Changchai Company, Limited Annual Report 2023
CHANGCHAI COMPANY, LIMITED
ANNUAL REPORT 2023
April 2024
1
Changchai Company, Limited Annual Report 2023
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.
Xie Guozhong, the Company’s legal representative and 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 RMB0.47 (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 2023
Table of Contents
Part I Important Notes, Table of Contents and Definitions........................................................... 2
Part II Corporate Information and Key Financial Information................................................... 6
Part III Management Discussion and Analysis..............................................................................12
Part IV Corporate Governance.......................................................................................................43
Part V Environmental and Social Responsibility.......................................................................... 65
Part VI Significant Events............................................................................................................... 66
Part VII Share Changes and Shareholder Information................................................................74
Part VIII Preferred Shares.............................................................................................................. 82
Part IX Bonds................................................................................................................................... 83
Part X Financial Statements............................................................................................................84
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Changchai Company, Limited Annual Report 2023
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.
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 2023
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.
Zhenjiang Siyang Zhenjiang Siyang Diesel Engine Manufacturing 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 2023 to 31 December 2023
Period”
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Changchai Company, Limited Annual Report 2023
Part II Corporate Information and Key Financial Information
I Corporate Information
Stock name Changchai, Changchai-B Stock code 000570, 200570
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 Xie Guozhong
Registered address 123 Huaide Middle Road, Changzhou, Jiangsu, China
Registered addresses previously used N/A
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
Stock exchange website where this Report is
Securities Times, Ta Kung Pao (HK)
disclosed
Media and website where this Report is disclosed http://www.cninfo.com.cn
Place where this Report is lodged Board Secretariat of the Company
IV Change to Company Registered Information
Unified social credit code 91320400134792410W
Change to principal activity of the
No change
Company since going public
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Changchai Company, Limited Annual Report 2023
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, which has thus become the controlling
shareholder of the Company.
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
5 July 2021-31
10/F, China Industrial December 2022
China Industrial Securities Plaza, 36 (continuous supervision
Liu Yi, Li Lihong
Securities Co., Ltd. Changliu Road, Pudong over matters associated
New District, Shanghai with unused raised funds
since 1 January 2023)
5 July 2021-31
6/F, Donghai Securities December 2022
Donghai Securities Co., Plaza, 1928 Dongfang (continuous supervision
Wang Jiangqin, Xu Qin
Ltd. Road, Pudong New District, over matters associated
Shanghai with unused raised funds
since 1 January 2023)
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
2023-over-2022
2023 2022 2021
change (%)
Operating revenue
2,155,698,787.49 2,182,043,095.61 -1.21% 2,452,430,515.60
(RMB)
Net profit attributable to
the listed company’s 108,495,607.05 76,684,796.91 41.48% 103,006,232.54
shareholders (RMB)
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Changchai Company, Limited Annual Report 2023
Net profit attributable to
the listed company’s
shareholders before -47,466,184.54 -73,636,511.02 —— 5,329,092.87
exceptional gains and
losses (RMB)
Net cash generated
from/used in operating 137,189,827.35 364,930,277.84 -62.41% -266,323,779.30
activities (RMB)
Basic earnings per share
0.1537 0.1087 41.40% 0.1657
(RMB/share)
Diluted earnings per
0.1537 0.1087 41.40% 0.1657
share (RMB/share)
Weighted average return
3.19% 2.51% 0.68% 3.86%
on equity (%)
Change of 31
31 December December 2023
31 December 2023 31 December 2021
2022 over 31 December
2022 (%)
Total assets (RMB) 5,159,394,958.92 5,219,359,853.42 -1.15% 4,860,382,961.26
Equity attributable to the
listed company’s 3,398,946,911.23 3,284,710,665.90 3.48% 3,077,550,018.33
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
Item 2023 2022 Note
Production and sales of the
Company’s primary products of
Operating revenue (RMB) 2,155,698,787.49 2,182,043,095.61
diesel engines, gasoline engines,
etc.
Deductions from operating Other business revenue than the
45,321,867.06 36,475,111.66
revenue (RMB) main operations
Operating revenue exclusive of Sale of diesel engines, gasoline
2,110,376,920.43 2,145,567,983.95
deductions (RMB) engines, and accessories
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Changchai Company, Limited Annual Report 2023
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.
VIII Key Financial Information by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Operating revenue 703,102,297.70 647,415,342.15 458,557,165.00 346,623,982.64
Net profit attributable to the
23,934,592.54 108,002,732.12 24,931,699.23 -48,373,416.84
listed company’s shareholders
Net profit attributable to the
listed company’s shareholders
1,107,543.07 4,718,000.91 -16,029,859.81 -37,261,868.71
before exceptional gains and
losses
Net cash generated from/used in
-71,086,048.66 -33,710,768.09 -109,331,432.55 351,318,076.65
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 2023 2022 2021 Note
Expropriation of the
Gain or loss on disposal
constructions on the
of non-current assets state-owned land of the
105,702,551.01 393,161.73 155,515.49
(inclusive of impairment Changzhou Wuxing
branch company in the
allowance write-offs)
Reporting Period
Government grants
Government grants recognised in current
recognised in current 3,009,573.87 3,774,298.59 4,268,950.18 profit or loss were
profit or loss (exclusive RMB6,419,303.33, and
the amount recognised in
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Changchai Company, Limited Annual Report 2023
of those that are closely current profit or loss that
was exclusive of deferred
related to the Company's
income was
normal business RMB3,409,729.46.
operations and given in
accordance with defined
criteria and in
compliance with
government policies, and
have a continuing impact
on the Company's profit
or loss)
Increase in the fair value
of the Company’s interest
Gain or loss on in Jiangsu Horizon New
fair-value changes in Energy Technology Co.,
Ltd., the sale of shares
financial assets and
held by wholly-owned
liabilities held by a subsidiary Horizon
non-financial enterprise, Investment in Guilin Stars
as well as on disposal of Science and Technology
74,628,323.54 162,319,373.53 114,738,153.54 Co., Ltd., as well as
financial assets and increased prices of the
liabilities (exclusive of shares held by
the effective portion of wholly-owned subsidiary
Horizon Investment in
hedges that arise in the
Jiangsu Liance
Company’s ordinary Electromechanical
course of business) Technology Co., Ltd. and
Kailong High Technology
Co., Ltd.
Reversed portions of
impairment allowances
for receivables which are 21,618.24 30,000.00 147,611.25
tested individually for
impairment
Non-operating income
and expense other than -254,543.89 1,735,346.51 2,400,863.71
the above
Negative goodwill due
to business combination
1,904,132.58
not under common
control
Less: Income tax effects 27,193,473.11 19,859,063.58 24,027,164.56
Non-controlling
interests effects (net of -47,741.93 -24,058.57 6,789.94
tax)
Total 155,961,791.59 150,321,307.93 97,677,139.67 --
Particulars about other items that meet the definition of exceptional gain/loss:
□ Applicable √ Not applicable
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Changchai Company, Limited Annual Report 2023
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 2023
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
harvesters, tractors, plant protection machinery, small engineering machinery, and shipborne 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.
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
In terms of policies, national regulations pertaining to internal combustion engine technology have considerably
tightened, with a notable emphasis on energy conservation, emissions reduction, and reliability, thereby making
them focal points of industrial development. The rigorous enforcement of national emission standards will
expedite the development and deployment of core technologies and crucial components within internal
combustion engines. The exploration and dissemination of efficient and clean internal combustion engine products
will drive the widespread adoption of independent-brand electronic fuel injection systems, high-efficiency
superchargers, and advanced after-treatment solutions.
In recent years, the issuance of the No. 1 Document by the central government has underscored its commitment to
elevating the importance of agriculture and bolstering agricultural development. In 2024, the No. 1 Document
outlined a "road map" to vigorously and effectively propel comprehensive rural revitalization. To stimulate
demand through industrial policies, it is imperative to enhance the research and application proficiency of
agricultural machinery and equipment, promote the innovation framework for cutting-edge agricultural machinery,
vigorously address the deficiencies in agricultural machinery and equipment, bolster the information-based
capabilities and service provision of agricultural machinery and equipment, advance the intelligence and
automation levels of agricultural machinery, reinforce the synergy between technology and reform, and intensify
efforts in core technology research and development, all of which will delineate the trajectory for agricultural
modernization.
As a result of the national policy of subsidies for the purchase of machinery, industrial development policies and
the impact of environmental regulations and requirements, overall market demand for single-cylinder diesel
engines for small agricultural machinery remained low, causing intense competition. Despite the gradual increase
in the use of single-cylinder engines in the non-agricultural sector, overall sales remained on a downward path.
The year 2023 is the first year of upgrading the National Emission Standard III to IV, and the agricultural
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Changchai Company, Limited Annual Report 2023
machinery industry has entered a drastic “reshuffle” period. From the point of view of the development of the
industry as a whole, the sales of low-quality products continued to weaken, and high-quality products continued to
take over more market share, which promoted the sustainable development of the industry as a whole. With the
full-scale implementation of National Emission Standard IV for Non-road Vehicles and the evolving market
dynamics, the pace of development for high-end agricultural machinery products in China has accelerated.
High-end and intelligent trends of agricultural machinery catalyzed a fresh wave of structural transformation
within the agricultural machinery industry. The sector has entered a phase of profound adjustments propelled by
optimization and upgrading, with agricultural machinery enterprises concurrently embarking on a trajectory of
high-quality development, hastening the integration and advancement of advanced technologies encompassing
energy conservation and emissions reduction, intelligent manufacturing, and the enhancement of product quality
and efficiency. As new opportunities for development arise in the national strategic deployment and the
accelerated transformation and upgrading process, the agricultural machinery market has a broad space for
growth.
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
engineering machinery,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
produc Graphic display Product description
features fields
ts
Our diesel engine products include
single-cylinder diesel engines and High power, low Agricultural
multi-cylinder engines, covering oil consumption, machinery,
power range from 3kW to 129kW, low noise, construction
Diesel
and cylinder diameters from 65mm compact machinery,
engine
to 135mm. Besides sale in domestic structure, low generator sets,
market, our diesel engines are sold emission, good shipborne
to Southeast Asia, South America, reliability machinery
the Middle East and Africa.
Our gasoline engines are mainly
general-purpose small gasoline Agricultural
Simple structure,
Gasolin engines, covering the power range machinery,
good reliability,
e from 1.5kW to 9.0kW. Besides sale small
easy
engine in domestic market, our gasoline construction
maintenance
engines are sold to Southeast Asia, machinery
the Middle East, Europe and
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Changchai Company, Limited Annual Report 2023
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 "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
(1) National policy driver
In recent years, the No. 1 Document issued by the central government has demonstrated the government's
intention to attach greater importance to agriculture and strengthen agricultural development, so as to promote the
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Changchai Company, Limited Annual Report 2023
development of agriculture and rural economy and society, and strengthen the support of agricultural technology
and equipment. China's agricultural machinery and equipment industry layout has always been based on the main
line of innovation, focused on core technology, strengthened the construction of innovation capacity, and strove to
make up for the shortcomings and weaknesses. The full implementation of National Emission Standard IV and the
high-end and intelligent trends of agricultural machinery have let the agricultural machinery industry towards a
new stage of development. The Action Plan for Promoting Large-scale Equipment Renewals and Consumer
Goods Trade-ins in 2024 clarifies that old agricultural and industrial machinery will be renewed, subsidy policies
will be continuously implemented for agricultural machinery scrapping and renewal, the scrapping and renewal of
old agricultural machinery will be promoted, and the structural adjustment of agricultural machinery will be
accelerated. The acceleration of the replacement process of old equipment of engineering machinery has created a
favourable policy environment for the application of internal combustion engines.
(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 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
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Changchai Company, Limited Annual Report 2023
management system, and accessed to the national export-free enterprise qualification. Changchai was honorably
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 2023, the Company and its
products garnered prestigious accolades. The Company was recognized as one of the Top 500 Machinery Industry
Enterprises in China, a National Demonstration Enterprise of Product and Service Quality Integrity, a National
Leading Enterprise in the Quality of the Internal Combustion Engine Industry, a National Leading Brand in the
Quality of the Internal Combustion Engine Industry, and for maintaining Stable Qualified Products in National
Quality Inspections. Additionally, the Company was honoured as one of the Top 50+ Agricultural Machinery
Enterprises in China, a Large Key Outstanding Enterprise in the Mechanical Industry, and received the distinction
of being an Internationally Renowned Brand Cultivated and Developed by Jiangsu Province from 2023 to 2025.
Furthermore, the Company was recognized as an Industrial Four Star Enterprise in Changzhou. 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, the Company was rated as Excellent in the performance appraisal by
the provincial engineering technology research centre in 2023, and it was awarded the first prize of the
achievements in the National Excellent Quality Management Group Activity in the Machinery Industry in 2023.
At the same time, multiple products were awarded the provincial certification of new products and new
technology, and the municipal certification of high-tech products. During the Reporting Period, the Company
obtained 19 patent authorizations. As at 2023, the Company had a total of 155 valid patents authorized
domestically and internationally, including 13 invention patents.
3. Advantages in Marketing
Changchai has built up a sales service network covering the whole country, with five marketing entities, 24 sales
service centers and 717 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 2023, China's macroeconomic landscape demonstrated a steady recovery and exhibited a discernible upward
trajectory, although overall volatility surpassed market expectations. The internal combustion engine market
benefited from various policies, facilitating its recovery, while both upstream and downstream sectors of the
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Changchai Company, Limited Annual Report 2023
industry experienced improvement. With the comprehensive implementation of the National Emission Standard
IV for Non-road Vehicles and the advancement of market demand, the entire agricultural machinery market
entered a period of in-depth adjustments led by optimization and upgrading. Competition was intensifying,
terminal-side sales were weak, and high-quality operation and deceleration operation remained the focus of
development. The Company rallied its efforts from top to bottom to surmount challenges, concentrating on
aligning product development, market expansion, and production quality with annual policies and objectives. By
seizing opportunities, the Company attained commendable outcomes in market penetration, product innovation
and enhancement, as well as corporate brand promotion, thus fostering the stable and robust development of the
enterprise. During the Reporting Period, the Company sold approximately 630,000 diesel engines, gasoline
engines and generator sets, generating total sales revenue of RMB2.156 billion, almost flat with last year.
In terms of product development and support, the Company completed the certification and application of
multiple models for the National Emission Standard IV for Non-road Vehicles, and orderly promoted the
development and application of products for the National Emission Standard IV for Non-road Vehicles in the field
of engineering machinery; based on market validation and feedback, the Company strengthened the optimization
of the full series of the products for the National Emission Standard IV for Non-road Vehicles, providing powerful
support for product upgrades. The Company continuously promoted the special development of generator sets in
unmanned aerial vehicle flight defence, parking and other fields, promoted the research and development of
outboard engine projects and hybrid power products, completed performance debugging and reliability testing of
diesel engines for outboard engines of more power ranges, and achieved progress in the research and development
of hybrid power products as scheduled.
In terms of market services, the domestic market adjusted and optimized its distribution network, consolidated its
advantages in application fields, continuously deepened its support for single-cylinder engines to multiple
non-agricultural segments, and achieved the comprehensive installation and application of multi-cylinder engines
for the National Emission Standard IV for Non-road Vehicles; the generator sets were gradually moving towards
high-end and specialized development in the segmented field of the general machinery market, and light engines
were applied into scenarios of micro and unmanned equipment, further optimizing product structure and
distribution channels. At the same time, the Company strengthened the building of service resources and the
control of service processes, implemented multiple rounds of service training and systematic case studies, and
adjusted service policies during the busy farming period, effectively improving the service guarantee work of the
products for the National Emission Standard IV for Non-road Vehicles.
In terms of quality management, the Company comprehensively improved the quality building of the products for
the National Emission Standard IV for Non-road Vehicles, strengthened whole process management, promoted the
work of stabilizing and strengthening supply chains, expanded and supplemented the supply chains of core
component suppliers, and strictly controlled the quality of product spare parts. During the Reporting Period, the
Company organized an annual management review, conducted an internal audit on the quality management
system, and passed the external audits on ISO9001 and IATF16949 quality management systems.
In terms of internal management, the Company completed the election of the Board of Directors, the Board of
Supervisors, and the Management, and improved its internal control procedures and policies, continuously
improving the Company's management level. The Company effectively strengthened cost control and reduced
costs and expenses. Additionally, the Company fully implemented various policies and emergency mechanisms
such as public security and fire safety, carried out special actions on fire safety, and organized safety risk control
and hidden danger inspection and treatment. These actions effectively prevented and resolved various safety risks,
and created a safe and stable environment for enterprise production and operation. The Company carried out a
series of activities to celebrate the 110th anniversary of the establishment of the plant, with a focus on production
17
Changchai Company, Limited Annual Report 2023
and operation, corporate culture, and brand image promotion, and strengthened the development of corporate
culture, achieving good results.
During the Reporting Period, the funds raised from the private placement investment project for relocating light
engines were effectively deployed, and the innovation capacity building project of the technology centre was
successfully concluded. Any surplus funds raised will be permanently allocated to working capital following the
completion of relevant procedures. In December 2023, the Company acquired 7.5% equity held by three natural
person shareholders of Zhenjiang Siyang. Currently the Company holds a total of 49% equity in Zhenjiang Siyang.
The houses within the expropriation scope of the bus plant areas (Phases 1 and 2), including the Company's
Wuxing Branch, and the houses within the expropriation scope of the Sanjing Branch's old city renovation project
were subject to government expropriation. The Company has signed a compensation agreement for housing
expropriation with relevant government departments. As at January 2024, the Company had received a total of
RMB117 million in compensation for housing expropriation from Wuxing Branch and RMB30 million in the first
phase of compensation for housing expropriation from Sanjing Branch.
2. Revenue and Cost Analysis
(1) Breakdown of Operating Revenue
Unit: RMB
2023 2022
As % of
As % of total Change (%)
total
Operating revenue operating Operating revenue
operating
revenue (%)
revenue (%)
Total 2,155,698,787.49 100% 2,182,043,095.61 100% -1.21%
By operating division
Internal
combustion 2,110,376,920.43 97.90% 2,145,567,983.95 98.33% -1.64%
engines
Other 45,321,867.06 2.10% 36,475,111.66 1.67% 24.25%
By product category
Diesel engines 1,908,040,669.16 88.51% 1,971,005,207.88 90.33% -3.19%
Gasoline
153,677,944.53 7.13% 148,144,749.68 6.79% 3.73%
engines
Other 93,980,173.80 4.36% 62,893,138.05 2.88% 49.43%
By operating segment
Domestic 1,778,018,604.18 82.48% 1,857,845,869.48 85.14% -4.30%
Overseas 377,680,183.31 17.52% 324,197,226.13 14.86% 16.50%
By marketing model
Distribution 754,228,779.91 34.99% 770,975,653.30 35.33% -2.17%
Direct sales 1,401,470,007.58 65.01% 1,411,067,442.31 64.67% -0.68%
(2) Operating Division, Product Category, Operating Segment or Marketing Model Contributing over 10%
of Operating Revenue or Operating Profit
√ Applicable □ Not applicable
18
Changchai Company, Limited Annual Report 2023
Unit: RMB
YoY
YoY
YoY change in
Gross change in
change in gross
Operating revenue Cost of sales profit operating
cost of profit
margin revenue
sales (%) margin
(%)
(%)
By operating division
Internal
combustion 2,110,376,920.43 1,813,233,693.78 14.08% -1.64% -5.77% 3.76%
engines
By product category
Diesel
1,908,040,669.16 1,662,842,571.43 12.85% -3.19% -7.37% 3.93%
engines
Gasoline
153,677,944.53 128,084,343.44 16.65% 3.73% 1.96% 1.45%
engines
By operating segment
Domestic 1,778,018,604.18 1,475,842,943.27 17.00% -4.30% -9.65% 4.92%
Overseas 377,680,183.31 362,912,888.14 3.91% 16.50% 15.13% 1.14%
By marketing model
Distribution 754,228,779.91 629,617,071.82 16.52% -2.17% -7.18% 4.50%
Direct sales 1,401,470,007.58 1,209,138,759.59 13.72% -0.68% -4.82% 3.75%
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 2023 2022 Change (%)
division
Unit sales Unit 478,280 458,300 4.36%
Diesel engines Output Unit 513,177 439,604 16.74%
Inventory Unit 99,764 64,867 53.80%
Any over 30% YoY movements in the data above and why:
√ Applicable □ Not applicable
The inventory changed mainly because the Company adjusted its marketing strategy and increased the inventory
of diesel engines.
(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
Product Item 2023 2022 Change (%)
19
Changchai Company, Limited Annual Report 2023
category As % of As % of
total cost total cost
Cost of sales Cost of sales
of sales of sales
(%) (%)
Raw
1,458,317,249.89 79.31% 1,560,381,852.91 80.07% -6.54%
materials
Diesel Labor cost 225,056,024.38 12.24% 229,434,494.85 11.77% -1.91%
engines
Depreciation 58,676,870.45 3.19% 56,624,131.58 2.91% 3.63%
Energy 24,344,615.38 1.32% 15,340,866.19 0.79% 58.69%
Energy cost changed mainly because the Company’s foundry business was in normal operation in 2023,
consuming more energy than it was in 2022 during a relocation.
(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) 890,387,045.58
Total sales to top five customers as % of total sales of the
41.30%
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 for the
No. Customer As % of total sales revenue (%)
Reporting Period (RMB)
1 Customer A 376,215,480.62 17.45%
2 Customer B 218,582,431.48 10.14%
3 Customer C 118,884,227.95 5.51%
4 Customer D 117,597,908.00 5.46%
5 Customer E 59,106,997.53 2.74%
Total -- 890,387,045.58 41.30%
Other information about major customers:
□ Applicable √ Not applicable
Major suppliers:
Total purchases from top five suppliers (RMB) 318,965,836.36
Total purchases from top five suppliers as % of total purchases
17.35%
of the Reporting Period (%)
Total purchases from related parties among top five suppliers
0.00%
as % of total purchases of the Reporting Period (%)
20
Changchai Company, Limited Annual Report 2023
Information about top five suppliers:
No. Supplier Purchase in the Reporting Period (RMB) As % of total purchases (%)
1 Supplier A 110,589,895.80 6.01%
2 Supplier B 83,433,267.64 4.54%
3 Supplier C 60,956,732.67 3.32%
4 Supplier D 41,071,878.77 2.23%
5 Supplier E 22,914,061.49 1.25%
Total -- 318,965,836.36 17.35%
Other information about major suppliers:
□ Applicable √ Not applicable
3. Expense
Unit: RMB
Reason for any
2023 2022 Change (%)
significant change
Selling expense 99,603,282.16 102,630,223.71 -2.95%
Administrative
123,981,333.99 119,511,189.72 3.74%
expense
Decreased exchange
Finance costs -11,284,676.92 -21,589,704.63 —— gains and interest
income
R&D expenses 90,339,104.33 81,239,597.06 11.20%
4. R&D Investments
√ Applicable □ Not applicable
Major R&D Expected impact on the
Purpose Progress Specific objectives
project Company
Significant optimization des
ign has been carried out o
n the structure and perfor
After the implementation
mance of diesel engines, r
Developing 390 s of the project, the engi
esulting in a significant lea
upercharged diesel nes will further meet the
p in the reliability, fuel co
Development engines with hig application requirements
nsumption, emissions and
of 390 sup h torque, lightwei In progres of various small and m
other indicators of the pro
ercharged di ght, energy-saving s edium-sized agricultural
ducts, reaching the advance
esel engines and emission red machinery. The products
d level of similar foreign
uction for agricult have a clear target mark
products, and meeting the
ural machinery et positioning, with broa
emission requirements of t
d market prospects.
he National Emission Stan
dard IV for Non-road Vehi
cles.
Development Developing efficie In progres By developing technology, After the implementation
of 4L88 di nt and environmen s optimizing matching, and p of the project, the prod
esel engines tally-friendly diese ost-processing techniques, d uct will meet the require
21
Changchai Company, Limited Annual Report 2023
with 37 K l engines that mee iesel engines will meet the ments of the original app
W and belo t emission require emission requirements of lication field and have a
w for the N ments the National Emission Stan broad market application
ational Emis dard IV for Non-road Vehi prospect.
sion Standar cles.
d IV for No
n-road Vehic
les
Through technological rese
Developing engine arch and development, the
s for common rail Company aims to create u
mining pickup tr nderground power systems
After the implementation
ucks that meet the with excellent performance
of the project, the Com
power application indicators and characteristi
pany will further expand
Development requirements of cs such as high reliability,
its product line, explore
of engines pickups for under low vibration, low noise,
In progres the power market, and i
for mining ground operations and safety that meet the e
s ncrease application fields.
pickup truck and mining, and t mission requirements of th
The products will have
s hat are energy-sav e National Emission Standa
broad market prospects,
ing, emission redu rd IV for Non-road Vehicl
adding new profit growth
cing, and environ es and related requirement
points for the Company.
mentally friendly s. The economic and powe
r performance indicators of
the engines will reach the
leading level in China.
Significant optimization des
ign has been carried out o
n the structure and perfor
After the implementation
Development mance of diesel engines, r
of the project, the prod
of 178FA a esulting in a significant lea
uct will meet the applica
ir-cooled die Developing efficie p in the reliability, fuel co
tion requirements of vari
sel engines nt and energy-savi nsumption, emissions and
In progres ous small-sized agricultur
for the Nati ng diesel engines other indicators of the pro
s al machinery, comply wit
onal Emissio that meet the emi duct, reaching the advance
h energy-saving and envi
n Standard I ssion requirements d level of similar foreign
ronmental protection poli
V for Non-r products and meeting the e
cies, and have broad mar
oad Vehicles mission requirements of th
ket prospects.
e National Emission Standa
rd IV for Non-road Vehicl
es.
Development
After the implementation
of L12 wat Developing efficie of the project, the Com
er-cooled di nt, environmentall Improve product reliability, pany will expand the pro
esel engines y-friendly, and ene save energy consumption, duct application fields, e
for the Nat rgy-saving single-c In progres and the emission indicator nrich product reserves, c
ional Emissi ylinder diesel engi s s will meet the emission r omply with national poli
on Standard nes equirements of the Nationa cies, and meet the machi
IV for Non l Emission Standard IV for nery application requirem
-road Vehicl Non-road Vehicles. ents and market demand.
es
Development Developing single- Improving diesel engine’s After the implementation
In progres
project of cylinder diesel en power performance, econo of the project, the prod
22
Changchai Company, Limited Annual Report 2023
single-cylind gines with a mech s mic efficiency of fuel, and uct will meet the require
er diesel en anical pump that other performance indicato ments of the National E
gines with a have higher perfor rs, as well as service life mission Standard IV for
mechanical mance and meet t and making the emission i Non-road Vehicles in ter
pump that he National Emiss ndicators meet the National ms of the emission indic
can meet th ion Standard IV f Emission Standard IV for ators and meet the suppo
e National or Non-road Vehic Non-road Vehicles rting requirements of ma
Emission St les chinery, bringing about n
andard IV f ew growth points for the
or Non-road Company’s benefits.
Vehicles
After the implementation
Improve various performan of the project, the upgr
ce indicators of diesel engi aded diesel engine will
Developing diesel
nes, meet domestically adv meet the requirements of
Development engines that have
anced level in terms of ec the National Emission S
project of higher performanc In progres
onomic efficiency and pow tandard IV for Non-road
4G29 diesel e and meet the e s
er performance and meet t Vehicles and drive the C
engine mission requireme
he requirements of the Nat ompany’s non-road vehicl
nts
ional Emission Standard IV e technologies to be mor
for Non-road Vehicles. e mature and well-develo
ped.
