
o
c
k
1. Balance as at the end of the 561,374, 164,328 317,059 17,560, 322,226, 726,689, 2,109,23 19,636,2 2,128,87
prior year 326.00 ,665.43 ,775.00 202.07 700.34 929.10 9,597.94 81.01 5,878.95
Add: Adjustment for change in
accounting policy
Adjustment for correction of 1,651,33 1,653,16 1,653,16
1,833.38
previous error 6.26 9.64 9.64
Adjustment for business
combination under common
control
Other adjustments
2. Balance as at the beginning 561,374, 164,328 317,059 17,560, 322,228, 728,341, 2,110,89 19,636,2 2,130,52
of the year 326.00 ,665.43 ,775.00 202.07 533.72 265.36 2,767.58 81.01 9,048.59
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Changchai Company, Limited Annual Report 2021
3. Increase/ decrease in the 108,422 1,252,7 3,222,99 49,557,8 162,456, -137,691 162,318,
period (“-” for decrease) ,983.24 84.48 7.42 14.30 579.44 .86 887.58
3.1 Total comprehensive 108,771 52,432,4 161,203, -137,691 161,066,
income ,351.91 43.05 794.96 .86 103.10
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
3,222,99 -3,222,9
3.3 Profit distribution
7.42 97.42
3.3.1 Appropriation to 3,222,99 -3,222,9
surplus reserves 7.42 97.42
3.3.2 Appropriation to
general reserve
3.3.3 Appropriation to
owners (or shareholders)
3.3.4 Other
3.4 Transfers within owners’ -348,36 348,368.
equity 8.67 67
3.4.1 Increase in capital (or
share capital) from capital
reserves
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Changchai Company, Limited Annual Report 2021
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
-348,36 348,368.
3.4.6 Other
8.67 67
1,252,7 1,252,78 1,252,78
3.5 Specific reserve
84.48 4.48 4.48
3,766,2 3,766,29 3,766,29
3.5.1 Increase in the period
91.74 1.74 1.74
2,513,5 2,513,50 2,513,50
3.5.2 Used in the period
07.26 7.26 7.26
3.6 Other
4. Balance as at the end of the 561,374, 164,328 425,482 18,812, 325,451, 777,899, 2,273,34 19,498,5 2,292,84
period 326.00 ,665.43 ,758.24 986.55 531.14 079.66 9,347.02 89.15 7,936.17
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Changchai Company, Limited Annual Report 2021
8. Statements of Changes in Owners’ Equity of the Company as the Parent
2021
Unit: RMB
2021
Other equity
instruments
Le
P
ss:
Pr er
Tr Other
efe pe O Total
Item Capital eas comprehe Specific Surplus Retained
Share capital rre tu Ot th owners’
reserves ur nsive reserve reserves earnings
d al he er equity
y income
sh b r
sto
are o
ck
s n
ds
1. Balance as at the end of the 561,374,326.0 183,071,14 425,482,7 18,812,986. 325,451,531 677,800,436. 2,191,993,1
prior year 0 7.70 58.24 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 561,374,326.0 183,071,14 425,482,7 18,812,986. 325,451,531 677,800,436. 2,191,993,1
the year 0 7.70 58.24 55 .14 75 86.38
3. Increase/ decrease in the 144,318,181.0 476,347,55 80,528,74 8,692,957.3 78,236,615.8 788,124,01
-36.51
period (“-” for decrease) 0 2.97 1.31 2 3 1.92
3.1 Total comprehensive 80,528,74 86,929,573.1 167,458,31
income 1.31 5 4.46
3.2 Capital increased and 144,318,181.0 476,347,55 620,665,73
reduced by owners 0 2.97 3.97
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Changchai Company, Limited Annual Report 2021
3.2.1 Ordinary shares 144,318,181.0 476,347,55 620,665,73
increased by owners 0 2.97 3.97
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
8,692,957.3 -8,692,957.3
3.3 Profit distribution
2 2
3.3.1 Appropriation to 8,692,957.3 -8,692,957.3
surplus reserves 2 2
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
3.4.4 Changes in defined
benefit schemes transferred to
retained earnings
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Changchai Company, Limited Annual Report 2021
3.4.5 Other comprehensive
income transferred to retained
earnings
3.4.6 Other
3.5 Specific reserve -36.51 -36.51
4,023,200.2 4,023,200.2
3.5.1 Increase in the period
4 4
4,023,236.7 4,023,236.7
3.5.2 Used in the period
5 5
3.6 Other
4. Balance as at the end of the 705,692,507.0 659,418,70 506,011,4 18,812,950. 334,144,488 756,037,052. 2,980,117,1
period 0 0.67 99.55 04 .46 58 98.30
2020
Unit: RMB
2020
Other equity
instruments
Le
P
ss:
Pr er
Tr Other
efe pe O Total
Item Capital ea comprehe Specific Surplus Retained
Share capital rre tu O th owners’
reserves sur nsive reserve reserves earnings
d al th er equity
y income
sh b er
sto
are o
ck
s n
ds
1. Balance as at the end of the 561,374,326.0 183,071,14 317,059,7 17,560,202 322,226,700 648,776,959. 2,050,069,1
prior year 0 7.70 75.00 .07 .34 53 10.64
Add: Adjustment for change in
accounting policy
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Changchai Company, Limited Annual Report 2021
Adjustment for correction of
1,833.38 16,500.44 18,333.82
previous error
Other adjustments
2. Balance as at the beginning of 561,374,326.0 183,071,14 317,059,7 17,560,202 322,228,533 648,793,459. 2,050,087,4
the year 0 7.70 75.00 .07 .72 97 44.46
3. Increase/ decrease in the 108,422,9 1,252,784. 3,222,997.4 29,006,976.7 141,905,74
period (“-” for decrease) 83.24 48 2 8 1.92
3.1 Total comprehensive 108,771,3 31,881,605.5 140,652,95
income 51.91 3 7.44
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
3,222,997.4 -3,222,997.4
3.3 Profit distribution
2 2
3.3.1 Appropriation to 3,222,997.4 -3,222,997.4
surplus reserves 2 2
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
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Changchai Company, Limited Annual Report 2021
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
1,252,784. 1,252,784.4
3.5 Specific reserve
48 8
3,766,291. 3,766,291.7
3.5.1 Increase in the period
74 4
2,513,507. 2,513,507.2
3.5.2 Used in the period
26 6
3.6 Other
4. Balance as at the end of the 561,374,326.0 183,071,14 425,482,7 18,812,986 325,451,531 677,800,436. 2,191,993,1
period 0 7.70 58.24 .55 .14 75 86.38
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Changchai Company, Limited Annual Report 2021
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, which verified by Jiangsu
Gongzheng Tianye Certified Public Accountants Company Limited with issuing Capital Verification Report SGC
[2010] No. B002.
A non-public offering of up to 168,412,297 new shares was deliberated on and approved as a resolution of the
2020 Annual General Meeting held on 7 May 2021 and approved by the Approval of the Non-public Offering of
Shares of Changchai Co., Ltd. (CSRC Permit [2020] No. 3374) issued by Changchai Company Limited the China
Securities Regulatory Commission. On 16 June 2021, the capital verification report "S.G. W [2021] B062" was
issued by Gongzheng Tianye Accounting Firm (Special General Partnership), confirming that the Company had
issued 144,318,181 RMB ordinary shares (A shares) in a non-public offering, with an additional paid-in capital
(share capital) of RMB144,318,181. The total amount raised was RMB634,999,996.40; the net amount raised was
RMB620,665,733.97, which increased the capital reserve (share capital premium) by RMB476,347,552.97. As of
31 December 2021, the total share capital of the Company was RMB705,692,507.
The unified social credit code of the company's business license is 91320400134792410W.
The Company’s registered address is situated at No. 123 Huaide Middle Road, Changzhou, Jiangsu, as well as its
head office located at No. 123 Huaide Middle Road, Changzhou, Jiangsu.
The Company belongs to manufacturing with business scope including manufacturing and sale of diesel engine,
diesel engines part and casting, grain harvesting machine, rotary cultivators, walking tractor, mould and fixtures,
assembling and sale of diesel generating set and pumping unit. The Company mainly engaged in the production
and sales of small and medium-sized single cylinders and multi-cylinder diesel engine with the label of Changchai
Brand. The diesel engine produced and sold by the Company were mainly used in tractors, combine harvest
models, light commercial vehicle, farm equipment, small-sized construction machinery, generating sets and
shipborne machinery and equipment, etc. The Company’s main business remained unchanged in the Reporting
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Changchai Company, Limited Annual Report 2021
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 11April 2022.
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
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.
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Changchai Company, Limited Annual Report 2021
2. Fiscal Period
The fiscal periods are divided into fiscal year and metaphase, the fiscal year is from January 1 to December 31
and as the metaphase included monthly, quarterly and semi-yearly periods.
3. Operating Cycle
A normal operating cycle refers to a period from the Group purchasing assets for processing to realizing cash or
cash equivalents. An operating cycle for the Group is 12 months, which is also the classification criterion for the
liquidity of its assets and liabilities.
4. Currency Used in Bookkeeping
Renminbi is functional currency of the Company.
5. Accounting Methods for Business Combinations under the Same Control and Business Combinations not
under the Same Control
(1) Business combinations under the same control:
A business combination under the same control is a business combination in which all of the combining
enterprises are ultimately controlled by the same party or the same parties both before and after the business
combination and on which the control is not temporary.
For the merger of enterprises under the same control, if the consideration of the merging enterprise is that it makes
payment in cash, transfers non-cash assets or bear its debts, it shall, on the date of merger, regard the share of the
book value of the owner's equity of the merged enterprise as the initial cost of the long-term equity investment.
The difference between the initial cost of the long-term equity investment and the payment in cash, non-cash
assets transferred as well as the book value of the debts borne by the merging party shall offset against the capital
reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted.
If the consideration of the merging enterprise is that it issues equity securities, it shall, on the date of merger,
regard the share of the book value of the owner's equity of the merged enterprise as the initial cost of the
long-term equity investment. The total face value of the stocks issued shall be regarded as the capital stock, while
the difference between the initial cost of the long-term equity investment and total face value of the shares issued
shall offset against the capital reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be
adjusted.
All direct costs for the business combination, including expenses for audit, evaluating and legal services shall be
recorded into the profits and losses at the current period. The expenses such as the handling charges and
commission etc, premium income of deducting the equity securities, and as for the premium income was
insufficient to dilute, the retained earnings shall be written down.
Owning to the reasons such as the additional investment, for the equity investment held before acquiring the
control right of the combined parties, the confirmed relevant gains and losses, other comprehensive income and
the changes of other net assets since the date of the earlier one between the date when acquiring the original equity
right and the date when the combine parties and combined ones were under the same control to the combination
date, should be respectively written down and compared with the beginning balance of retained earnings or the
current gains and losses during the statement period.
(2) Business combinations not under the same control
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Changchai Company, Limited Annual Report 2021
A business combination not under the same control is a business combination in which the combining enterprises
are not ultimately controlled by the same party or the same parties both before and after the business combination.
The combination costs of the acquirer and the identifiable net assets obtained by the acquirer in a business
combination shall be measured at the fair values. The acquirer shall recognize the positive balance between the
combination costs and the fair value of the identifiable net assets it obtains forms the acquiree as business
reputation. The direct relevant expenses occurred from the enterprise combination should be included in the
current gains and losses when occurred. The combination costs of the acquirer and the identifiable net assets
obtained by it in the combination shall be measured according to their fair values at the acquiring date. The
difference between the fair value of the assets paid out by the Company and its book value should be included in
the current gains and losses. The purchase date refers to the date that the purchaser acquires the control right of the
acquiree.
For the business combinations not under the same control realized through step by step multiple transaction, as for
the equity interests that the Group holds in the acquiree before the acquiring date, they shall be re-measured
according to their fair values at the acquiring date; the positive difference between their fair values and carrying
amounts shall be recorded into the investment gains for the period including the acquiring date. The equity holed
by the acquiree which involved with the other comprehensive income and the other owners’ equities changes
except for the net gains and losses, other comprehensive income and the profits distribution and other related
comprehensive gains and other owners’ equities which in relation to the equity interests that the Group holds in
the acquiree before the acquiring date should be transferred into the current investment income on the acquiring
date, except for the other comprehensive income occurred from the re-measurement of the net profits of the
defined benefit plans or the changes of the net assets of the investees.
6. Methods for Preparing Consolidated Financial Statements
The Company confirms the consolidated scope based on the control and includes the subsidiaries with actual
control right into the consolidated financial statement.
The consolidated financial statement of the Company is compiled according to the regulations of No. 33 of
ASBE-Consolidated Financial Statement and the relevant regulations and as for the whole significant
come-and-go balance, investment, transaction and the unrealized profits should be written off when compiling the
consolidated financial statement. The portion of a subsidiary’s shareholders’ equity and the portion of a
subsidiary’s net profits and losses for the period not held by the Group are recognized as minority interests and
minority shareholder profits and losses respectively and presented separately under shareholders’ equity and net
profits in the consolidation financial statements. The portion of a subsidiary’s net profits and losses for the period
that belong to minority interests is presented as the item of “minority shareholder profits and losses” under the
bigger item of net profits in the consolidated financial statements. Where the loss of a subsidiary shared by
minority shareholders exceeds the portion enjoyed by minority shareholders in the subsidiary’s opening owners’
equity, minority interests are offset.
The accounting policy or accounting period of each subsidiary is different from which of the Company, which
shall be adjusted as the Company; or subsidiaries shall prepare financial statement again required by the Company
when preparing the consolidated financial statements.
As for the added subsidiary company not controlled by the same enterprise preparing the consolidated financial
statement, shall adjust individual financial statement based on the fair value of the identifiable net assets on the
acquisition date; as for the added subsidiary companies controlled by the same enterprise preparing the financial
statement, shall not adjust the financial statement of the subsidiaries, namely survived by integration as
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Changchai Company, Limited Annual Report 2021
participating in the consolidation when the final control party starts implementing control and should adjust the
period-begin amount of the consolidated balance sheet and at the same time adjust the relevant items of the
compared statement.
As for the disposed subsidiaries, the operation result and the cash flow should be included in the consolidated
income statement and the consolidated cash flow before the disposing date; the disposed subsidiaries of the
current period, should not be adjusted the period-begin amount of the consolidated balance sheet.
Where the Group losses control on its original subsidiaries due to disposal of some equity investments or other
reasons, the residual equity interests are re-measured according to the fair value on the date when such control
ceases. The summation of the consideration obtained from the disposal of equity interests and the fair value of the
residual equity interests, minus the portion in the original subsidiary’s net assets measured on a continuous basis
from the acquisition date that is enjoyable by the Group according to the original shareholding percentage in the
subsidiary, is recorded in investment gains for the period when the Group’s control on the subsidiary ceases. Other
comprehensive incomes in relation to the equity investment and the other owners’ equities changes except for the
net gains and losses, other comprehensive income and profits distribution in the original subsidiary are treated on
the same accounting basis as the acquiree directly disposes the relevant assets or liabilities (that is, except for the
changes in the net liabilities or assets with a defined benefit plan resulted from re-measurement of the original
subsidiary, the rest shall all be transferred into current investment gains) when such control ceases. And
subsequent measurement is conducted on the residual equity interests according to the No.2 Accounting Standard
for Business Enterprises-Long-term Equity Investments or the No.22 Accounting Standard for Business
Enterprises-Recognition and Measurement of Financial Instruments.
For the disposal of equity investment belongs to a package deal, should be considered as a transaction and conduct
accounting treatment. However, Before losing control, every disposal cost and corresponding net assets balance of
subsidiary of disposal investment are confirmed as other comprehensive income in consolidated financial
statements, which together transferred into the current profits and losses in the loss of control, when the Group
losing control on its subsidiary.
For the disposal of the equity investment not belongs to a package deal, should be executed accounting treatment
according to the relevant policies of partly disposing the equity investment of the subsidiaries under the situation
not lose the control right before losing the control right; when losing the control right, the former should be
executed accounting treatment according to the general disposing method of the disposal of the subsidiaries.
7. Classification of Joint Arrangements and Accounting Treatment of Joint Operations
The Group classifies joint arrangements into joint operations and joint ventures.
A joint operation refers to a joint arrangement where the Group is the joint operations party of the joint
arrangement and enjoys assets and has to bear liabilities related to the arrangement. The Company confirms the
following items related to the interests share among the joint operations and executes accounting treatment
according to the regulations of the relevant ASBE:
(1) Recognizes the assets that it holds and bears in the joint operation and recognizes the jointly-held assets
according to the Group’s stake in the joint operation;
(2) Recognizes the liabilities that it holds and bears in the joint operation and recognizes the jointly-held liabilities
according to the Group’s stake in the joint operation;
(3) Recognizes the income from sale of the Group’s share in the output of the joint operation
(4) Recognizes the income from sale of the joint operation’s outputs according to the Group’s stake in it
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Changchai Company, Limited Annual Report 2021
(5) Recognizes the expense solely incurred to the Group and the expense incurred to the joint operation according
to the Group’s stake in it.
8. Recognition Standard for Cash and Cash Equivalents
In the Group’s understanding, cash and cash equivalents include cash on hand, any deposit that can be used for
cover, and short-term (usually due within 3 months since the day of purchase) and high circulating investments,
which are easily convertible into known amount of cash and whose risks in change of value are minimal.
9. Foreign Currency Businesses and Translation of Foreign Currency Financial Statements
(1) Foreign currency business
Concerning the foreign-currency transactions that occurred, the foreign currency shall be converted into the
recording currency according to the middle price of the market exchange rate disclosed by the People’s Bank of
China on the date of the transaction. Among the said transactions that occurred, those involving foreign exchanges
shall be converted according to the exchange rates adopted in the actual transactions.
On the balance sheet date, the foreign-currency monetary assets and the balance of the liability account shall be
converted into the recoding currency according to the middle price of the market exchange rates disclosed by the
People’s Bank of China on the Balance Sheet Date. The difference between the recording-currency amount
converted according to the exchange rate on the Balance Sheet Date and the original book recording-currency
amount shall be recognized as gains/losses from foreign exchange. And the exchange gain/loss caused by the
foreign-currency borrowings related to purchasing fixed assets shall be handled according to the principle of
capitalizing borrowing expenses; the exchange gain/loss incurred in the establishment period shall be recorded
into the establishment expense; others shall be recorded into the financial expenses for the current period.
On the balance sheet date, the foreign-currency non-monetary items measured by historical cost shall be converted
according to the middle price of the market exchange disclosed by the People’s Bank of China on the date of the
transaction, with no changes in the original recording-currency amount; while the foreign-currency non-monetary
items measured by fair value shall be converted according to the middle price of the market exchange disclosed by
the People’s Bank of China on the date when the fair value is recognized, and the exchange gain/loss caused
thereof shall be recognized as the gain/loss from fair value changes and recorded into the gain/loss of the current
period.
(2) Translation of foreign currency
The assets and liabilities items among the balance sheet of the foreign operation shall be translated at a spot
exchange rate on the balance sheet date. Among the owner’s equity items, except for the items as “undistributed
profits”, other items shall be translated at the spot exchange rate at the time when they are incurred. And the
revenues and expenses items among the balance sheet of the foreign operation shall be translated at the
approximate exchange rate of the transaction date. The difference caused from the above transaction of the foreign
currency statement should be listed in the other comprehensive income among the owners’ equities.
10. Financial Instruments
(1) 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
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Changchai Company, Limited Annual Report 2021
(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.
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
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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
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
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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.
Lifetime expected credit losses refer to those caused by possible defaults during the entire expected duration of a
financial instrument.
The expected credit losses in the next 12 months refers to those caused by the default events of the financial
instrument that may occur within 12 months (or the expected duration if the expected duration of the financial
instrument is less than 12 months) after the balance sheet date, and is part of the expected credit losses in the
entire duration.
On each balance sheet date, the Company respectively measured the expected credit losses of financial
instruments in different stages. If the credit risk of a financial instrument has had no significant increase since its
initial recognition, the instrument shall fall in the first stage, for which the Company would measure the loss
reserves according to the expected credit losses in the future 12 months. If the credit risk of a financial instrument
has had a significant increase since its initial recognition but no credit impairment has occurred, the instrument
shall fall in the second stage, for which the Company would measure the loss reserves according to the expected
credit losses in the entire duration of the instrument. If the credit impairment has occurred since its initial
recognition, the financial instrument shall fall in the third stage, for which the Company would measure the loss
reserves according to the expected credit losses in the entire duration of the instrument.
As for a financial instrument with low credit risks on the balance sheet date, the Company measured the loss
reserves according to the expected credit losses in the future 12 months, assuming that its credit risk has had no
significant increase since its initial recognition.
For financial instruments with low credit risks in stages 1 and 2, the Company calculated the interest income at the
effective interest rate and on the carrying amount of the instruments without deductions for provisions for asset
impairment. For financial instruments in stage 3, interest income was calculated at the effective interest rates and
on the amortized cost by reducing the provisions for asset impairment from the carrying amount.
For notes receivables, accounts receivables, and financing receivables, whether there was a significant financial
component or not, the Company measured the loss reserves based on the expected credit losses for the entire
duration.
A. Accounts receivable
For notes receivable, accounts receivable, other receivables and accounts receivable financing 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, other receivables, accounts receivable financing, contract assets and long-term
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 notes receivable, accounts receivable,
other receivables and accounts receivable financing into groups according to the characteristics of credit risk, and
calculates the expected credit loss based on receivable groups. The basis for recognizing groups is as follows:
Item Recognition basis Method of measuring expected credit losses
Group 1 of notes Consulting historical experience in credit losses,
All commercial bills
receivable combining current situation and prediction for future
Group 2 of notes Bank’s acceptance bills economic situation, the expected credit loss shall be
receivable with low credit rating accounted through exposure at default and the expected
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credit loss rate over the entire life
Bank’s acceptance bills Consulting historical experience in credit losses,
with high credit rating combining current situation and prediction for future
Accounts receivable
economic situation, the expected credit loss shall be
financing
accounted through exposure at default and the expected
credit loss rate over the entire life
Prepare the comparative list between aging of accounts
receivable and expected credit loss rate over the entire
life and calculate the expected credit loss by consulting
Accounts Accounts receivable
historical experience in credit losses, combining current
receivable-credit risk portfolio with credit
situation and prediction for future economic situation.
characteristics group period
The Company takes aging as credit risk characteristics
groups and calculates the expected credit loss for
accounts receivable.
Accounts Consulting historical experience in credit losses,
receivable-intercourse combining current situation and prediction for future
Related party within the
funds among related economic situation, the expected credit loss shall be
consolidation scope
party group within the accounted through exposure at default and the expected
consolidation scope credit loss rate over the entire life
Basis for recognizing groups of other receivables is as follows:
Item Recognition basis Method of measuring expected credit losses
Consulting historical experience in credit losses,
Other receivables combining current situation and prediction for future
excluding those from economic situation, the expected credit loss shall be
Group 1 of other receivables
related parties-aging accounted through exposure at default and the expected
group credit loss rate within the next 12 months or over the
entire life
Consulting historical experience in credit losses,
combining current situation and prediction for future
Related party within
economic situation, the expected credit loss shall be
Group 2 of other receivables the consolidation
accounted through exposure at default and the expected
scope
credit loss rate within the next 12 months or over the
entire life
11. Accounts Receivable
See “10. Financial Instruments”.
12. Accounts Receivable Financing
See “10. Financial Instruments”.
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13. Other Receivables
See “10. Financial Instruments”.
14. 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
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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15. 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.11.
16. 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.
17. 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;
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(2) The Company had made solutions on disposing the components (or the non-current assets), for example, the
Company should gain the approval from the shareholders according to the regulations and had acquired the
approved from the Annual General Meeting or the relevant authority institutions;
(3) The Company had signed the irrevocable transformation agreement with the transferee;
(4) The transformation should be completed within 1 year.
18. 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
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value of the equity securities issued.
The initial cost of a long-term equity investment of an investor shall be the value stipulated in the investment
contract or agreement, the unfair value stipulated in the contract or agreement shall be measured at fair value.
As for long-term investment obtained by the exchange of non-monetary assets, where it is commercial in nature,
the fair value of the assets surrendered shall be recognized as the initial cost of the long-term equity investment
received; where it is not commercial in nature, the book value of the assets surrendered shall be recognized as the
initial cost of the long-term equity investment received.
The initial cost of a long-term equity investment obtained by recombination of liabilities shall be recognized at
fair value of long-term equity investment.
(3) Subsequent measurement and recognition of profits and losses
1) An investment in the subsidiary company shall be measured by employing the cost method
Where the Company hold, and is able to do equity investment with control over an invested entity, the invested
entity shall be its subsidiary company. Where the Company holds the shares of an entity over 50%, or, while the
Company holds the shares of an entity below 50%, but has a real control to the said entity, then the said entity
shall be its subsidiary company.
2) An investment in the joint enterprise or associated enterprise shall be measured by employing the equity
method
Where the Company hold, and is able to do equity investment with joint control with other parties over an
invested entity, the invested entity shall be its joint enterprise. Where the Company hold, and is able to have
equity investment with significant influences on an invested entity, the invested entity shall be its associated
entity.
After the Company acquired the long-term equity investment, should respectively recognize investment income
and other comprehensive income according to the net gains and losses as well as the portion of other
comprehensive income which should be enjoyed or be shared, and at the same time adjust the book value of the
long-term equity investment; corresponding reduce the book value of the long-term equity investment according
to profits which be declared to distribute by the investees or the portion of the calculation of cash dividends which
should be enjoyed; for the other changes except for the net gains and losses, other comprehensive income and the
owners’ equity except for the profits distribution of the investees, should adjust the book value of the long-term
equity investment as well as include in the owners’ equity .
The investing enterprise shall, on the ground of the fair value of all identifiable assets of the invested entity when
it obtains the investment, recognize the attributable share of the net profits and losses of the invested entity after it
adjusts the net profits of the invested entity.
If the accounting 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
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equity investment is insufficient for written down, should be continued to recognized the investment losses limited
to the book value of other long-term equity which forms of the net investment of the investees and to written
down the book value of the long-term accounts receivable etc. Lastly, through the above handling, for those
should still undertake the additional obligations according to the investment contracts or the agreements, it shall
be recognized as the estimated liabilities in accordance with the estimated duties and then recorded into
investment losses at current period. If the invested entity realizes any net profits later, the 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
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adopting the equity method for measurement, should be carried forward into the current gains and losses
according to the proportion. Of which, for the disposed remained equity which adopted the equity method for
measurement, the other comprehensive income and the other owners’ equity should be carried forward according
to the proportion; for the disposed remained equity which changed to execute the accounting disposal according to
the recognition and measurement standards of financial instrument, the other comprehensive income and the other
owners’ equity should be carried forward in full amount.
For those the Company lost the control of the investees by disposing part of the equity investment, the disposed
remained equity should change to calculate according to the recognition and measurement standards of financial
instrument, and difference between the fair value and book value on the date lose the control right should be
included in the current gains and losses. For the other comprehensive income recognized from the original equity
investment by adopting the equity method, should execute the accounting disposal by adopting the same basis of
the accounting disposal of the relevant assets or liabilities directly disposed by the investees when terminate the
equity method for measurement, while for the owners’ equity recognized owning to the changes of the other
owner’s equity except for the net gains and losses, other comprehensive income and the profits distribution of the
investees, should be transferred into the current investment income with full amount when terminate adopting the
equity method.
19. 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.
20. 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
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Transportation Average method of
5-10 10%-20%
equipment useful life
Average method of
Other equipment 5-10 10%-20%
useful life
(3) Recognition Basis, Pricing and Depreciation Method of Fixed Assets by Finance Lease
The Company recognizes those meet with the following one or certain standards as the fixed assets by finance
lease:
1) The leasing contract had agreed that (or made the reasonable judgment according to the relevant conditions on
the lease starting date) when the lease term expires, the ownership of leasing the fixed assets could be transferred
to the Company;
2) The Company owns the choosing right for purchasing and leasing the fixed assets, with the set purchase price
which is estimated far lower than the fair value of the fixed assets by finance lease when executing the choosing
right, so the Company could execute the choosing right reasonably on the lease starting date;
3) Even if the ownership of the fixed assets not be transferred, the lease period is of 75% or above of the useful
life of the lease fixed assets;
4) The current value of the minimum lease payment on the lease starting date of the Company is equal to 90% or
above of the fair value of the lease fixed assets on the lease starting date; the current value of the minimum lease
receipts on the lease starting date of the leaser is equal to 90% or above of the fair value of the lease fixed assets
on the lease starting date;
5) The nature of the lease assets is special that only the Company could use it if not execute large transformation.
The fixed assets by finance lease should take the lower one between the fair value of the leasing assets and the
current value of the minimum lease payment on the lease starting date as the entry value. As for the minimum
lease payment which be regarded as the entry value of the long-term accounts payable, its difference should be
regarded as the unrecognized financing expense. For the initial direct expenses occur in the lease negotiations and
the signing process of the lease contracts that attribute to the handling expenses, counsel fees, travel expenses and
stamp taxes of the lease items, should be included in the charter-in assets value. The unrecognized financing
expenses should be amortized by adopting the actual interest rate during the period of the lease term.
The fixed assets by finance lease shall adopt the same depreciation policy for self-owned fixed assets. If it is
reasonable to be certain that the lessee will obtain the ownership of the leased asset when the lease term expires,
the leased asset shall be fully depreciated over its useful life. If it is not reasonable to be certain that the lessee will
obtain the ownership of the leased asset at the expiry of the lease term, the leased asset shall be fully depreciated
over the shorter one of the lease term or its useful life
21. 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
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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.