Making major optimization
Developing lightw Diversifying the Compan
of the diesel engine’s stru
Development eight single-cylind y’s products, further expa
cture and performance to
project of t er, water-cooled, h nding the power market,
meet the advanced level of
he special d igh-speed diesel e In progres and meeting non-emissi
similar products abroad as
iesel engine ngines to meet th s on regulatory requirement
well as the requirements
of the mot e power requireme s can bring about new g
of the National Emission S
orcycle nts of motor-tricyc rowth points for the Co
tandard IV for Three-wheel
le in the market mpany’s benefits.
ers.
By applying high-performa
nce technologies such as e
nergy-saving, noise reductio
The devel After the implementation
n, environmental protection,
opment of of the project, the prod
material saving, and longe
Development high-hors uct has obvious advantag
Developing efficie vity enhancement of diesel
of diesel e epower ou es in power, safety, econ
nt, environmentall engines, energy savings h
ngines for h tboard en omy, and environmental
y-friendly and ene as been achieved, meeting
igh-horsepo gine powe protection, meeting the e
rgy-saving outboar the emission requirements
wer outboar r platform mission requirements of t
d engines of the National Emission S
d engines has been he National Emission Sta
tandard IV for Non-road V
complete ndard IV for Non-road V
ehicles, and meeting the a
d ehicles.
pplication requirements of
various small fishing machi
nery.
Conducting major design o After the implementation
Development Developing more
ptimization of the engine s of the project, the prod
of D15 die efficient, environm Completed tructure and performance t uct will meet the require
sel outboard entally friendly an
o improve the reliability, f ments of non-road China
engine d energy-saving di
uel consumption, emissions IV vehicle emission reg
esel-powered prod
and other indicators of th ulations and open up the
23
Changchai Company, Limited Annual Report 2023
ucts e product, so as to reach t market of ship machiner
he advanced level of simil y.
ar foreign products.
Optimization design has be
en carried out on the struc
ture and performance of th
After the implementation
e engines, resulting in a si
Developing efficie of the project, the prod
Development gnificant leap in the reliabi
nt, environmentall ucts meet the emission r
of power a lity, fuel consumption, emi
y-friendly and ene equirements of National
nd assembly ssions and other indicators
rgy-saving power Completed Emission Standard IV for
for diesel of the products, reaching
and assembly for Non-road Vehicles, and
outboard en the advanced level of simil
diesel outboard en have a wide range of ap
gines ar foreign products, and m
gines plication scenarios and br
eeting the emission require
oad market prospects.
ments of the National Emi
ssion Standard IV for Non
-road Vehicles.
After the implementation
of the project, the prod
Improving the emission ch uct meets the market de
aracteristics and economic mand and makes the goo
Development Developing efficie
characteristics of diesel-elec ds quality and logistics e
of diesel-el nt and environmen Completed
tric hybrid diesel engines t fficiency of the cold chai
ectric hybrid tally friendly diese
o enhance the energy effici n timely, safe and efficie
products l-powered products
ency, endurance and reliabi nt, providing a whole-pro
lity. cedure temperature and q
uality management soluti
on.
After the implementation
Developing light of the project, the prod
multi-cylinder dies The structure of diesel eng ucts meet the emission r
Development el engines that ha ine components has been o equirements of the Natio
of V402 di ve higher perform Completed ptimized to improve produ nal Emission Standard I
esel engines ance and meet em ct performance and reliabili V for Non-road Vehicles,
ission requirement ty. and satisfy the machiner
s y application requirement
s and market demand.
Developing small-
bore and multi-cyl
inder diesels to m After the implementation
Development eet the application Optimize and upgrade the of the project, the upgr
of light lo requirements of r product, increase engine po aded diesel engines have
w-emission ice transplanters, p wer,and meet the emission broad and good market
Completed
common-rail lant protection spr requirements of the Natio application prospects, as
series diese ay machines, tract nal Emission Standard IV well as a more competiti
l engines ors, small enginee for Non-road Vehicles. ve advantage in the mar
ring machinery an ket.
d gardening machi
nery
Details about R&D personnel:
24
Changchai Company, Limited Annual Report 2023
2023 2022 Change (%)
Number of R&D personnel 225 236 -4.66%
R&D personnel as % of total employees 8.74% 8.89% -0.15%
Educational background of R&D personnel
Bachelor’s degree 96 101 -4.95%
Master’s degree 6 7 -14.29%
Age structure of R&D personnel
Below 30 31 25 24.00%
30~40 77 84 -8.33%
Details about R&D investments:
2023 2022 Change (%)
R&D investments (RMB) 90,339,104.33 81,239,597.06 11.20%
R&D investments as % of operating revenue 4.19% 3.72% 0.47%
Capitalized R&D investments (RMB) 0.00 0.00 ——
Capitalized R&D investments as % of total
0.00% 0.00% ——
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 2023 2022 Change (%)
Subtotal of cash generated from operating activities 2,169,305,862.90 2,150,597,784.38 0.87%
Subtotal of cash used in operating activities 2,032,116,035.55 1,785,667,506.54 13.80%
Net cash generated from/used in operating activities 137,189,827.35 364,930,277.84 -62.41%
Subtotal of cash generated from investing activities 1,197,150,475.33 944,067,348.19 26.81%
Subtotal of cash used in investing activities 1,044,165,754.31 1,082,020,854.62 -3.50%
Net cash generated from/used in investing activities 152,984,721.02 -137,953,506.43 ——
Subtotal of cash generated from financing activities 135,437,700.65 -100.00%
Subtotal of cash used in financing activities 131,365,400.07 114,312,925.54 14.92%
Net cash generated from/used in financing activities -131,365,400.07 21,124,775.11 ——
Net increase in cash and cash equivalents 161,278,557.41 247,948,744.46 -34.95%
Explanation of why any of the data above varies significantly:
√Applicable Not applicable
The significant year-on-year change in net cash generated from/used in the company's increase in diesel engine
reserve inventory and the increase in procurement funds paid to supplier during the reporting period.
The significant year-on-year change in net cash generated from/used in investing activities was primarily because
the company compressed its wealth management scale, recovered some of its wealth management funds, and
25
Changchai Company, Limited Annual Report 2023
received some land collection and storage funds from Changzhou Wuxing Branch.
The significant year-on-year change in net cash generated from/used in financing activities was primarily because
bank acceptance notes with low credit levels were discounted in the prior period, with no comparable event in the
current period.
Reason for any big difference between the net operating cash flow and the net profit for this Reporting Period
√Applicable Not applicable
The big difference between the net operating cash flow and the net profit for this Reporting Period was mainly
because of the impact on the current income of the fair value changes of the financial assets held by the Company,
the impact on the current profit or loss of the requisition of the state-owned land of the branch company in
Wuxing, Changzhou, and the discounting of certain bank acceptance notes with high credit levels.
V Analysis of Non-Core Businesses
√Applicable Not applicable
Unit: RMB
As % of gross Recurrent
Amount Source
profit or not
Dividends from stocks held, income
from cash management, and the s
Return on ale of shares held by wholly-owned
19,102,348.95 12.54% Yes
investment subsidiary Horizon Investment in
Guilin Stars Science and Technolog
y Co., Ltd.,
Increase in the fair value of the C
ompany’s interest in Jiangsu Horizo
n New Energy Technology Co., Lt
Gains/losses on d., as well as increased prices of t
changes in fair 49,816,098.68 32.70% he shares held by wholly-owned su No
value bsidiary Horizon Investment in Jian
gsu Liance Electromechanical Techn
ology Co., Ltd. and Kailong High
Technology Co., Ltd.
Asset impairment
-27,893,895.75 -18.31% Inventory valuation loss No
loss
Non-operating Compensation for trademark rights
927,993.65 0.61% No
income of subsidiary
Non-operating Loss on retirement of non-current a
1,182,537.54 0.78% No
expense ssets
Expropriation of the constructions o
Asset disposal n the state-owned land of the Chan
105,702,551.01 69.39% No
income gzhou Wuxing branch company in t
he Reporting Period
VI Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB
31 December 2023 1 January 2023 Change in Reason for any
26
Changchai Company, Limited Annual Report 2023
As % of As % of percentage significant
Amount total Amount total (%) change
assets assets
The strengthen
ed collection
of payments b
y customers, a
nd the discoun
Monetary
1,083,867,966.87 21.01% 930,013,350.97 17.82% 3.19% ting of certain
assets
bank accepta
nce notes fro
m customers i
n the Reportin
g Period.
Accounts
316,543,159.91 6.14% 370,322,179.77 7.10% -0.96%
receivable
During the Re
porting Period,
the Company
adjusted its
Inventories 789,220,185.68 15.30% 571,996,881.74 10.96% 4.34% marketing strat
egy and increa
sed the invent
ory of diesel
engines.
Investment
39,837,558.11 0.77% 42,160,779.65 0.81% -0.04%
property
Fixed assets 675,596,920.95 13.09% 720,061,387.76 13.80% -0.71%
Wholly-owned
subsidiary Ch
angchai Machi
nery’ lightwe
ight engine an
d casting reloc
Construction ation project
4,275,622.18 0.08% 30,281,547.56 0.58% -0.50%
in progress was transferre
d from constr
uction in prog
ress to fixed a
ssets in the R
eporting Perio
d.
Mainly due to
the terminatio
n of recogniti
on of all bank
acceptance bi
Short-term
0.00 0.00% 115,437,700.65 2.21% -2.21% lls with lower
borrowings
credit ratings
discounted in
the early and
reporting peri
ods.
Contract
33,352,877.66 0.65% 32,843,692.83 0.63% 0.02%
liabilities
27
Changchai Company, Limited Annual Report 2023
Indicate whether overseas assets take up a high percentage in total assets.
□ Applicable √ Not applicable
2. Assets and Liabilities at Fair Value
√ Applicable □ Not applicable
Unit: RMB
Gain/loss
Cumulati Impairme
on
ve nt Purchase Sold in
fair-value
Beginnin fair-value allowance d in the the Other Ending
Item changes
g 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
assets 370,103,6 10,401,52 947,071,9 1,109,608 225,641,4
(derivativ 0.00 0.00 0.00
e 02.57 1.88 04.04 ,816.74 29.94
financial
assets
exclusive
)
4.
Investme
nt in 955,560,2 13,927,78 969,488,0
other 0.00 0.00 0.00 0.00 0.00
equity 40.08 5.59 25.67
instrumen
ts
Subtotal
of 1,325,663 10,401,52 13,927,78 947,071,9 1,109,608 1,195,129
0.00 0.00
financial ,842.65 1.88 5.59 04.04 ,816.74 ,455.61
assets
412,809,5 39,414,57 453,688,0
Other 0.00 0.00 0.00 0.00 0.00
87.93 6.80 86.55
Total of 1,738,473 49,816,09 13,927,78 947,071,9 1,109,608 1,648,817
0.00 0.00
above ,430.58 8.68 5.59 04.04 ,816.74 ,542.16
Financial
0.00 0.00
liabilities
Contents of other change: N/A
Significant changes to the measurement attributes of the major assets in the Reporting Period:
□ Yes √ No
28
Changchai Company, Limited Annual Report 2023
3. Restricted Asset Rights as at the Period-End
Unit: RMB
At the period-end At the period-begin
Item Reason Reason
Gross Carrying Type of Gross Carrying Type of
for for
amount amount restriction amount amount restriction
restriction restriction
Security Security
deposits deposits
Monetary associate associate
assets-ot d with b d with b
76,238,44 76,238,44 Security 95,662,38 95,662,38 Security
her mone ank acce ank acce
3.41 3.41 deposits 4.92 4.92 deposits
tary asset ptance n ptance n
s otes, env otes, env
ironment, ironment,
etc. etc.
As collat
Fixed ass eral for t
As collat
ets-buildi he issue
1,332,81 1,332,81 As collat 1,530,89 1,530,89 As collat eral for
ngs and
2.48 2.48 eral of bank 0.90 0.90 eral bank loa
constructi
n
ons acceptanc
e note
As collat
eral for t
Intangible As collat
assets-la 847,162.2 847,162.2 As collat he issue 879,275.3 879,275.3 As collat eral for
nd use ri 8 8 eral of bank 5 5 eral bank loa
ghts n
acceptanc
e note
As collat
eral for t
Fixed ass As collat
ets-plant 23,728,73 23,728,73 As collat he issue 31,222,42 31,222,42 As collat eral for
and equi 3.18 3.18 eral of bank 0.22 0.22 eral bank loa
pment n
acceptanc
e note
Discounte
Payment d at the
Notes rec
obligation period-en
eivable-di
110,000,0 110,000,0 of disco d and un
scounted
00.00 00.00 unted un due at th
undue no
due notes e balance
tes
sheet da
te
Notes rec Payment Endorsed Payment Endorsed
eivable-tr obligation at the p obligation at the p
55,979,83 55,979,83 66,395,23 66,395,23
ansferred of trans eriod-end of trans eriod-end
2.64 2.64 1.83 1.83
undue n ferred un and und ferred un and und
otes due notes ue at the due notes ue at the
29
Changchai Company, Limited Annual Report 2023
balance balance
sheet dat sheet dat
e e
158,126,9 158,126,9 305,690,2 305,690,2
Total
83.99 83.99 03.22 03.22
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)
7,170,000.00 108,520,800.00 -93.39%
2. Major Equity Investments Made in the Reporting Period
□ Applicable √ Not applicable
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
Initia on f Purc Gain/
Acco ted f Sold
Begi air v hase loss Endi
Varie Code Nam l inv untin air v in t Acco Fund
nnin alue d in in th ng c
ty of of s e of g me alue he R untin ing s
estm g car chan the e Re arryi
asure chan eport
sec ecuri sec rying ges i Repo porti ng a g titl ource
ent c ment ges r ing
amo n the rting ng P mou
urity ty urity met ecord Perio e
unt Rep Peri eriod nt
ost hod ed in d
ortin od
equi
g Pe
ty
riod
Dom Inves
Fair 352, 394,
estic/ Foto 41,78 406,0 tmen Self-
6001 value 701, 485,
forei n M 4,00 45,00 0.00 0.00 0.00 0.00 t in fund
66 met 000. 000.
gn st otor 0.00 0.00 other ed
hod 00 00
ock equi
30
Changchai Company, Limited Annual Report 2023
ty in
stru
ment
s
Inves
tmen
Dom t in
Bank Fair 113, 11,4 156,
estic/ 42,78 170,5 other Self-
6009 of J value 760, 82,3 546,
forei 6,00 86,00 0.00 0.00 0.00 equi fund
19 iangs met 000. 80.0 000.
gn st 0.00 0.00 ty in ed
u hod 00 0 00
ock stru
ment
s
Kailo Held
Dom
ng H Fair 18,1 -for-t
estic/ 20,00 13,59 4,52 4,52 radin Self-
3009 igh value 19,8
forei 1,26 2,41 7,45 0.00 0.00 0.00 7,45 g fin fund
12 Tech met 61.0
gn st 8.00 1.00 0.00 0.00 ancia ed
nolo hod 0 l ass
ock ets
gy
Dom Lian Held
Fair 66,8 -for-t
estic/ ce T 7,20 60,06 6,81 6,70 radin Self-
6881 value 73,6
forei echn 0,00 2,40 1,20 0.00 0.00 0.00 2,14 g fin fund
13 met 00.0
gn st olog 0.00 0.00 0.00 0.38 ancia ed
hod 0 l ass
ock y ets
Dom Held
Fair -for-t
estic/ Lanti 69,6 301, radin Self-
6053 160,7 value 247,0 54,56
forei an G 0.00 0.00 0.00 83.0 560. g fin fund
68 44.76 met 00.00 0.00
gn st as 2 00 ancia ed
hod l ass
ock ets
Stars
Dom Scie Held
Fair -for-t
estic/ nce 3,60 4,83 -1,23 7,38 2,62 radin Self-
8328 value
forei and 0,00 7,50 7,50 0.00 0.00 5,85 7,79 0.00 g fin fund
85 met
gn st Tech 0.00 0.00 0.00 7.60 6.19 ancia ed
hod l ass
ock nolo ets
gy
466, 25,4 636,
115,5 655,3 10,15 7,38
461, 09,4 326,
Total 32,01 -- 70,31 5,71 0.00 5,85 -- --
2.76 000. 49.5 021.
1.00 0.00 7.60
00 9 00
(2) Investments in Derivative Financial Instruments
□ Applicable √ Not applicable
31
Changchai Company, Limited Annual Report 2023
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
Total
Total Propor Raised
Total raised Use
raised Total tion of Total funds
raised funds and
funds accum total raised that
funds with owner
that ulative accum funds have
Year Metho that altered ship
Total Net have raised ulative that been
for d of have purpos chang
raised procee been funds raised have left
fund-r fund-r ds been es e of
funds used with funds not unuse
aising aising used during unuse
in the altered with been d for
accum the d
curren purpos altered used over
ulative Report raised
t es purpos yet two
ly ing funds
period es years
Period
Non-p
ublic 63,50 62,06 23,96 57,13
2021 0 0 0.00% 0 N/A 0
offerin 0.00 6.57 0.95 8.48
g
63,50 62,06 23,96 57,13
Total -- 0 0 0.00% 0 -- 0
0.00 6.57 0.95 8.48
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
32
Changchai Company, Limited Annual Report 2023
Exchange, and the Company strictly complies with it when using the raised funds.
As at 31 December 2023, the Company had used a total of RMB571,384,800 in raised funds. The proposed
raised funds (including interest in the special account for raised funds and net income from wealth
management) for the Private Placement Raised Funds Investment Project of Relocation of Light Engines and
Casting were fully utilized as planned; the R&D projects for innovation capacity building realized the planned
R&D goals and achieved corresponding R&D results. The Company completed the innovation capacity
building project for the fundraising project and will permanently supplement the surplus raised funds of
RMB60,242,000 to working capital for routine production and operation activities. This project was approved
at the third extraordinary general meeting in 2023. The special account for raised funds was cancelled and will
no longer be used. The relevant raised funds supervision agreements signed between the Company and the
sponsors, as well as the commercial banks that deposit the raised funds, will be terminated accordingly. For
details, please refer to the Announcement on the Use of Surplus Raised Funds and Cancellation of Special
Account for Raised Funds for the Private Placement Raised Funds Investment Project of Relocation of Light
Engines (Announcement No: 2023-060), the Announcement on the Completion of the Project of Innovation
Capacity Building of the Technology Centre in Private Placement Raised Funds Investment Project and
Permanent Supplement of Surplus Raised Funds to Working Capital (Announcement No.: 2023-068), and the
Announcement on Resolutions of the Third Extraordinary General Meeting in 2023 (Announcement No.:
2023-072), which were disclosed on the http://www.cninfo.com.cn.
(2) Committed Projects of Raised Funds
√ Applicable □ Not applicable
Unit: RMB’0,000
Accu
Wheth Wheth
mulati Invest
er er
The ve ment Date
projec Benefi there
Total invest invest progre when Wheth
ts Adjust ts are
Committed comm ment ment ss as the er the
have ed record materi
investment itted amou amou of the projec estima
been total ed al
projects and invest nt nt as end of ts are ted
altere invest during chang
investment of ment during of the the ready benefi
d ment the es in
excessive raised with the end of Repor for ts are
(inclu amou Repor the
funds raised Repor the ting their reache
ding nt (1) ting projec
funds ting Repor Period intend d
partial Period t
Period ting (3) = ed use
altern feasibi
Period (2)/(1)
ation) lity
(2)
Committed investment projects
Relocation project
54,76 54,76 23,37 55,79 101.8 May -6,00
of light engines No No No
6.71 6.71 6.88 5.20 8% 2022 0.61
and casting
Innovation Dece Not
8,733. 7,299. 584.0 1,343. 18.4
capacity building No mber 0.00 applic No
29 86 8 28 0%
project of the 2023 able
33
Changchai Company, Limited Annual Report 2023
technical center
Subtotal of
committed 63,50 62,06 23,96 57,13 -6,00
-- -- -- -- --
investment 0 6.57 0.96 8.48 0.61
projects
Investment of excessive raised funds
Not applicable
63,50 62,06 23,96 57,13 -6,00
Total -- -- -- -- --
0 6.57 0.96 8.48 0.61
Explain project by The reason why the project of relocation of light engines and casting failed to achieve
project why a benefits during this Reporting Period: The project consisted of multiple production lines
project failed to such as casting and single-cylinder engine assembly, with the main customer being the
meet the schedule parent company. Due to market conditions, there was a certain degree of reduction in
or expected internal and external orders for the casting business, and the project's main source of
returns (including profit, the single-cylinder engine business, was not fully transferred from the parent
reason for company to the project until the end of 2023, resulting in the project falling short of its
inputting “N/A” expected benefits.
for “Whether the
estimated benefits
are reached”)
Explanations of
the material
Not applicable
changes in the
project feasibility
Amount, use, and
use progress of
Not applicable
excessive raised
funds
Applicable
Occurred in the prior year
Implementation The Proposal on Adding Implementation Location to the Private Placement Raised Funds
of location Investment Project of Innovation Capacity Building of the Technical Centre was approved
changes in the at the 13th Meeting of the 9th Board of Directors and the 12th Meeting of the 9th
investment Supervisory Committee of the Company on 22 August 2022. The Company decided to
projects with the add the sites of certain branches of the Company as the parent and wholly-owned
raised funds subsidiary Changchai Machinery as locations to place the R&D equipment and
implement the R&D project. This change will not re-purpose the raised funds and will
help carry forward the technical innovation project.
Implementation
of method
adjustments to the
Not applicable
investment
projects with the
raised funds
34
Changchai Company, Limited Annual Report 2023
Applicable
Prior to the availability of the raised funds, in order to ensure the smooth implementation
of the investment projects with raised funds, the Company used its own funds to invest in
part of the investment projects with raised funds and paid part of the issuance expenses.
As of 17 June 2021, the cumulative amount of the Company's self-financing funds
pre-invested in the investment projects with raised funds was RMB181,803,327.94, the
amount of issuance expenses advanced was RMB2,358,490.56, totaling
RMB184,161,818.50, and the proposed replacement amount was RMB184,161,818.50.
The capitals were verified by the Gongzheng Tianye Accounting Firm (Special General
Early investment
Partnership), and the Verification Report on the Pre-investment of Self-financing Funds
and placement
into the Investment Project with Raised Funds and the Payment of Issuance Expenses by
concerning the
Self-financing Funds of Changchai Co., Ltd. (S.G.W [2021] E1347) was issued on 25
investment
June 2021. On 28 June 2021, the Third Interim Meeting of the Board of Directors of the
projects with the
Company in 2021 deliberated and approved the Proposal on Replacing the Funds
raised 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 30 June 2021.
Temporary
replenishment of
working capital Not applicable
with the idle
raised funds
Applicable
On 14 November 2023, the Third Interim Meeting of the Board of Directors of the
Company in 2023 deliberated and approved the Proposal on the Completion of the Project
of Innovation Capacity Building of the Technology Centre in Private Placement Raised
Funds Investment Project and Permanent Supplement of Surplus Raised Funds to
Surplus raised Working Capital, agreeing to close the "Project of Innovation Capacity Building of the
funds for project Technology Centre" in the Company's Private Placement Raised Funds Investment
implementation Project and permanently supplement the surplus raised funds with working capital of
and reasons for RMB60,236,300 (actual data is subject to bank settlement amount). As at 31 December
the surplus 2023, the Company had transferred all the above-mentioned surplus funds to its own fund
account, with an actual amount of RMB60,242,041.74 supplemented to working capital.
The main reasons for the surplus of raised funds: 1. During the implementation of
innovation capacity building project, the Company strictly followed the relevant
regulations on the use of raised funds, scientifically and prudently used the raised funds,
adhered to the principles of saving funds and improving asset utilization rate, and
integrated existing equipment and other resources while ensuring project progress, and
35
Changchai Company, Limited Annual Report 2023
used technological innovation to complete part of the research and development process,
saving some financial expenses. 2. In order to improve the using efficiency of raised
funds, the Company obtained certain investment returns by using some idle raised funds
for cash management, while ensuring that it did not affect the building of fundraising
projects and the safety of raised funds. Meanwhile, a certain amount of deposit interest
income was generated during the deposit period of the raised funds.
As of December 31, 2023, all funds raised for the relocation project of the company's
Use and
non-public offering fundraising project have been fully utilized, and the innovation
ownership change
capacity construction project of the non-public offering fundraising project has been
of unused raised
completed. The quality assurance deposit and final payment to be paid after the
funds
completion of the innovation capacity construction project are 2.49 million yuan.
On 13 July 2021, the Fourth Interim Meeting of the Board of Directors of the Company in
2021 deliberated and approved the Proposal on Changing the Implementation Entity of
Some Investment Projects with Raised Funds, agreeing to change the implementation
entity of the Company's investment projects with funds raised through non-public
offering of shares, the "relocation project of light engines and casting", from Changchai
Problems in the Machinery, a wholly-owned subsidiary of the Company, to the parent company of
use of raised Changchai Co., Ltd. The matter did not change the use and implementation of the funds
funds and raised and was not a significant change in the investment projects with raised funds.
disclosure, or The Proposal on Adding Implementation Entity to the Private Placement Raised Funds
other cases Investment Project of Relocation of Light Engines and Casting was approved at the 13th
Meeting of the 9th Board of Directors and the 12th Meeting of the 9th Supervisory
Committee of the Company on 22 August 2022. As such, the Company added Changchai
Machinery as another operating entity with the Company as the parent to jointly operate
the relocation project for better operational flexibility and stronger market
competitiveness.
(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
36
Changchai Company, Limited Annual Report 2023
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
Relations
hip with Principal Registere Total Operating Operating
Name Net assets Net profit
the activity d capital assets revenue profit
Company
Productio
n of dies
Changcha Subsidiar 55,063,00 147,378,8 76,927,10 220,119,6 -2,783,19 -3,123,28
el engine
i Benniu y 0.00 87.22 0.64 87.04 1.08 1.26
accessor
ies
Changcha Diesel en
Subsidiar 85,000,00 63,531,35 49,947,19 43,364,24 1,258,490 261,794.6
i Wanzh gine asse
y 0.00 3.62 8.85 6.66 .11 4
ou mbly
External
Horizon
Subsidiar investme 40,000,00 108,778,4 91,623,43 14,145,89 10,692,33
Investme 0.00
y nt and c 0.00 81.44 7.75 7.62 6.36
nt
onsulting
agricultur
al machi
Horizon
nery pro
Agricultu Subsidiar 10,000,00 2,946,402 -16,003,0 5,762,363 -1,022,92 -948,611.
duct of r
ral Equip y 0.00 .96 77.63 .85 9.03 03
ice trans
ment
planter et
c.