22. 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.
23. 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.
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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.
24. Impairment of Long-term Assets
For non-current financial Assets of fixed Assets, projects under construction, intangible Assets with limited
service life, investing real estate with cost model, long-term equity investment of subsidiaries, cooperative
enterprises and joint ventures, the 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
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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.
25. 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.
26. 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.
27. 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.
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
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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.
28. Lease Liabilities
On the commencement date of the lease term, the Company recognizes the present value of outstanding lease
payments as lease liabilities. The amount of lease payment includes the following five contents: fixed amount and
substantial fixed amount. If there is lease incentive, the amount related to lease incentive will be deducted.
Variable lease payments subject to an index or ratio, which at the time of initial measurement is based on the
index or ratio of the commencement date of the lease term; The exercise price of the purchase option provided that
the lessee is reasonably certain that the option will be exercised; The amount payable for exercising the
termination option provided that the lease term reflects that the Lessee will exercise the termination option; The
amount expected to be paid based on the residual value of the security provided by the lessee.
When calculating the present value of the lease payment, the lease embedded interest rate is used as the discount
rate; if the lease embedded interest rate cannot be determined, the company's incremental loan interest rate is used
as the discount rate. The company calculates the interest expense of the lease liability in each period of the lease
term according to the fixed periodic interest rate and records it into the profit and loss of the current period, except
otherwise stipulated to record it into the cost of related assets. Variable lease payments that are not included in the
measurement of lease liabilities shall be included in current profit and loss when actually incurred, unless
otherwise stipulated to be included in the cost of related assets. Lease term began, in the future when substantial
changes occurred in the fixed payment, the guaranteed residual value is expected to cope with the amount of
change, is used to determine the lease payment ratio index or change, call options, renewal options or terminate
the option evaluation results or the actual exercise changes, the company in accordance with the changes of the
lease the present value of the payments to measure lease liability.
29. 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:
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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.
30. 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
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
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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.
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.
Specific methods
The specific methods of the Company's revenue recognition are as follows:
The sale contract between the Company and its customers usually contains only the performance obligation for
the transfer of goods, which is satisfied at a point in time.
The following requirements must be met to confirm the revenue of domestic products: The Company has
delivered the goods to the customer in accordance with the contract and the customer has accepted the goods. The
payment has been recovered or the receipt voucher has been obtained, and the relevant economic benefits are
likely to flow in. The customer has obtained control of the relevant goods. The main risks and rewards of product
ownership have been transferred. The legal ownership of the goods has been transferred.
The following requirements must be met to confirm the revenue of export products: The Company has declared
the products in accordance with the contract, obtained the bills of lading, and received the payment or obtained the
receipt voucher and the related economic benefits are likely to flow in. The main risks and rewards of product
ownership have been transferred. The legal ownership of the goods has been transferred.
Interest Revenue
Interest Revenue shall be determined according to the time of the Company’s use of monetary capital and the
actual interest rate.
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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.
31. 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.
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.
32. 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.
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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.
33. Lease
Lease refers to a contract whereby the lessor assigns the right to use an asset to the lessee for consideration within
a certain period of time. On the commencement date of the contract, the company evaluates whether the contract
is a lease or includes a lease. The contract is a lease or includes a lease if a party in the contract cedes the right to
control the use of one or more identified assets for a specified period in exchange for consideration. If the contract
contains multiple separate leases at the same time, the company will divide the contract and conduct accounting
treatment for each separate lease. If the contract contains both the leased part and the non-leased part, the lessee
and the lessor shall divide the leased part and the non-leased part.
(1) The Company acts as the lessee
The general accounting treatment of the Company as a lessee is shown in Note 28, Lease Liabilities.
For short-term leases with a lease term of less than 12 months and low-value asset leases with a low value when a
single asset is brand-new, the Company chooses not to recognize the right to use assets and lease liabilities, and
will record the relevant rental expenses into current profits and losses or the cost of relevant assets in each period
of the lease term according to the straight-line method.
If the lease changes and the following conditions are met, the company will treat the lease change as a separate
lease: the lease change expands the scope of the lease by adding the right to use one or more leased assets; The
increased consideration is equivalent to the amount of the separate price for the extended portion of the lease
adjusted for the circumstances of the contract. If the lease change is not accounted for as a separate lease, on the
effective date of the lease change, the Company shall re-apportion the consideration of the contract after the
change, re-determine the lease term, and re-measure the lease liability according to the present value calculated
from the lease payment after the change and the revised discount rate.
(2) The Company acts as the lessor
On the lease commencement date, the Company classifies the leases that substantially transfer almost all risks and
rewards related to the ownership of the leased assets as financial leases, and all other leases as operating leases.
1) Operating lease
During each period of the lease term, the Company recognizes rental income as rental income in accordance with
the straight-line method, and the initial direct expenses incurred are capitalized and apportion on the same basis as
rental income recognition, and recorded into current profit and loss by stages. The variable lease payments
obtained by the company related to operating leases and not included in the lease receipts shall be included in the
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current profit and loss when actually incurred.
2) Finance lease
On the beginning date of the lease term, the company recognizes the finance lease receivables and terminates the
recognition of finance lease assets in accordance with the net amount of lease investment (the sum of the
unguaranteed residual value and the amount of lease receipts not received on the beginning date of the lease term).
During each period of the lease term, the company calculates and recognizes the interest income in accordance
with the inherent interest rate of the lease. The variable lease payments obtained by the company, which are not
included in the net lease investment measurement, shall be included in the current profit and loss when actually
incurred.
(3) After-sales leaseback
The Company evaluates and determines whether the transfer of assets in a sale-and-leaseback transaction is a sale
in accordance with the accounting Standards for Business Enterprises No. 14 - Revenue.
1) The Company acts as the lessee
If the transfer of assets in the sale and leaseback transaction is a sale, the Company shall measure the right to use
assets formed by the sale and leaseback according to the part of the book value of the original asset related to the
right to use acquired by leaseback, and shall only recognize the relevant gains or losses in respect of the right
transferred to the lessor.
If the transfer of assets in a sale-and-leaseback transaction is not a sale, the Company shall continue to recognize
the transferred assets and at the same time recognize a financial liability equal to the transfer income, and conduct
accounting treatment for the financial liability in accordance with the Accounting Standards for Business
Enterprises No. 22 - Recognition and Measurement of Financial Instruments.
2) The Company acts as the lessor
If the transfer of assets in a sale-and-leaseback transaction is a sale, the Company shall provide accounting
treatment for the purchase of assets in accordance with other applicable accounting standards for enterprises and
the lease of assets in accordance with accounting Standards for Business Enterprises No. 21 - Lease.
If the transfer of assets in a sale-leaseback transaction is not a sale, the Company does not recognize the
transferred asset, but recognizes a financial asset equal to the transfer income, and conducts accounting treatment
on the financial asset in accordance with the Accounting Standards for Business Enterprises No. 22 - Recognition
and Measurement of Financial Instruments.
34. Other Significant Accounting Policies and Accounting Estimates
The Company evaluates the important accounting estimates and key assumptions adopted on an ongoing basis,
based on historical experience and other factors, including reasonable expectations of future events. Important
accounting estimates and critical assumptions that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next fiscal year are listed as follows:
(1) Classification of financial assets
The significant judgments involved when the Company determines the classification of financial assets include
analysis of business models and contractual cash flow characteristics. The Company determines the business
model for managing financial assets at the level of the financial asset portfolio, taking into account factors such as
the approach of evaluating and reporting the performance of financial assets to key management personnel, the
risks affecting the performance of financial assets and the manner in which they are managed, and way in which
the relevant business management personnel are compensated.
The following main judgments exist in assessing whether the contractual cash flows of financial assets are
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consistent with the basic lending arrangements:
Whether the time distribution or amount of the principal amount during the duration may change due to early
repayment or for other reasons; whether the interest includes only the time value of money, credit risk, other basic
lending risks and consideration against costs and profits. For example, whether the amount of early repayment
reflects only the outstanding principal and interest based on the outstanding principal, as well as reasonable
compensation paid for early termination of the contract.
(2) Measurement of expected credit losses of accounts receivable
The Company calculates the expected credit loss of accounts receivable using the exposure to default risk of
accounts receivable and the expected credit loss ratio, and determines the expected credit loss ratio based on the
probability of default and the default loss ratio. When determining the expected credit loss ratio, the Company
uses data such as internal historical credit loss experience and adjusts historical data to take into account current
conditions and forward-looking information. When considering forward-looking information, the Company uses
indicators such as the risk of economic downturn and changes in the external market environment, technological
environment and customer profile. The Company regularly monitors and reviews the assumptions related to the
calculation of expected credit losses.
(3) Inventory falling price reserves
The Company follows the inventory accounting policy and carries out measurement based on which is smaller
between the cost and the net realizable value. If the cost of inventories is higher than its net realizable value, then
the inventory falling prices reserves were implemented. The impairment of inventories to net realizable value is
based on an assessment of the marketability of the inventories and their net realizable value. The management
shall determine the impairment of inventories after obtaining reliable evidence while taking into account the
purpose of holding inventories, the effect of items after the balance sheet date, and other factors. Differences
between actual results and original estimates will affect the carrying value of inventories and the provision or
reversal of reverses for falling prices of inventories in the period in which the estimates are changed.
(4) Determination of fair value of unlisted equity investment
The fair value of unlisted equity investment is the expected future cash flows discounted at the current discount
rate for items with similar terms and risk characteristics. Such valuation requires the Company to estimate
expected future cash flows and discount rates and is therefore subject to uncertainty. Under limited circumstances,
if the information used to determine fair value is insufficient, or if the range of possible estimates of fair value is
wide and the cost represents the best estimate of fair value within that range, the cost may represent its appropriate
estimate of fair value within that range of distribution.
(5) Reserves for long-term assets impairment
The Company determines at the balance sheet date whether there is any indication that a non-current asset, other
than a financial asset, may be impaired. For intangible assets with an uncertain useful life, impairment tests shall
be conducted when there is an indication of impairment besides the annual impairment test. Other non-current
assets other than financial assets shall be tested for impairment when there is an indication that the carrying
amount is irrecoverable.
An impairment is indicated when the carrying amount of an asset or asset group is greater than the recoverable
amount, which is the higher of the fair value minus disposal expenses and the present value of estimated future
cash flows.
The net value of the fair value minus disposal expenses is determined by referring to the negotiable sale price or
observable market price of similar assets in a fair transaction and deducting incremental costs directly attributable
to the disposal of the asset.
Estimating the present value of future cash flows requires significant judgments with respect to the production
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volume of the asset (or asset group), the selling price, the related operating costs and the discount rate used in
calculating the present value. The Company uses all available relevant information in estimating recoverable
amounts, including projections of volumes, selling prices and related operating costs based on reasonable and
supportable assumptions.
(6) Depreciation and amortization
The Company depreciates and amortizes investment properties, fixed assets and intangible assets on a straight-line
basis within their service lives after taking into account their residual values. The Company regularly reviews
service lives to determine the amount of depreciation and amortization expenses to be included in each reporting
period. The service life is determined by the Company based on past experience with similar assets and expected
technological updates. Depreciation and amortization expenses will be adjusted in the future period if there is a
significant change in previous estimates.
(7) Deferred income tax assets
To the extent that it is probable that sufficient taxable profit will be available to offset the losses, the Company
recognizes deferred income tax assets for all unused tax losses. This requires the Company's management to use
many judgments to estimate the timing and amount of future taxable profits, taking into account tax planning
strategies, so as to determine the amount of deferred income tax assets to be recognized.
(8) Income tax
In the normal operating activities of the Company, the ultimate tax treatment and calculation of certain
transactions are subject to certain uncertainties. Whether some items can be disbursed before tax requires the
approval of the tax authorities. If the final determination of these tax matters differs from the amounts initially
estimated, the difference will have an impact on current and deferred income taxes in the period in which they are
finally determined.
35. Changes in Main Accounting Policies and Estimates
(1) Change of Accounting Policies
√ Applicable □ Not applicable
Changes to the accounting policies and why Approval process Remark
The Ministry of Finance issued the Accounting The 10th meeting of the 9th
Standards for Business Enterprises No.21-Leases Board of Directors held on
(Revised) in 2018, requiring that enterprises listed August 16, 2021
both domestically and abroad and overseas listed
enterprises preparing financial statements in
accordance with the International Financial
Reporting Standards or the Accounting Standards for
Business Enterprises shall implement it since 1
January 2019 and that others carry it out since 1
January 2021.
In 2018, the Ministry of Finance issued the revised Accounting Standards for Business Enterprises No. 21 --
Leases (referred to as the "New Lease Standards"). The new lease standards require the lessee to recognize the
right to use assets and lease liabilities, as well as depreciation and interest expenses, for all leases except
short-term leases and low-value asset leases.
Since January 1, 2021, the Company has conducted accounting treatment in accordance with the newly revised
lease standards. For contracts existing prior to the first execution, the Company has chosen not to re-evaluate
149
Changchai Company, Limited Annual Report 2021
whether they are leases or include leases, and will not adjust the information for comparable periods in accordance
with the cohesion provisions. Adopting the newly revised leasing standards The newly revised leasing standards
have no significant impact on the company's net profit, total assets and net assets of the current and early period,
and there is no adjustment of the amount of retained earnings at the beginning of the period and other relevant
items in the financial statements.
(2) Changes in Accounting Estimates
□ Applicable √ Not applicable
(3) Adjustments to the Financial Statements at the Beginning of the First Execution Year of any New
Standards Governing Revenue or Leases since 2020
□ Applicable √ Not applicable
(4) Retroactive Adjustments to Comparative Data of Prior Years when First Execution of any New
Standards Governing Revenue or Leases since 2020
□ 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%, 5%
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%、2.5%
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
25%
Co., Ltd.
Changzhou Horizon Investment Co., Ltd. 25%
Changzhou Changchai Horizon Agricultural
25%
Equipment Co., Ltd.
Changzhou Fuji Changchai Robin Gasoline Engine
15%
Co., Ltd.
Jiangsu Changchai Machinery Co., Ltd. 25%
Changzhou Xingsheng Real Estate Management Co.,
2.5%
Ltd.
2. Tax Preference
On 30 November 2021, 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
150
Changchai Company, Limited Annual Report 2021
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
Taxation about the Preferential Tax Policies for the Western Development and Ministry of Finance Announcement
No. 23 [2020] Announcement of the Ministry of Finance, the State Administration of Taxation and the National
Development and Reform Commission on Continuing the Enterprise Income Tax Policy for the Great 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 145,594.98 287,505.91
Bank deposits 561,746,767.12 620,966,786.57
Other monetary assets 146,074,316.64 139,473,930.37
Total 707,966,678.74 760,728,222.85
Of which: Total amount deposited
overseas
Total amount of
restriction in use by mortgage, 145,564,457.15 130,788,682.35
pledge or freeze
At the period-end, the restricted monetary assets of the Company was RMB145,564,457.15, of which
RMB141,773,647.60 was the cash deposit for bank acceptance bills, RMB2,993,220.00 was cash deposit for L/G,
and RMB797,589.55 was cash deposit for environment.