Gasoline
Changcha Subsidiar 37,250,00 118,648,0 98,943,41 153,677,9 13,465,56 12,559,61
engines a
i Robin y 0.00 70.60 9.34 44.53 8.83 0.52
ssembly
Internal c
ombustio
Changcha
Subsidiar n engine 300,000,0 710,909,7 217,446,0 135,924,1 -57,540,2 -60,006,1
i Machin
y and rela 00.00 95.88 76.75 17.06 87.98 43.72
ery
ted acces
sories
Xingshen Real esta
g Real E Subsidiar te manag 1,000,000 3,263,927 1,459,102 4,721,964 891,596.1 899,883.9
state Ma y ement se .00 .91 .03 .91 0 9
nagement rvice
37
Changchai Company, Limited Annual Report 2023
Manufact
uring and
marketin
Zhenjiang Subsidiar 2,000,000 119,143,2 98,847,85 66,935,15 12,868,23 10,487,80
g of dies
Siyang y .00 92.70 5.74 6.33 4.45 1.85
el engine
s for shi
ps
Subsidiaries obtained or disposed of in the Reporting Period:
□ Applicable √ Not applicable
Other information about principal subsidiaries and joint stock companies:
In December 2023, the Company acquired 7.5% equity interests in Zhenjiang Siyang held by three natural person
shareholders, and now the Company holds a total of 49% equity interests in Zhenjiang Siyang, making it the
largest shareholder. Other shareholders are dispersed. The Company appointed four out of the seven members of
Zhenjiang Siyang's Board of Directors, including the Chairman. Therefore, the Company is the actual controller of
Zhenjiang Siyang, which constitutes the conditions for the consolidation.
X Structured Bodies Controlled by the Company
□ Applicable √ Not applicable
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 state’s policies on comprehensively promoting rural revitalization and accelerating to build China into an
agricultural power will bring about significant and positive impacts for the industry. The Company will make full
use of the policy-based dividend of strong national support for agricultural production and development of
agricultural machinery and continue to promote innovative development, talent recruitment, quality improvement,
brand building, and capital boost to accelerate the technological upgrade of traditional power products, expand
new markets in new fields, and also to achieve diversified development of the industry. The Company’s main
development directions are as follows:
(1) Accelerating technological upgrading and area expansion of existing advantageous products
First, the Company will prioritize the optimization and enhancement of its core products. It will further refine
products to comply with the National Emission Standard IV for Non-road Vehicles based on market feedback,
thereby bolstering competitiveness within existing application domains. Through production and manufacturing,
supply chain management, and service capacity building, the Company will comprehensively improve the quality
level and service skills for the products of the National Emission Standard IV for Non-road Vehicles, so as to meet
the market demand for product efficiency, emission reduction, and reliability.
Second, the Company will focus on value extension and develop high-end products.
1) The Company will continuously promote the optimization of generator set products and network layout, move
towards high-end and professional development in segmented fields, develop high-end industrial chains, and
expand the application of generator sets in markets such as special vehicles, unmanned aerial vehicle defence,
38
Changchai Company, Limited Annual Report 2023
parking, and communication.
2) Based on the electronic, networked and intelligent characteristics of the development of agricultural machinery
products, the Company will promote the application of advanced technologies such as the Internet, big data,
artificial intelligence and new materials to product development, further improve the diesel engines’ functions of
intelligent control, real-time monitoring and big data collection and analysis, accelerate the R&D of intelligent
terminals and hybrid power, and raise the added value of products to better meet user demands.
Third, existing advantageous products will be developed in the terminal direction. 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 non-road fields such as agricultural machinery, plant protection machinery, engineering
machinery, and marine machinery. The Company is increasing its research and development efforts in
terminal-side fields such as generator sets, outboard engines, cold chains, fishing boats, and iron towers, and
increasing its market development efforts. Through its subsidiary Zhenjiang Siyang, the Company will continue to
improve its business structure and strengthen cooperation in the field of marine machinery, to promote long-term
development. At the same time, the research and development project of the outboard engines in the project of
innovation capacity building of the technology centre in the private placement raised funds investment project has
been successfully completed, and the development of the outboard engine power platform for the 10-20
horsepower, 30-60 horsepower, and 70-90 horsepower (80 horsepower) has been completed in steps. Some
products have passed the CCS certification of China Classification Society, the EU RCD certification, and MED
certification. For the low-power outboard engine, market validation has been completed and a sales system for
domestic and international markets has been established. For the high-power diesel engines for outboard engines,
the installation and performance debugging of the entire machine have been completed, and reliability tests have
been conducted. The Company fully utilizes the capital platform of listed companies, and accelerates the
extension of the industrial chain through joint ventures and mergers and acquisitions, to build new competitive
advantages.
(2) Promoting industrial transformation and development in the direction of combination with new energy
With the rapid development of new energy technology, traditional power has been impacted in some fields, posing
a threat of industrial substitution for the development of new energy. However, the development opportunities of
traditional power still exist for a long time. The Company leverages its advantages in light power, expands new
energy products, and promotes the research and development of hybrid power projects. The research and
development project for the oil-electric hybrid platform in the project of innovation capacity building of
technology centre in the private placement raised funds investment project has been completed. The product
prototype of the project has been built, meeting the adaptive charging function with a maximum power of 15 kW,
and achieving certain research and development results. Jiangsu Horizon New Energy Technology Co., Ltd., in
which the Company invests, is mainly engaged in lithium battery wet-processed separator project products with a
good development momentum. In the future, the Company will continue to increase its exploration efforts in new
power and energy fields such as hydrogen fuel and hybrid power, and strengthen cooperation and penetration with
relevant green industries, to promote the expansion of enterprises into new fields.
2. Operation plan for the year 2024
The Company will consolidate the traditional market of agricultural machinery, explore the emerging area of
power, raise quality to create fine products with core technologies, highlight efficiency by integrating resources,
stimulate vitality by deepening reform, and leverage capital to promote development. In 2024, sales revenue is
expected to be RMB2.3 billion, with revenue of USD58 million through export.
The above operation plan does not represent the profit forecast of Y2024 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
39
Changchai Company, Limited Annual Report 2023
team. There is a lot of uncertainty, and investors should pay special attention on it.
3. Possible future risks and countermeasures of the Company
(1) Market risk
With the upgrading of emission standards in the non-road field and the advancement of market demand,
competition in the existing market has intensified, and industry concentration has increased. Currently, the
industry has entered a period of in-depth adjustments led by optimization and upgrading, and most enterprises
have continuously strengthened product development and optimization, and increased market maintenance and
development efforts in response to market demand. Meanwhile, the products for the National Emission Standard
IV for Non-road Vehicles have fully entered the market, further intensifying industry competition.
Countermeasures: First, the Company will keep up with market trends, strengthen product performance
optimization, quality improvement, and supply guarantee to meet market demand. Second, the Company will
stabilize the traditional application field, further break through in advantageous fields, and extend product lines,
expanding the application of products in the high-end industrial chain market. Third, the Company will enhance
innovation awareness, actively promote the application of advanced technologies such as the Internet, big data,
artificial intelligence and new materials, further improve the intelligence and specialization of products, and
accelerate the research and development of intelligent terminals and hybrid power, to build new competitive
advantages.
(2) Industrial risk
In recent years, influenced by the development of new energy application technology and relevant policy
incentives, various enterprises have accelerated their research, application, and market application in the field of
new energy power, so the market share of application fields related to diesel engines has been affected to a certain
extent. At present, new energy power still faces challenges such as high costs and complex operating
environments in the field of agricultural machinery. However, with the continuous breakthrough of new energy
technology, some application scenarios of non-road diesel engines may be replaced by new energy power.
Countermeasures: First, the Company will accelerate the optimization and upgrading of product performance,
develop efficient and environmentally-friendly products, and comply with national energy conservation and
emission reduction policies, to enhance product competitiveness. Second, the Company will accelerate the
research and analysis of new energy power and expand new energy hybrid products, to prepare for sustainable
development.
(3) Foreign trade risk
In recent years, the international situation has become increasingly turbulent, and the global political and
economic environment has become increasingly complex, causing varying degrees of impact on foreign trade
policies of various countries. If there are significant changes in the political stability and foreign trade policies of
foreign markets, it will have a significant impact on product export sales.
Countermeasures: First, the Company will promote close collaboration among relevant departments, and enhance
overall foreign trade efficiency through complementary resources, information, and products. Second, the
Company will innovate and transform the technological route in combination with overseas market demand, and
promote more high-performance products to overseas markets. Third, the Company will accelerate the
implementation in the training of overseas service personnel, service capacity building, overseas commissioned
station construction, and the supporting enterprise overseas market channels, so as to establish a complete sales
service network in the export market.
(4) Foreign exchange risk
In recent years, the challenges and uncertainties in the international political and economic environment have
increased, leading to an increase in exchange rate fluctuation factors. The Company's products are exported
40
Changchai Company, Limited Annual Report 2023
overseas, and exchange rate fluctuations may have adverse effects on the sales of the Company's products.
Countermeasures: First, the Company will closely monitor exchange rate fluctuations, choose appropriate
currencies for pricing and settlement, and hedge against risks through hedging and other measures. Second, the
Company will reduce risks by changing payment methods and purchasing export credit insurance. Third, the
Company will adjust product prices and payment terms in a timely manner in response to fluctuations in exchange
rates and material prices. Fourth, the Company will enhance the competitiveness of products and services to cope
with exchange rate fluctuations, to reduce the impact of exchange rate fluctuations on the Company's product
sales.
(5) Risk of fluctuations in raw material prices
The market prices of raw materials often fluctuate, influenced by factors such as macroeconomic environment,
production capacity, and changes in demand. The price fluctuations of raw materials such as steel and pig iron will
bring pressure to the Company's manufacturing costs and have a certain impact on the Company's profits.
Countermeasures: The Company will optimize the supply system and strengthen supply chain management
through measures such as technological improvement and strengthening cost management; the Company will
timely track market trends and strengthen inventory management, to alleviate the adverse effects of raw material
price fluctuations on the Company.
(6) Talent risk
Talent is one of the key factors for the development of the Company. The Company needs talent to help improve
operational efficiency and accelerate its development and building. If the Company's remuneration policies and
talent incentive and constraint policies are inadequate, it will lead to a shortage of high-end leading management
and technical talents, and a shortage of reserve talents, which will affect research and innovation capabilities and
core competitiveness.
Countermeasures: First, based on the Company's development plan and actual needs of business management, the
Company will continuously improve the talent introduction mechanism and talent cultivation system, optimize
personnel structure, and comprehensively enhance the overall quality of the employee team. Second, the
Company will continuously improve the professional abilities of employees through systematic training and other
measures based on business development needs. Third, the Company will improve talent incentive methods and
performance appraisal systems, to comprehensively enhance the contribution rate of human resources.
XII Communications with the Investment Community such as Researches, Inquiries and
Interviews during the Reporting Period
√ Applicable □ Not applicable
Place Contents and
Way of Type of Index to main inquiry
Date of visit of Visitor materials
visit visitor information
visit provided
The Company’s
production and Information on 000570
Onlin operation, Changchai’s Results
Investors
e Online development and Presentation and
20 April 2023 Other and the
meeti exchange construction, Roadshow on
public
ng investment and www.cninfo.com.cn
wealth dated 20 April 2023
management, etc.
41
Changchai Company, Limited Annual Report 2023
XIII Implementation of the “Quality and Earnings Dual Improvement” Action Plan
Indicate whether the Company has disclosed the “Quality and Earnings Dual Improvement” Action Plan.
□ Yes √ No
42
Changchai Company, Limited Annual Report 2023
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.
43
Changchai Company, Limited Annual Report 2023
5. Business: The Company has an independent and complete business system with independent and autonomous
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
Disclosur
Meeting Type participatio the Resolution
e date
n ratio meeting
The 2022
Annual All proposals were approved. See
Annual 18 May 19 May Announcement No. 2023-020 on
General 32.52%
General 2023 2023 Resolutions of the 2022 Annual G
Meeting eneral Meeting.
Meeting
The 1st Extr All proposals were approved. See
Extraordinary 12 June 13 June
aordinary G Announcement No. 2023-035 on
General Meeti 32.33%
eneral Meeti 2023 2023 Resolutions of the 1st Extraordinar
ng
ng of 2023 y General Meeting of 2023.
The 2nd Ext
All proposals were approved. See
raordinary Extraordinary 10 August 11 August Announcement No. 2023-054 on
General Me General Meeti 32.33%
2023 2023 Resolutions of the 2nd Extraordinar
eting of 202 ng
y General Meeting of 2023.
3
The 3rd Extr 14 15 All proposals were approved. See
Extraordinary
aordinary G Announcement No. 2023-072 on
General Meeti 32.29% Novembe Novembe
eneral Meeti Resolutions of the 3rd Extraordinar
ng r 2023 r 2023
ng of 2023 y General Meeting of 2023.
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
Gend Incumben
Name Age Office title Start of tenure End of tenure shareholdin
er t/Former
g (share)
Incumben
Li Male 42 Chairman of 12 June 2023 Ongoing 0
t
44
Changchai Company, Limited Annual Report 2023
Desen the Board
Vice
Zhang Incumben
Male 57 Chairman of 12 June 2023 Ongoing 0
Xin t
the Board
Xie Director
Incumben
Guozh Male 54 General 12 June 2023 Ongoing 0
t
ong Manager
Fema Incumben
Tan Jie 44 Director 12 June 2023 Ongoing 0
le t
Director
Jiang Incumben
Male 51 Chief 16 April 2020 Ongoing 0
He t
Accountant
Yang Incumben
Male 51 Director 16 April 2020 Ongoing 0
Feng t
Wang
Independent Incumben
Manca Male 60 16 April 2020 Ongoing 0
director t
ng
Zhang Fema Independent Incumben
53 16 April 2020 Ongoing 0
Yan le director t
Independent Incumben
Jia Bin Male 45 12 June 2023 Ongoing 0
director t
Chairman of
Ni
the Incumben
Mingli Male 56 12 June 2023 Ongoing 0
Supervisory t
ang
Committee
Shi Fema Incumben
43 Supervisor 12 June 2023 Ongoing 0
Xingyu le t
Lu
Incumben
Zhong Male 56 Supervisor 18 October 2016 Ongoing 0
t
gui
Incumben
Liu Yi Male 54 Supervisor 18 October 2016 Ongoing 0
t
Lin Incumben
Male 41 Supervisor 12 June 2023 Ongoing 0
Wei t
Sun
Vice-general Incumben
Jianzho Male 51 16 April 2020 Ongoing 0
Manager t
ng
Vice-general
He 13 December 2021
Manager Incumben
Jianjia Male 44 Ongoing 0
Secretary of t
ng 18 October 2016
the Board
Wang Vice-general Incumben
Male 36 12 June 2023 Ongoing 0
Jing Manager t
Wang Chief Incumben
Male 52 12 June 2023 Ongoing 0
Weifen Engineer t
45
Changchai Company, Limited Annual Report 2023
g
Shi Chairman of
Male 59 Former 18 October 2016 12 June 2023 0
Xinkun the Board
Zhang General
Male 56 Former 18 October 2016 12 June 2023 0
Xin Manager
Lin
Male 60 Director Former 17 December 2018 12 June 2023 0
Tian
Director
Xu Yi Male 59 Vice-general Former 16 April 2020 12 June 2023 0
Manager
Xing Independent
Male 69 Former 16 April 2020 12 June 2023 0
Min director
Yin Vice-general
Male 59 Former 18 October 2016 12 June 2023 0
Lihou Manager
Xie
Vice-general
Guozh Male 54 Former 16 April 2020 12 June 2023 0
Manager
ong
Chairman of
He
the
Jiangua Male 59 Former 17 December 2020 12 June 2023 0
Supervisory
ng
Committee
Chen Fema
40 Supervisor Former 16 April 2020 12 June 2023 0
Lijia le
Ge Fema
53 Supervisor Former 16 April 2020 12 June 2023 0
Jiangli le
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
Name Office title Type of change Date of change Reason for change
Li Desen Chairman of the Board Elected 12 June 2023 General election
Vice Chairman of the
Zhang Xin Elected 12 June 2023 General election
Board
Director Elected General election
Xie
12 June 2023 Appointed by the
Guozhong General Manager Appointed
Board
Tan Jie Director Elected 12 June 2023 General election
Jia Bin Independent director Elected 12 June 2023 General election
Chairman of the
Ni
Supervisory Elected 12 June 2023 General election
Mingliang
Committee
46
Changchai Company, Limited Annual Report 2023
Shi Xingyu Supervisor Elected 12 June 2023 General election
Lin Wei Supervisor Elected 12 June 2023 General election
Appointed by the
Wang Jing Vice-general Manager Appointed 12 June 2023
Board
Wang Appointed by the
Chief Engineer Appointed 12 June 2023
Weifeng Board
Departure on Departure on
Shi Xinkun Chairman of the Board expiration of term of 12 June 2023 expiration of term of
office office
Departure on Departure on
Lin Tian Director expiration of term of 12 June 2023 expiration of term of
office office
Director Departure on Departure on
Xu Yi expiration of term of 12 June 2023 expiration of term of
Vice-general Manager
office office
Departure on Departure on
Xing Min Independent director expiration of term of 12 June 2023 expiration of term of
office office
Departure on Departure on
Zhang Xin General Manager expiration of term of 12 June 2023 expiration of term of
office office
Departure on Departure on
Yin Lihou Vice-general Manager expiration of term of 12 June 2023 expiration of term of
office office
Departure on Departure on
Xie
Vice-general Manager expiration of term of 12 June 2023 expiration of term of
Guozhong
office office
Chairman of the Departure on Departure on
He
Supervisory expiration of term of 12 June 2023 expiration of term of
Jianguang
Committee office office
Departure on Departure on
Chen Lijia Supervisor expiration of term of 12 June 2023 expiration of term of
office office
Departure on Departure on
Ge Jiangli Supervisor expiration of term of 12 June 2023 expiration of term of
office office
2. Biographical Information
Professional backgrounds, major work experience and current duties in the Company of the incumbent directors,
supervisors and senior management:
Li Desen: He successively took the posts of Director of the Office of the Qishuyan Rail Transit Industrial Park
Management Committee, Deputy Secretary of the Qishuyan Street Party Working Committee and its Office
Director, Director of the Financial Development Bureau in the Changzhou Economic Development Zone, Vice
47
Changchai Company, Limited Annual Report 2023
General Manager and Party Member of the Local Financial Supervision and Administration Bureau in Changzhou,
Standing Committee Member, Minister of the United Front Work Department in Changzhou, Deputy District
Mayor and Party Member of the Wujin District Committee in Changzhou, and Deputy Secretary of the District
Political Consultative Conference Party Group in Changzhou. Now, he acts as Chairman and Party Committee
Secretary of Changzhou Investment Group Co., Ltd., as well as Party Committee Secretary and Chairman of the
Company.
Zhang Xin: He successively took the posts of Sales Manager, General Manager Assistant, Deputy General
Manager, and General Manager in the Company. Now, he acts as Vice Chairman of the Company.
Xie Guozhong: He successively took the posts of Sales Manager, General Manager Assistant, and Deputy General
Manager of the Company. Now, he acts as Deputy Party Committee Secretary,Director and General Manager of
the Company, as well as Supervisor of Beiqi Foton Motor Co., Ltd.
Tan Jie: She successively took the posts of Deputy Director of the Accounting Department and Deputy Director of
the Personnel and Education Department of the Changzhou Municipal Bureau of Finance, Deputy Secretary and
Youth League Secretary of the Changzhou Institute of Certified Public Accountants, Director of the
Comprehensive Department, Agriculture Department, Agriculture and Rural Department, and Administrative and
Legal Department of the Changzhou Municipal Bureau of Finance, and President Assistant of Changzhou
Investment Group Co., Ltd. Now, she acts as Member of the Party Committee and Vice President of Changzhou
Investment Group Co., Ltd., as well as Director of the Company.
Jiang He: He successively took the posts of Accountant, Chief Assistant, and Deputy Chief of the Finance
Department of the Company. Now, he acts as Director, Chief Accountant, and Chief of the Finance Department of
the Company.
Yang Feng: He successively served as 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., General Manager of the Investment Banking Department and the
Operation Management Headquarters, as well as Chairman Assistant of AJ Securities Co., Ltd., Executive General
Manager of the Enterprise Development and Financing Department and the Investment Banking Department of
CITIC Securities Co., Ltd., and Managing Director of Daiwa Securities China Co., Ltd. Now, he acts as Executive
Director of De Xin Investment Manage Co., Limited, Independent Director of Shanghai Kindly Enterprise
Development Group Co., Ltd., and Director of the Company.
Wang Mancang: He successively served as a teacher and lecturer in the Department of Management, as well as a
financial lecturer and professor in the Department of Finance of the School of Economics and Management of
Northwest University. Now, he acts as Director of the Department of Finance of the School of Economics and
Management of Northwest University, Chairman of Shaanxi Securities Research Society, as well as Independent
Director of Focuslight Technologies Inc., Ccoop Group Co., Ltd., and Xi'an Wonder Energy Chemical Co., Ltd.,
Director of Chang'an International Trust Co., Ltd., Xi'an Guolian Quality Testing Technology Co., Ltd. and the
Company.
Zhang Yan: She successively served as Chief Accountant of Changzhou Zhengda Certified Public Accountants
Co., Ltd., and Executive Deputy Chief Accountant of Jiangsu Gongzheng Certified Public Accountants Co., Ltd.
Now, she acts as Associate Professor of Management School of Jiangsu University of Technology, Director of
Changzhou Communications Industry Group Co., Ltd., Independent Director of Jiangsu Tianmu Lake Tourism
Co., Ltd., Independent Non-executive Director of S-Enjoy Service Group Co., Limited, and Independent Director
of the Company.
Jia Bin: He successively served as Deputy Director of the First Research Office of Tianjin Internal Combustion
Engine Research Institute, Assistant Secretary General of China Internal Combustion Engine Industry Association
48
Changchai Company, Limited Annual Report 2023
(CICEIA), and Secretary General of Small Gasoline Engine Branch of CICEIA. Now, he acts as Director of the
First Research Office of Tianjin Internal Combustion Engine Research Institute, Deputy Secretary General of
CICEIA, Independent Director of Lutian Machinery Co., Ltd. and Suzhou Parsun Power Machinery Co., Ltd.,
Director of Tianjin Tianbo Keda Technology Co., Ltd., and Independent Director of the Company.
Ni Mingliang: He successively served as Staff Member and Vice Chairman of the Labour Union of the Company.
Now, he acts as Deputy Party Committee Secretary, Chairman of Board of Supervisors, Secretary of the Party
Discipline Committee, Chairman of the Labour Union of the Company, Chairman of Xingsheng Real Estate
Management, and Director of Horizon Investment.
Shi Xingyu: He successively served as Staff Member, Section Chief, and Deputy General Manager of the Finance
Department of Changzhou Investment Group Co., Ltd. Now, he acts as General Manager of the Finance
Department of Changzhou Investment Group Co., Ltd., Director of Donghai Securities Co., Ltd., and Supervisor
of the Company.
Lu Zhonggui: He successively served as Staff Member of the Personnel Department, Full-time Disciplinary
Inspector of the Party Discipline Committee, and Deputy Secretary of Organ Party General Branch. Now, he acts
as Secretary of Organ Party General Branch, Chief of Political Department, Office Director, Employee Supervisor
of the Company, and Director of Xingsheng Real Estate Management.
Liu Yi: He successively took the posts of Chief Assistant of Enterprise Management Department, Deputy Chief of
the Finance Department and the Audit Department of the Company. Now, he acts as Chief of Audit Department
and Employee Supervisor of the Company, Director of Zhenjiang Siyang, Supervisor of Changchai Wanzhou,
Changchai Benniu, Horizon Investment, Horizon Agricultural Equipment, Changchai Robin, Changchai
Machinery, and Xingsheng Real Estate Management.
Lin Wei: He successively took the posts of Staff Member, Deputy Chief, Chief of the Enterprise Management
Department of the Company, and Deputy General Manager of Changchai Machinery. Now, he acts as Supervisor
and Chief of the Human Resources Department of the Company.
Sun Jianzhong: He successively took the posts of Director of the Technology Centre and Assistant General
Manager of the Company. Now, he acts as Deputy General Manager of the Company and General Manager of
Changchai Machinery.
He Jianjiang: He successively took the posts of Staff Member, Chief Assistant, and Deputy Chief of the
Investment and Development Department, and Securities Representative of the Company. Now, he acts as Deputy
General Manager, Secretary of the Board, and Chief of the Investment and Development Department of the
Company, as well as Chairman of the Board & GM of Horizon Investment, Director of Horizon Agricultural
Equipment, Chairman of Zhenjiang Siyang, Director of Jiangsu Horizon New Energy Technology Co., Ltd., and
Supervisor of Donghai Securities Co., Ltd.
Wang Jing: He successively took the posts of Foreign Trade Salesperson in the Overseas Business Department of
the Company, Technician in the single-cylinder engine plant, Deputy Director of the workshop, Assistant to the
Plant Director, Deputy Director of the Plant, Secretary of the Single-cylinder Engine Plant Party Branch, and
Assistant General Manager of the Company. Now, he acts as Deputy General Manager of the Company.
Wang Weifeng: He successively took the posts of Designer in the Development Department, Designer in the
technology centre, and Deputy Chief Engineer of the Company. Now, he acts as Chief Engineer of the Company.
Offices held concurrently in shareholding entities:
√ Applicable □ Not applicable
49
Changchai Company, Limited Annual Report 2023
Remuneratio
n or
Office held in the End of allowance
Name Shareholding entity Start of tenure
shareholding entity tenure from the
shareholding
entity
Secretary of the Party
Li Changzhou Investment
Committee, Chairman of January 2024 Yes
Desen Group Co., Ltd.
the Board
Member of the Party
Changzhou Investment
Tan Jie Committee, Director, Vice April 2023 Yes
Group Co., Ltd.
President
Shi Changzhou Investment General Manager of November
Yes
Xingyu Group Co., Ltd. Finance Department 2021
Notes N/A
Offices held concurrently in other entities:
√ Applicable □ Not applicable
Rem
uner
ation
or
Office allo
Name Other entity held in the Start of tenure End of tenure wan
entity ce
from
the
entit
y
Xie
Superviso
Guozho Beiqi Foton Motor Co., Ltd. 15 November 2022 No
r
ng
Superviso
He Donghai Securities Co., Ltd. 18 January 2023 17 January 2026
r
Jianjian No
Jiangsu Horizon New Energy Technology
g Director 28 July 2023
Co., Ltd.
Executive
De Xin Investment Manage Co., Limited 1 June 2022 No
Director
Yang
Independe
Feng Shanghai Kindly Enterprise Development
nt 17 April 2023
Group Co., Ltd.
Director
Shi
Donghai Securities Co., Ltd. Director 20 May 2021 17 January 2026 No
Xingyu
Wang Department of Finance of the School of Head of
Mancan Economics and Management of Departme 1 September 2006 Yes
g Northwest University nt,
50
Changchai Company, Limited Annual Report 2023
Professor
Shaanxi Securities Research Society Chairman 1 October 2017
Independe
Focuslight Technologies Inc. nt 2 May 2019 Yes
Director
Independe
Ccoop Group Co., Ltd. nt 18 September 2020 Yes
Director
Independe
Shaanxi Construction Machinery Co., Ltd. nt 16 November 2018 5 February 2024 Yes
Director
Independe
Xi'an Wonder Energy Chemical Co., Ltd. nt 24 June 2020 13 September 2025 Yes
Director
Chang'an International Trust Co., Ltd. Director 1 September 2018
Xi'an Guolian Quality Testing Technology
Director 1 June 2020
Co., Ltd.
Vice-Secr
China Internal Combustion Engine
etary-Gen 1 January 2018 No
Industry Association
eral
Director
of the
Tianjin Internal Combustion Engine
First 1 March 2009 Yes
Research Institute
Research
Jia Bin Office
Independe
Lutian Machinery Co., Ltd. nt 31 December 2019 5 January 2026 Yes
Director
Independe
Suzhou Parsun Power Machinery Co.,
nt 31 July 2021 Yes
Ltd.