2. Trading Financial Assets
Unit: RMB
Item Ending balance Beginning balance
Financial assets at fair value
404,053,261.57 11,500,272.00
through profit or loss
Of which: Stocks 121,940,343.76
Forward settlement 200,272.00
Financial products 282,112,917.81 11,300,000.00
Total 404,053,261.57 11,500,272.00
151
Changchai Company, Limited Annual Report 2021
3. Notes Receivable
(1) Notes Receivable Listed by Category
Unit: RMB
Item Ending balance Beginning balance
Bank acceptance bill 334,311,236.78 600,140,938.05
Total 334,311,236.78 600,140,938.05
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 135,391,302.15
Total 135,391,302.15
(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
50,43 44,05 6,383, 33,70 31,807
which bad debt 94.38 1,895,5
7,453. 9.10 4,367. 87.34 086.4 3,039. 5.98% ,452.8
provision % 86.83
63 15 8 72 9
separately
accrued
Of which:
152
Changchai Company, Limited Annual Report 2021
Accounts
receivable for
504,0 135,2 368,8 529,4 134,22
which bad debt 94.02 25.35 395,258
92,72 90.90 66,68 26.83 26,04 86,38 7,952.
provision % % ,429.66
0.08 0.08 0.00 2.09 43
accrued by
group
Of which:
Accounts
receivable for
which bad debt 504,0 135,2 368,8 529,4 134,22
94.02 25.35 395,258
provision 92,72 90.90 66,68 26.83 26,04 86,38 7,952.
% % ,429.66
accrued by 0.08 0.08 0.00 2.09 43
credit risk
features group
554,5 179,3 375,2 563,1 166,03
100.0 100.00 29.48 397,154
Total 30,17 21,04 32.34 09,12 89,42 5,405.
0 % % ,016.49
3.71 7.23 6.48 1.81 32
Account receivables withdrawn bad debt provision separately with significant amount at the period end:
Unit: RMB
Ending balance
Name Carrying Bad debt Withdrawal
Reason of withdrawal
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 2,797,123.26 2,194,980.28 78.47% Expected to difficultly recover
Customer 5 3,633,081.23 2,122,165.73 58.41% Expected to difficultly recover
Customer 6 2,584,805.83 2,584,805.83 100.00% Difficult to recover
Customer 7 1,523,110.59 1,523,110.59 100.00% Difficult to recover
Customer 8 1,511,937.64 302,387.53 20.00% Expected to difficultly recover
Customer 9 3,780,509.60 720,031.71 19.05% Expected to difficultly recover
Customer 10 1,962,873.80 1,962,873.80 100.00% Difficult to recover
Customer 11 2,790,920.00 2,790,920.00 100.00% Difficult to recover
Customer 12 2,025,880.18 2,025,880.18 100.00% Difficult to recover
Customer 13 2,589,892.74 2,589,892.74 100.00% Difficult to recover
Customer 14 2,837,045.23 2,837,045.23 100.00% Difficult to recover
Customer 15 5,972,101.90 5,972,101.90 100.00% Difficult to recover
Customer 16 4,592,679.05 4,592,679.05 100.00% Difficult to recover
Total 48,190,060.91 41,806,974.43 -- --
Accounts receivable for which bad debt provision accrued by credit risk features group:
Unit: RMB
153
Changchai Company, Limited Annual Report 2021
Ending balance
Aging
Carrying amount Bad debt provision Withdrawal proportion
Within 1 year 349,034,264.26 6,980,685.29 2.00%
1 to 2 years 22,333,500.04 1,116,675.00 5.00%
2 to 3 years 2,363,804.88 354,570.74 15.00%
3 to 4 years 2,689,676.16 806,902.85 30.00%
4 to 5 years 4,159,071.34 2,495,442.80 60.00%
Over 5 years 123,512,403.40 123,512,403.40 100.00%
Total 504,092,720.08 135,266,680.08 --
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) 353,357,486.52
1 to 2 years 45,104,892.94
2 to 3 years 4,591,959.37
Over 3 years 151,475,834.88
3 to 4 years 4,639,425.72
4 to 5 years 6,695,361.09
Over 5 years 140,141,048.07
Total 554,530,173.71
(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 24,084,034.50 147,611.25 11,689,508.99 44,054,367.15
withdrawn
separately
154
Changchai Company, Limited Annual Report 2021
Bad debt
provision
134,227,952.43 27,517,871.70 26,479,144.05 135,266,680.08
withdrawn by
group
Total 166,035,405.32 51,601,906.20 147,611.25 38,168,653.04 179,321,047.23
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.
Unit: RMB
Item Verified amount
Accounts receivable with actual verification 38,168,653.04
Of which the verification of significant accounts receivable:
Unit: RMB
Nature Arising
of the from
Name of the accou Verified Reason for related-pa
Verification procedures performed
entity nts amount verification rty
receiv transactio
able ns or not
Customer 1 997,047.83 The account age The Company held the 10th
Customer 2 516,384.40 of the debtor is Meeting of the 9th Board of
Customer 3 5,359,381.00 more than 5 Directors and the 10th Meeting of
Customer 4 5,309,605.00 years, and the the 9th Supervisory Committee on
Customer 5 3,662,926.13 debtor has no 16 August 2021 and approved the
Customer 6 3,279,100.00 assets to pay off Proposal on Verification of Some
Accou
Customer 7 2,295,898.35 due to the Accounts Receivable；On
nts
Customer 8 1,617,988.01 cancellation or December 23, 2021, the 30th Not
receiv
Customer 9 707,050.39 debt meeting of the board of 2nd
able
Customer 10 612,001.02 restructuring of Directors of Changzhou Changchai
Customer 11 583,558.66 the other party, Benniu Diesel Engine Fittings Co.,
bankruptcy Ltd. decided to review and approve
Customer 12 533,146.26
liquidation or the Proposal on the write-off of
Customer 13 978,233.10
judicial part of receivables by Changzhou
Customer 14 1,217,860.04 litigation. Changniu Machinery Co., LTD.
Total -- 27,670,180.19 -- -- --
(4) Top 5 of the Ending Balance of the Accounts Receivable 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 1 174,635,898.30 31.49% 3,492,717.97
Customer 2 64,375,015.92 11.61% 1,287,500.32
Customer 3 37,370,796.27 6.74% 747,415.93
Customer 4 18,082,456.14 3.26% 361,649.12
Customer 5 8,152,568.83 1.47% 163,051.38
155
Changchai Company, Limited Annual Report 2021
Total 302,616,735.46 54.57%
5. Accounts Receivable Financing
Unit: RMB
Item Ending balance Beginning balance
Bank acceptance bills 497,388,826.02
Total 497,388,826.02
Changes of accounts receivable financing and fair value thereof in the Reporting Period
√ Applicable □ Not applicable
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
financing.
□ Applicable √ Not applicable
Other notes:
The Company discounts and endorses a portion of its bank acceptances based on its routine fund management
needs, and the conditions for derecognition are met, so the bank acceptances are classified as financial assets
measured at fair value whose change is included in other comprehensive income.
On 31 December 2021, there was no bank acceptance for which bad debt provision accrued separately in the
Company. The Company measures the provision of bad debt provision on the basis of expected credit losses
throughout the duration. The Company believes that the credit risk characteristics of the bank acceptances it holds
are similar, and there was no bank acceptance for which bad debt provision accrued separately. In addition, there
was no significant credit risk in the bank acceptance, and no significant loss would be caused by bank defaults.
(1) Accounts receivable financing which had endorsed by the Company or had discounted but had not due at the
period-end
Amount of recognition Amount of not terminated
Item
termination at the period-end recognition at the period-end
Bank acceptance bill 214,422,574.14
Total 214,422,574.14
6. Prepayments
(1) List by Aging Analysis
Unit: RMB
Ending balance Beginning balance
Aging
Amount Proportion Amount Proportion
Within 1 year 6,706,970.55 81.82% 7,039,656.05 75.23%
1 to 2 years 94,583.55 1.15% 641,762.79 6.86%
2 to 3 years 362,397.67 4.42% 673,819.29 7.20%
Over 3 years 1,033,466.62 12.61% 1,002,602.620 10.71%
Total 8,197,418.39 -- 9,357,840.75 --
156
Changchai Company, Limited Annual Report 2021
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 RMB2,411,854.81 accounting for 29.42% of the total ending balance of prepayments.
7. Other Receivables
Unit: RMB
Item Ending balance Beginning balance
Interest receivable
Dividend receivable
Other receivables 19,515,350.52 6,212,062.80
Total 19,515,350.52 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 1,299,600.00 4,200.00
Intercourse funds 35,889,738.80 22,967,220.99
Petty cash and borrowings by
1,184,204.41 1,359,483.08
employees
Other 13,630,284.64 13,806,779.19
Total 52,003,827.85 38,137,683.26
2) Withdrawal of Bad Debt Provision
Unit: RMB
First stage Second stage Third stage
Expected loss in Expected loss in
Expected credit
Bad debt provision the duration (credit the duration Total
loss of the next
impairment not (credit impairment
12 months
occurred) occurred)
Balance of 1 January
31,925,620.46 31,925,620.46
2021
Balance of 1 January
2021 in the Current
Period
--Transfer to Second
-26,783,142.19 26,783,142.19
stage
-- Transfer to Third stage -5,039,368.41 5,039,368.41
-- Reverse to Second
stage
-- Reverse to First stage
Withdrawal of the
184,499.59 674,822.50 859,322.09
Current Period
157
Changchai Company, Limited Annual Report 2021
Reversal of the Current
296,465.22 296,465.22
Period
Write-offs of the Current
Period
Verification of the
Current Period
Other changes
Balance of 30 December
287,609.45 26,486,676.97 5,714,190.91 32,488,477.33
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) 17,631,994.08
1 to 2 years 1,416,120.16
2 to 3 years 116,820.58
Over 3 years 32,838,893.03
3 to 4 years 396,819.78
4 to 5 years 1,119,890.57
Over 5 years 31,322,182.68
Total 52,003,827.85
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 Ending
Category Withdraw Reversal or Write-
balance Other balance
al recovery off
Bad debt
provision for 674,822.5
5,039,368.41 5,714,190.91
which accrued 0
separately
Bad debt
provision for
26,886,252.05 111,965.63 26,774,286.42
which accrued by
group
674,822.5
Total 31,925,620.46 111,965.63 32,488,477.33
0
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
158
Changchai Company, Limited Annual Report 2021
Proportion to
Ending
Ending ending balance
Name of the entity Nature Aging balance of bad
balance of other
debt provision
receivables%
Interco
Changzhou
urse 2,940,000.00 Over 5 years 5.65% 2,940,000.00
Compressor Factory
funds
Interco
Changchai Group
urse 2,853,188.02 Over 5 years 5.49% 2,853,188.02
Imp. & Exp. Co., Ltd.
funds
Changzhou New Interco
District Accounting urse 1,626,483.25 Over 5 years 3.13% 1,626,483.25
Center funds
Interco 1,140,722.16
Changchai Group
urse 1,140,722.16 Over 5 years 2.19%
Settlement Center
funds
Changzhou Huadi Engine 53,270.00
Engineering ering 1,065,400.00 1-2 years 2.05%
Guarantee Co., Ltd. deposit
Total 9,625,793.43 18.51% 8,613,663.43
8. 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 148,617,321. 141,356,757. 134,712,519. 129,153,006.
7,260,564.47 5,559,513.66
materials 85 38 83 17
Materials
13,877,280.6 13,877,280.6 14,065,866.5 13,996,989.9
processed on 68,876.57
0 0 2 5
commission
Goods in 119,354,374. 15,534,236.3 103,820,137. 134,454,109. 18,512,449.0 115,941,660.
process 14 5 79 88 8 80
Finished 403,855,588. 13,029,104.2 390,826,484. 361,975,004. 15,261,416.1 346,713,588.
goods 94 6 68 89 7 72
Low priced
and easily 1,203,097.73 1,203,097.73 1,906,803.53 1,031,708.62 875,094.91
worn articles
686,907,663. 35,823,905.0 651,083,758. 647,114,304. 40,433,964.1 606,680,340.
Total
26 8 18 65 0 55
159
Changchai Company, Limited Annual Report 2021
(2) Provision for inventory depreciation and provision for impairment of contract performance costs
Unit: RMB
Increase Decrease
Beginning
Item Reversal or Ending balance
balance Withdrawal Other Other
write-off
Raw materials 5,559,513.65 5,635,488.24 3,934,437.42 7,260,564.47
Materials
processed on 68,876.57 68,876.57
commission
Goods in
18,512,449.09 4,137,802.16 7,116,014.90 15,534,236.35
process
Finished goods 15,261,416.17 2,232,311.91 13,029,104.26
Low priced and
easily worn 1,031,708.62 1,031,708.62
articles
Total 40,433,964.10 9,773,290.40 14,383,349.42 35,823,905.08
(3) There Was No Capitalized Borrowing Expense in the Ending Balance of Inventories
9. Other Current Assets
Unit: RMB
Item Ending balance Beginning balance
The VAT tax credits 37,806,274.29 22,534,134.72
Private placement of intermediary
2,358,490.56
agency fees
Prepaid corporate income tax 6,143,886.15 2,240,396.88
Prepaid expense 110,662.13 80,070.32
Other 86,270.24
Total 44,060,822.57 27,299,362.72
10. Investments in Debt Obligations
Unit: RMB
Ending balance Beginning balance
Item Carrying Falling price Carrying Carrying Falling price Carrying
amount reserves value amount reserves value
Three-year
37,898,226.3 37,898,226.3
fixed term
9 9
deposit
37,898,226.3 37,898,226.3
Total
9 9
Significant investments in debt obligations
Unit: RMB
Item Ending balance Beginning balance
160
Changchai Company, Limited Annual Report 2021
Actual Actual
Par Coupon Maturity Par Coupon Maturity
interest interest
value rate date value rate date
rate rate
Three-year fixed 37,000,0 26 April
3.80%
term deposit 00.00 2024
37,000,0
Total —— —— —— —— —— ——
00.00
Changes of carrying amount with significant amount changed of loss provision in the reporting period
□ Applicable √ Not applicable
11. 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
II. Associated enterprises
Beijin
g
Tsingh
ua
Indust
rial 44,182
0.00 0.00
Invest .50
ment
Mana
gemen
t Co.,
Ltd.
Subtot 44,182
0.00 0.00
al .50
44,182
Total 0.00 0.00
.50
12. Other Equity Instrument Investment
Unit: RMB
161
Changchai Company, Limited Annual Report 2021
Item Ending balance Beginning balance
Changzhou Synergetic Innovation Private Equity
146,375,646.53 102,198,950.87
Fund (Limited Partnership)
Other equity instrument investment measured by
633,502,000.00 582,939,000.00
fair value
Total 779,877,646.53 685,137,950.87
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
455,296,000.00
Ltd. investment
Non-trading equity
Bank of Jiangsu 7,394,400.00 93,636,000.00
investment
Changzhou
Synergetic
Innovation Non-trading equity
46,375,646.53
Private Equity investment
Fund (Limited
Partnership)
Other notes:
The corporate securities of accommodation business still on lending at the period-end: 3,276,000 shares of Foton
Motor Co., Ltd.
13. Other Non-current Financial Assets
Unit: RMB
Item Ending balance Beginning balance
Jiangsu Liance Electromechanical Technology
7,200,000.00
Co., Ltd.
Kailong High Technology Co., Ltd. 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. 160,744.76
Hebei Songhe Renewable Resources Co., Ltd. 104,699.44
Anhui Haofang Electromechanical Co., Ltd. 89,987.14
Jiangsu Horizon New Energy Technology 112,500,000.00 52,500,000.00
162
Changchai Company, Limited Annual Report 2021
Co., Ltd.
Total 112,500,000.00 98,732,938.63
14. 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 5,444,908.38 5,444,908.38
(1) Outsourcing
(2) Transfer from inventories/fixed
5,444,908.38 5,444,908.38
assets/construction in progress
(3) Enterprise combination increase
3. Decreased amount of the period
(1) Disposal
(2) Other transfer
4. Ending balance 93,077,479.52 93,077,479.52
II. Accumulative depreciation and
accumulative amortization
1. Beginning balance 41,393,245.11 41,393,245.11
2. Increased amount of the period 7,086,979.20 7,086,979.20
(1) Withdrawal or amortization 2,208,340.80 2,208,340.80
(2) Transferred into 4,878,638.40 4,878,638.40
3. Decreased amount of the period
(1) Disposal
(2) Other transfer
4. Ending balance 48,480,224.31 48,480,224.31
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 44,597,255.21 44,597,255.21
2. Beginning carrying value 46,239,326.03 46,239,326.03
163
Changchai Company, Limited Annual Report 2021
15. Fixed Assets
Unit: RMB
Item Ending balance Beginning balance
Fixed assets 402,915,521.65 454,181,555.68
Disposal of fixed assets
Total 402,915,521.65 454,181,555.68
(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 2,893,957.93 24,394,538.81 746,936.13 1,132,052.80 29,167,485.67
period
(1) Purchase 890,191.23 1,758,130.59 499,325.51 553,980.35 3,701,627.68
(2) Transfer
from
2,003,766.70 22,636,408.22 247,610.62 578,072.45 25,465,857.99
construction in
progress
(3) Enterprise
combination
increase
3. Decreased
amount of the 10,947,523.68 8,814,883.34 2,176,590.76 1,901,608.94 23,840,606.72
period
(1) Disposal or
5,502,615.30 8,814,883.34 2,176,590.76 1,901,608.94 18,395,698.34
scrap
(2) Transfer out 5,444,908.38 5,444,908.38
4. Ending 1,012,550,535.1
457,375,409.96 15,509,653.38 41,354,836.97 1,526,790,435.43
balance 2
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
164
Changchai Company, Limited Annual Report 2021
2. Increased
amount of the 16,282,369.02 55,623,684.44 937,276.73 1,076,506.45 73,919,836.64
period
(1) Withdrawal 16,282,369.02 55,623,684.44 937,276.73 1,076,506.45 73,919,836.64
3. Decreased
amount of the 4,911,488.40 8,529,943.08 2,002,885.69 1,882,606.49 17,326,923.66
period
(1) Disposal or
32,850.00 8,529,943.08 2,002,885.69 1,882,606.49 12,448,285.26
scrap
(2) Transfer out 4,878,638.40 4,878,638.40
4. Ending
309,538,003.03 765,592,089.06 12,399,386.82 35,864,760.62 1,123,394,239.53
balance
III.Depreciation
reserves
1. Beginning
480,674.25 480,674.25
balance
2. Increased
amount of the
period
(1) Withdrawal
3. Decreased
amount of the
period
(1) Disposal or
scrap
4. Ending
480,674.25 480,674.25
balance
IV. Carrying
value
1. Ending
147,837,406.93 246,477,771.81 3,110,266.56 5,490,076.35 402,915,521.65
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
(2) List of Temporarily Idle Fixed Assets
Original Accumulative Depreciation
Item Carrying value Note
carrying value depreciation reserves
Machinery
561,589.50 80,915.25 480,674.25
equipment
16. Construction in Progress
Unit: RMB
165
Changchai Company, Limited Annual Report 2021
Item Ending balance Beginning balance
Construction in progress 268,417,880.66 44,844,896.77
Engineering materials 1,887,810.25 21,657,535.64
Total 270,305,690.91 66,502,432.41
(1) List of Construction in Progress
Unit: RMB
Ending balance Beginning balance
Item Carrying Depreciatio Carrying Carrying Depreciati Carrying
amount n reserves value amount on reserves value
Expansion
capacity of
multi-cylinde 1,097,435.90 1,097,435.90 1,128,887.90 1,128,887.90
r (The 2nd
Period)
Innovation
capacity
construction
3,714,601.76 3,714,601.76
of
technology
center
Relocation
project of 254,748,122.4 254,748,122.4
40,307,243.35 40,307,243.35
light engine 9 9
and casting
Equipment to
be installed
8,857,720.51 8,857,720.51 3,408,765.52 3,408,765.52
and payment
for projects
268,417,880.6 268,417,880.6
Total 44,844,896.77 44,844,896.77
6 6
(2) Changes in Significant Construction in Progress during the Reporting Period
Unit: RMB
Propo Of Capit
Accu
rtion which alizati
mulat
of : on
ed
Trans Other accu Amo rate
Begin Incre Endin amou Capit
ferred decre mulat Job unt of of
Budg ning ased g nt of al
Item in ased ed sched capita intere
et balan amou balan intere resou
fixed amou invest ule lized sts for
ce nt ce st rces
assets nt ment intere the
capita
in sts for Repor
lizati
constr the ting
on
uctio Repor Perio
166
Changchai Company, Limited Annual Report 2021
ns to ting d
budge Perio
t d
Expa
nsion
capac
ity of
multi- 79,00 1,128 1,097 Unco
31,45 Self-r
cylin 0,000 ,887. ,435. mplet
2.00 aised
der .00 90 90 ed
(The
2nd
Perio
d)
Innov
ation
capac Self-r
ity aised
96,06 3,714 3,714 Unco
constr 3.87 funds
6,200 ,601. ,601. mplet
uctio % and
.00 76 76 ed
n of raised
techn fund
ology
center
Reloc
ation
Self-r
proje
aised
ct of 1,000 40,30 214,4 254,7 Unco
25.47 funds
light ,118,7 7,243 40,87 48,12 mplet
% and
engin 00.00 .35 9.14 2.49 ed
raised
e and
fund
castin
g
Noise
reduc
tion
1,972 1,972
renov Comp Self-r
,314. ,314.
ation leted aised
70 70
of the
house
s
1,175 43,40 218,1 2,003 259,5
Total ,184, 8,445 55,48 ,766. 60,16 -- -- --
900.0 .95 0.90 70 0.15
167
Changchai Company, Limited Annual Report 2021
0
(3) Engineering Materials
Unit: RMB
Ending balance Beginning balance
Depreciati
Item Carrying Carrying Carrying Depreciation Carrying
on
amount value amount reserves value
reserves
Engineerin
1,887,810.25 1,887,810.25 21,657,535.64 21,657,535.64
g materials
Total 1,887,810.25 1,887,810.25 21,657,535.64 21,657,535.64
17. Intangible Assets
(1) List of Intangible Assets
Unit: RMB
Trademark use
Item Land use right Software License fee Total
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 1,668,804.50 563,930.68 2,232,735.18
(1) Purchase 1,668,804.50 563,930.68 2,232,735.18
(2) Internal R&D
(3) Business
combination increase
3. Decreased amount of
the period
(1) Disposal
4. Ending balance 206,783,546.68 15,736,719.66 5,488,000.00 1,650,973.47 229,659,239.81
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 4,259,967.94 977,672.47 548,799.96 162,180.61 5,948,620.98
(1) Withdrawal 4,259,967.94 977,672.47 548,799.96 162,180.61 5,948,620.98
3. Decreased amount of
the period
(1) Disposal
4. Ending balance 58,805,643.96 12,856,960.12 2,652,533.14 189,356.68 74,504,493.90
III. Depreciation
reserves
1. Beginning balance
168
Changchai Company, Limited Annual Report 2021
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 147,977,902.72 2,879,759.54 2,835,466.86 1,461,616.79 155,154,745.91
2. Beginning carrying
value 152,237,870.66 2,188,627.51 3,384,266.82 1,059,866.72 158,870,631.71
18. Long-term Prepaid Expenses
Item Beginning Increase Amortized Decrease Ending balance
balance amount
Furniture of
employee 13,693.20 13,693.20
dormitory, etc.
Trademark
114,257.43 3,912.13 110,345.30
renewal fee
Total 13,693.20 114,257.43 17,605.33 110,345.30
19. 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 7,196,880.38 1,087,755.38 6,544,083.47 981,314.04
Deductible loss 59,064,221.02 9,085,419.14 21,670,394.08 3,250,559.11
Inventory falling
2,990,223.81 448,533.57
price reserves
Impairment of fixed
480,674.25 72,101.14
assets
Total 69,731,999.46 10,693,809.23 28,214,477.55 4,231,873.15
(2) Deferred Income Tax Liabilities Had Not Been Off-set
Unit: RMB
Item Ending balance Beginning balance
169
Changchai Company, Limited Annual Report 2021
Taxable temporary Deferred income Taxable temporary Deferred income
difference tax liabilities difference tax liabilities
Changes in fair
value of other
595,307,646.53 89,296,146.98 500,567,950.87 75,085,192.63
equity instrument
investment
Changes in fair
value of trading 89,101,335.36 22,064,042.06 18,481,109.00 4,600,250.05
financial assets
Changes in fair
value of other
36,250,000.00 5,437,500.00 2,500,000.00 375,000.00
non-current
financial assets
Assets evaluation
appreciation for
business
3,643,147.16 546,472.07 4,074,374.26 611,156.14
combination not
under the same
control
Total 724,302,129.05 117,344,161.11 525,623,434.13 80,671,598.82
(3) List of Unrecognized Deferred Income Tax Assets
Unit: RMB
Item Ending balance Beginning balance
Bad debt provision 204,612,644.18 191,416,942.31
Falling price reserves of
32,833,681.27 40,433,964.10
inventories
Deductible loss 14,716,019.78 13,352,584.61
Total 252,162,345.23 245,203,491.02
(4) Deductible Losses of Unrecognized Deferred Income Tax Assets will Due in the Following Years
Years Ending amount Beginning amount Note
2021 1,490,211.13
2022 434,000.66 769,219.70
2023 940,673.56 2,275,610.42
2024 6,538,363.99 6,538,363.99
2025 2,279,179.37 2,279,179.37
2026 4,523,802.20
Total 14,716,019.78 13,352,584.61 --
20. Other Non-current Assets
Unit: RMB
Item Ending balance Beginning balance
170
Changchai Company, Limited Annual Report 2021
Depreciati
Carrying Carrying Depreciation Carrying
on Carrying value
amount amount reserves value
reserves
Advances
19,971,006.5 19,971,006.5
payment of 4,543,240.88 4,543,240.88
6 6
equipments
19,971,006.5 19,971,006.5
Total 4,543,240.88 4,543,240.88
6 6
21. 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 5,000,000.00 10,000,000.00
Credit loans 5,000,000.00
Obligation to pay bills discounted
61,971,466.65
before maturity
Total 73,971,466.65 22,000,000.00
(2) There Was No Short-term Borrowings Overdue but Unpaid.
22. Notes Payable
Unit: RMB
Category Ending balance Beginning balance
Bank acceptance bill 550,774,400.00 595,346,000.00
Total 550,774,400.00 595,346,000.00
At the end of the current period, there were no notes payable due and not paid.
23. Accounts Payable
(1) List of Accounts Payable
Unit: RMB
Item Ending balance Beginning balance
Payment for goods 666,186,668.82 612,757,392.46
Total 666,186,668.82 612,757,392.46
(2) Significant Accounts Payable Aging over One Year
Item Ending balance Unpaid/ Un-carry-over reason
Supplier terminates cooperation,
Payment for goods 12,367,497.92
pending payment
Payment for equipment 1,845,062.03 Equipment warranty
171
Changchai Company, Limited Annual Report 2021
Total 14,212,559.95
24. Advances from Customers
Unit: RMB
Item Ending balance Beginning balance
Payment for goods 660,965.62 661,612.17
Total 660,965.62 661,612.17
There were no significant advances from customers aging over one year at the end of the period.
25. Contract Liabilities
Unit: RMB
Item Ending balance Beginning balance
Contract liabilities 26,864,081.97 35,944,517.15
Total 26,864,081.97 35,944,517.15
There were no significant contract liabilities aging over one year at the end of the period.
26. Payroll Payable
(1) List of Payroll Payable
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
I. Short-term salary 50,127,161.47 285,683,270.01 290,424,764.00 45,385,667.48
II.Post-employment
benefit-defined 32,595,783.09 32,595,783.09
contribution plans
III. Termination
benefits
IV. Current portion
of other benefits
Total 50,127,161.47 318,279,053.10 323,020,547.09 45,385,667.48
(2) List of Short-term Salary
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
1. Salary, bonus,
41,908,627.17 240,287,147.00 244,820,001.40 37,375,772.77
allowance, subsidy
2.Employee welfare 1,592.74 2,040,614.93 2,040,614.93 1,592.74
3. Social insurance 19,165,330.63 19,165,330.63
Of which: Medical
insurance 15,877,310.21 15,877,310.21
premiums
Work-related injury
1,747,668.07 1,747,668.07
insurance
172
Changchai Company, Limited Annual Report 2021
Maternity insurance 1,540,352.35 1,540,352.35
4. Housing fund 19,414,745.80 19,414,745.80
5.Labor union
budget and
8,216,941.56 4,775,431.65 4,984,071.24 8,008,301.97
employee education
budget
6. Short-term
absence with salary
7. Short-term profit
sharing scheme
Total 50,127,161.47 285,683,270.01 290,424,764.00 45,385,667.48
(3) List of Defined Contribution Plans
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
1. Basic pension
benefits 31,606,867.16 31,606,867.16
2. Unemployment
988,915.93 988,915.93
insurance
3. Enterprise
annuities
Total 32,595,783.09 32,595,783.09
27. Taxes Payable
Unit: RMB
Item Ending balance Beginning balance
VAT 372,401.11 461.22
Corporate income tax 470,363.07 531,557.38
Personal income tax 76,559.47 114,208.40
Urban maintenance and
957,520.42 879,346.31
construction tax
Property tax 1,160,865.33 94,863.50
Land use tax 1,026,217.69 100,135.19
Stamp duty 44,759.84 6,851.35
Education Surcharge 90,862.46 35,023.81
Comprehensive fees 1,075,134.76 1,075,134.76
Environmental protection tax 31,694.67 31,903.49
Total 5,306,378.82 2,869,485.41
28. Other Payables
Unit: RMB
Item Ending balance Beginning balance
173
Changchai Company, Limited Annual Report 2021
Interest payable
Dividends payable 3,891,433.83 3,891,433.83
Other payables 144,469,939.46 193,653,642.25
Total 148,361,373.29 197,545,076.08
(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
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 5,045,246.58 3,406,041.83
Intercourse funds among units 8,364,769.41 9,309,617.95
Intercourse funds among
402,661.04 1,256,848.49
individuals
Sales discount and three
114,581,855.32 147,739,746.71
guarantees
Other 16,075,407.11 31,941,387.27
Total 144,469,939.46 193,653,642.25
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.