Director
Tianjin Tianbo Keda Technology Co., Ltd. Director 1 August 2020 No
Associate
Jiangsu University of Technology 1 August 2008 Yes
professor
Independe
Jiangsu Tianmu Lake Tourism Co., Ltd. nt 8 February 2021 6 November 2026 Yes
Director
Zhang
Independe
Yan Wuxi SAHAT Electric Technology Co.,
nt 2 November 2020 25 December 2023 Yes
Ltd.
Director
Independe
S-Enjoy Service Group Co., Limited nt 20 October 2018 Yes
non-execu
51
Changchai Company, Limited Annual Report 2023
tive
Director
Changzhou Communications Industry
Director 14 April 2022 13 April 2025 Yes
Group Co., Ltd.
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
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 2023, 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. The incumbent director Li Desen, Tan Jie, the incumbent supervisor Shi Xingyu and the former dirctor Lin
Tian, the former supervisor He Jianguang obtained salaries in shareholders' entities. The former supervisor Chen
Lijia obtained salaries in both shareholders’ entities and other entities.
Remuneration of directors, supervisors and senior management for the Reporting Period
Unit: RMB’0,000
Any
Total before-tax
Incumbent/F remuneration
Name Gender Age Office title remuneration from
ormer from related
the Company
party
Chairman of
Li Desen Male 42 Incumbent 0.00 Yes
the Board
Vice
Zhang
Male 57 Chairman of Incumbent 85.47 No
Xin
the Board
Xie Director
Guozhon Male 54 General Incumbent 81.91 No
g Manager
Tan Jie Female 44 Director Incumbent 0.00 Yes
Director
Jiang He Male 51 Chief Incumbent 74.62 No
Accountant
Yang
Male 51 Director Incumbent 0.00 No
Feng
Wang Independent
Male 60 Incumbent 10.00 No
Mancang director
Zhang Independent
Female 53 Incumbent 10.00 No
Yan director
Independent
Jia Bin male 45 Incumbent 5.00 No
director
52
Changchai Company, Limited Annual Report 2023
Chairman of
Ni
the
Minglian Male 56 Incumbent 76.15 No
Supervisory
g
Committee
Shi
Female 43 Supervisor Incumbent 0.00 Yes
Xingyu
Lu
Male 56 Supervisor Incumbent 23.18 No
Zhonggui
Liu Yi Male 54 Supervisor Incumbent 25.15 No
Lin Wei Male 41 Supervisor Incumbent 20.69 No
Sun
Vice-general
Jianzhon male 51 Incumbent 75.38 No
Manager
g
Vice-general
He Manager
Male 44 Incumbent 74.62 No
Jianjiang Secretary of
the Board
Wang Vice-general
Male 36 Incumbent 65.61 No
Jing Manager
Wang Chief
Male 52 Incumbent 61.69 No
Weifeng Engineer
Shi Chairman of
Male 60 Former 42.74 No
Xinkun the Board
Lin Tian Male 61 Director Former 0.00 Yes
Director
Xu Yi Male 60 Vice-general Former 71.94 No
Manager
Independent
Xing Min Male 70 Former 5.00 No
director
Chairman of
He
the
Jianguan Male 60 Former 0.00 Yes
Supervisory
g
Committee
Chen
Female 41 Supervisor Former 0.00 Yes
Lijia
Ge
Female 54 Supervisor Former 22.87 No
Jiangli
Yin Vice-general
Male 60 Former 71.94 No
Lihou Manager
Total -- -- -- -- 903.96 --
53
Changchai Company, Limited Annual Report 2023
VI Performance of Duty by Directors in the Reporting Period
1. Board Meetings Convened in the Reporting Period
Date of
Meeting Disclosure date Resolution
meeting
The meeting deliberated on and approved the Report
on the Work of the General Manager for the Year
2022, the Business Policy Objectives of the
The 15th Meeting 13 January Company for the Year 2023, the Results of the
of the 9th Board of / Performance Appraisal of the Senior Management of
Directors 2023 the Company for the Year 2022, the Proposal on the
Performance Appraisal of the Senior Management of
the Company for the Year 2023, and the Proposal on
Application for Bank Credit Line for the Year 2023
The meeting deliberated on and approved the Annual
Report for 2022 and Its Summary, the Annual Work
Report of the Board of Directors for 2022, Plan of
the Profit Distribution and Conversion of Surplus
Reserves into Share Capital for 2022, Rewards Plan
The 16th Meeting for Shareholders in Next Three Years (2023-2025),
of the 9th Board of 10 April 2023 12 April 2023 Proposal on Provision of Reserves for Credit
Directors Impairment and Asset Impairment, Proposal on
Subsidiaries' Planning to Sell Part of the Trading
Financial Assets, Special Report on the Deposit and
Use of Raised Funds for 2022, Annual
Self-Evaluation Report on Internal Control for 2022,
and 2022 Social Responsibility Report
The 1st
The meeting deliberated on and approved the Report
Extraordinary
for the First Quarter of 2023 and the Proposal on
Meeting of the 26 April 2023 28 April 2023
Convening the Annual General Meeting of the
Board of Directors
Company for 2022
in 2023
The meeting deliberated on and approved the
Proposal on Signing the Wuxing Branch's Agreement
on Housing Expropriation on Changzhou
State-owned Land and Compensation, Proposal on
Amending the Articles of Association and its
The 17th Meeting
Appendix, Proposal on the Election of the Board of
of the 9th Board of 25 May 2023 26 May 2023
Directors and Nomination of Non-independent
Directors
Directors for the Tenth Board of Directors, Proposal
on the Election of the Board of Directors and
Nomination of Independent Directors for the Tenth
Board of Directors, and Proposal on Convening the
First Extraordinary General Meeting in 2023
The meeting deliberated on and approved the
Proposal on Electing the Chairman of the Company,
Proposal on Election of Vice Chairman of the
The 1st Meeting of Company, Proposal on Appointing the General
the 10th Board of 12 June 2023 13 June 2023 Manager of the Company, Proposal on Appointing
Directors the Deputy General Manager of the Company,
Proposal on Appointing the Chief Accountant of the
Company, Proposal on Appointing the Chief
Engineer of the Company, Proposal on Appointing
54
Changchai Company, Limited Annual Report 2023
Board Secretary of the Company, Proposal on
Election of Members of the Remuneration and
Evaluation Committee of the Board of Directors of
the Company, Proposal on Election of Members of
the Audit Committee of the Board of Directors of the
Company, and Proposal on Election of Members of
the Strategy Committee of the Board of Directors of
the Company
The 2nd
Extraordinary The meeting deliberated on and approved the
Meeting of the 10 July 2023 11 July 2023 Proposal on Using Idle Funds to Purchase Wealth
Board of Directors Management Products
in 2023
The meeting deliberated on and approved the
Proposal on Changing the Legal Representative of
the Company and Amending the Articles of
The 3rd
Association and Rules of Procedure of the Board of
Extraordinary
Directors, Proposal on the Re-appointment of the
Meeting of the 25 July 2023 26 July 2023
Financial Audit Institution for 2023 and Its Audit
Board of Directors
Expenses, Proposal on the Re-appointment of the
in 2023
Internal Control Audit Institution for 2023 and Its
Audit Expenses, and Proposal on Convening the
Second Extraordinary General Meeting in 2023
The meeting deliberated on and approved the
The 2nd Meeting of 22 August Semi-annual Report for 2023, Proposal on Provision
the 10th Board of 24 August 2023 of Reserves for Credit Impairment and Asset
Directors 2023 Impairment, and Special Report on the Deposit and
Use of Raised Funds for the Half Year of 2023
The meeting deliberated on and approved the Report
of the Third Quarter of 2023, Proposal on the
Completion of the Project of Innovation Capacity
Building of the Technology Centre in Private
Placement Raised Funds Investment Project and
Permanent Supplement of Surplus Raised Funds to
Working Capital, Proposal on Amending the Articles
of Association of the Company, Proposal on
Amending the Rules of Procedure of the Board of
Directors, Proposal on Amending the Independent
Director System, Proposal on Amending the
Implementation Rules of the Audit Committee of the
The 3rd Meeting of 27 October 28 October Board of Directors, Proposal on Amending the
the 10th Board of Implementation Rules of the Remuneration and
Directors 2023 2023
Evaluation Committee of the Board of Directors,
Proposal on Amending the Rules of Procedure of the
Strategic Development Committee of the Board of
Directors, Proposal on Amending the Work System
for Annual Reports of Independent Directors,
Proposal on Amending the Shareholding
Management System for Directors, Supervisors, and
Senior Management Members, Proposal on
Amending the Financial Accounting System,
Proposal on Signing the Sanjing Branch's Agreement
on Non-residential Housing Expropriation and
Compensation in Xinbei District, Changzhou City,
and Proposal on Convening the Third Extraordinary
55
Changchai Company, Limited Annual Report 2023
General Meeting in 2023
The 4th
Extraordinary 15 December 16 December The meeting deliberated on and approved the
Meeting of the Proposal on Using Idle Funds to Purchase Wealth
Board of Directors 2023 2023 Management Products
in 2023
2. Attendance of Directors at Board Meetings and General Meetings
Attendance of directors at board meetings and general meetings
Total The
number of Board director
Board Board
board Board meetings failed to
meetings meetings General
meetings meetings attended by attend two
Director attended the director meetings
the director attended on way of consecutiv
through a failed to attended
was site telecommu e board
proxy attend
eligible to nication meetings
attend (yes/no)
Li Desen 6 1 5 0 0 No 2
Zhang Xin 10 3 7 0 0 No 4
Xie
6 1 5 0 0 No 3
Guozhong
Tan Jie 6 1 5 0 0 No 3
Jiang He 10 3 7 0 0 No 4
Yang Feng 10 1 9 0 0 No 4
Wang
10 1 9 0 0 No 4
Mancang
Zhang Yan 10 2 8 0 0 No 4
Jia Bin 6 1 5 0 0 No 3
Shi Xinkun 4 2 2 0 0 No 2
Lin Tian 4 0 4 0 0 No 2
Xu Yi 4 2 2 0 0 No 2
56
Changchai Company, Limited Annual Report 2023
Xing Min 4 0 4 0 0 No 2
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:
All 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, Rules of Procedure of the Board and Independent
Directors System, comprehensively focused on the development and operation of the Company, actively attended
the general meeting of shareholder and meeting of board of directors. Independent directors 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 directors upon the significant events and
adopted them. For more details, please refer to the Report on the Work of the Board of Directors for 2023
disclosed by the Company on http://www.cninfo.com.cn dated 12 April 2024.
VII Special Committees under the Board of Directors during the Reporting Period
Numb
er of Date Other
Name of
meeti of Important comments and performan
committ Members Contents
ngs meeti suggestions ce of
ee
conve ng duties
ned
The audit plan for the
Company's 2022 annual report
The meeting deliberated on and was relatively reasonable, and
Zhang
Audit 28 approved the Preliminary Review the key communication matters
Yan, of 2022 Annual Report, Audit Plan were in line with the actual
Committ Febru for 2022 Annual Report, Report on situation of the Company. The
Wang 3 None
ee ary Internal Audit Work for 2022 and management and the accounting
Mancang, Internal Audit Plan for 2023, and firm are expected to continue to
2023 Report on the Use of Raised Funds closely cooperate to ensure the
Lin Tian
for 2022 smooth completion of the
disclosure of the Company's
2022 annual report
57
Changchai Company, Limited Annual Report 2023
The Company's financial
The meeting deliberated on and
statements fairly reflect the
approved the 2022 Financial
financial condition of the
Statements, Proposal on Provision
6 Company as at 31 December
of Reserves for Credit Impairment
2022 in all material respects, and
April and Asset Impairment, Special
its operating results and cash
Report on the Deposit and Use of
2023 flows in 2022. It was consented
Raised Funds for 2022, and
that both the proposals shall be
Annual Self-Evaluation Report on
submitted to the Board of
Internal Control for 2022
Directors for discussion
The meeting deliberated on the
Work Summary of the Audit
25 Department for the First Quarter It was consented that both the
of 2023, and approved the Report proposals shall be submitted to
April
of the First Quarter of 2023 and the 1st Extraordinary Meeting of
2023 the Special Report on the Deposit the Board of Directors in 2023
and Use of Raised Funds in the
First Quarter of 2023
The meeting deliberated on and
approved the Proposal on the
24 Re-appointment of the Financial It was consented that both the
Audit Institution for 2023 and Its proposals shall be submitted to
July
Audit Expenses, and Proposal on the 3rd Extraordinary Meeting of
2023 the Re-appointment of the Internal the Board of Directors in 2023
Control Audit Institution for 2023
and Its Audit Expenses
The meeting deliberated on the
Work Report of Audit Department
for the Half Year of 2023, and
18 approved the Semi-annual Report It was consented that both the
for 2023, Proposal on Provision of proposals shall be submitted to
Augus
Reserves for Credit Impairment the 2nd Meeting of the 10th Board
Zhang t 2023 and Asset Impairment, and Special of Directors
Yan, Report on the Deposit and Use of
Wang 3 Raised Funds for the Half Year of
Mancang, 2023
Tan Jie The meeting deliberated on and Agree to submit the Report of
approved the Work Summary of the Third Quarter of 2023 and
Audit Department for the Third Proposal on the Completion of
Quarter of 2023, Report of the
the Project of Innovation
Third Quarter of 2023, Special
25 Report on the Deposit and Use of Capacity Building of the
Octob Raised Funds in the Third Quarter Technology Centre in Private
of 2023, and Proposal on the Placement Raised Funds
er Completion of the Project of Investment Project and
2023 Innovation Capacity Building of Permanent Supplement of
the Technology Centre in Private
Surplus Raised Funds to
Placement Raised Funds
Investment Project and Permanent Working Capital to the Third
Supplement of Surplus Raised Meeting of the Tenth Board of
Funds to Working Capital Directors for deliberation
The meeting deliberated on and
Remuner Xing approved the Results on the
ation and Min, 12 Performance Appraisal of the
It was consented that both the
Evaluati Wang Januar Senior Management of the
proposals shall be submitted to
1 Company for the Year 2022 and
on Mancang, y the Board of Directors for
the Contract on the Performance
discussion
Committ Shi 2023 Appraisal of the Senior
ee Xinkun Management of the Company for
the Year 2023
58
Changchai Company, Limited Annual Report 2023
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 the parent at
2,002
the period-end
Number of in-service employees of major subsidiaries at the
571
period-end
Total number of in-service employees at the period-end 2,573
Total number of paid employees in the Reporting Period 2,573
Number of retirees to whom the Company as the parent or its
0
major subsidiaries need to pay retirement pensions
Functions
Function Employees
Production 1,677
Sales 187
Technical 348
Financial 41
Administrative 280
Other 40
Total 2,573
Educational backgrounds
Educational background Employees
Junior high school graduates and below 1,094
High school graduates 679
College graduates and technical secondary school graduates 497
Bachelors 285
Masters and above 18
Total 2,573
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
59
Changchai Company, Limited Annual Report 2023
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
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, 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 meeting Yes
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
Specific reasons and the next steps it intends to take to enhance the investor return level if
N/A
the Company did not pay cash dividend:
Non-controlling interests are able to fully express their opinion and desire and their legal
Yes
rights and interests are fully protected
In case of adjusting or changing the cash dividend policy, the conditions and procedures
N/A
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
60
Changchai Company, Limited Annual Report 2023
Dividend for every 10 shares (RMB) (tax inclusive) 0.47
Additional shares to be converted from capital reserve for every
0
10 shares (share)
Total shares as the basis for the profit distribution proposal
705,692,507
(share)
Cash dividends (RMB) (tax inclusive) 33,167,547.83
Cash dividends in other forms (such as share repurchase) (RMB) 0
Total cash dividends (including those in other forms) (RMB) 33,167,547.83
Distributable profit (RMB) 1,002,436,724.71
Total cash dividends (including those in other forms) as % of
100%
total profit 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 2023, a cash dividend of RMB0.47 (tax inclusive) per 10 shares is to be distributed to the
shareholders, with no bonus issue from either profit or capital reserves.
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
61
Changchai Company, Limited Annual Report 2023
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
12 April 2024
control self-evaluation report
Index to the disclosed internal
2024-012
control self-evaluation report
Evaluated entities’ combined assets
100.00%
as % of consolidated total assets
Evaluated entities’ combined
operating revenue as % of 100.00%
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
Defects with the following
as serious defect, important defect
random characteristics should be
and general defect according to the
recognized as serious defect:
influence degree from the internal
1) Seriously violated the national
control:
laws and administrative
(1) Serious defect: refers to one or
regulations and the normative
multiple groups with control defect
documents;
which may lead the enterprise
2) “three significant one great”
seriously deviates the control target;
event had not been through the
(2) Important defect: refers to one or
collective decision-making
multiple groups with control defect
process;
with the severity and the economic
3) the significant events involved
Nature standard results lower than the great defect
with the production and
but may still lead the enterprise
operation of the Company lacked
seriously deviates the control target;
of systematic control or the
(3) General defect: refers to other
institutional system was invalid;
defect except for the great defect
4) the internal control of the
and significant defect.
information disclosure was
Nature standards:
invalid, which led the Company
defects with the following random
be open condemned by the
characteristics should be recognized
supervision department;
as serious defect:
5) the serious defect from the
1) the defect involves with the
assessment results of the internal
malpractice of the Directors,
control had not been revised.
Supervisors and Senior Executives;
62
Changchai Company, Limited Annual Report 2023
2) revised the disclosed financial
report;
3) CPAs discovered the great
misstatement among the current
financial statement while which
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.
Refer to the quantitative criteria
of the internal control defect of
Quantitative standards:
the financial report, to recognize
The quantitative standards of
the quantitative criteria of the
recognizing the significant degree of
significant degree of the internal
the misstatement (including the false
control defect of the
negatives) of the consolidated
non-financial report of the
financial report of the Company
Company as:
based on the data from the
Serious defect: possibly caused
Quantitative standard 2023consolidated statements was as:
directly losses≥0.1% of the net
Serious defect: misstatement≥5% of
assets
the annual profits
Important defect: 0.05% of the
Important defect: 2.5% of the annual
net assets≤ possibly caused
profits≤ misstatement ＜ 5% of the
directly losses ＜ 0.1% of the net
annual profits
assets
General defect＜2.5% of the annual
General defect: possibly caused
profits
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
63
Changchai Company, Limited Annual Report 2023
2023.
Independent auditor’s report on internal control disclosed or not Disclosed
Disclosure date 12 April 2024
Index to such report disclosed S.G. W[2024]No.E1086
Type of the auditor’s opinion Unmodified unqualified opinion
Material weaknesses in internal control not related to financial reporting None
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
XV Remediation of Problems Identified by Self-inspection in the Special Action on the
Governance of Listed Companies
N/A
64
Changchai Company, Limited Annual Report 2023
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
Other environmental information disclosed with reference to key polluters:
N/A
Actions taken during the Reporting Period to reduce carbon emissions and the impact:
√ Applicable □ Not applicable
See the 2023 Social Responsibility and ESG Report of Changchai Company, Limited disclosed on
http://www.cninfo.com.cn dated 12 April 2024.
The reason for not disclosing other environmental information: The Company and its subsidiaries are not listed as
key polluting units by the environmental protection department. The production and operation of the Company
and its subsidiaries strictly comply with relevant national laws and regulations. The Company will continue to
strengthen environmental supervision and management to ensure that the development of the enterprise complies
with environmental protection policies and regulations.
II Social Responsibility
See the 2023 Social Responsibility and ESG Report of Changchai Company, Limited disclosed on
http://www.cninfo.com.cn dated 12 April 2024.
III Efforts in Poverty Alleviation and Rural Revitalization
N/A
65
Changchai Company, Limited Annual Report 2023
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
Ty te
pe of
of co
Ful
co m Term of
fill
Commitment Promisor m Details of commitment mi commit
me
mi tm ment
nt
tm ent
en ma
t kin
g
A
bo
ut
sh
ar 5
It will not transfer the shares it has 5 July
e Jul On
Changzhou Investment obtained in the private placement of 2021 -5
tra
Changchai within 36 months starting from y goi
Group Co., Ltd. di July
the date when the private placement of 20 ng
ng
A-shares is allowed for public trading. 2024
re 21
str
ict
io
n
Commitments made in 1. It undertakes not to interfere in the
refinancing
Company's operation and management
activities beyond its authority and not to
encroach on the Company's interests;
11 11 April
2. It undertakes not to transfer benefits to
Ot Ap 2020 On
Changzhou Investment other entities or individuals free of charge
he ril -31 goi
Group Co., Ltd. or on unfair terms, nor to impair the
r 20 Decemb ng
interests of the Company by any other
20 er 9999
means;
3. After the issuance of this Letter of
Commitment and before the completion of
the Company's non-public offering of
66
Changchai Company, Limited Annual Report 2023
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.
Rewards Plan for Shareholders in Next
Three Years(2023-2025)
Under the premise of positive distributive
profit (remaining after-tax profits after
making up for the loss and extracting for
A
the common reserves) in this year or half
bo
year and abundant money flow and no 18
ut
Other commitments influence on the following-up going M Year On
Changchai Company, di
made to minority concern after cash bonus, the profits ay 2023-20 goi
Limited vi
shareholders allocated by cash every year shouldn’t be 20 25 ng
de
lower than 10% of the allocable profits 23
nd
from parent company. Meanwhile, the
s
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 or not Yes
Specific reasons for
failing to fulfill
commitments on time N/A
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
67
Changchai Company, Limited Annual Report 2023
II Occupation of the Company’s Capital by the Controlling Shareholder or any of Its Related
Parties for Non-Operating Purposes
□ Applicable √ Not applicable
No such cases in the Reporting Period.
III Irregularities in the Provision of Guarantees
□ Applicable √ Not applicable
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
Approval
Changes to the accounting policies and why Remark
process
The Company starts to implement the “accounting treatment for deferred
income tax relating to assets and liabilities arising from a single transaction that Notes of changes
is not subject to the initial recognition exemption” stipulated in the Accounting / to accounting
Standards for Business Enterprises Interpretation No. 16 issued by the Ministry policies
of Finance on 13 November 2022 since 1 January 2023.
Description of changes in accounting policies:
(1) The impact of implementing the Interpretation No. 16 of Accounting Standards for Business Enterprises on the
Company
On 13 December 2022, the Ministry of Finance issued the Interpretation No. 16 of Accounting Standards for
Business Enterprises (CaiKuai [2022] No. 31, hereinafter referred to as "Interpretation No. 16"). Since 1 January
2023, the stipulation of "the accounting processing of initial recognition exemption is not applicable to deferred
income tax related to assets and liabilities arising from individual transactions" has been implemented, allowing
enterprises to execute it ahead of schedule for their own annual release. The accounting processing related to this
matter that was not implemented in advance by the Company in 2023 will be implemented from 1 January 2023.
Interpretation No. 16 stipulates that for single transactions that are not business combinations, that affect neither
accounting profit nor taxable income (or deductible losses) at the time when the transaction occurs, and where the
68
Changchai Company, Limited Annual Report 2023
initial recognition of assets and liabilities results in taxable temporary differences and deductible temporary
differences of equal amounts (including lease transactions in which the lessee recognises the initial lease liability
and includes it in the right-of-use asset on the commencement date of the lease term, as well as single transactions
in which estimated liabilities are recognised and included in the costs of related assets due to fixed assets'
retirement obligations), exemption from initial recognition of deferred income tax liabilities and deferred income
tax assets shall not apply. Enterprises shall recognise the corresponding deferred income tax liabilities and
deferred income tax assets, respectively, in accordance with No. 18 of the Accounting Standards for Business
Enterprises -- Income Taxes when the transaction is affected.
For single transactions that occurred between the beginning of the earliest period presented in the financial
statements and the date of initial application of this provision, as well as lease liabilities and right-of-use assets
recognised at the beginning of the earliest period presented in the financial statements due to the application of
this provision to single transactions, and recognised estimated liabilities related to retirement obligations and
corresponding related assets, which create taxable temporary differences and deductible temporary differences,
enterprises shall make adjustments in accordance with this provision.
The change in accounting policy has no impact on the Company's financial statements.
VII YoY Changes to the Scope of the Consolidated Financial Statements
□ Applicable √ Not applicable
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
63
auditor (RMB’0,000)
How many consecutive years the domestic independent
22
auditor has provided audit service for the Company
Names of the certified public accountants from the
domestic independent auditor writing signatures on the Wang Wenkai, Qin Zhijun
auditor’s report
How many consecutive years the certified public
Three years for Wang Wenkai, three years for Qin
accountants have provided audit service for the
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 RMB140,000.
69
Changchai Company, Limited Annual Report 2023
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.
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.
70
Changchai Company, Limited Annual Report 2023
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
No such cases in the Reporting Period.
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
71
Changchai Company, Limited Annual Report 2023
No such cases in the Reporting Period.
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
Capital overdue amount
Specific type Amount incurred Undue balance overdue
resources with provision for
amount
impairment
Bank financial
Self-funded 36,070 13,070 0 0
products
Bank financial Raised-funde
10,000 0 0 0
products d
Broker
financial Self-funded 2,028.98 1,300 0 0
products
Total 48,098.98 14,370 0 0
High-risk wealth management transactions with a significant single amount, or with low security, low liquidity:
□ Applicable √ Not applicable
Situation where the principal is expectedly irrecoverable or impairment may be incurred:
□ 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.
XVI Other Significant Events
√ Applicable □ Not applicable
1. Expropriation of the Wuxing branch company’s properties on state-owned land and compensation
On 25 May 2023, the Proposal on the Intention to Sign the Agreement on the Expropriation of the Properties of
the Wuxing Branch Company on State-owned Land in Changzhou City and the Compensation was approved at
the 17th Meeting of the Ninth Board of Directors. Later, the said matter was approved at the First Extraordinary
General Meeting of Shareholders in 2023 dated 12 June 2023. As such, the Company was agreed to sign a
contract with Changzhou Zhonglou District Housing and Urban-Rural Development Bureau on the expropriation
72
Changchai Company, Limited Annual Report 2023
of the Wuxing branch company’s properties on state-owned land and the compensation, with the contractual total
compensation amount being RMB117 million. On 14 June 2023, the Company signed the Agreement on the
Expropriation of the Properties of the Wuxing Branch Company on State-owned Land in Changzhou City and the
Compensation with Changzhou Zhonglou District Housing and Urban-Rural Development Bureau, and received
the first compensation payment of RMB70 million on 28 June 2023, and received the residual compensation
payment of RMB47 million on 9 January 2024.
2. Housing expropriation on state-owned land and compensation of Sanjing Branch
On 27 October 2023, the Company held the Third Meeting of the Tenth Board of Directors, deliberating on and
approving the Proposal on Signing the Sanjing Branch's Agreement on Non-residential Housing Expropriation
and Compensation in Xinbei District, Changzhou City. The matter was approved at the third extraordinary general
meeting on 14 November 2023, approving that the Company would sign agreement with the Housing and
Urban-Rural Development Bureau of Changzhou National High-tech Industrial Development Zone and the
Housing Expropriation and Compensation Service Centre of Sanjing Street, Xinbei District, Changzhou City,
regarding the housing expropriation on state-owned land and compensation of the Sanjing Branch. The total
compensation amount under the agreement was RMB99,929,900. On 29 November 2023, the Company signed the
Agreement on Non-residential Housing Expropriation and Compensation with the Housing and Urban-Rural
Development Bureau of Changzhou National High-tech Industrial Development Zone and the Housing
Expropriation and Compensation Service Centre of Sanjing Street, Xinbei District, Changzhou City. The
Company received the first compensation of RMB30 million until January 2024.
XVII Significant Events of Subsidiaries
√ Applicable □ Not applicable
1. Acquisition of 7.5% equity held by natural person shareholders of Zhenjiang Siyang
In December 2023, the Company acquired 7.5% equity held by three natural person shareholders of its
partially-owned subsidiaries Zhenjiang Siyang with RMB7.17 million. As at 31 December 2023, the Company
had held a total of 49% equity in Zhenjiang Siyang and remained its largest shareholder.
73
Changchai Company, Limited Annual Report 2023
Part VII Share Changes and Shareholder Information
I Share Changes
1. Share Changes
Unit: share
Before Increase/decrease in the Reporting Period (+/-) After
Shares
Shares
as
as
dividend
Percenta New dividend Percenta
Number converte Other Subtotal Number
ge (%) issues converte ge (%)
d from
d from
capital
profit
reserves
1.
56,818,1 56,818,1
Restricte 8.05% 0 8.05%
81 81
d shares
1.1
Shares
held by 0 0.00% 0 0 0.00%
governm
ent
1.2
Shares
held by
56,818,1 56,818,1
state-ow 8.05% 0 8.05%
81.00 81.00
ned
legal
persons
1.3
Shares
held by
other
0 0.00% 0 0 0.00%
domesti
c
investor
s
Among
which:
0 0.00% 0 0 0.00%
Shares
held by
74
Changchai Company, Limited Annual Report 2023
domesti
c legal
persons
S
hares
held by
0 0.00% 0 0 0.00%
domesti
c natural
persons
1.4
Shares
held by
0 0.00% 0 0 0.00%
foreign
investor
s
Among
which:
Shares
held by 0 0.00% 0 0 0.00%
foreign
legal
persons
S
hares
held by
0 0.00% 0 0 0.00%
foreign
natural
persons
2.
Unrestri 648,874, 648,874,
91.95% 0 91.95%
cted 326 326
shares
2.1
RMB-de
nominat 498,874, 498,874,
70.69% 0 70.69%
ed 326 326
ordinary
shares
2.2
Domesti
cally 150,000, 150,000,
21.26% 0 21.26%
listed 000 000
foreign
shares
75
Changchai Company, Limited Annual Report 2023
2.3
Oversea
listed 0 0.00% 0 0 0.00%
foreign
shares
2.4
0 0.00% 0 0 0.00%
Other
3. Total 705,692, 100.00 705,692, 100.00
0
shares 507 % 507 %
Reasons for the share changes:
□ Applicable √ Not applicable
Approval of share changes:
□ Applicable √ Not applicable
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
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
II. Issuance and Listing of Securities
1. Securities (Exclusive of Preferred Shares) Issued in the Reporting Period
□ Applicable √ Not applicable
2. Changes to Total Shares, Shareholder Structure and Asset and Liability Structures
□ Applicable √ Not applicable
3. Existing Staff-Held Shares
□ Applicable √ Not applicable
III Shareholders and Actual Controller
Unit: share
76
Changchai Company, Limited Annual Report 2023
Number of
Number of
preferred
ordinary Number of
shareholders with
Number of shareholders at preferred
resumed voting
ordinary 58,653 the month-end 56,686 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
Investment Group 32.26% 227,663,417 0 56,818,181 170,845,236
legal person
Co., Ltd
Domestic
-1,501,30
Chen Jian natural 0.49% 3,478,600 3,478,600
0
person
KGI ASIA Foreign legal
0.44% 3,101,695 0 3,101,695
LIMITED person
Domestic
Wu Chunhua natural 0.35% 2,442,200 2,442,200 2,442,200
person
China International
Capital State-owned
0.27% 1,921,527 1,921,527 1,921,527
Corporation legal person N/A 0
Limited
Domestic 0
Lu Zhang natural 0.26% 1,836,643 1,836,643 1,836,643
person
Domestic
Li Suinan natural 0.23% 1,593,800 24,700 1,593,800
person
Domestic
Zhang Wenbing natural 0.22% 1,556,700 1,556,700 1,556,700
person
Domestic
Huang Guoliang natural 0.22% 1,528,891 0 1,528,891
person
Huatai Securities State-owned
0.21% 1,509,155 1,509,155 1,509,155
Co., Ltd. legal person
Strategic investor or general legal
person becoming a top-10
N/A
ordinary shareholder due to rights
issue (if any)
Related or acting-in-concert It is unknown whether there is among the top 10 public shareholders and the
parties among the shareholders top 10 unrestricted public shareholders any related parties or acting-in-concert
77
Changchai Company, Limited Annual Report 2023
above parties as defined in the Administrative Measures for Information Regarding
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 3,478,600 3,478,600
ordinary share
Domestically listed
KGI ASIA LIMITED 3,101,695 3,101,695
foreign share
RMB-denominated
Wu Chunhua 2,442,200 2,442,200
ordinary share
China International Capital RMB-denominated
1,921,527 1,921,527
Corporation Limited ordinary share
Domestically listed
Lu Zhang 1,836,643 1,836,643
foreign share
Domestically listed
Li Suinan 1,593,800 1,593,800
foreign share
RMB-denominated
Zhang Wenbing 1,556,700 1,556,700
ordinary share
Domestically listed
Huang Guoliang 1,528,891 1,528,891
foreign share
RMB-denominated
Huatai Securities Co., Ltd. 1,509,155 1,509,155
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 Wu Chunhua held 2,952,800 and 2,442,200 shares
involved in securities margin
respectively in the Company through their margin accounts.
trading (if any)
Top 10 shareholders involved in refinancing shares lending
□ Applicable √ Not applicable
78
Changchai Company, Limited Annual Report 2023
Changes in top 10 shareholders compared with the prior period
√ Applicable □ Not applicable
Unit: share
Changes in top 10 shareholders compared with the end of the prior period
Newly Shares in the common
added or Shares lent in refinancing account and credit account
existing and not yet returned at the plus shares lent in
from top period-end refinancing and not yet
Full name of shareholder 10 returned at the period-end
shareholde
rs in the As % of As % of
Reporting Total shares total share Total shares total share
Period capital capital
Newly
Wu Chunhua 0 0.00% 2,442,200 0.35%
added
China International Capital Newly
0 0.00% 1,921,527 0.27%
Corporation Limited added
Newly
Lu Zhang 0 0.00% 1,836,643 0.26%
added
Newly
Zhang Wenbing 0 0.00% 1,556,700 0.22%
added
Newly
Huatai Securities Co., Ltd. 0 0.00% 1,509,155 0.21%
added
MORGAN STANLEY & CO.
Exiting 0 0.00% 694,573 0.10%
INTERNATIONAL PLC.
Yang Xuee Exiting 0 0.00% 0 0.00%
China Minsheng Bank-Goldstate
Yuanqi Dynamic Asset Allocation
Exiting 0 0.00% 0 0.00%
Mixed Type Securities Investment
Fund
CLSA Asset Management
Exiting 0 0.00% 938,641 0.13%
Limited-Clients’ Capital
Dai Wenping Exiting 0 0.00% 0 0.00%
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 representati Date of Unified social credit
Principal activity
shareholder ve/person establishment code
in charge
Changzhou Investment Property
Li Desen 20 June 2002 91320400467283980X
Group Co., Ltd investment and
79
Changchai Company, Limited Annual Report 2023
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
representativ Date of
Name of actual controller Unified social credit code Principal activity
e/person in establishment
charge
State-owned Assets
Supervision and
Administration
Shi Jiangshui 11320400014110251M Not applicable
Commission of
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:
80
Changchai Company, Limited Annual Report 2023
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
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
81
Changchai Company, Limited Annual Report 2023
Part VIII Preference Shares
□ Applicable √ Not applicable
No preference shares in the Reporting Period.
82
Changchai Company, Limited Annual Report 2023
Part IX Bonds
□ Applicable √ Not applicable
83
Changchai Company, Limited Annual Report 2023
Part X Financial Statements
I Independent Auditor’s Report
Type of the independent auditor’s opinion Unmodified unqualified opinion
Date of signing this report 10 April 2024
Gongzheng Tianye Certified Public Accountants
Name of the independent auditor
(Special General Partnership)
No. of the auditor’s report S.G. W[2024]No.A250
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 2023, 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 2023 and the consolidated and
parent business performance and cash flow for 2023.
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 accounting policies
stated in the notes to financial statements “III. 30. Revenue” and “V. 39. Operating income and operating cost”. In
2023, the operating income of Changchai Company amounted to RMB2,155,698,800.
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.
84
Changchai Company, Limited Annual Report 2023
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) For sales revenue, conducting sampling tests on supporting documents related to revenue recognition, so as to
check supporting documents such as terms associated with control transfer of commodities in sales contracts and
documentation collected and acknowledged by auxiliary manufacturers (including but not limited to sales
contracts, orders, sales invoices, delivery notes, export customs declarations, etc.);
(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 accounting policies stated in the notes to financial statements “III. 10. Impairment of financial instruments”
and “V. 4. Accounts receivable”. On 31 December 2023, the book balance of accounts receivable of Changchai
Company stood at RMB464,310,500, the bad debt provision amounted to RMB147,767,300, and the book value
was RMB316,543,200, accounting for 6.13% of the total assets at the end of the reporting period. As the balance
of accounts receivable is significant and the judgement of the Management is involved in the withdrawal of bad
debt provision of accounts receivable, we consider this as a key audit matter.
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 bad debt provision policy for accounts receivable, verifying the accuracy of the basis for
determining accounts receivable portfolio and the reasonableness of bad debt provision separately accrued;
(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 accounts receivable with bad debt provision by single item, referring to corresponding contracts and other
information to obtain an understanding of sales and repayments and determine whether the bad debt provision by
single item is adequately withdrawn.
(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.
The other information comprises all of the information included in the Company’s 2023 Annual Report other than
85
Changchai Company, Limited Annual Report 2023
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.
(5) Evaluate the overall presentation, structure and content of the financial statements, and whether the financial
86
Changchai Company, Limited Annual Report 2023
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:
(Special General Partnership) (Engagement Partner)
Chinese CPA:
Wuxi China 10 April 2024
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 2023
Unit: RMB
Item 31 December 2023 1 January 2023
Current assets:
Monetary assets 1,083,867,966.87 930,013,350.97
Settlement reserve
Interbank loans granted
Held-for-trading financial assets 225,641,429.94 370,103,602.57
Derivative financial assets
Notes receivable 161,632,567.94 297,125,872.54
Accounts receivable 316,543,159.91 370,322,179.77
Accounts receivable financing 195,875,948.92 242,813,392.79
Prepayments 12,333,310.85 6,330,202.69
Premiums receivable
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Changchai Company, Limited Annual Report 2023
Reinsurance receivables
Receivable reinsurance contract
reserve
Other receivables 49,699,753.61 32,938,305.16
Including: Interest receivable
Dividends
receivable
Financial assets purchased under
resale agreements
Inventories 789,220,185.68 571,996,881.74
Contract assets
Assets held for sale
Current portion of non-current
40,773,509.75
assets
Other current assets 20,910,504.84 49,279,022.49
Total current assets 2,896,498,338.31 2,870,922,810.72
Non-current assets:
Loans and advances to
customers
Investments in debt obligations 39,309,587.93
Investments in other debt
obligations
Long-term receivables
Long-term equity investments
Investments in other equity
969,488,025.67 955,560,240.08
instruments
Other non-current financial
412,914,576.80 373,500,000.00
assets
Investment property 39,837,558.11 42,160,779.65
Fixed assets 675,596,920.95 720,061,387.76
Construction in progress 4,275,622.18 30,281,547.56
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets 148,458,185.68 157,392,217.54
Development costs
Goodwill
Long-term prepaid expense 8,227,958.66 3,279,970.32
Deferred income tax assets 1,518,995.79 26,220,575.93
Other non-current assets 2,578,776.77 670,735.93
Total non-current assets 2,262,896,620.61 2,348,437,042.70
88
Changchai Company, Limited Annual Report 2023
Total assets 5,159,394,958.92 5,219,359,853.42
Current liabilities:
Short-term borrowings 115,437,700.65
Borrowings from the central
bank
Interbank loans obtained
Held-for-trading financial
liabilities
Derivative financial liabilities
Notes payable 528,139,582.33 471,876,397.72
Accounts payable 641,484,184.05 747,010,098.88
Advances from customers 1,647,441.22 837,425.55
Contract liabilities 33,352,877.66 32,843,692.83
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 47,738,883.57 49,351,022.47
Taxes payable 6,231,169.74 8,570,175.39
Other payables 159,023,382.81 160,046,882.93
Including: Interest payable
Dividends payable 3,891,433.83 3,891,433.83
Handling charges and
commissions payable
Reinsurance payables
Liabilities directly associated
with assets held for sale
Current portion of non-current
liabilities
Other current liabilities 67,069,965.96 78,645,741.16
Total current liabilities 1,484,687,487.34 1,664,619,137.58
Non-current liabilities:
Insurance contract reserve
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
89
Changchai Company, Limited Annual Report 2023
Long-term payables
Long-term employee benefits
payable
Provisions
Deferred income 32,795,896.48 36,205,625.94
Deferred income tax liabilities 171,843,455.52 161,360,251.33
Other non-current liabilities
Total non-current liabilities 204,639,352.00 197,565,877.27
Total liabilities 1,689,326,839.34 1,862,185,014.85
Owners’ equity:
Share capital 705,692,507.00 705,692,507.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 640,509,675.84 640,133,963.01
Less: Treasury stock
Other comprehensive income 667,180,321.82 655,341,704.07
Specific reserve 19,432,089.52 18,848,856.75
Surplus reserves 363,695,592.34 349,197,725.72
General reserve
Retained earnings 1,002,436,724.71 915,495,909.35
Total equity attributable to owners
3,398,946,911.23 3,284,710,665.90
of the Company as the parent
Non-controlling interests 71,121,208.35 72,464,172.67
Total owners’ equity 3,470,068,119.58 3,357,174,838.57
Total liabilities and owners’ equity 5,159,394,958.92 5,219,359,853.42
Legal representative: Xie Guozhong General Manager: Xie Guozhong
Head of the accounting department: Jiang He
90
Changchai Company, Limited Annual Report 2023
2. Balance Sheet of the Company as the Parent
Unit: RMB
Item 31 December 2023 1 January 2023
Current assets:
Monetary assets 971,143,382.52 792,744,709.77
Held-for-trading financial assets 100,437,916.67 280,354,111.11
Derivative financial assets
Notes receivable 152,906,979.84 282,556,327.54
Accounts receivable 291,996,837.94 329,060,940.50
Accounts receivable financing 193,679,203.92 291,837,385.00
Prepayments 5,850,589.29 3,097,586.07
Other receivables 399,142,024.92 179,596,495.57
Including: Interest receivable
Dividends
receivable
Inventories 475,538,711.10 397,626,837.43
Contract assets
Assets held for sale
Current portion of non-current
40,773,509.75
assets
Other current assets 5,839,708.73 15,594,949.05
Total current assets 2,637,308,864.68 2,572,469,342.04
Non-current assets:
Investments in debt obligations 39,309,587.93
Investments in other debt
obligations
Long-term receivables
Long-term equity investments 576,443,530.03 569,273,530.03
Investments in other equity
969,488,025.67 955,560,240.08
instruments
Other non-current financial
412,914,576.80 373,500,000.00
assets
Investment property 39,837,558.11 42,160,779.65
Fixed assets 229,931,726.27 249,558,305.21
Construction in progress 2,166,940.74 18,366,604.84
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets 58,781,756.11 64,783,364.89
Development costs
Goodwill
91
Changchai Company, Limited Annual Report 2023
Long-term prepaid expense
Deferred income tax assets 920,609.18 19,860,262.43
Other non-current assets 830,991.15
Total non-current assets 2,291,315,714.06 2,332,372,675.06
Total assets 4,928,624,578.74 4,904,842,017.10
Current liabilities:
Short-term borrowings 108,437,700.65
Held-for-trading financial
liabilities
Derivative financial liabilities
Notes payable 524,671,742.33 518,918,596.58
Accounts payable 526,544,716.02 541,911,517.64
Advances from customers 1,647,441.22 837,425.55
Contract liabilities 26,149,334.52 24,129,579.35
Employee benefits payable 40,766,429.54 41,558,489.86
Taxes payable 2,069,482.65 3,119,171.69
Other payables 151,919,473.64 151,206,684.89
Including: Interest payable
Dividends payable 3,243,179.97 3,243,179.97
Liabilities directly associated
with assets held for sale
Current portion of non-current
liabilities
Other current liabilities 53,417,011.96 67,810,395.33
Total current liabilities 1,327,185,631.88 1,457,929,561.54
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 32,795,896.48 36,205,625.94
Deferred income tax liabilities 157,053,077.87 149,039,152.68
Other non-current liabilities
Total non-current liabilities 189,848,974.35 185,244,778.62
Total liabilities 1,517,034,606.23 1,643,174,340.16
Owners’ equity:
92
Changchai Company, Limited Annual Report 2023
Share capital 705,692,507.00 705,692,507.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 659,418,700.67 659,418,700.67
Less: Treasury stock
Other comprehensive income 667,180,321.82 655,341,704.07
Specific reserve 19,010,793.43 18,848,856.75
Surplus reserves 363,695,592.34 349,197,725.72
Retained earnings 996,592,057.25 873,168,182.73
Total owners’ equity 3,411,589,972.51 3,261,667,676.94
Total liabilities and owners’ equity 4,928,624,578.74 4,904,842,017.10
Legal representative: Xie Guozhong General Manager: Xie Guozhong
Head of the accounting department: Jiang H
93
Changchai Company, Limited Annual Report 2023
3. Consolidated Income Statement
Unit: RMB
Item 2023 2022
1. Revenue 2,155,698,787.49 2,182,043,095.61
Including: Operating revenue 2,155,698,787.49 2,182,043,095.61
Interest income
Insurance premium income
Handling charge and commission income
2. Costs and expenses 2,156,452,273.22 2,247,441,538.64
Including: Cost of sales 1,838,755,831.41 1,948,677,036.52
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 15,057,398.25 16,973,196.26
Selling expense 99,603,282.16 102,630,223.71
Administrative expense 123,981,333.99 119,511,189.72
R&D expense 90,339,104.33 81,239,597.06
Finance costs -11,284,676.92 -21,589,704.63
Including: Interest expense 1,825,195.98 1,993,453.71
Interest income 9,008,657.82 12,804,077.19
Add: Other income 6,788,111.97 7,184,028.05
Return on investment (“-” for loss) 19,102,348.95 7,969,467.19
Including: Share of profit or loss of joint ventures
and associates
Income from the derecognition of financial assets
at amortized cost (“-” for loss)
Exchange gain (“-” for loss)
Net gain on exposure hedges (“-” for loss)
Gain on changes in fair value (“-” for loss) 49,816,098.68 145,243,457.17
Credit impairment loss (“-” for loss) -172,171.65 -2,953,740.73
Asset impairment loss (“-” for loss) -27,893,895.75 -14,367,197.27
Asset disposal income (“-” for loss) 105,702,551.01 393,161.73
3. Operating profit (“-” for loss) 152,589,557.48 78,070,733.11
Add: Non-operating income 927,993.65 4,257,942.65
Less: Non-operating expense 1,182,537.54 618,463.56
4. Profit before tax (“-” for loss) 152,335,013.59 81,710,212.20
94
Changchai Company, Limited Annual Report 2023
Less: Income tax expense 37,636,658.03 2,464,079.74
5. Net profit (“-” for net loss) 114,698,355.56 79,246,132.46
5.1 By operating continuity
5.1.1 Net profit from continuing operations (“-” for net
114,698,355.56 79,246,132.46
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
108,495,607.05 76,684,796.91
Company as the parent
5.2.1 Net profit attributable to non-controlling interests 6,202,748.51 2,561,335.55
6. Other comprehensive income, net of tax 11,838,617.75 149,330,204.52
Attributable to owners of the Company as the parent 11,838,617.75 149,330,204.52
6.1 Items that will not be reclassified to profit or loss 11,838,617.75 149,330,204.52
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
11,838,617.75 149,330,204.52
equity instruments
6.1.4 Changes in the fair value arising from changes
in own credit risk
6.1.5 Other
6.2 Items that will be reclassified to profit or loss
6.2.1 Other comprehensive income that will be
reclassified to profit or loss under the equity method
6.2.2 Changes in the fair value of investments in other
debt obligations
6.2.3 Other comprehensive income arising from the
reclassification of financial assets
6.2.4 Credit impairment allowance for investments in
other debt obligations
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 126,536,973.31 228,576,336.98
Attributable to owners of the Company as the parent 120,334,224.80 226,015,001.43
Attributable to non-controlling interests 6,202,748.51 2,561,335.55
8. Earnings per share
8.1 Basic earnings per share 0.1537 0.1087
95
Changchai Company, Limited Annual Report 2023
8.2 Diluted earnings per share 0.1537 0.1087
Legal representative: Xie Guozhong General Manager: Xie Guozhong
Head of the accounting department: Jiang He
96
Changchai Company, Limited Annual Report 2023
4. Income Statement of the Company as the Parent
Unit: RMB
Item 2023 2022
1. Operating revenue 2,057,120,913.33 1,988,473,044.55
Less: Cost of sales 1,788,129,884.67 1,784,345,704.10
Taxes and surcharges 8,602,178.79 11,846,885.20
Selling expense 92,935,731.73 97,601,117.35
Administrative expense 87,122,617.94 90,150,661.31
R&D expense 79,855,291.69 72,372,647.10
Finance costs -19,194,141.71 -22,274,862.27
Including: Interest expense 1,562,299.35 1,531,942.32
Interest income 17,311,210.31 15,122,552.35
Add: Other income 6,016,229.41 6,504,428.46
Return on investment (“-” for loss) 15,102,581.80 36,604,658.62
Including: Share of profit or loss of joint ventures
28,800,000.00
and associates
Income from the derecognition of financial assets
at amortized cost (“-” for loss)
Net gain on exposure hedges (“-” for loss)
Gain on changes in fair value (“-” for loss) 39,852,493.47 186,354,111.11
Credit impairment loss (“-” for loss) 3,495,307.23 -8,854,137.91
Asset impairment loss (“-” for loss) -20,288,104.38 -11,526,145.82
Asset disposal income (“-” for loss) 105,727,630.80 4,181,548.77
2. Operating profit (“-” for loss) 169,575,488.55 167,695,354.99
Add: Non-operating income 319,236.80 345,409.40
Less: Non-operating expense 51,648.54 102,766.76
3. Profit before tax (“-” for loss) 169,843,076.81 167,937,997.63
Less: Income tax expense 24,864,410.60 17,405,625.04
4. Net profit (“-” for net loss) 144,978,666.21 150,532,372.59
4.1 Net profit from continuing operations (“-” for net loss) 144,978,666.21 150,532,372.59
4.2 Net profit from discontinued operations (“-” for net
loss)
5. Other comprehensive income, net of tax 11,838,617.75 149,330,204.52
5.1 Items that will not be reclassified to profit or loss 11,838,617.75 149,330,204.52
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 the equity method
5.1.3 Changes in the fair value of investments in other
11,838,617.75 149,330,204.52
equity instruments
5.1.4 Changes in the fair value arising from changes in
97
Changchai Company, Limited Annual Report 2023
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 156,817,283.96 299,862,577.11
7. Earnings per share
7.1 Basic earnings per share
7.2 Diluted earnings per share
Legal representative: Xie Guozhong General Manager: Xie Guozhong
Head of the accounting department: Jiang He
98
Changchai Company, Limited Annual Report 2023
5. Consolidated Cash Flow Statement
Unit: RMB
Item 2023 2022
1. Cash flows from operating activities:
Proceeds from sale of commodities and rendering of services 2,031,067,538.52 2,089,127,900.17
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 98,155,472.59 38,479,590.77
Cash generated from other operating activities 40,082,851.79 22,990,293.44
Subtotal of cash generated from operating activities 2,169,305,862.90 2,150,597,784.38
Payments for commodities and services 1,533,814,952.73 1,312,012,931.69
Net increase in loans and advances to customers
Net increase in deposits in the central bank and in interbank loans
granted
Payments for claims on original insurance contracts
Net increase in interbank loans granted
Interest, handling charges and commissions paid
Policy dividends paid
Cash paid to and for employees 310,775,202.76 313,119,839.28
Taxes paid 33,394,657.94 52,344,111.33
Cash used in other operating activities 154,131,222.12 108,190,624.24
Subtotal of cash used in operating activities 2,032,116,035.55 1,785,667,506.54
Net cash generated from/used in operating activities 137,189,827.35 364,930,277.84
2. Cash flows from investing activities:
Proceeds from disinvestment 1,101,955,152.04 914,060,767.00
Return on investment 23,632,366.98 17,913,476.59
Net proceeds from the disposal of fixed assets, intangible assets
71,562,956.31 692,980.99
and other long-lived assets
Net proceeds from the disposal of subsidiaries and other business
units
Cash generated from other investing activities 11,400,123.61
Subtotal of cash generated from investing activities 1,197,150,475.33 944,067,348.19
Payments for the acquisition of fixed assets, intangible assets and
97,110,602.27 48,439,287.62
other long-lived assets
Payments for investments 947,055,152.04 1,033,581,567.00
Net increase in pledged loans granted
99
Changchai Company, Limited Annual Report 2023
Net payments for the acquisition of subsidiaries and other business
units
Cash used in other investing activities
Subtotal of cash used in investing activities 1,044,165,754.31 1,082,020,854.62
Net cash generated from/used in investing activities 152,984,721.02 -137,953,506.43
3. Cash flows from financing activities:
Capital contributions received
Including: Capital contributions by non-controlling interests to
subsidiaries
Borrowings raised 7,000,000.00
Cash generated from other financing activities 128,437,700.65
Subtotal of cash generated from financing activities 135,437,700.65
Repayment of borrowings 7,000,000.00 12,000,000.00
Interest and dividends paid 7,195,400.07 18,689,380.47
Including: Dividends paid by subsidiaries to non-controlling
interests
Cash used in other financing activities 117,170,000.00 83,623,545.07
Subtotal of cash used in financing activities 131,365,400.07 114,312,925.54
Net cash generated from/used in financing activities -131,365,400.07 21,124,775.11
4. Effect of foreign exchange rates changes on cash and cash
2,469,409.11 -152,802.06
equivalents
5. Net increase in cash and cash equivalents 161,278,557.41 247,948,744.46
Add: Cash and cash equivalents, beginning of the period 810,350,966.05 562,402,221.59
6. Cash and cash equivalents, end of the period 971,629,523.46 810,350,966.05
Legal representative: Xie Guozhong General Manager: Xie Guozhong
Head of the accounting department: Jiang He
100
Changchai Company, Limited Annual Report 2023
6. Cash Flow Statement of the Company as the Parent
Unit: RMB
Item 2023 2022
1. Cash flows from operating activities:
Proceeds from sale of commodities and rendering of services 2,151,742,371.58 2,040,092,339.55
Tax rebates 40,874,390.40 27,588,745.34
Cash generated from other operating activities 21,935,914.65 21,378,587.89
Subtotal of cash generated from operating activities 2,214,552,676.63 2,089,059,672.78
Payments for commodities and services 1,636,385,419.97 1,330,893,073.67
Cash paid to and for employees 212,298,042.01 243,134,907.26
Taxes paid 8,731,121.51 39,870,320.72
Cash used in other operating activities 302,274,673.41 222,082,917.91
Subtotal of cash used in operating activities 2,159,689,256.90 1,835,981,219.56
Net cash generated from/used in operating activities 54,863,419.73 253,078,453.22
2. Cash flows from investing activities:
Proceeds from disinvestment 1,010,000,000.00 855,000,000.00
Return on investment 18,887,391.07 45,708,640.27
Net proceeds from the disposal of fixed assets, intangible assets
71,055,306.33 38,250,224.61
and other long-lived assets
Net proceeds from the disposal of subsidiaries and other business
units
Cash generated from other investing activities
Subtotal of cash generated from investing activities 1,099,942,697.40 938,958,864.88
Payments for the acquisition of fixed assets, intangible assets and
7,558,187.67 8,002,707.77
other long-lived assets
Payments for investments 837,170,000.00 983,520,800.00
Net payments for the acquisition of subsidiaries and other
business units
Cash used in other investing activities
Subtotal of cash used in investing activities 844,728,187.67 991,523,507.77
Net cash generated from/used in investing activities 255,214,509.73 -52,564,642.89
3. Cash flows from financing activities:
Capital contributions received
Borrowings raised
Cash generated from other financing activities 128,437,700.65
Subtotal of cash generated from financing activities 128,437,700.65
Repayment of borrowings
Interest and dividends paid 7,056,925.07 18,348,005.18
Cash used in other financing activities 110,000,000.00 80,503,408.97
Subtotal of cash used in financing activities 117,056,925.07 98,851,414.15
Net cash generated from/used in financing activities -117,056,925.07 29,586,286.50
4. Effect of foreign exchange rates changes on cash and cash
2,008,960.07 -1,851,060.10
equivalents
5. Net increase in cash and cash equivalents 195,029,964.46 228,249,036.73
101
Changchai Company, Limited Annual Report 2023
Add: Cash and cash equivalents, beginning of the period 704,659,776.14 476,410,739.41
6. Cash and cash equivalents, end of the period 899,689,740.60 704,659,776.14
Legal representative: Xie Guozhong General Manager: Xie Guozhong
Head of the accounting department: Jiang He
102
Changchai Company, Limited Annual Report 2023
7. Consolidated Statements of Changes in Owners’ Equity
2023
Unit: RMB
2023
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 705,692, 640,133 655,341 18,848, 349,197, 915,495, 3,284,71 72,464,1 3,357,17
prior year 507.00 ,963.01 ,704.07 856.75 725.72 909.35 0,665.90 72.67 4,838.57
Add: Adjustment for change in
accounting policy
Adjustment for correction of
103
Changchai Company, Limited Annual Report 2023
previous error
Other adjustments
2. Balance as at the beginning 705,692, 640,133 655,341 18,848, 349,197, 915,495, 3,284,71 72,464,1 3,357,17
of the year 507.00 ,963.01 ,704.07 856.75 725.72 909.35 0,665.90 72.67 4,838.57
3. Increase/ decrease in the 375,712 11,838,6 583,232 14,497,8 86,940,8 114,236, -1,342,9 112,893,
period (“-” for decrease) .83 17.75 .77 66.62 15.36 245.33 64.32 281.01
3.1 Total comprehensive 11,838,6 108,495, 120,334, 6,202,74 126,536,
income 17.75 607.05 224.80 8.51 973.31
3.2 Capital increased and 375,712 375,712. -7,545,7 -7,170,0
reduced by owners .83 83 12.83 00.00
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
375,712 375,712. -7,545,7 -7,170,0
3.2.4 Other
.83 83 12.83 00.00
14,497,8 -21,554, -7,056,9 -7,056,9
3.3 Profit distribution
66.62 791.69 25.07 25.07
3.3.1 Appropriation to 14,497,8 -14,497,
surplus reserves 66.62 866.62
3.3.2 Appropriation to
general reserve
3.3.3 Appropriation to -7,056,9 -7,056,9 -7,056,9
owners (or shareholders) 25.07 25.07 25.07
3.3.4 Other
3.4 Transfers within owners’
equity
104
Changchai Company, Limited Annual Report 2023
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
583,232 583,232. 583,232.