29. Other Current Liabilities
Unit: RMB
Item Ending balance Beginning balance
Sale service fee 460,437.94 365,047.65
Transportation storage fee 870,397.06 260,055.33
Electric charge 3,131,920.88 1,972,314.61
Tax to be transferred 2,250,515.65 2,636,529.53
Estimated share value added tax 3,989,913.45
174
Changchai Company, Limited Annual Report 2021
Obligation to pay bills transferred
72,391,302.15
before maturity
Other withholding expenses 5,843,705.66
Total 88,938,192.79 5,233,947.12
30. Deferred Income
Unit: RMB
Beginning Reason for
Item Increase Decrease Ending balance
balance formation
Government Government
56,949,737.60 -14,970,000.00 2,364,382.20 39,615,355.40
grants appropriation
Total 56,949,737.60 -14,970,000.00 2,364,382.20 39,615,355.40 --
Item involving government grants:
Unit: RMB
Amount
recorded Amount
Amou into recorded Amount Related
Beginni nt of non-oper into other offset Other Ending to
Item ng new ating income in cost in the chan balanc assets/re
balance subsid income in the Reporting ges e lated
y the Reporting Period income
Reporting Period
Period
National major
project special -14,77 13,040
allocations- Flexible 28,770, 759,633.0 200,0 Related
0,000. ,367.0
processing production 000.00 0 00.00 to assets
line for cylinders of 00 0
diesel engines
18,513
19,179, 665,973.6 Related
Remove ,763.9
737.60 2 to assets
compensation 8
Research and
development and
industrialization
allocations of national 9,000,0 938,775.5 8,061, Related
III/IV standard 00.00 8 224.42 to assets
high-powered
efficient diesel engine
for agricultural use
-14,77 200, 39,615
56,949, 2,364,382.
Total 0,000. 000. ,355.4
737.60 20
00 00 0
175
Changchai Company, Limited Annual Report 2021
Notes: The national major special project - the flexible processing production line for diesel engine cylinder
blocks underwent comprehensive performance evaluation by the Industrial Development Promotion Center of the
Ministry of Industry and Information Technology (MIIT), and it was determined that the final appropriation
income was RMB13.8 million, with RMB28.77 million received from the country and the balance of RMB14.77
million returned to MIIT.
31. 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
Note: A non-public offering of up to 168,412,297 new shares was deliberated on and approved as a resolution of
the 8th Meeting of the 9th Board of Directors held on 13 April 2021 and the 2020 Annual General Meeting held on
7 May 2021 and approved by the Approval of the Non-public Offering of Shares of Changchai Co., Ltd. (CSRC
Permit [2020] No. 3374) issued by Changchai Company Limited the China Securities Regulatory Commission.
On June 16, 2021, the capital verification report "S.G. W [2021] B062" was issued by Gongzheng Tianye
Accounting Firm (Special General Partnership), confirming that the Company had issued 144,318,181 RMB
ordinary shares (A shares) in a non-public offering, with an additional paid-in capital (share capital) of
RMB144,318,181. The total amount raised was RMB634,999,996.40; the net amount raised after deducting
related issuance expenses of RMB14,334,262.43 was RMB620,665,733.97, which increased the capital reserve
(share capital premium) by RMB476,347,552.97. After this alteration, the total share capital was
RMB705,692,507.00. The Company has completed corresponding registration procedures for industrial and
commercial change on 17 September 2021.
32. 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
Other notes, including changes and reasons thereof: The increase in premium on stock for the current period is
shown in the paid-in capital statement.
33. Other Comprehensive Income
Unit: RMB
176
Changchai Company, Limited Annual Report 2021
Reporting Period
Less:
Record
Less: ed in
Recorded other
in other compre
comprehe hensiv Attribu
nsive e table to Attribu
Income
income in income owners table to
before Less: Endin
Beginni prior in prior of the non-co
taxatio Income g
Item ng period period Compa ntrollin
n in the tax balan
balance and and ny as g
Curren expens ce
transferre transfe the interest
t e
d in rred in parent s after
Period
profit or retaine after tax
loss in d tax
the earning
Current s in the
Period Curren
t
Period
I. Other comprehensive 506,0
425,482, 94,739, 14,210, 80,528,
income that will not be 11,49
758.24 695.66 954.35 741.31
reclassified to profit or loss 9.55
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 506,0
425,482, 94,739, 14,210, 80,528,
other equity instrument 11,49
758.24 695.66 954.35 741.31
investment 9.55
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
177
Changchai Company, Limited Annual Report 2021
investees that will be
reclassified to profit or loss
under equity method
Changes in fair value of
investment in other debt
obligations
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
506,0
Total of other 425,482, 94,739, 14,210, 80,528,
11,49
comprehensive income 758.24 695.66 954.35 741.31
9.55
34. Specific Reserve
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Safety production
18,812,986.55 4,023,200.24 4,023,236.75 18,812,950.04
cost
Total 18,812,986.55 4,023,200.24 4,023,236.75 18,812,950.04
35. Surplus Reserves
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Statutory surplus
312,294,673.24 8,692,957.32 320,987,630.56
reserves
Discretional surplus
13,156,857.90 13,156,857.90
reserves
Total 325,451,531.14 8,692,957.32 334,144,488.46
36. Retained Earnings
Unit: RMB
178
Changchai Company, Limited Annual Report 2021
Item Reporting Period Same period of last year
Beginning balance of retained earnings before
777,899,079.66 726,689,929.10
adjustments
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
103,006,232.54 52,432,443.05
Company as the parent
Less: Withdrawal of statutory surplus reserves 8,692,957.32 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
the Current Period
Ending retained earnings 872,212,354.88 777,899,079.66
List of adjustment of beginning retained earnings:
1) RMB0 beginning retained earnings was affected by retrospective adjustment conducted according to the
Accounting Standards for Business Enterprises and relevant new regulations.
2) RMB0 beginning retained earnings was affected by changes in accounting policies.
3) RMB0 beginning retained earnings was affected by correction of significant accounting errors.
4) RMB0 beginning retained earnings was affected by changes in combination scope arising from same control.
5) RMB0 beginning retained earnings was affected totally by other adjustments.
37. 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 2,404,119,747.06 2,051,932,677.42 2,252,479,553.51 1,918,486,625.85
Other operations 48,310,768.54 32,739,084.66 43,985,157.73 32,087,365.42
Total 2,452,430,515.60 2,084,671,762.08 2,296,464,711.24 1,950,573,991.27
Whether the lower of the audited net profit before and after deduction of non-recurring gains and losses is
negative
□ Yes √ No
Relevant information of revenue:
Unit: RMB
Category of contracts Segment 1
Product Types
179
Changchai Company, Limited Annual Report 2021
Of which:
Single-cylinder diesel engines 1,050,641,417.26
Multi-cylinder diesel engines 1,091,284,576.58
Other products 181,798,390.14
Accessories 80,395,363.08
Classified by business area
Of which:
Sales in domestic market 1,990,006,910.43
Export sales 414,112,836.63
Total 2,404,119,747.06
Information related to performance obligations: none
38. Taxes and Surtaxes
Unit: RMB
Item Reporting Period Same period of last year
Urban maintenance and
1,472,605.59 2,090,758.82
construction tax
Education surcharge 1,051,826.51 1,493,399.12
Property tax 6,157,554.67 4,573,282.78
Land use tax 5,226,882.22 3,752,947.49
Vehicle and vessel use tax 2,875.00 1,350.00
Stamp duty 969,210.59 698,047.82
Environment tax 204,133.44 221,775.24
Other 40,860.94 38,047.88
Total 15,125,948.96 12,869,609.15
39. Selling Expense
Unit: RMB
Item Reporting Period Same period of last year
Employee benefits 42,968,060.55 38,670,632.17
Office expenses 11,247,378.94 15,665,504.29
Sales promotional expense 1,435,536.25 6,859,494.25
Three guarantees 60,722,393.46 65,108,496.52
Transport charge 320,853.84
Other 548,067.28 2,068,151.39
Total 117,242,290.32 128,372,278.62
180
Changchai Company, Limited Annual Report 2021
40. Administrative Expense
Unit: RMB
Item Reporting Period Same period of last year
Employee benefits 51,646,790.82 54,275,945.07
Office expenses 9,359,397.93 10,970,658.73
Depreciation and amortization 9,925,872.31 10,255,597.50
Safety expenses 4,023,200.24 3,766,291.74
Repair charge 1,985,784.26 788,498.70
Inventory scrap and inventory loss
5,218,542.74
(profit)
Other 16,730,695.92 7,389,204.00
Total 98,890,284.22 87,446,195.74
41. Development Costs
Unit: RMB
Item Reporting Period Same period of last year
Direct input expense 49,871,973.96 43,808,908.87
Employee benefits 21,059,641.45 20,288,706.97
Depreciation and amortization 4,240,194.24 4,534,946.69
Design costs 250,000.00
Entrusted development charges 5,521,861.13 430,000.00
Other 1,446,613.36 3,196,218.55
Total 82,390,284.14 72,258,781.08
42. Finance Costs
Unit: RMB
Item Reporting Period Same period of last year
Interest expense 5,907,625.42 7,302,086.80
Less: Interest income 7,921,535.62 5,467,634.76
Net foreign exchange gains or
3,969,634.63 14,491,248.00
losses
Other -752,108.63 -557,389.72
Total 1,203,615.80 15,768,310.32
43. Other Income
Unit: RMB
Sources Reporting Period Same period of last year
181
Changchai Company, Limited Annual Report 2021
Government grants directly
recorded into the current profit or 4,234,711.29 5,848,842.03
loss
Government grants related to
2,364,382.20 1,914,373.62
deferred income
Others 34,238.89 45,516.87
44. 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
450,637.63 -25,036.13
financial assets
Dividend income from holding of other equity
7,394,400.00 5,004,000.00
instrument 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
Income from debt reorganization
Investment income from disposal of other
-221,711.92 149,821.58
non-current financial assets
Dividend income from holding of held-for-trading
189,085.80
financial assets
Dividend income from holding of other
non-current financial assets
Income from refinancing business 1,028,964.68 433,925.05
Investment income from financial products 2,292,008.67 753,991.35
Forward income from foreign exchange settlement 63,235.00 229,125.00
Accounts receivable financing-discount interest of
-1,869,322.91
bank acceptance bills
Total 9,327,296.95 6,545,826.85
182
Changchai Company, Limited Annual Report 2021
45. Gain on Changes in Fair Value
Unit: RMB
Sources Reporting Period Same period of last year
Held-for-trading financial assets 70,820,498.36 200,272.00
Other non-current financial assets 33,750,000.00 20,780,837.00
Total 104,570,498.36 20,981,109.00
46. Credit Impairment Loss
Unit: RMB
Item Reporting Period Same period of last year
Bad debt loss of other receivables -562,856.87 1,498,356.99
Bad debt loss of accounts
-51,454,294.95 880,273.69
receivable
Total -52,017,151.82 2,378,630.68
47. Asset Impairment Loss
Unit: RMB
Item Reporting Period Same period of last year
I. Bad debt loss
II. Loss on inventory valuation and contract
-8,676,024.20 -11,155,930.76
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 -8,676,024.20 -11,155,930.76
48. Asset Disposal Income
Unit: RMB
Sources Reporting Period Same period of last year
Disposal income of fixed assets 155,515.49 229,121.29
183
Changchai Company, Limited Annual Report 2021
49. 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 scrapping
5,825.24 5,825.24
fixed assets
Income from scrapping
projects under 2,089,369.81 2,089,369.81
construction
Income from penalty 398,143.00 267,439.00 398,143.00
Accounts not required to
1,429,558.71 399,049.91 1,429,558.71
be paid
Other 115,000.00 380,625.30 115,000.00
Total 4,037,896.76 1,047,114.21 4,037,896.76
50. 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
22,405.72 34,356.44 22,405.72
non-current assets
Compensation for quality 507,265.91 2,085,438.03 507,265.91
Donation 250,000.00
Other 1,107,361.42 260,002.86 1,107,361.42
Total 1,637,033.05 2,629,797.33 1,637,033.05
51. Income Tax Expense
(1) List of Income Tax Expense
Unit: RMB
Item Reporting Period Same period of last year
Current income tax expense 443,034.91 838,369.52
Deferred income tax expense 15,999,671.86 1,247,230.81
Adjustment of income tax of prior
-4,073,920.19
years
Total 12,368,786.58 2,085,600.33
(2) Adjustment Process of Accounting Profit and Income Tax Expense
Unit: RMB
184
Changchai Company, Limited Annual Report 2021
Item Reporting Period
Profit before taxation 115,300,660.95
Current income tax expense accounted at statutory/applicable tax rate 17,295,099.15
Influence of applying different tax rates by subsidiaries 6,503,621.47
Influence of income tax before adjustment -4,073,920.19
Influence of non-taxable income -1,156,431.45
Influence of non-deductable costs, expenses and losses 812,440.52
Influence of deductable losses of unrecognized deferred income tax at the
-89,988.54
beginning of the Reporting Period
Influence of deductable temporary difference or deductable losses of
1,898,604.18
unrecognized deferred income tax assets in the Reporting Period
Tax preference from eligible expenditures -8,820,638.56
Income tax expense 12,368,786.58
52. Other Comprehensive Income
See Note 33 for details.