3.5 Specific reserve
.77 77 77
5,136,9 5,136,98 5,136,98
3.5.1 Increase in the period
88.70 8.70 8.70
4,553,7 4,553,75 4,553,75
3.5.2 Used in the period
55.93 5.93 5.93
3.6 Other
4. Balance as at the end of the 705,692, 640,509 667,180 19,432, 363,695, 1,002,43 3,398,94 71,121,2 3,470,06
period 507.00 ,675.84 ,321.82 089.52 592.34 6,724.71 6,911.23 08.35 8,119.58
2022
Unit: RMB
2022
Equity attributable to owners of the Company as the parent
Non-cont Total
Item Other L Other G Ot
Share Capital Specific Surplus Retained rolling owners’
equity e compre e he Subtotal
capital reserves reserve reserves earnings interests equity
instruments s hensive n r
105
Changchai Company, Limited Annual Report 2023
s income er
: al
P T re
P
re r se
er
fe e rv
p
rr a e
et
e O s
u
d th u
al
s er r
b
h y
o
ar s
n
e t
ds
s o
c
k
1. 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
prior year 507.00 ,218.40 499.55 950.04 488.46 354.88 0,018.33 30.98 4,249.31
Add: Adjustment for change in
accounting policy
Adjustment for correction of
previous error
Other adjustments
2. Balance as at the beginning 705,692, 640,676 506,011, 18,812, 334,144, 872,212, 3,077,55 19,424,2 3,096,97
of the year 507.00 ,218.40 499.55 950.04 488.46 354.88 0,018.33 30.98 4,249.31
3. Increase/ decrease in the -542,25 149,330 35,906. 15,053,2 43,283,5 207,160, 53,039,9 260,200,
period (“-” for decrease) 5.39 ,204.52 71 37.26 54.47 647.57 41.69 589.26
3.1 Total comprehensive 149,330 76,684,7 226,015, 2,561,33 228,576,
income ,204.52 96.91 001.43 5.55 336.98
3.2 Capital increased and -542,25 -542,25 50,478,6 49,936,3
reduced by owners 5.39 5.39 06.14 50.75
106
Changchai Company, Limited Annual Report 2023
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
-542,25 -542,25 50,478,6 49,936,3
3.2.4 Other
5.39 5.39 06.14 50.75
15,053,2 -33,401, -18,348, -18,348,
3.3 Profit distribution
37.26 242.44 005.18 005.18
3.3.1 Appropriation to 15,053,2 -15,053,
surplus reserves 37.26 237.26
3.3.2 Appropriation to
general reserve
3.3.3 Appropriation to -18,348, -18,348, -18,348,
owners (or shareholders) 005.18 005.18 005.18
3.3.4 Other
3.4 Transfers within owners’
equity
3.4.1 Increase in capital (or
share capital) from capital
reserves
3.4.2 Increase in capital (or
share capital) from surplus
reserves
3.4.3 Loss offset by surplus
reserves
3.4.4 Changes in defined
benefit schemes transferred to
107
Changchai Company, Limited Annual Report 2023
retained earnings
3.4.5 Other comprehensive
income transferred to retained
earnings
3.4.6 Other
35,906. 35,906.7 35,906.7
3.5 Specific reserve
71 1 1
4,877,2 4,877,23 4,877,23
3.5.1 Increase in the period
32.12 2.12 2.12
4,841,3 4,841,32 4,841,32
3.5.2 Used in the period
25.41 5.41 5.41
3.6 Other
4. Balance as at the end of the 705,692, 640,133 655,341 18,848, 349,197, 915,495, 3,284,71 72,464,1 3,357,17
period 507.00 ,963.01 ,704.07 856.75 725.72 909.35 0,665.90 72.67 4,838.57
Legal representative: Xie Guozhong General Manager: Xie Guozhong Head of the accounting department: Jiang He
108
Changchai Company, Limited Annual Report 2023
8. Statements of Changes in Owners’ Equity of the Company as the Parent
2023
Unit: RMB
2023
Other equity
instruments Le
Pe ss:
Pr
rp Tr Other
efe O Total
Item et Capital eas comprehe Specific Surplus Retained
Share capital rre O th owners’
ua reserves ur nsive reserve reserves earnings
d th er equity
l y income
sh er
bo sto
are
nd ck
s
s
1. Balance as at the end of the 705,692,507.0 659,418,70 0.0 655,341,7 18,848,856. 349,197,725 873,168,182. 3,261,667,6
prior year 0 0.67 0 04.07 75 .72 73 76.94
Add: Adjustment for change in
0.00
accounting policy
Adjustment for correction of
0.00
previous error
Other adjustments 0.00
2. Balance as at the beginning of 705,692,507.0 659,418,70 0.0 655,341,7 18,848,856. 349,197,725 873,168,182. 3,261,667,6
the year 0 0.67 0 04.07 75 .72 73 76.94
3. Increase/ decrease in the 11,838,61 14,497,866. 123,423,874. 149,922,29
161,936.68
period (“-” for decrease) 7.75 62 52 5.57
3.1 Total comprehensive 11,838,61 144,978,666. 156,817,28
income 7.75 21 3.96
3.2 Capital increased and
reduced by owners
3.2.1 Ordinary shares
109
Changchai Company, Limited Annual Report 2023
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
14,497,866. -21,554,791. -7,056,925.
3.3 Profit distribution
62 69 07
3.3.1 Appropriation to 14,497,866. -14,497,866.
surplus reserves 62 62
3.3.2 Appropriation to -7,056,925.0 -7,056,925.
owners (or shareholders) 7 07
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
3.4.5 Other comprehensive
income transferred to retained
earnings
110
Changchai Company, Limited Annual Report 2023
3.4.6 Other
3.5 Specific reserve 161,936.68 161,936.68
4,598,473.0 4,598,473.0
3.5.1 Increase in the period
4 4
4,436,536.3 4,436,536.3
3.5.2 Used in the period
6 6
3.6 Other
4. Balance as at the end of the 705,692,507.0 659,418,70 0.0 667,180,3 19,010,793. 363,695,592 996,592,057. 3,411,589,9
period 0 0.67 0 21.82 43 .34 25 72.51
2022
Unit: RMB
2022
Other equity
instruments Le
Pe ss:
Pr
rp Tr Other
efe O Total
Item et Capital eas comprehe Specific Surplus Retained
Share capital rre O th owners’
ua reserves ur nsive reserve reserves earnings
d th er equity
l y income
sh er
bo sto
are
nd ck
s
s
1. 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
prior year 0 0.67 99.55 04 .46 58 98.30
Add: Adjustment for change in
accounting policy
Adjustment for correction of
previous error
Other adjustments
2. Balance as at the beginning of 705,692,507.0 659,418,70 506,011,4 18,812,950. 334,144,488 756,037,052. 2,980,117,1
the year 0 0.67 99.55 04 .46 58 98.30
111
Changchai Company, Limited Annual Report 2023
3. Increase/ decrease in the 149,330,2 15,053,237. 117,131,130. 281,550,47
35,906.71
period (“-” for decrease) 04.52 26 15 8.64
3.1 Total comprehensive 149,330,2 150,532,372. 299,862,57
income 04.52 59 7.11
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
15,053,237. -33,401,242. -18,348,00
3.3 Profit distribution
26 44 5.18
3.3.1 Appropriation to 15,053,237. -15,053,237.
surplus reserves 26 26
3.3.2 Appropriation to -18,348,005. -18,348,00
owners (or shareholders) 18 5.18
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
112
Changchai Company, Limited Annual Report 2023
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 35,906.71 35,906.71
4,877,232.1 4,877,232.1
3.5.1 Increase in the period
2 2
4,841,325.4 4,841,325.4
3.5.2 Used in the period
1 1
3.6 Other
4. Balance as at the end of the 705,692,507.0 659,418,70 655,341,7 18,848,856. 349,197,725 873,168,182. 3,261,667,6
period 0 0.67 04.07 75 .72 73 76.94
Legal representative: Xie Guozhong General Manager: Xie Guozhong Head of the accounting department: Jiang He
113
Changchai Company, Limited Annual Report 2023
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 share capital of the Company after the capital increase was
RMB705,692,507.
Credibility code of the Company’s License of Business Corporation: 91320400134792410W.
The Company’s registered address is situated at No. 123 Huaide Middle Road, Changzhou, Jiangsu, as well as its
head office located at No. 123 Huaide Middle Road, Changzhou, Jiangsu.
The Company belongs to manufacturing with business scope including manufacturing and sale of diesel engine,
diesel engines part and casting, grain harvesting machine, rotary cultivators, walking tractor, mould and fixtures,
assembling and sale of diesel generating set and pumping unit. The Company mainly engaged in the production
and sales of small and medium-sized single cylinders and multi-cylinder diesel engine with the label of Changchai
Brand. The diesel engine produced and sold by the Company were mainly used in tractors, combine harvest
models, light commercial vehicle, farm equipment, small-sized construction machinery, generating sets and
shipborne machinery and equipment, etc. The Company’s main business remained unchanged in the Reporting
Period.
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Changchai Company, Limited Annual Report 2023
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, Machine Processing Plant,
Single-cylinder Engine Plant, Multi-cylinder Engine Plant, Machine Set Business Department and Overseas
Business Department in the Company.
The financial report has been approved to be issued by the Board of Directors on 10 April 2024.
The consolidated scope of the Company of the Reporting Period includes the Company as the parent and 8
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 2023)
by China Securities Regulatory Commission.
In accordance with relevant provisions of the Accounting Standards for Business Enterprises, the Group adopted
the accrual basis in accounting. Except for some financial instruments, where impairment occurred on an asset, an
impairment reserve was withdrawn accordingly pursuant to relevant requirements.
2. Continuation
The Company comprehensively evaluated the information acquired recently that there would be no such factors in
the 12 months from the end of the Reporting Period that would obviously influence the continuation capability of
the Company and predicted that the operating activities would continue in the future 12 months of the Company.
The financial statement compiled base on the continuous operation.
V. Important Accounting Policies and Estimations
Notification of specific accounting policies and accounting estimations:
The Company and each subsidiary according to the actual production and operation characteristics and in accord
with the regulations of the relevant ASBE, formulated certain specific accounting policies and accounting
estimations, which mainly reflected in the financial instruments, withdrawal method of the bad debt provision of
the accounts receivable, the measurement of the inventory and the depreciation of the fixed assets etc.
115
Changchai Company, Limited Annual Report 2023
1. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Group are in compliance with in compliance with the Accounting
Standards for Business Enterprises, which factually and completely present the Company’s and the Group’s
financial positions, business results and cash flows and other relevant information.
2. Fiscal Period
The fiscal periods are divided into fiscal year and metaphase, the fiscal year is from January 1 to December 31
and as the metaphase included monthly, quarterly and semi-yearly periods.
3. Operating Cycle
A normal operating cycle refers to a period from the Group purchasing assets for processing to realizing cash or
cash equivalents. An operating cycle for the Group is 12 months, which is also the classification criterion for the
liquidity of its assets and liabilities.
4. Currency Used in Bookkeeping
Renminbi is functional currency of the Company.
5. Methods for Determining Materiality Standards and Selection Criteria
Applicable □ Not applicable
Item Materiality criteria
Account receivable with bad debt provision by major
Amount greater than or equal to RMB1,000,000.00
single item
Other receivables with bad debt provision by major
Amount greater than or equal to RMB1,000,000.00
single item
Significant construction in progress Amount greater than or equal to RMB3,000,000.00
6. 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
116
Changchai Company, Limited Annual Report 2023
long-term equity investment. The total face value of the stocks issued shall be regarded as the capital stock, while
the difference between the initial cost of the long-term equity investment and total face value of the shares issued
shall offset against the capital reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be
adjusted.
All direct costs for the business combination, including expenses for audit, evaluating and legal services shall be
recorded into the profits and losses at the current period. The expenses such as the handling charges and
commission etc, premium income of deducting the equity securities, and as for the premium income was
insufficient to dilute, the retained earnings shall be written down.
Owning to the reasons such as the additional investment, for the equity investment held before acquiring the
control right of the combined parties, the confirmed relevant gains and losses, other comprehensive income and
the changes of other net assets since the date of the earlier one between the date when acquiring the original equity
right and the date when the combine parties and combined ones were under the same control to the combination
date, should be respectively written down and compared with the beginning balance of retained earnings or the
current gains and losses during the statement period.
(2) Business combinations not under the same control
A business combination not under the same control is a business combination in which the combining enterprises
are not ultimately controlled by the same party or the same parties both before and after the business combination.
The combination costs of the acquirer and the identifiable net assets obtained by the acquirer in a business
combination shall be measured at the fair values. The acquirer shall recognize the positive balance between the
combination costs and the fair value of the identifiable net assets it obtains forms the acquiree as business
reputation. The direct relevant expenses occurred from the enterprise combination should be included in the
current gains and losses when occurred. The combination costs of the acquirer and the identifiable net assets
obtained by it in the combination shall be measured according to their fair values at the acquiring date. The
difference between the fair value of the assets paid out by the Company and its book value should be included in
the current gains and losses. The purchase date refers to the date that the purchaser acquires the control right of the
acquiree.
For the business combinations not under the same control realized through step by step multiple transaction, as for
the equity interests that the Group holds in the acquiree before the acquiring date, they shall be re-measured
according to their fair values at the acquiring date; the positive difference between their fair values and carrying
amounts shall be recorded into the investment gains for the period including the acquiring date. The equity holed
by the acquiree which involved with the other comprehensive income and the other owners’ equities changes
except for the net gains and losses, other comprehensive income and the profits distribution and other related
comprehensive gains and other owners’ equities which in relation to the equity interests that the Group holds in
the acquiree before the acquiring date should be transferred into the current investment income on the acquiring
date, except for the other comprehensive income occurred from the re-measurement of the net profits of the
defined benefit plans or the changes of the net assets of the investees.
7. Criteria for Judging Control and Methods for Preparing Consolidated Financial Statements
(1) Criteria for determining control
Control refers to the authority held by the investor over the investee, entailing participation in its relevant
activities to yield variable returns and the capability to influence the investee's returns through exercising power
over it.
The Company will judge whether these entities have been controlled by the investee based on its comprehensive
117
Changchai Company, Limited Annual Report 2023
consideration of relevant facts and circumstances. Should any changes in such facts and circumstances alter the
elements defining control, a reassessment is promptly conducted.
Relevant facts and circumstances primarily encompass:
① The purpose of the investee's establishment.
② The investee's pertinent activities and decision-making processes therein.
③ Whether the rights held by the investor currently enable it to dominate the investee's relevant activities.
④ Whether the investor gains variable returns through participating in the investee's relevant activities.
⑤ The investor's capacity to influence the investee's returns through exercising power over it.
⑥ The relationship between the investor and other entities.
(2) Consolidation scope
The consolidation scope of the Company's consolidated financial statements is determined based on control,
encompassing all subsidiaries (including separately controlled entities by the Company) in the consolidated
financial statements.
(3) Combination procedure
The Company prepares consolidated financial statements based on its own and each subsidiary's financial
statements, along with other relevant information.
When the Company prepares the consolidated financial statements, it shall regard the entire Group as an
accounting entity, and shall reflect the overall financial status, operating results and cash flows of the Group in
accordance with the requirements for recognition, measurement and presentation of the relevant accounting
standard for business enterprises, as well as unified accounting policies.
All subsidiaries included in the consolidation scope of the consolidated financial statements apply accounting
policies and accounting periods consistent with the Company.
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.
In preparing the consolidated financial statements, transactions between the Company and its subsidiaries, as well
as among subsidiaries themselves, are offset to reflect their impact on the consolidated balance sheet, consolidated
income statement, consolidated cash flow statement, and consolidated statement of changes in equity. If there are
differences in the recognition of the same transaction when viewed from the perspective of the corporate group's
consolidated financial statements compared to when viewed from the standpoint of the Company or a subsidiary
as the accounting entity, adjustments are made from the perspective of the corporate group.
The portion of a subsidiary’s shareholders’ equity and the portion of a subsidiary’s net profits and losses for the
period 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.
For subsidiaries acquired through business combinations under common control, adjustments to their financial
statements are based on their assets, liabilities (including goodwill arising from the acquisition by the ultimate
controller), and their carrying value in the financial statements of the ultimate controller.
118
Changchai Company, Limited Annual Report 2023
For subsidiaries acquired through business combinations not under common control, adjustments to their financial
statements are based on the fair value of identifiable net assets as of the acquisition date.
① Addition of subsidiaries or businesses
If subsidiaries or businesses are added through business combinations under common control during the Reporting
Period, adjustments are made to the opening balances of the consolidated balance sheet. The income, expenses,
and profits of the subsidiaries or businesses from the beginning of the current period to the end of the Reporting
Period are included in the consolidated income statement. The cash flows of the subsidiaries or businesses from
the beginning of the current period to the end of the Reporting Period are included in the consolidated cash flow
statement. Comparative items in the financial statements are adjusted accordingly, treating the reporting entity
after the combination as if it had existed since the date when control was obtained by the ultimate controller.
If control over an investee under common control is achieved due to the reasons such as the additional investment,
adjustments are made as if all parties participating in the merger existed in their current state from the date when
control was obtained by the ultimate controller. 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.
During the Reporting Period, if there is an increase in subsidiaries or businesses due to business combinations not
under common control, the opening balances of the consolidated balance sheet are not adjusted. The income,
expenses, and profits of the subsidiary or business from the acquisition date to the end of the Reporting Period are
included in the consolidated income statement. The cash flows of the subsidiary or business from the acquisition
date to the end of the Reporting Period are included in the consolidated cash flow statement.
In the event of acquiring control over an investee previously not under common control due to additional
investments or similar reasons, 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.
② Disposal of subsidiaries or businesses
A. General disposal methods
During the Reporting Period, if the Company disposes of a subsidiary or business, the income, expenses, and
profits of the subsidiary or business from the beginning of the period to the disposal date are included in the
consolidated income statement. The cash flows of the subsidiary or business from the beginning of the period to
the disposal date are included in the consolidated cash flow statement.
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
119
Changchai Company, Limited Annual Report 2023
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.
B. Disposal of subsidiaries step by step
If the clauses, conditions, and economic impact, by which the equity investments of a subsidiary were disposed of
step by step through multiple transactions until the control was lost, and the various transactions in the equity
investments of a subsidiary were disposed of, fell under one or more of the following circumstances, the multiple
transactions were generally regarded as a "Package Deal":
a. These transactions are reached concurrently or after the impact thereof on each other is taken into consideration.
b. These transactions might achieve a complete business result only as a whole;
c. The occurrence of a transaction depends on the occurrence of, at a minimum, one another transaction; and/or
d. A transaction is considered uneconomical separately but is considered economical when other transactions are
also taken into consideration.
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.
③ Acquisition of minority equity of subsidiaries
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 share premium of capital reserves within the consolidated balance sheet shall be adjusted,
if the capital reserves are not sufficient to offset, the retained profits shall be adjusted.
④ The Company disposed part of the long-term equity investment on subsidiaries without losing its controlling
right on them
In the case of partial disposal of long-term equity investments in a subsidiary without loss of control, the
difference between the disposal proceeds obtained and the proportionate share of net assets of the subsidiary
continuously calculated from the purchase date or merger date corresponding to the disposal of long-term equity
investments is adjusted in the share premium within the consolidated balance sheet. If the share premium in the
capital reserve is insufficient to offset the difference, adjustments are made to retained earnings.
8. 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
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arrangement and enjoys assets and has to bear liabilities related to the arrangement. The Company confirms the
following items related to the interests share among the joint operations and executes accounting treatment
according to the regulations of the relevant ASBE:
(1) Recognizes the assets that it holds and bears in the joint operation and recognizes the jointly-held assets
according to the Group’s stake in the joint operation;
(2) Recognizes the liabilities that it holds and bears in the joint operation and recognizes the jointly-held liabilities
according to the Group’s stake in the joint operation;
(3) Recognizes the income from sale of the Group’s share in the output of the joint operation
(4) Recognizes the income from sale of the joint operation’s outputs according to the Group’s stake in it
(5) Recognizes the expense solely incurred to the Group and the expense incurred to the joint operation according
to the Group’s stake in it.
9. 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.
10. 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
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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.
11. Financial Instruments
(1) Classification of Financial Instruments
The Company classifies the financial assets when initially recognized into the following three categories based on
the business model for financial assets management and characteristics of contractual cash flow of financial assets:
financial assets measured at amortized cost, financial assets at fair value through other comprehensive income
(debt instruments) and financial assets at fair value through profit or loss
Financial liabilities were classifies when initially recognized into financial liabilities at fair value through profit or
loss and financial liabilities measured at amortized cost.
(2) Recognition Basis and Measurement Method for Financial Instruments
① Financial assets measured at amortized cost
Financial assets at amortized cost include notes receivable, accounts receivable, other receivables, long-term
receivables, and investment in debt obligations which are initially measured at fair value and related transaction
cost shall be recorded into the initial recognized amount. For accounts receivable excluding significant financing
and accounts receivable that the Company decides not to consider financing components less than one year, the
initial measurement shall be made at the contract transaction price. The interest calculated with actual rates for the
holding period shall be recorded into the current profit or loss. When recovered or disposed, the difference
between the price obtained and the carrying value of the financial assets shall be recorded into the current profit or
loss.
② Financial assets at fair value through other comprehensive income (debt instruments)
Financial assets at fair value through other comprehensive income (debt instruments) include accounts receivable
financing and investment in other debt obligations which are initially measured at fair value and related
transaction cost shall be recorded into the initial recognized amount. The subsequent measurement of the financial
assets shall be at fair value and changes of fair value except for interest calculated with actual rates, impairment
losses or gains and exchange gains or losses shall be recorded into other comprehensive income. When
derecognized, the accumulated gains or losses originally recorded into other comprehensive income shall be
transferred into the current profit or loss.
③ Financial assets at fair value through other comprehensive income (equity instruments)
Financial assets at fair value through other comprehensive income (equity instruments) include investment in
other equity instruments, etc. which are initially measured at fair value and related transaction cost shall be
recorded into the initial recognized amount. The subsequent measurement of the financial assets shall be at fair
value and changes of fair value shall be recorded into other comprehensive income. The dividends obtained shall
be recorded into the current profit or loss. When derecognized, the accumulated gains or losses originally recorded
into other comprehensive income shall be transferred into retained earnings.
④ Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include held-for-trading financial assets, derivative financial
assets and other non-current financial assets which are initially measured at fair value and the related transaction
cost shall be recorded into the current profit or loss. The subsequent measurement of the financial assets shall be
at fair value and the changes of fair value shall be recorded into the current profit or loss.
⑤ Financial liabilities at fair value through profit or loss
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Financial liabilities at fair value through profit or loss include held-for-trading financial liabilities and derivative
financial liabilities which are initially measured at fair value and the related transaction cost shall be recorded into
the current profit or loss. The subsequent measurement of the financial liabilities shall be at fair value and the
changes of fair value shall be recorded into the current profit or loss. When derecognized, the difference between
the carrying value and the paid consideration shall be recorded into the current profit or loss.
⑥ Financial liabilities at amortized cost
Financial liabilities at amortized cost include short-term borrowings, notes payable, accounts payable, other
payables, long-term borrowings, bonds payable and long-term payables which are initially measured at fair value
and the related transaction cost shall be recorded into the initial recognized amount. The interest calculated with
actual rates for the holding period shall be recorded into the current profit or loss. When derecognized, the
difference between the paid consideration and the carrying value of the financial liabilities shall be recorded into
the current profit or loss.
(3) Recognition Basis and Measurement of Transfer of Financial Assets
Where the Company has transferred nearly all of the risks and rewards related to the ownership of the financial
asset to the transferee, it shall stop recognizing the financial asset and separately recognize the rights and
obligations generated retained from the transfer as assets or liabilities. If it retained nearly all of the risks and
rewards related to the ownership of the financial asset, it shall continue to recognize the transferred financial asset.
Where the Company does not transfer or retain nearly all of the risks and rewards related to the ownership of a
financial asset, it shall deal with it according to the circumstances as follows, respectively: (1) If it gives up its
control over the financial asset, it shall stop recognizing the financial asset and separately recognize the rights and
obligations generated retained from the transfer as assets or liabilities; (2) If it does not give up its control over the
financial asset, it shall, according to the extent of its continuous involvement in the transferred financial asset,
recognize the related financial asset and recognize the relevant liability accordingly.
If the transfer of an entire financial asset satisfies the conditions for stopping recognition, the difference between
the amounts of the following 2 items shall be recorded in the profits and losses of the current period: (1) The
carrying value of the transferred financial asset on the derecognition date; (2) The sum of consideration received
from the transfer of financial assets, and derecognition amount among the accumulative amount of the changes of
the fair value originally recorded in the other comprehensive income (the financial assets involve transfer are
investments in debt instruments at fair value through other comprehensive income. If the transfer of partial
financial asset satisfies the conditions to stop the recognition, the entire carrying value of the transferred financial
asset shall, between the portion whose recognition has been stopped and the portion whose recognition has not
been stopped, be apportioned according to their respective relative fair value on the transfer date, and the
difference between the amounts of the following two items shall be included into the profits and losses of the
current period: (1)The carrying value of the portion whose recognition has been stopped; (2)The sum of
consideration of the portion whose recognition has been stopped, and derecognition amount among the
accumulative amount of the changes of the fair value originally recorded in the other comprehensive income (the
financial assets involve transfer are investments in debt instruments at fair value through other comprehensive
income.
(4) Derecognition Basis of Financial Liabilities
A financial liability or part of it can be derecognized after its current obligation has been relieved in full or in part.
(5) Recognition of Fair Value of Financial Assets and Financial Liabilities
The fair value of financial instruments with an active market is determined by the quoted price in the active
market. For financial instruments without active market, the fair value is determined by valuation techniques. The
Company adopts the valuation techniques applicable to the current conditions which are supported by sufficient
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data and other information for valuation, and selects the input values consistent with the characteristics of assets
or liabilities considered by market participants in asset or liability transactions, with priority to observable input
values. Unobservable input values are used only when relevant observable input values are not available or
practical.
(6) Impairment of financial instrument
① Impairment measurement and accounting handling of financial instrument
Based on expected credit loss, the Company conducts impairment handling and confirms credit impairment loss
for financial assets which is measured by amortized cost, debt instrument investment which is measured by fair
value and whose change is calculated into other comprehensive profits, financial guarantee contract.
Expected credit loss refers to weighted average of credit loss of financial instrument which takes the risk of
contract breach occurrence as the weight. Credit loss refers to the difference between all contract cash flow which
is converted into cash according to actual interest rate and receivable according to contract and all cash flow
which to be charged as expected, i.e. current value of all cash shortage. Among it, as for financial asset purchased
or original which has had credit impairment, it should be converted into cash according actual interest rate of this
financial asset after credit adjustment.
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
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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
Bank’s acceptance bills economic situation, the expected credit loss shall be
Group 2 of notes
with low credit rating accounted through exposure at default and the expected
receivable
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
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12. Accounts Receivable
See “11. Financial Instruments”.
13. Accounts Receivable Financing
See “11. Financial Instruments”.
14. Other Receivables
See “11. Financial Instruments”.
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. 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
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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.
17. Assets Held for Sale
(1) Classification under held for sale recognition criteria
The Company confirms certain non-current assets or disposal groups as held for sale when they simultaneously
meet the following conditions:
① They can be sold immediately in their current condition, following the customary practices observed in similar
transactions; and
② The sale is highly probable, meaning the Company has resolved to execute a sales plan, obtained regulatory
approval (where applicable), secured definite purchase commitments, and anticipates completion of the sale
within one year.
A definite purchase commitment refers to a legally binding purchase agreement between the Company and
another party. This agreement encompasses essential terms such as the transaction price, timing, and sufficiently
stringent penalty clauses for breach, minimizing the likelihood of significant adjustments or cancellation.
(2) Accounting treatment for held for sale assets
The Company does not depreciate or amortize non-current assets or disposal groups classified as held for sale. If
their carrying amount exceeds the net amount derived from subtracting the fair value less selling costs, the
carrying amount should be written down to the net amount. The written-down amount is recognized as an
impairment loss, reflected in the current period's income statement, while also establishing a provision for
impairment of held for sale assets.
Non-current assets or disposal groups classified as held-for-sale on the date of acquisition shall be measured at the
lower of net amount of initial measurement amount minus sales cost and that of fair value minus selling expenses,
assuming they were not classified as held-for-sale during initial measurement.
The aforementioned principles apply to all non-current assets, excluding investment properties measured using the
fair value model, biological assets measured at fair value less selling costs, assets arising from employee benefits,
deferred tax assets, financial assets governed by accounting standards related to financial instruments, and rights
arising from insurance contracts regulated by accounting standards related to insurance contracts.
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.
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(2) Recognition for initial investment cost
The initial investment cost of the long-term equity investment shall be recognized by adopting the following ways
in accordance with different methods of acquisition:
1) As for those forms under the same control of the enterprise combine, if the combine party takes the cash
payment, non-cash assets transformation, liabilities assumption or equity securities issuance as the combination
consideration, should take the shares of the book value by the ultimate control party in the consolidate financial
statement of the owners’ equities of the combiners acquired on the merger date as the initial investment cost. The
difference between the initial investment cost and the book value of the paid combination consideration or the
total amount of the issued shares of the long-term equity investment should be adjusted the capital reserve; If the
capital reserve is insufficient to dilute, the retained earnings shall be adjusted. To include each direct relevant
expense occurred when executing the enterprise merger into the current gains and losses; while the handling
charges and commission occurs from the issuing the equity securities or the bonds for the enterprise merger
should be included in the initial measurement amount of the shareholders’ equities or the liabilities.
2) As for long-term equity investment acquired through the merger of enterprises not under the same control, its
initial investment cost shall regard as the combination cost calculated by the fair value of the assets, equity
instrument issued and liabilities incurred or undertaken on the purchase date adding the direct cost related with the
acquisition. The identifiable assets of the combined party and the liabilities (including contingent liability)
undertaken on the combining date shall be measured at the fair value without considering the amount of minority
interest. The acquirer shall recognize the positive balance between the combination costs and the fair value of the
identifiable net assets it obtains from the acquiree as business reputation. The acquirer shall record the negative
balance between the combination costs and the fair value of the identifiable net assets it obtains from the acquiree
into the consolidated income statement directly. The agent expense and other relevant management expenses such
as the audit, legal service and evaluation consultation occurs from the enterprise merger, should be included in the
current gains and losses when occur; while the handling charges and commission occurs from the issuing the
equity securities or the bonds for the enterprise merger should be included in the initial measurement amount of
the shareholders’ equities or the liabilities.
3) Long-term equity investment obtained by other means
The initial cost of a long-term equity investment obtained by making payment in cash shall be the purchase cost
which is actually paid.
The initial cost of a long-term equity investment obtained on the basis of issuing equity securities shall be the fair
value of the equity securities issued.
The initial cost of a long-term equity investment of an investor shall be the value stipulated in the investment
contract or agreement, the unfair value stipulated in the contract or agreement shall be measured at fair value.
As for long-term investment obtained by the exchange of non-monetary assets, where it is commercial in nature,
the fair value of the assets surrendered shall be recognized as the initial cost of the long-term equity investment
received; where it is not commercial in nature, the book value of the assets surrendered shall be recognized as the
initial cost of the long-term equity investment received.
The initial cost of a long-term equity investment obtained by recombination of liabilities shall be recognized at
fair value of long-term equity investment.
(3) Subsequent measurement and recognition of profits and losses
1) An investment in the subsidiary company shall be measured by employing the cost method
Where the Company hold, and is able to do equity investment with control over an invested entity, the invested
entity shall be its subsidiary company. Where the Company holds the shares of an entity over 50%, or, while the
Company holds the shares of an entity below 50%, but has a real control to the said entity, then the said entity
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shall be its subsidiary company.
2) An investment in the joint enterprise or associated enterprise shall be measured by employing the equity
method
Where the Company hold, and is able to do equity investment with joint control with other parties over an
invested entity, the invested entity shall be its joint enterprise. Where the Company hold, and is able to have
equity investment with significant influences on an invested entity, the invested entity shall be its associated
entity.
After the Company acquired the long-term equity investment, should respectively recognize investment income
and other comprehensive income according to the net gains and losses as well as the portion of other
comprehensive income which should be enjoyed or be shared, and at the same time adjust the book value of the
long-term equity investment; corresponding reduce the book value of the long-term equity investment according
to profits which be declared to distribute by the investees or the portion of the calculation of cash dividends which
should be enjoyed; for the other changes except for the net gains and losses, other comprehensive income and the
owners’ equity except for the profits distribution of the investees, should adjust the book value of the long-term
equity investment as well as include in the owners’ equity .
The investing enterprise shall, on the ground of the fair value of all identifiable assets of the invested entity when
it obtains the investment, recognize the attributable share of the net profits and losses of the invested entity after it
adjusts the net profits of the invested entity.
If the accounting policy adopted by the investees is not accord with that of the Company, should be adjusted
according to the accounting policies of the Company and the financial statement of the investees during the
accounting period and according which to recognize the investment income as well as other comprehensive
income.
For the transaction happened between the Company and associated enterprises as well as joint ventures, if the
assets launched or sold not form into business, the portion of the unrealized gains and losses of the internal
transaction, which belongs to the Company according to the calculation of the enjoyed proportion, should
recognize the investment gains and losses on the basis. But the losses of the unrealized internal transaction
happened between the Company and the investees which belongs to the impairment losses of the transferred assets,
should not be neutralized.
The Company shall recognize the net losses of the invested enterprise according to the following sequence: first of
all, to write down the book value of the long-term equity investment. Secondly, if the book value of the long-term
equity investment is insufficient for written down, should be continued to recognized the investment losses limited
to the book value of other long-term equity which forms of the net investment of the investees and to written
down the book value of the long-term accounts receivable etc. Lastly, through the above handling, for those
should still undertake the additional obligations according to the investment contracts or the agreements, it shall
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
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recorded into owners’ equity.
For other ways on disposal of long-term equity investment, the balance between the book value of the disposed
equity and its actual payment gained shall be recorded into current profits and losses.
For the long-term equity investment measured by adopting equity method, if the remained equity after disposal
still adopts the equity method for measurement, the other comprehensive income originally recorded into owners’
equity should adopt the same basis of the accounting disposal of the relevant assets or liabilities directly disposed
by the investees according to the corresponding proportion. The owners’ equity recognized owning to the changes
of the other owners’ equity except for the net gains and losses, other comprehensive income and the profits
distribution of the investees, should be transferred into the current gains and losses according to the proportion.
For the long-term equity investment which adopts the cost method of measurement, if the remained equity still
adopt the cost method, the other comprehensive income recognized owning to adopting the equity method for
measurement or the recognition and measurement standards of financial instrument before acquiring the control of
the investees, should adopt the same basis of the accounting disposal of the relevant assets or liabilities directly
disposed by the investees and should be carried forward into the current gains and losses according to the
proportion; the changes of the other owners’ equity except for the net gains and losses, other comprehensive
income and the profits distribution among the net assets of the investees which recognized by adopting the equity
method for measurement, should be carried forward into the current gains and losses according to the proportion.
For those the Company lost the control of the investees by disposing part of the equity investment as well as the
remained equity after disposal could execute joint control or significant influences on the investees, should change
to measure by equity method when compiling the individual financial statement and should adjust the
measurement of the remained equity to equity method as adopted since the time acquired; if the remained equity
after disposal could not execute joint control or significant influences on the investees, should change the
accounting disposal according to the relevant regulations of the recognition and measurement standards of
financial instrument, and its difference between the fair value and book value on the date lose the control right
should be included in the current gains and losses. For the other comprehensive income recognized by adopting
equity method for measurement or the recognition and measurement standards of financial instrument before the
Company acquired the control of the investees, should execute the accounting disposal by adopting the same basis
of the accounting disposal of the relevant assets or liabilities directly disposed by the investees when lose the
control of them, while the changes of the other owners’ equity except for the net gains and losses, other
comprehensive income and the profits distribution among the net assets of the investees which recognized by
adopting the equity method for measurement, should be carried forward into the current gains and losses
according to the proportion. Of which, for the disposed remained equity which adopted the equity method for
measurement, the other comprehensive income and the other owners’ equity should be carried forward according
to the proportion; for the disposed remained equity which changed to execute the accounting disposal according to
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
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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 years 2.50%-5%
useful life
Machinery equipment Average method of
6-15 years 6.67%-16.67%
useful life
Transportation Average method of
5-10 years 10%-20%
equipment useful life
Average method of
Other equipment 5-10 years 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;
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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
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
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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) Useful Life and the Basis for its Determination, Estimation, Amortization Methodology or Review
Procedures
(1) Pricing method of intangible assets
Intangible assets purchased should take the actual payment and the relevant other expenses as the actual cost.
For the intangible assets invested by the investors should be recognized the actual cost according to the value of
the investment contracts or agreements, however, for the value of the contracts or agreements is not fair, the actual
cost should be recognized according to the fair value.
For the intangible assets acquires from the exchange of the non-currency assets, if own the commercial nature,
should be recorded according to the fair value of the swap-out assets; for those not own the commercial nature,
should be recorded according to the book value of the swap-out assets.
For the intangible assets acquires from the debts reorganization should be recognized by the fair value.
(2) Amortization method and term of intangible assets
As for the intangible assets with limited service life, which are amortized by straight-line method when it is
available for use within the service period, shall be recorded into the current profits and losses. The Company
shall, at least at the end of each year, check the service life and the amortization method of intangible assets with
limited service life. When the service life and the amortization method of intangible assets are different from those
before, the years and method of the amortization shall be changed.
Intangible assets with uncertain service life may not be amortized. However, the Company shall check the service
life of intangible assets with uncertain service life during each accounting period. Where there are evidences to
prove the intangible assets have limited service life, it shall be estimated of its service life, and be amortized
according to the above method mentioned.
The rights to use land of the Company shall be amortized according to the rest service life.
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(2) The Scope of R&D Expenditure Collection and the Related Accounting Treatment
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
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
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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
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.
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(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. Provisions
(1) Criteria of provisions
Only if the obligation pertinent to a contingencies shall be recognized as an estimated debts when the following
conditions are satisfied simultaneously:
1) That obligation is a current obligation of the Company;
2) It is likely to cause any economic benefit to flow out of the Company as a result of performance of the
obligation;
3) The amount of the obligation can be measured in a reliable way.
(2) Measurement of provisions
The Company shall measure the provisions in accordance with the best estimate of the necessary expenses for the
performance of the current obligation.
The Company shall check the book value of the provisions on the Balance Sheet Date. If there is any conclusive
evidence proving that the said book value can’t truly reflect the current best estimate, the Company shall, subject
to change, make adjustment to carrying value to reflect the current best estimate.
29. 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
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Performance Schedule cannot be reasonably determined and all resulting costs are predicted to be compensated,
the Company shall recognize the revenue based on the resulting cost amount till the Performance Schedule can be
reasonably determined.
When the contract involves two or more than two performance obligations, the transaction price shall be
amortized to each single performance obligation on the contract commencement day according to the relative
proportion of the independent selling price of commodities or services under each single performance obligation.
If any solid evidence proves that the contract discount or variable consideration only relates to one or more than
one (not all) performance obligation under the contract, the Company shall amortize the contract discount or
variable consideration to one or more than one related performance obligations. Independent selling price refers to
the price adopted by the Company to independently sell commodities or services to the client. However,
independent selling price cannot be directly observed. The Company shall estimate the independent selling price
by comprehensively considering all related information that can be reasonably obtained and maximally adopting
the observable input value.
Variable Consideration
If any variable consideration exists in the contract, the Company shall determine the optimal estimation of the
variable consideration based on the expected values or the most possible amount. The variable consideration’s
transaction price shall be included without exceeding the total revenue amount recognized without the risk of
significant restitution when all uncertainties are eliminated. On each balance sheet day, the Company shall
re-estimate the variable consideration amount to be included in the transaction price.
Consideration Payable to the Client
If any consideration payable to the client exists in the contract, the Company shall use such consideration to offset
the transaction price unless such consideration is paid for acquiring other clearly-defined commodities or services
from the client, and write down the current revenue at the later time between the time of recognizing relevant
revenues and the time of paying (or promising the payment) the consideration to the client.
Sales with the Quality Assurance
For sales with the Quality Assurance, if the Quality Assurance involves another separate service except for the
guarantee of all sold commodities or services meeting all established standards, the Quality Assurance shall
constitute a single Performance Obligation; otherwise, the Company shall make corresponding accounting
treatment to the Quality Assurance according to ASBE No.13--Contingency.
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
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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.
30. 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.
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.
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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.
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
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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
(1) Accounting treatment for leases as the lessee
On the beginning date of the lease term, the Company will recognize the lease with a lease term not exceeding 12
months and exclude the purchase option as a short-term lease. Leases with lower value when a single leased asset
is a brand-new asset are identified as low-value asset leases. If the Company sublets or expects to sublet the leased
assets, the original lease shall not be deemed as a low-value asset lease.
The Company records the payments of short-term and low-value asset leases incurred during each period of the
lease term in the relevant asset costs or the profit or loss for the current period by the straight-line method.
The Company will recognize right-of-use assets and lease liabilities on the inception date of the lease term,
excluding the above short-term and low-value asset leases.
① Right-of-use assets
The right-of-use asset is measured at cost and the cost shall comprise:
A. the amount of the initial measurement of the lease liabilities;
B. any lease payments made at or before the commencement date, less any lease incentives received;
C. any initial direct costs incurred by the lessee;
D. an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the
site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of
the lease.
The Company depreciates the right-of-use asset using the straight-line method. If it is reasonably certain that
ownership of the leased asset(s) will be obtained at the end of the lease term, the Company depreciates the leased
asset(s) over its/their remaining service life. If it is not reasonably certain that the ownership of the leasehold
property will be obtained at the end of the lease term, the Company will depreciate the leased asset(s) over the
lease term or the remaining service life, whichever is shorter.
② Lease liabilities
At the commencement date, the Company measures the lease liabilities at the present value of the lease payments
that are not paid at that date, The Company uses the interest rate implicit in lease as the rate of discount when
calculating the present value of the lease payments. The incremental interest rate on borrowing of the lessee will
be used as the rate of discount, if the interest rate implicit in lease cannot be determined. The difference between
the lease payment and its present value is regarded as an unrecognized financing expense. Interest expense is
recognized at the discount rate of the present value of the recognized lease payment during each period of the
lease term and is recorded in the profit and loss for the current period. Variable lease payments that are not
covered in the measurement of the lease liabilities are included in current profit or loss when actually incurred.
After the commencement date, if there is a change in the following items: (a) actual fixed payments; (b) amounts
expected to be payable under residual value guarantees; (c) an index or a rate used to determine lease payments;
(d) assessment result or exercise of purchase option, extension option or termination option., the Company
remeasures the lease liabilities based on the present value of lease payments after changes, and adjusts the
carrying amount of the right-of-use asset accordingly. If the carrying amount of the right-of-use asset is reduced to
zero but there shall be a further reduction in the lease liabilities, the remaining amount shall be recognized into
profit or loss.
140
Changchai Company, Limited Annual Report 2023
(2) Accounting treatment of leases as the lessor
The Company as lessor
On the start date of the lease term, the Company divides the lease that substantially transfers almost all risks and
rewards related to the ownership of the leased assets into finance leases, except for operating leases.
① Operating lease
The Company recognizes the lease payments receivable as rental earnings in each period within the lease term on
a straight-line basis. The initial direct costs related to the operating lease are capitalized, amortized within the
lease term on the same basis as the recognition of rental earnings, and included in the profit or loss for the current
period. Variable lease payments obtained by the Company in relation to operating leases that are not included in
the lease receivable are included in the profit or loss for the current period when they are actually incurred.
②Financial lease
At the commencement date, the Company recognizes the finance lease payment receivable based on the net
investment in the lease (sum of the present value of unguaranteed residual value and lease receipts that are not
received at the commencement date, discounted by the interest rate implicit in the lease), and derecognizes assets
held under the finance lease. The Company calculates and recognizes interest income using the interest rate
implicit in the lease over the lease term.
Variable lease payments not included in the measurement of the net investment in the lease are charged as profit or
loss in the periods in which they are incurred.
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
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
141
Changchai Company, Limited Annual Report 2023
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
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
142
Changchai Company, Limited Annual Report 2023
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
Unit: RMB
Name of report
items that are Affected
Changes to the accounting policies and why
significantly amount
affected
The Company starts to implement the “accounting treatment for deferred
income tax relating to assets and liabilities arising from a single transaction that
is not subject to the initial recognition exemption” stipulated in the Accounting N/A 0.00
Standards for Business Enterprises Interpretation No. 16 issued by the Ministry
of Finance on 13 November 2022 since 1 January 2023.
Description of changes in accounting policies:
(1) The impact of implementing the Interpretation No. 16 of Accounting Standards for Business Enterprises on the
Company
On 13 December 2022, the Ministry of Finance issued the Interpretation No. 16 of Accounting Standards for
Business Enterprises (CaiKuai [2022] No. 31, hereinafter referred to as "Interpretation No. 16"). Since 1 January
2023, the stipulation of "the accounting processing of initial recognition exemption is not applicable to deferred
income tax related to assets and liabilities arising from individual transactions" has been implemented, allowing
enterprises to execute it ahead of schedule for their own annual release. The accounting processing related to this
matter that was not implemented in advance by the Company in 2023 will be implemented from 1 January 2023.
Interpretation No. 16 stipulates that for single transactions that are not business combinations, that affect neither
accounting profit nor taxable income (or deductible losses) at the time when the transaction occurs, and where the
initial recognition of assets and liabilities results in taxable temporary differences and deductible temporary
differences of equal amounts (including lease transactions in which the lessee recognises the initial lease liability
and includes it in the right-of-use asset on the commencement date of the lease term, as well as single transactions
in which estimated liabilities are recognised and included in the costs of related assets due to fixed assets'
retirement obligations), exemption from initial recognition of deferred income tax liabilities and deferred income
143
Changchai Company, Limited Annual Report 2023
tax assets shall not apply. Enterprises shall recognise the corresponding deferred income tax liabilities and
deferred income tax assets, respectively, in accordance with No. 18 of the Accounting Standards for Business
Enterprises -- Income Taxes when the transaction is affected.
For single transactions that occurred between the beginning of the earliest period presented in the financial
statements and the date of initial application of this provision, as well as lease liabilities and right-of-use assets
recognised at the beginning of the earliest period presented in the financial statements due to the application of
this provision to single transactions, and recognised estimated liabilities related to retirement obligations and
corresponding related assets, which create taxable temporary differences and deductible temporary differences,
enterprises shall make adjustments in accordance with this provision.
The change in accounting policy has no impact on the Company's financial statements.
(2) Changes in Accounting Estimates
□ Applicable √ Not applicable
(3) Adjustments to Financial Statement Items at the Beginning of the Year of the First Implementation of
the New Accounting Standards Implemented since 2023
□ 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%, 5%
Education surcharge Taxable turnover amount 5%
Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate
Name Income tax rate
Changchai Company, Limited 15%
Changchai Wanzhou Diesel Engine Co., Ltd. 15%
Changzhou Changchai Benniu Diesel Engine Fittings Co., Ltd. 25%
Changzhou Horizon Investment Co., Ltd. 25%
Changzhou Changchai Horizon Agricultural Equipment Co., Ltd. 25%
Changzhou Fuji Changchai Robin Gasoline Engine Co., Ltd. 15%
Jiangsu Changchai Machinery Co., Ltd. 25%
Changzhou Xingsheng Real Estate Management Co., Ltd. 5%
Zhenjiang Siyang Diesel Engine Manufacturing Co., Ltd. 15%
2. Tax Preference
On 30 November 2021, the Company obtained the Certificates for High-tech Enterprises again, and it stil
144
Changchai Company, Limited Annual Report 2023
l 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, s
hall pay the corporate income tax at tax rate 15% from 1 January 2011 to 31 December 2030 in accord
ance 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 an
d 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 E
nterprise Income Tax Policy for the Great Western Development. On 6 November 2023, the wholly-owne
d subsidiary Changzhou Fuji Changchai Robin Gasoline Engine Co., Ltd. obtained again the "High-tech
Enterprise Certificate" and enjoyed a 15% preferential corporate income tax rate during the Reporting Per
iod; The wholly-owned subsidiary Changzhou Xingsheng Real Estate Management Co., Ltd. is eligible s
mall enterprise with low profits and shall pay the corporate income tax at tax rate 5% for small enterpri
ses with low profits during the Reporting Period; The subsidiary Zhenjiang Siyang Diesel Engine Manufa
cturing Co., Ltd. has obtained the "High-tech Enterprise Certificate" and enjoyed a 15% preferential corp
orate income tax rate 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 157,238.05 251,965.06
Bank deposits 999,604,998.68 830,914,999.19
Other monetary assets 84,105,730.14 98,846,386.72
Total 1,083,867,966.87 930,013,350.97
Other notes: At the period-end, the restricted monetary assets of the Company was RMB76,238,443.41, of which
RMB74,453,641.92 was the cash deposit for bank acceptance bills, RMB897,966.00 was cash deposit for L/G,
and RMB886,835.49 was cash deposit for environment.
2. Trading Financial Assets
Unit: RMB
Item Ending balance Beginning balance
Financial assets at fair value
225,641,429.94 370,103,602.57
through profit or loss
Of which:
Stocks 85,295,021.00 78,739,311.00
Financial products 140,346,408.94 291,364,291.57
Of which:
Total 225,641,429.94 370,103,602.57
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Changchai Company, Limited Annual Report 2023
3. Notes Receivable
(1) Notes Receivable Listed by Category
Unit: RMB
Item Ending balance Beginning balance
Bank acceptance bill 161,632,567.94 297,125,872.54
Total 161,632,567.94 297,125,872.54
(2) Disclosure by Withdrawal Methods for Bad Debts
Unit: RMB
Ending balance Beginning balance
Bad debt Bad debt
Carrying amount Carrying amount
provision provision
Carryi Carry
Category Withdr Withdr
ng ing
Amou Propor Amou awal Amoun Proport Amoun awal
value value
nt tion nt propor t ion t proport
tion ion
Notes
receivable for
which bad
debt
provision
separately
accrued
Of which:
Notes
receivable for
which bad 161,63 161,63 297,12 297,1
100.00 100.00
debt 2,567. 2,567. 5,872.5 25,87
% %
provision 94 94 4 2.54
accrued by
group
Of which:
Bank 161,63 161,63 297,12 297,1
100.00 100.00
acceptance 2,567. 2,567. 5,872.5 25,87
% %
bills 94 94 4 2.54
161,63 161,63 297,12 297,1
100.00 100.00
Total 2,567. 2,567. 5,872.5 25,87
% %
94 94 4 2.54
If adopting the general mode of expected credit loss to withdraw bad debt provision of notes receivable:
□Applicable √ Not applicable
(3) Notes Receivable Pledged by the Company at the Period-end: None
(4) 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
146
Changchai Company, Limited Annual Report 2023
Bank acceptance bill 55,979,832.64
Total 55,979,832.64
4. Accounts Receivable
(1) Disclosure by Aging
Unit: RMB
Aging Ending carrying amount Beginning carrying amount
Within 1 year (including 1 year) 313,597,375.85 343,017,134.79
1 to 2 years 1,873,298.19 25,903,580.29
2 to 3 years 4,436,548.28 6,917,677.75
Over 3 years 144,403,241.11 146,329,907.31
3 to 4 years 5,278,022.33 3,465,761.24
4 to 5 years 1,815,570.52 3,840,453.02
Over 5 years 137,309,648.26 139,023,693.05
Total 464,310,463.43 522,168,300.14
(2) Disclosure by Withdrawal Methods for Bad Debts
Unit: RMB
Ending balance Beginning balance
Carrying Bad debt Carrying Bad debt
amount provision amount provision
Withd Carryi Withd
Category Carryin
Amou Propo Amou rawal ng Amou Propor Amou rawal g value
value
nt rtion nt propo nt tion nt propor
rtion tion
Accounts
receivable
withdrawal of 33,80 33,80 51,75 34,367
100.0 66.40 17,389,
Bad debt 5,182. 7.28% 5,182. 0.00 7,257. 9.91% ,361.8
provision 0% % 896.16
71 71 99 3
separately
accrued
Of which:
Accounts
receivable 430,5 113,9 316,5 470,4 117,47
withdrawal of 92.72 26.47 90.09 24.97 352,932
05,28 62,12 43,15 11,04 8,758.
bad debt % % % % ,283.61
provision of by 0.72 0.81 9.91 2.15 54
group
Of which:
147
Changchai Company, Limited Annual Report 2023
Accounts
receivable for
which bad debt 430,5 113,9 316,5 470,4 117,47
92.72 26.47 90.09 24.97 352,932
provision 05,28 62,12 43,15 11,04 8,758.