53. Cash Flow Statement
(1) Cash Generated from Other Operating Activities
Unit: RMB
Item Reporting Period Same period of last year
Subsidy and appropriation 4,240,292.03 5,857,679.00
Other intercourses in cash 6,603,764.28 5,144,619.79
Interest income 7,921,535.62 5,467,634.76
Other 3,871,134.26 507,167.41
Total 22,636,726.19 16,977,100.96
(2) Cash Used in Other Operating Activities
Unit: RMB
Item Reporting Period Same period of last year
Selling and administrative expense
101,602,750.69 120,289,403.78
paid in cash
Handling charges 1,220,112.47 1,776,237.12
Other 15,807,386.22 777,383.09
Other transactions 23,381,748.58 690,007.30
Total 142,011,997.96 123,533,031.29
(3) Cash Generated from Other Investing Activities
Unit: RMB
Item Reporting Period Same period of last year
Deposit of construction unit 336,150.00
Total 336,150.00
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Changchai Company, Limited Annual Report 2021
(4) Cash Used in Other Investing Activities
Unit: RMB
Item Reporting Period Same period of last year
Project margin 4,141,850.71
Accounts receivable
financing-discount interest from bank 1,869,322.91
acceptance bills
Total 1,869,322.91 4,141,850.71
(5) Cash Generated from Other Financial Activities
Unit: RMB
Item Reporting Period Same period of last year
Discount of undue bank acceptance bills
58,971,466.65
with low credit rating
Total 58,971,466.65
(6) Cash Used in Other Financial Activities
Unit: RMB
Item Reporting Period Same period of last year
Intermediary agency fees for private
10,849,056.61 2,500,000.00
placement
Discount interest from bank
3,772,107.02
acceptance bills
Total 14,621,163.63 2,500,000.00
54. 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 102,931,874.37 52,294,751.19
Add: Provision for impairment of assets 60,693,176.02 8,777,300.08
Depreciation of fixed assets, of oil and gas assets, of
76,128,177.44 80,616,241.38
productive living assets
Depreciation of right-of-use assets
Amortization of intangible assets 4,711,649.34 5,129,822.75
Amortization of long-term deferred expenses 17,605.33 39,804.60
Losses on disposal of fixed assets, intangible assets and other
-155,515.49 -229,121.29
long-term assets (gains by “-”)
Losses on the scrapping of fixed assets (gains by “-”) -2,072,789.33 34,356.44
Losses on the changes in fair value (gains by “-”) -104,570,498.36 -20,981,109.00
186
Changchai Company, Limited Annual Report 2021
Financial expenses (gains by “-”) 8,122,828.51 16,911,546.38
Investment losses (gains by “-”) -9,327,296.95 -6,545,826.85
Decrease in deferred income tax assets (increase by “-”) -6,461,936.08 -3,208,010.11
Increase in deferred income tax liabilities (decrease by “-”) 22,461,607.94 4,455,240.92
Decrease in inventory (increase by “-”) -53,079,441.83 -144,477,102.41
Decrease in accounts receivable from operating activities
-286,670,314.47 16,892,902.36
(increase by “-”)
Increase in payables from operating activities (decrease by
-79,052,905.74 278,992,494.07
“-”)
Other -36,906,635.98
Net cash flows generated from operating activities -266,323,779.30 251,796,654.53
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 562,402,221.59 629,939,540.50
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 -67,537,318.91 83,979,542.30
(2) Cash and Cash Equivalents
Unit: RMB
Item Ending balance Beginning balance
I. Cash 562,402,221.59 629,939,540.50
Including: Cash on hand 145,594.98 287,505.91
Bank deposit on demand 561,746,767.12 620,966,786.57
Other monetary assets on demand 509,859.49 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
562,402,221.59 629,939,540.50
equivalents
Of which: Cash and cash equivalents with
restriction in use for the Company as the
parent or subsidiaries of the Group
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Changchai Company, Limited Annual Report 2021
55. Assets with Restricted Ownership or Right to Use
Unit: RMB
Item Ending carrying value Reason for restriction
As cash deposit for bank acceptance bill
Monetary assets 145,564,457.15
and for environment
Houses and buildings 1,760,577.22 Mortgaged for borrowings from banks
Land use right 911,388.42 Mortgaged for borrowings from banks
Machinery equipment 30,560,526.26 Mortgaged for borrowings from banks
Obligation to pay bills discounted
61,971,466.65
before maturity
Undue transferred bill payment 72,391,302.15
obligation
Total 313,159,717.85
56. 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 -- --
Of which: USD 16,223,008.73 6.3757 103,433,038.04
EUR
HKD 285,401.45 0.8176 233,344.23
SGD 54,427.95 4.7179 256,785.63
Accounts receivable -- --
Of which: USD 10,773,556.74 6.3757 68,688,965.83
GBP -67,212.27 8.6064 -578,455.68
Accounts payable
Of which: USD 302.60 6.3757 1,929.29
Contract liabilities
Of which: USD 784,613.15 6.3757 5,002,458.10
EUR 117,145.84 7.2197 845,757.83
(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
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Changchai Company, Limited Annual Report 2021
57. Government Grants
(1) Basic Information on Government Grants
Unit: RMB
Amount recorded in
Category Amount Listed items the current profit or
loss
Industrial and information industry
70,000.00 Other income 70,000.00
transformation and upgrading subsidies
Project fund for the first purchase of special
innovative products for industrial high-quality 200,000.00 Other income 200,000.00
development and application promotion
Changzhou industrial Internet special fund 100,000.00 Other income 100,000.00
Subsidy for Changzhou Strong Quality City
100,000.00 Other income 100,000.00
Award
Subsidy for stabilizing posts 61,713.39 Other income 61,713.39
Business development fund 693,000.00 Other income 693,000.00
Discount interest for loans from Finance
Bureau for Science and Technology 1,391,000.00 Other income 1,391,000.00
Achievement Transformation Fund Project
Benniu Town 2020 Gas Boiler Low Nitrogen
20,000.00 Other income 20,000.00
Combustion Reconstruction Subsidy
Special fund for high-quality development 37,000.00 Other income 37,000.00
Tax contribution award 20,000.00 Other income 20,000.00
Funding for the first year of the demonstration
30,000.00 Other income 30,000.00
base for training advanced skilled personnel
Subsidies for training by work 468,621.90 Other income 468,621.90
Epidemic subsidy 100,000.00 Other income 100,000.00
Post-doctoral grants, outbound awards and site
120,000.00 Other income 120,000.00
establishment awards
Financial center subsidy 240,376.00 Other income 240,376.00
Innovation-driven rewards 30,000.00 Other income 30,000.00
Subsidy fund of New District Finance Bureau
13,000.00 Other income 13,000.00
award
Subsidy fund of New District Finance Bureau
540,000.00 Other income 540,000.00
award
Relocation compensation (replace Zou Village
13,344,397.90 Deferred income 267,333.48
with Hehai Road
Relocation compensation- Main workshop of
11,864,289.02 Deferred income 398,640.14
Hehai Road Base
National major project special allocations-
Flexible processing production line for 13,800,000.00 Deferred income 759,633.00
cylinders of diesel engine
189
Changchai Company, Limited Annual Report 2021
Appropriation or research and development
and industrialization allocations of national
10,000,000.00 Deferred income 938,775.58
III/IV standard high-powered efficient diesel
engine for agricultural use
Total 53,243,398.21 6,599,093.49
Return of Government Grants
√ Applicable □Not applicable
Item Amount Reason
National major project special
allocations- Flexible processing
14,770,000.00 See Note 30 for details
production line for cylinders of
diesel engine
VIII. Equity in Other Entities
1. Equity in Subsidiary
(1) Subsidiaries
Natur Holding percentage
Main Registrat
e of (%) Way of
Name operatin ion
busin Indirectl gaining
g place place Directly
ess y
Changchai Wanzhou Diesel Engine Chongq Chongqi Indus
60.00% Set-up
Co., Ltd. ing ng try
Changzhou Changchai Benniu Diesel Changz Changzh Indus
99.00% 1.00% Set-up
Engine Fittings Co., Ltd. hou ou try
Changzhou Horizon Investment Co., Changz Changzh Servi
100.00% Set-up
Ltd. hou ou ce
Changzhou Changchai Horizon Changz Changzh Indus
70.00% 25.00% Set-up
Agricultural Equipment Co., Ltd. hou ou try
Combination
Changzhou Fuji Changchai Robin Changz Changzh Indus
100.00% not under the
Gasoline Engine Co., Ltd. hou ou try
same control
Jiangsu Changchai Machinery Co., Changz Changzh Indus
100.00% Set-up
Ltd. hou ou try
Changzhou Xingsheng Property Changz Changzh Servi
100.00% Set-up
Management Co., Ltd. hou ou ce
(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
190
Changchai Company, Limited Annual Report 2021
Changchai
Wanzhou Diesel 40.00% 154,626.91 19,966,486.37
Engine Co., Ltd.
Changzhou
Changchai Horizon
Agricultural 5.00% -228,985.08 -542,255.39
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 48,20 24,14 72,34 22,42 22,42 49,26 25,04 74,31 24,78 24,78
Diese 0,342 1,889 2,232 6,016 6,016 7,159 4,012 1,171 1,522 1,522
l .77 .90 .67 .75 .75 .00 .17 .17 .52 .52
Engin
e Co.,
Ltd.
Chan
gzhou
Chan
gchai
Horiz
on 14,50 14,83 25,67 25,67 26,35 26,77 33,04 33,04
324,3 423,4
Agric 5,888 0,191 5,299 5,299 6,205 9,698 5,105 5,105
02.84 93.77
ultura .53 .37 .17 .17 .03 .80 .00 .00
l
Equip
ment
Co.,
Ltd.
Unit: RMB
Reporting Period Same period of last year
Total Cash Total Cash
Name Operating Operating
Net profit comprehe flows Net profit comprehe flows
revenue revenue
nsive from nsive from
191
Changchai Company, Limited Annual Report 2021
income operating income operating
activities activities
Changcha
i
Wanzhou 42,629,37 386,567.2 386,567.2 2,563,679 43,143,29 494,776.8 494,776.8 2,183,407
Diesel 9.24 7 7 .17 6.52 4 4 .36
Engine
Co., Ltd.
Changzh
ou
Changcha
i Horizon
14,362,87 -4,579,70 -4,579,70 6,216,842 14,280,06 -6,712,05 -6,712,05 -171,680.
Agricultu
2.77 1.60 1.60 .70 6.47 2.03 2.03 44
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
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.
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Changchai Company, Limited Annual Report 2021
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.
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
282,112,917.
1. Trading financial assets 121,940,343.76 404,053,261.57
81
(I) Financial assets at fair value 282,112,917.
121,940,343.76 404,053,261.57
through profit or loss 81
(1) Equity instrument investment 121,940,343.76 121,940,343.76
282,112,917.
(2 Financial investment 282,112,917.81
81
2. Financial assets designated to be
measured at fair value and the
changes included into the current
193
Changchai Company, Limited Annual Report 2021
profit or loss
(1) Debt instrument investment
(2) Equity instrument investment
(II) Other bond investment
(III)Other equity instrument
633,502,000.00 146,375,646.53 779,877,646.53
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
Receivables financing 497,388,826.02 497,388,826.02
Other non-current financial assets 112,500,000.00 112,500,000.00
Total assets consistently measured 282,112,917. 1,793,819,734.1
755,442,343.76 756,264,472.55
by fair value 81 2
(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
194
Changchai Company, Limited Annual Report 2021
2. Market Price Recognition Basis for Consistent and Inconsistent Fair Value Measurement Items at Level
1
The company shall use the closing price of the trading market on the balance sheet date as the basis for the fair
value measurement of the stocks of the listed company held in the trading financial assets measured at fair value.
3. Valuation Technique Adopted and Nature and Amount Determination of Important Parameters for
Consistent and Inconsistent Fair Value Measurement Items at Level 2
Financial investment: The basic assets of financial products include bond assets, deposit assets, fund assets, etc.
The portfolio of investment is dynamically managed, and the fair value of financial products is adjusted according
to the return rate of similar products provided by the counterparty.
4. Valuation Technique Adopted and Nature and Amount Determination of Important Parameters for
Consistent and Inconsistent Fair Value Measurement Items at Level 3
(1) Receivables financing: Receivables financing refers to bank acceptance bills with high credit rating, this item
features with short term and low risk, and the par value is close to the fair value, so the par value is adopted as the
fair value.
(2)Other non-current financial assets: for the investments in equity instrument of Jiangsu Horizon New Energy
Technology Co., Ltd., Jiangsu Horizon 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. The
company’s new investors signed the investment agreements respectively in June 2021 and December 2021.
Therefore, the fair value of the equity investment had been adjusted and confirmed accordingly based on the
premium rate of capital increase from new investors.
(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 Horizon 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.
5. Sensitiveness Analysis on Unobservable Parameters and Adjustment Information between Beginning and
Ending Carrying Value of Consistent Fair Value Measurement Items at Level 3
Not applicable
195
Changchai Company, Limited Annual Report 2021
6. Explain the Reason for Conversion and the Governing Policy when the Conversion Happens if
Conversion Happens among Consistent Fair Value Measurement Items at Different Levels
Not applicable
7. Changes in the Valuation Technique in the Current Period and the Reason for Such Changes
Not applicable
8. Fair Value of Financial Assets and Liabilities Not Measured at Fair Value
The financial assets and liabilities measured at amortization cost mainly include notes receivable, accounts
receivable, other receivables, short-term borrowings, accounts payable, other payables, etc. The difference
between the carrying value and fair value for financial assets and liabilities not measured at fair value is small.
9. Other
During the year, there was no conversion between Level 1 and Level 2, nor was there any transfer to or from
Level 3 for the fair value measurement of the Company's financial assets and financial liabilities.
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 32.26% 32.26%
Group Co., Ltd. investment
consulting
(excluding
consulting on
investment in
securities and
options), etc.
Notes: Information on the Company as the parent
196
Changchai Company, Limited Annual Report 2021
The parent company of the enterprise is Changzhou Investment Group Co., Ltd., which is a wholly-owned
subsidiary of Changzhou Municipal People's Government. In accordance with Changzhou People’s Government
Document (CZF [2006] No. 62), both the Company and Changzhou Investment Group Co., Ltd. are enterprises
which Changzhou People’s Government authorizes Changzhou Government State-owned Assets Supervision and
Administration Commission to perform duties of investors. Thus, after the sharer transfer, Changzhou Investment
Group Co., Ltd. is the controlling shareholder of the Company and Changzhou Government State-owned Assets
Supervision and Administration Commission is still the actual controller of the Company. The final controller of
the Company is Changzhou Government State-owned Assets Supervision and Administration Commission.
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 Horizon New Energy Technology Co., Ltd. Shareholding enterprise of the Company
Donghai Securities Co., Ltd. Controlled by the same Company as the parent
4. Related-party Transactions
(1) Other Related-party Transaction
1) On 28 June 2020, the 3rd Meeting of the 9th Board of Directors approved the Proposal on Signature of Joint
Sponsorship Underwriting Agreement of the Private Placement of A shares and Related-party Transaction, which
allowed the Company signing the joint sponsorship underwriting agreement with Industrial Securities Co., Ltd.
(hereinafter referred to as “Industrial Securities”) and Donghai Securities Co., Ltd. (hereinafter referred to as
“Donghai Securities”), and appointing Industrial Securities and Donghai Securities as the co-sponsor underwriters
for the private placement of A shares of the Company with sponsor fee of RMB3 million to Industrial Securities
and Donghai Securities and the underwriting fee of no more than RMB11 million (inclusive of RMB11 million).
As of 31 December 2021, the Company has paid a sponsorship fee of RMB 1.5 million (of which, RMB0.75
million was paid in 2021 and RMB0.75 million was paid in 2020) to Donghai Securities and paid an underwriting
fee of RMB6.5million (paid in 2021). All is tax-inclusive.
2) The Proposal on Using Idle Funds to Purchase Wealth Management Products was deliberated and approved at
the Fourth Interim Meeting of the Board of Directors in 2021 and the Second Interim Meeting of the Board of
Supervisors in 2021 held by the Company on 13 July 2021, allowing the Company and its wholly-owned
subsidiaries to use no more than RMB350 million of idle raised funds to purchase wealth management products
for cash management on the premise that the investment projects with raised funds are carried out normally and
the use of raised funds is not affected.
On 27 July 2021, the Company entered into a subscription agreement with Donghai Securities Co., Ltd. for the
product "Donghai Securities Long Gain Return Certificate June Type Customized Issue No. 13". The subscription
amount is RMB50 million, and the source of funds is idle raised funds. The return certificate matured on 25
197
Changchai Company, Limited Annual Report 2021
January 2022, with a total of RMB50,949,315.07 in principal and return actually received, which is recognized as
gains on changes of fair value of RMB817,465.75 in 2021.
XII. Stock Payment
1. The Overall Situation of Stock Payment
□ Applicable √ Not applicable
2. The Stock Payment Settled in Equity
□ Applicable √ Not applicable
3. The Stock Payment Settled in Cash
□ Applicable √ Not applicable
4. Modification and Termination of the Stock Payment
None
XIII. Commitments and Contingency
1. Significant Commitments
Significant commitments on balance sheet date
As of 31 December 2021, there was no significant commitment for the Company to disclose.
2. Contingency
Approved on the 8th Meeting of the 9th Board of Directors held on 13 April 2021, the Company provided a
guarantee for the credit granted to the subsidiary Horizon Agricultural Equipment by ICBC not exceeding RMB20
million, which was also approved on the Company’s Annual General Meeting of Shareholders in 2020.
As of 31 December 2021, the Company provided a guarantee for the short-term borrowings of RMB5 million of
the subsidiary Horizon Agricultural Equipment.
XIV. Events after Balance Sheet Date
1. Profit Distribution
Unit: RMB
Profits or dividends to be distributed 18,348,005.18
198
Changchai Company, Limited Annual Report 2021
2. Sales Return
None
3. Notes to Other Events after Balance Sheet Date
The Sixth Interim Meeting of the Board of Directors in 2021 held by the Company on 28 October 2021
deliberated on and approved the Proposal on Participating in the Public Listed Transfer of 41.5% Equity Interests
in Zhenjiang Siyang Diesel Engine Manufacturing Co., Ltd., authorizing the Management of the Company to
participate in the bidding of the public listed transfer by Jiangsu University of Science and Technology Assets
Management Co., Ltd. (hereinafter referred to as "Science University Assets") of its 41.5% equity interest in
Zhenjiang Siyang Diesel Engine Manufacturing Co., Ltd. (hereinafter referred to as "Zhenjiang Siyang").
On 1 January 2022, Zhenjiang Siyang Diesel Engine Manufacturing Co., Ltd. Issued the Confirmation of
Transaction on the Transfer of 41.5% Equity Interest (Corresponding to Capital Contribution of RMB830,000) .
The Company won the 41.5% equity interest in Zhenjiang Siyang at a price of RMB33,520,800.00 as of February
2022. On 23 February 2022, the Company signed the Contract on Transfer of State-owned Property Rights with
Science University Assets. On 9 March 2022, Zhenjiang Siyang has completed the business change registration.
XV. 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
None
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
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 27,50 6.00% 21,12 76.80 6,383, 33,54 7.29% 31,647 94.35 1,895,5
199
Changchai Company, Limited Annual Report 2021
receivable for 9,745. 6,658. % 086.4 3,441. ,855.0 % 86.83
which bad debt 33 85 8 92 9
provision
separately
accrued
Of which:
Accounts
receivable for
430,7 88,01 342,7 426,3 110,36
which bad debt 94.00 20.43 25.89 315,932
71,91 9,743. 52,16 00,27 92.71 7,704.
provision % % % ,574.42
2.03 09 8.94 9.29 % 87
accrued by
group
Of which:
Accounts
receivable for
which bad debt 430,7 88,01 342,7 426,3 110,36
94.00 20.43 25.89 315,932
provision 71,91 9,743. 52,16 00,27 92.71 7,704.
% % % ,574.42
accrued by 2.03 09 8.94 9.29 % 87
credit risk
features group
458,2 109,1 349,1 459,8 142,01
100.0 23.82 100.00 30.88 317,828
Total 81,65 46,40 35,25 43,72 5,559.
0% % % % ,161.25
7.36 1.94 5.42 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 Withdrawal
Carrying amount Bad debt provision Withdrawal reason
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
Expected to
Customer 4 2,797,123.26 2,194,980.28 78.47%
difficultly recover
Expected to
Customer 5 3,633,081.23 2,122,165.73 58.41%
difficultly recover
Customer 6 2,584,805.83 2,584,805.83 100.00% Difficult to recover
Customer 7 1,523,110.59 1,523,110.59 100.00% Difficult to recover
Customer 8 1,511,937.64 302,387.53 20.00% Difficult to recover
Customer 9 3,780,509.60 720,031.71 19.05% Difficult to recover
Total 25,418,668.01 19,035,581.53 -- --
200
Changchai Company, Limited Annual Report 2021
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 329,625,991.33 6,592,519.83 2.00%
1 to 2 years 17,473,471.22 873,673.56 5.00%
2 to 3 years 1,426,271.10 213,940.67 15.00%
3 to 4 years 709,597.16 212,879.15 30.00%
4 to 5 years 3,524,628.34 2,114,777.00 60.00%
Over 5 years 78,011,952.88 78,011,952.88 100.00%
Total 430,771,912.03 88,019,743.09 --
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) 333,949,213.59
1 to 2 years 17,473,471.22
2 to 3 years 3,514,160.19
Over 3 years 103,344,812.36
3 to 4 years 2,659,346.72
4 to 5 years 6,048,418.09
Over 5 years 94,637,047.55
Total 458,281,657.36
(2) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
Unit: RMB
Changes in the Reporting Period
Beginning
Category Reversal or Ending balance
balance Withdrawal Write-off Other
recovery
Bad debt
provision
31,647,855.09 1,315,924.00 147,611.25 11,689,508.99 21,126,658.85
withdrawn
separately
201
Changchai Company, Limited Annual Report 2021
Bad debt
provision
110,367,704.87 1,595,171.86 23,943,133.64 88,019,743.09
withdrawn
by group
Total 142,015,559.96 2,911,095.86 147,611.25 35,632,642.63 109,146,401.94
Of which bad debt provision reversed or recovered with significant amount in the Reporting Period: No.
(3) Accounts Receivable with Actual Verification during the Reporting Period
Unit: RMB
Item Amount verified
Accounts receivable with actual verification 35,632,642.63
Of which the verification of significant accounts receivable:
Unit: RMB
Whether
Performance of
Name of the generated from
Nature Amount verified Reason verification
entity related-party
procedures
transaction
Customer 1 997,047.83
The account age of
Customer 2 516,384.40 The Company held
the debtor is more
Customer 3 5,359,381.00 the 10th Meeting of the
than 5 years, and
Customer 4 5,309,605.00 9th Board of Directors
the debtor has no
Customer 5 3,662,926.13 and the 10th Meeting
assets to pay off
Customer 6 Loan 3,279,100.00 of the 9th Supervisory
due to the
receiva Committee on 16 Not
Customer 7 2,295,898.35 cancellation or debt
bles August 2021 and
Customer 8 1,617,988.01 restructuring of the
approved the Proposal
Customer 9 707,050.39 other party,
on Verification of
Customer 10 612,001.02 bankruptcy
Some Accounts
Customer 11 583,558.66 liquidation or
Receivable.
Customer 12 533,146.26 judicial litigation.
Total 25,474,087.05 -- -- --
(4) Top 5 of the Ending Balance of Accounts Receivable Collected according to the Arrears Party
Unit: RMB
Name of the Ending balance of Proportion to total ending balance of Ending balance of bad
entity accounts receivable accounts receivable debt provision
Customer 1 174,635,898.30 38.11% 3,492,717.97
Customer 2 64,375,015.92 14.05 % 1,287,500.32
Customer 3 37,370,796.27 8.15 % 747,415.93
Customer 4 18,082,456.14 3.95 % 361,649.12
Customer 5 8,152,568.83 1.78 % 163,051.38
Total 302,616,735.46 66.04%
202
Changchai Company, Limited Annual Report 2021
2. Other Receivables
Unit: RMB
Item Ending balance Beginning balance
Other receivables 26,497,081.34 24,327,355.36
Total 26,497,081.34 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 55,450,919.93 39,857,085.87
Petty cash and borrowings by
613,410.65 673,198.96
employees
Other 13,629,784.64 13,614,585.00
Total 69,698,315.22 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
-24,494,613.09 24,494,613.09 -24,494,613.09
Second stage
-- Transfer to Third
-5,039,368.41 5,039,368.41 -5,039,368.41
stage
-- Reverse to
Second stage
-- Reverse to First
stage
Withdrawal of the
14,143,241.36 14,143,241.36
Current Period
Reversal of the
78,119.44 685,602.51 763,721.95
Current Period
Write-offs of the
Current Period
203
Changchai Company, Limited Annual Report 2021
Verification of the
Current Period
Other changes
Balance of 31
209,613.53 23,809,010.58 19,182,609.77 43,201,233.88
December 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 Carrying amount
Within 1 year (including 1 year) 37,544,101.26
1 to 2 years 2,067,489.45
2 to 3 years 116,820.58
Over 3 years 29,969,903.93
3 to 4 years 392,301.53
4 to 5 years 1,113,086.11
Over 5 years 28,464,516.29
Total 69,698,315.22
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 14,143,241.36 19,182,609.77
withdrawn
separately
Bad debt
provision
24,782,346.06 763,721.95 24,018,624.11
withdrawn by
group
Total 29,821,714.47 14,143,241.36 763,721.95 43,201,233.88
4) Particulars of the Actual Verification of Other Receivables during the Reporting Period: None.
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
204
Changchai Company, Limited Annual Report 2021
Within 1 year
Changzhou Changchai Interco with
Horizon Agricultural urse 13,468,418.86 RMB11,668,418. 19.32% 13,468,418.86
Equipment Co., Ltd. funds 86, 1-2 years with
RMB18 billion
Changzhou Changchai Interco
Benniu Diesel Engine urse 9,000,000.00 Within 1 year 12.91% 180,000.00
Fittings Co., Ltd. funds
Interco
Changzhou Compressors
urse 2,940,000.00 Over 5 years 4.22% 2,940,000.00
Factory
funds
Interco
Changchai Group Imp.
urse 2,853,188.02 Over 5 years 4.09% 2,853,188.02
& Exp. Co., Ltd.
funds
Interco
Changzhou New District
urse 1,626,483.25 Over 5 years 2.33% 1,626,483.25
Accounting Center
funds
Total -- 29,888,090.13 42.88% 21,068,090.13
6) Derecognition of Other Receivables due to the Transfer of Financial Assets: none
7) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvement of
Other Receivables: none
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
205
Changchai Company, Limited Annual Report 2021
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
Horizon 40,000,000 40,000,000
Investment .00 .00
Co., Ltd.
Changzhou
Changchai
Horizon 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 140,000,00 160,000,00 300,000,00
Machinery 0.00 0.00 0.00
Co., Ltd.
Changzhou
Xingsheng
1,000,000. 1,000,000.
Property
00 00
Managemen
t Co., Ltd.
375,752,73 160,000,00 535,752,73 7,000,000.
Total
0.03 0.00 0.03 00
206
Changchai Company, Limited Annual Report 2021
(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
Main operations 2,221,914,222.25 1,913,817,106.36 2,086,035,553.15 1,794,202,913.98
Other operations 45,317,897.53 31,003,356.23 37,164,684.96 29,240,490.81
Total 2,267,232,119.78 1,944,820,462.59 2,123,200,238.11 1,823,443,404.79
Information on revenue:
Unit: RMB
207
Changchai Company, Limited Annual Report 2021
Category of contracts Segment 1
Product Types
Of which:
Single-cylinder diesel engines 1,053,647,263.06
Multi-cylinder diesel engines 1,091,284,576.58
Other products 36,122,588.06
Accessories 40,859,794.55
Classified by business area
Of which:
Sales in domestic market 1,898,433,419.02
Export sales 323,480,803.23
Total 2,221,914,222.25
Information related to performance obligations: None
5. Investment Income
Unit: RMB
Item Reporting Period Same period of last year
Dividend income from holding of other equity
7,394,400.00 5,004,000.00
instrument investment
Income from transferring to accommodation
1,028,964.68 433,925.05
business
Investment income from disposal of
1,798,672.49
held-for-trading financial assets
Accounts receivable financing-discount interest of
-1,869,322.91
bank acceptance bills
Total 8,352,714.26 5,437,925.05
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
155,515.49
(inclusive of impairment allowance write-offs)
208
Changchai Company, Limited Annual Report 2021
Government subsidies charged to current profit or loss
(exclusive of government subsidies given in the
Company’s ordinary course of business at fixed quotas 4,268,950.18
or amounts as per the government’s uniform
standards)
Increase in the fair value of the
equity of Jiangsu Liance
Electromechanical Technology
Gain/loss from change of fair value of trading Co., Ltd. and Guilin Stars
financial assets and liabilities, and investment gains Science and Technology Co.,
from disposal of trading financial assets and liabilities, Ltd. held by the Company’s
114,738,153.54
and derivative financial assets and liabilities, and wholly-owned subsidiary
available-for-sale financial assets, other than valid Horizon Investment and the
hedging related to the Company’s common businesses equity of Jiangsu Horizon
New Energy Technology Co.,
Ltd. held by the Company
during the Reporting Period
Impairment of receivables tested separately is ready to
147,611.25
be rolled back
Other non-operating income and expenses other than
2,400,863.71
the above
Less: Income tax effects 24,027,164.56
Non-controlling interests effects (after tax) 6,789.94
Total 97,677,139.67 --
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
3.86% 0.1657 0.1657
shareholders of the Company
209
Changchai Company, Limited Annual Report 2021
Net profit attributable to ordinary
shareholders of the Company after
0.20% 0.0086 0.0086
deduction of non-recurring profit
or loss
The Board of Directors
Changchai Company, Limited
13 April 2022
210