% % % % ,283.61
accrued by 0.72 0.81 9.91 2.15 54
credit risk
features group
464,3 147,7 316,5 522,1 151,84
100.0 31.83 100.00 29.08 370,322
Total 10,46 67,30 43,15 68,30 6,120.
0% % % % ,179.77
3.43 3.52 9.91 0.14 37
Number of categories of bad debt provision by individual item: 1
Bad debt provision separately accrued: RMB33,805,182.71, of which: RMB31,609,904.23 for large impairment
items, the breakdown is as follows:
Unit: RMB
Beginning balance Ending balance
Withdraw
Reason
Name Carrying Bad debt Carrying Bad debt al
for
amount provision amount provision proportio
withdraw
n
Difficult
Customer 1 1,470,110.64 1,470,110.64 1,470,110.64 1,470,110.64 100.00%
to recover
Difficult
Customer 2 1,902,326.58 1,902,326.58 1,902,326.58 1,902,326.58 100.00 %
to recover
Difficult
Customer 3 6,215,662.64 6,215,662.64 6,215,662.64 6,215,662.64 100.00%
to recover
Difficult
Customer 4 2,797,123.26 2,194,980.28 2,797,123.26 2,797,123.26 100.00%
to recover
Difficult
Customer 5 3,633,081.23 2,122,165.73 2,322,278.50 2,322,278.50 100.00%
to recover
Difficult
Customer 6 2,584,805.83 2,584,805.83 2,584,805.83 2,584,805.83 100.00%
to recover
Difficult
Customer 7 1,731,493.71 1,731,493.71 1,726,935.65 1,726,935.65 100.00%
to recover
Difficult
Customer 8 2,025,880.18 2,025,880.18 2,025,880.18 2,025,880.18 100.00%
to recover
Difficult
Customer 9 5,972,101.90 5,972,101.90 5,972,101.90 5,972,101.90 100.00%
to recover
Customer Difficult
4,592,679.05 4,592,679.05 4,592,679.05 4,592,679.05 100.00%
10 to recover
Total 32,925,265.02 30,812,206.54 31,609,904.23 31,609,904.23 -- --
Number of categories of bad debt provision by group: 1
Withdrawal of bad debt provision by group: Provision for bad debts by credit risk characteristic group was
RMB113,962,120.81
Unit: RMB
148
Changchai Company, Limited Annual Report 2023
Ending balance
Name
Carrying amount Bad debt provision Withdrawal proportion
Within 1 year 313,597,375.85 6,271,947.50 2.00%
1 to 2 years 1,873,298.19 93,664.91 5.00%
2 to 3 years 3,894,285.62 584,142.84 15.00%
3 to 4 years 5,278,022.33 1,583,406.70 30.00%
4 to 5 years 1,083,349.67 650,009.80 60.00%
Over 5 years 104,778,949.06 104,778,949.06 100.00%
Total 430,505,280.72 113,962,120.81 --
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
(3) Bad Debt Provision Withdrawal, Reversed or Recovered in the Current Period
Withdrawal of bad debt provision:
Unit: RMB
Changes in the current period
Beginning
Category Reversed or Ending balance
balance Withdrawal Verification Others
recovered
Bad debt
provision
34,367,361.83 177,368.28 37,668.24 701,879.16 33,805,182.71
separately
accrued
Withdrawal
of bad debt
117,478,758.54 294,284.60 3,395,028.39 415,893.94 113,962,120.81
provision by
group
Total 151,846,120.37 471,652.88 3,432,696.63 1,117,773.10 147,767,303.52
Of which bad debt provision reversed or recovered with significant amount in the Reporting Period: No.
(4) Accounts Receivable Written-off in Current Period
Unit: RMB
Item Written-off amount
Accounts receivable with actual verification 1,117,773.10
Of which the verification of significant accounts receivable:
Unit: RMB
Nature Arising
Verificati
of the from
on
account Verified related-pa
Name of the entity Reason for verification procedure
s amount rty
s
receiva transactio
performed
ble ns or not
Reorganiz
Customer 1 Accoun 42,099.41 Debt reorganisation Not
ation
149
Changchai Company, Limited Annual Report 2023
ts agreement
receiva Reorganiz
Customer 2 659,779.75 Debt reorganisation ation
ble for
agreement
goods
With accounts receivable
aging over 5 years, the
debtors have no assets for
debt extinguishment due Minutes
Long term receivables from of the
415,893.94 to the counterpart
94 customers Executive
company being revoked Office
or cancelled, or debt
reorganisation,
bankruptcy clearing.
Total 1,117,773.10
(5) Top 5 of the Ending Balance of the Accounts Receivable and the Contract Assets Collected according to
Arrears Party
Unit: RMB
Ending balance
Proportion to of bad debt
Ending balance total ending provision of
Ending balance Ending balance
Name of the of accounts balance of accounts
of accounts of contract
entity receivable and accounts receivable and
receivable assets
contract assets receivable and impairment
contract assets provision for
contract assets
Customer 1 155,981,057.12 0.00 155,981,057.12 33.59% 3,119,621.14
Customer 2 35,865,520.31 0.00 35,865,520.31 7.72% 717,310.41
Customer 3 30,056,545.72 0.00 30,056,545.72 6.47% 601,130.91
Customer 4 18,140,927.66 0.00 18,140,927.66 3.91% 362,818.55
Customer 5 13,769,193.20 0.00 13,769,193.20 2.97% 275,383.86
Total 253,813,244.01 0.00 253,813,244.01 54.66% 5,076,264.87
5. Accounts Receivable Financing
(1) Accounts Receivable Financing Listed by Category
Unit: RMB
Item Ending balance Beginning balance
Bank acceptance bills 195,875,948.92 242,813,392.79
Total 195,875,948.92 242,813,392.79
(2) Disclosure by Withdrawal Methods for Bad Debts
Unit: RMB
Catego Ending balance Beginning balance
150
Changchai Company, Limited Annual Report 2023
ry Bad debt Bad debt
Carrying amount Carrying amount
provision provision
Withdr Carryin Withdr Carryin
Amoun Proport Amoun awal g value Amoun Proport Amoun awal g value
t ion t proport t ion t proport
ion ion
Bad
debt
provisi
on
separat
ely
accrued
Of
which:
Bad
debt
provisi 195,87 195,87 242,81 242,81
100.00 100.00
on 5,948.9 5,948.9 3,392.7 3,392.7
% %
accrued 2 2 9 9
by
group
Of
which:
Bank
195,87 195,87 242,81 242,81
accepta 100.00 100.00
5,948.9 5,948.9 3,392.7 3,392.7
nce % %
2 2 9 9
bills
195,87 195,87 242,81 242,81
100.00 100.00
Total 5,948.9 5,948.9 3,392.7 3,392.7
% %
2 2 9 9
(3) Notes Receivable Pledged by the Company at the Period-end: None
(4) Accounts receivable financing which had endorsed by the Company or had discounted but had not due
at the period-end
Unit: RMB
Amount of recognition termination at Amount of not terminated
Category
the period-end recognition at the period-end
Bank acceptance bill 567,763,410.38
Total 567,763,410.38
6. Other Receivables
Unit: RMB
151
Changchai Company, Limited Annual Report 2023
Item Ending balance Beginning balance
Interest receivable
Dividend receivable
Other receivables 49,699,753.61 32,938,305.16
Total 49,699,753.61 32,938,305.16
(1) Other Receivables
1) Other Receivables Classified by Accounts Nature
Unit: RMB
Nature Ending carrying value Beginning carrying value
Margin and cash pledge 595,723.55 2,028,096.87
Intercourse funds 69,845,564.95 48,701,034.90
Petty cash and borrowings by
922,370.54 742,075.76
employees
Other 13,638,079.94 13,635,867.60
Total 85,001,738.98 65,107,075.13
2) Disclosure by Aging
Unit: RMB
Aging Ending carrying amount Beginning carrying amount
Within 1 year (including 1 year) 56,704,032.54 16,050,004.29
1 to 2 years 115,776.00 15,783,825.92
2 to 3 years 12,802.00 1,164,476.00
Over 3 years 28,169,128.44 32,108,768.92
3 to 4 years 30,000.00 420,716.17
4 to 5 years 338,457.65
Over 5 years 28,139,128.44 31,349,595.10
Total 85,001,738.98 65,107,075.13
3) Disclosure by Withdrawal Methods for Bad Debts
√Applicable □Not applicable
Provision for bad debts based on general model of expected credit losses
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
373,682.65 2,908,755.15 28,886,332.17 32,168,769.97
2023
152
Changchai Company, Limited Annual Report 2023
Balance of 1 January
2023 in the Current
Period
--Transfer to Second
stage
-- Transfer to Third stage
-- Reverse to Second
stage
-- Reverse to First stage
Withdrawal of the
20,686.21 118.44 3,488,275.48 3,509,080.13
Current Period
Reversal of the Current
182,697.13 193,167.60 375,864.73
Period
Write-offs of the Current
Period
Verification of the
Current Period
Other changes
Balance of 31 December
211,671.73 2,715,705.99 32,374,607.65 35,301,985.37
2023
The basis for the division of each stage and the withdrawal proportion of bad debt provision: None
Changes of carrying amount with significant amount changed of loss provision in the current period
□ Applicable √ Not applicable
4) Bad Debt Provision Withdrawn, Reversed or Recovered in the Current Period
Withdrawal of bad debt provision:
Unit: RMB
Changes in the current period
Beginning Ending
Category Reversed or Charged-off Other
balance Withdrawal balance
recovered /Written-off s
Bad debt
provision
5,536,285.44 254,122.09 5,282,163.35
separately
accrued
Withdrawal of
bad debt
26,632,484.53 3,387,337.49 30,019,822.02
provision by
group
Total 32,168,769.97 3,387,337.49 254,122.09 35,301,985.37
153
Changchai Company, Limited Annual Report 2023
5) There Were No Particulars of the Actual Verification of Other Receivables during the Reporting Period
6) Top 5 of the Ending Balance of Other Receivables Collected according to the Arrears Party
Unit: RMB
Proportion to
total ending Ending
Name of the entity Nature Ending balance Aging balance of balance of bad
other debt provision
receivables %
Compensat
Changzhou Zhonglou ion for land
District Housing and acquisition
47,000,000.00 Within 1 year 55.29% 0.00
Urban-Rural of Wuxing
Development Bureau bus plant
area plot
Changzhou Compressor Intercourse
2,940,000.00 Over 5 years 3.46% 2,940,000.00
Factory funds
Changchai Group Imp. & Intercourse
2,853,188.02 Over 5 years 3.36% 2,853,188.02
Exp. Co., Ltd. funds
Changzhou New District Intercourse 1,626,483.25
1,626,483.25 Over 5 years 1.91%
Accounting Center funds
Changchai Group Intercourse 1,128,676.16
1,128,676.16 Over 5 years 1.33%
Settlement Center funds
Total 55,548,347.43 65.35% 8,548,347.43
7. Prepayments
(1) Prepayment Listed by Aging Analysis
Unit: RMB
Ending balance Beginning balance
Aging
Amount Proportion Amount Proportion
Within 1 year 11,196,498.47 90.78% 5,941,708.21 93.86%
1 to 2 years 840,617.01 6.82% 289,373.60 4.57%
2 to 3 years 289,345.37 2.35% 71,654.18 1.13%
Over 3 years 6,850.00 0.05% 27,466.70 0.44%
Total 12,333,310.85 -- 6,330,202.69 --
Notes of the reasons of the prepayment aging over 1 year with significant amount but failed settled in time: There
was no prepayment with significant amount aging over one year as of the period-end.
154
Changchai Company, Limited Annual Report 2023
(2) Top 5 Prepayment in Ending Balance 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 RMB8,775,900 accounting for 71.16% of the total ending balance of prepayments.
8. Inventories
Whether the Company needs to comply with the disclosure requirements for the real estate industry
No
(1) Category of Inventory
Unit: RMB
Ending balance Beginning balance
Depreciation Depreciation
reserves of reserves of
inventories inventories
Item or or
Carrying Carrying Carrying Carrying
impairment impairment
amount value amount value
provision for provision for
contract contract
performance performance
costs costs
Raw 199,751,010. 192,221,131. 163,954,131. 157,971,844.
7,529,878.82 5,982,286.51
materials 25 43 27 76
Materials
12,422,107.0 12,422,107.0 12,299,968.9 12,299,968.9
processed on 0.00 0.00
2 2 8 8
commission
Goods in 90,202,210.0 83,441,080.9 110,883,778. 10,725,860.4 100,157,918.
6,761,129.14
process 5 1 58 3 15
Finished 527,412,149. 27,690,142.4 499,722,006. 322,959,181. 22,755,460.8 300,203,720.
goods 21 2 79 08 0 28
Low priced
and easily 1,413,859.53 0.00 1,413,859.53 1,363,429.57 0.00 1,363,429.57
worn articles
831,201,336. 41,981,150.3 789,220,185. 611,460,489. 39,463,607.7 571,996,881.
Total
06 8 68 48 4 74
(2) Falling Price Reserves of Inventory and Impairment Reserves for Contract Performance Costs
Unit: RMB
Increase Decrease
Beginning Transferred-ba
Item Other Ending balance
balance Withdrawal Others ck or
s
charged-off
Raw materials 5,982,286.51 4,292,094.21 2,744,501.90 7,529,878.82
Goods in 466,905.79
10,725,860.43 4,431,637.08 6,761,129.14
process
155
Changchai Company, Limited Annual Report 2023
Finished goods 22,755,460.80 23,134,895.75 18,200,214.13 27,690,142.42
Total 39,463,607.74 27,893,895.75 25,376,353.11 41,981,150.38
(3) There Was No Capitalized Borrowing Expense in the Ending Balance of Inventories.
(4) There Was No Inventory Pledged for Guarantee at the Period-end
9. Current Portion of Non-current Assets
Item Ending balance Beginning balance
Investments in debt obligations due within
40,773,509.75
one year
Total 40,773,509.75
(1) Investments in Debt Obligations Due within One Year
√Applicable □Not applicable
1）Investments in Debt Obligations Due within One Year
Unit: RMB
Ending balance Beginning balance
Falling
Group name Carrying Carrying Falling price Carrying
price Carrying value
amount amount reserves value
reserves
Three-year
fixed term 40,773,509.75 40,773,509.75 0.00 0.00
deposit
Total 40,773,509.75 40,773,509.75 0.00 0.00
2) Significant Investments in Debt Obligations Due within One Year at the Period-end
Unit: RMB
Actual interest rate Overdue principal
Coupon Maturity
Item Par value Ending Beginning Ending Beginning
rate date
balance balance balance balance
Three-year
37,000,000 26 April
fixed term 3.80% 3.72% 0.00% 0.00 0.00
.00 2024
deposit
37,000,000
Total 0.00 0.00
.00
10. Other Current Assets
Unit: RMB
156
Changchai Company, Limited Annual Report 2023
Item Ending balance Beginning balance
The VAT tax credits 19,940,871.92 47,682,930.23
Prepaid corporate income tax 908,233.33 1,505,424.80
Prepaid expense 61,399.59 90,667.46
Total 20,910,504.84 49,279,022.49
11. Investments in Debt Obligations
(1) List of Investments in Debt Obligations
Unit: RMB
Ending balance Beginning balance
Item Carrying Impairmen Carrying Impairmen Carrying
Carrying value
amount t provision amount t provision value
Three-year
fixed term 0.00 0.00 39,309,587.93 39,309,587.93
deposit
Total 0.00 0.00 39,309,587.93 39,309,587.93
12. Other Equity Instrument Investment
Unit: RMB
Reason
for
Accumul Accumul
assigning
Gains Losses ative ative
to
recorded recorded gains losses
Dividend measure
in other in other recorded recorded
income in fair
Ending Beginnin comprehe comprehe in other in other
recognize value of
Item nsive nsive comprehe comprehe
balance g balance d in which
income in income in nsive nsive
current changes
the the income in income in
year included
current current the the
other
period period current current
comprehe
period period
nsive
income
Changzho
u
Synergeti
c
Non-tradi
Innovatio
418,457,0 378,929,2 39,527,78 318,457,0 ng equity
n Private
25.67 40.08 5.59 25.67 investme
Equity
nt
Fund
(Limited
Partnershi
p)
Other 551,031,0 576,631,0 25,600,00 466,461,0 11,482,38 Non-tradi
157
Changchai Company, Limited Annual Report 2023
equity 00.00 00.00 0.00 00.00 0.00 ng equity
instrumen investme
t nt
investme
nt
measured
by fair
value
969,488,0 955,560,2 39,527,78 25,600,00 784,918,0 11,482,38
Total
25.67 40.08 5.59 0.00 25.67 0.00
Non-trading equity instrument investment disclosed by category
Unit: RMB
Reason for
assigning to
Reason for
Amount of measure by
other
other fair value of
Dividend comprehensi
Accumulativ Accumulativ comprehensi which
Item income ve income
e gains e losses ve transferred changes be
recognized transferred to
to retained included to
retained
earnings other
earnings
comprehensi
ve income
Non-trading
Foton Motor 352,701,000.
equity
Co., Ltd. 00
investment
Non-trading
Bank of 11,482,380.0 113,760,000.
equity
Jiangsu 0 00
investment
Changzhou
Synergetic
Innovation Non-trading
318,457,025.
Private equity
67
Equity Fund investment
(Limited
Partnership)
Other notes:
The corporate securities of accommodation business still on lending at the period-end: 931,800 shares of Foton
Motor Co., Ltd.
13. Long-term Equity Investment
Unit: RMB
Invest Begin Begin Increase/decrease Endin Endin
ees ning ning Addit Redu Gain Adjus Chan Cash Withd Other g g
158
Changchai Company, Limited Annual Report 2023
balan balan ional ced or tment ges in bonus rawal balan balan
ce of
ce invest invest loss of other or of ce ce of
depre
(carry ciatio ment ment recog other equity profit depre (carry depre
ing n nized comp annou ciatio ing ciatio
value) reserv under rehen nced n value) n
es
the sive to reserv reserv
equity incom issue es es
metho e
d
I. Joint venture
Subto
0.00 0.00 0.00 0.00
tal
II. Associated enterprises
Beijin
g
Tsing
hua
Indust
rial
44,18 44,18
Invest 0.00 0.00
2.50 2.50
ment
Mana
geme
nt
Co.,
Ltd.
Subto 44,18 44,18
0.00 0.00
tal 2.50 2.50
44,18 44,18
Total 0.00 0.00
2.50 2.50
The recoverable amount is determined based on the net amount of the fair value minus disposal costs
□ Applicable √ Not applicable
The recoverable amount is determined by the present value of the forecasted future cash flow.
□ Applicable √ Not applicable
The reason for the discrepancy between the foregoing information and the information used in the impairment
tests in prior years or external information: Not applicable
The reason for the discrepancy between the information used in the Company's impairment tests in prior years and
the actual situation of those years: Not applicable
14. Other Non-current Financial Assets
Unit: RMB
Item Ending balance Beginning balance
159
Changchai Company, Limited Annual Report 2023
Jiangsu Horizon New Energy Technology
412,914,576.80 373,500,000.00
Co., Ltd.
Total 412,914,576.80 373,500,000.00
15. 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 93,077,479.52 93,077,479.52
2. Increased amount of the period
(1) Outsourcing
(2) Transfer from inventories/fixed
assets/construction in progress
(3) Enterprise combination increase
3. Decreased amount of the period
(1) Disposal
(2) Other transfer
4. Ending balance 93,077,479.52 93,077,479.52
II. Accumulative depreciation and
accumulative amortization
1. Beginning balance 50,916,699.87 50,916,699.87
2. Increased amount of the period 2,323,221.54 2,323,221.54
(1) Withdrawal or amortization 2,323,221.54 2,323,221.54
3. Decreased amount of the period
(1) Disposal
(2) Other transfer
4. Ending balance 53,239,921.41 53,239,921.41
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 39,837,558.11 39,837,558.11
2. Beginning carrying value 42,160,779.65 42,160,779.65
The recoverable amount is determined based on the net amount of the fair value minus disposal costs
160
Changchai Company, Limited Annual Report 2023
□ Applicable √ Not applicable
The recoverable amount is determined by the present value of the forecasted future cash flow.
□ Applicable √ Not applicable
The reason for the discrepancy between the foregoing information and the information used in the impairment
tests in prior years or external information: Not applicable
The reason for the discrepancy between the information used in the Company's impairment tests in prior years and
the actual situation of those years: Not applicable
16. Fixed Assets
Unit: RMB
Item Ending balance Beginning balance
Fixed assets 675,596,920.95 720,061,387.76
Disposal of fixed assets
Total 675,596,920.95 720,061,387.76
(1) List of Fixed Assets
Unit: RMB
Houses and Machinery Transportation Other
Item Total
buildings equipment equipment equipment
I. Original
carrying value
1. Beginning
710,604,039.88 1,118,697,686.65 19,132,190.47 57,025,921.99 1,905,459,838.99
balance
2. Increased
amount of the 1,834,818.27 38,989,742.83 1,987,770.58 8,118,776.09 50,931,107.77
period
(1) Purchase 26,548.67 2,982,332.29 174,778.77 658,300.25 3,841,959.98
(2) Transfer
from
1,808,269.60 36,007,410.54 1,812,991.81 7,460,475.84 47,089,147.79
construction in
progress
(3) Enterprise
combination
increase
3. Decreased
amount of the 28,465,330.35 40,568,592.59 4,592,712.12 3,324,523.35 76,951,158.41
period
(1) Disposal or
28,465,330.35 40,568,592.59 4,592,712.12 3,324,523.35 76,951,158.41
scrap
4. Ending
683,973,527.80 1,117,118,836.89 16,527,248.93 61,820,174.73 1,879,439,788.35
balance
161
Changchai Company, Limited Annual Report 2023
II.
Accumulative
depreciation
1. Beginning
330,845,140.13 803,945,702.56 13,446,223.77 36,738,140.74 1,184,975,207.20
balance
2. Increased
amount of the 22,013,333.90 57,662,526.29 1,228,111.91 5,752,924.77 86,656,896.87
period
(1) Withdrawal 22,013,333.90 57,662,526.29 1,228,111.91 5,752,924.77 86,656,896.87
(2) Transfer
from
combination
3. Decreased
amount of the 21,079,535.16 39,127,527.89 4,572,617.88 3,306,776.44 68,086,457.37
period
(1) Disposal or
21,079,535.16 39,127,527.89 4,572,617.88 3,306,776.44 68,086,457.37
scrap
4. Ending
331,778,938.87 822,480,700.96 10,101,717.80 39,184,289.07 1,203,545,646.70
balance
III.Depreciation
reserves
1. Beginning
423,244.03 423,244.03
balance
2. Increased
amount of the
period
(1) Withdrawal
3. Decreased
amount of the 126,023.33 126,023.33
period
(1) Disposal or
126,023.33 126,023.33
scrap
4. Ending
297,220.70 297,220.70
balance
IV. Carrying
value
1. Ending
352,194,588.93 294,340,915.23 6,425,531.13 22,635,885.66 675,596,920.95
carrying value
2. Beginning
379,758,899.75 314,328,740.06 5,685,966.70 20,287,781.25 720,061,387.76
carrying value
(2) List of Temporarily Idle Fixed Assets
Unit: RMB
162
Changchai Company, Limited Annual Report 2023
Original Accumulative Depreciation
Item Carrying value Note
carrying value depreciation reserves
Machinery
309,407.50 12,186.80 297,220.70
equipment
17. Construction in Progress
Unit: RMB
Item Ending balance Beginning balance
Construction in progress 4,253,721.78 30,259,647.16
Engineering materials 21,900.40 21,900.40
Total 4,275,622.18 30,281,547.56
(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
Innovation
capacity
construction
981,532.17 981,532.17 5,443,764.33 5,443,764.33
of
technology
center
Relocation
project of
0.00 0.00 11,155,119.70 11,155,119.70
light engine
and casting
Equipment to
be installed
3,272,189.61 3,272,189.61 13,660,763.13 13,660,763.13
and payment
for projects
Total 4,253,721.78 4,253,721.78 30,259,647.16 30,259,647.16
(2) Changes in Significant Construction in Progress during the Reporting Period
Unit: RMB
Transf Other Accu Of Capita
Begin Increa Endin Capita
erred decrea Job mulate which: lizatio
Budge ning sed g l
Item in sed schedu d Amou n rate
t balanc amoun balanc resour
fixed amoun le amoun nt of of
e t e ces
assets t t of capital interes
163
Changchai Company, Limited Annual Report 2023
interes ized ts for
t interes the
capital ts for Report
ization the ing
Report Period
ing
Period
Innov
ation
capac
ity Self-ra
96,066 ised
constr 5,443, 4,245, 8,707, 981,53 Compl
,200.0 and
uctio 764.33 219.52 451.68 2.17 eted raised
0
n of funds
techn
ology
center
Reloc
ation
proje
Self-ra
ct of 474,70 11,155 13,568 ised
7,427, 5,014, Compl
light 6,000. ,119.7 ,085.5 0.00 and
088.87 123.04 eted raised
engin 00 0 3
funds
e and
castin
g
570,77 16,598 11,672 22,275
5,014, 981,53
Total 2,200. ,884.0 ,308.3 ,537.2 -- --
123.04 2.17
00 3 9 1
(3) Impairment Test of Construction in Progress
□Applicable Not applicable
(4) Engineering Materials
Unit: RMB
Ending balance Beginning balance
Impairme
Item Carrying Carrying Carrying Impairment Carrying
nt
amount value amount provision value
provision
Engineerin
21,900.40 21,900.40 21,900.40 21,900.40
g materials
Total 21,900.40 21,900.40 21,900.40 21,900.40
164
Changchai Company, Limited Annual Report 2023
18. 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 214,187,775.71 17,847,202.14 5,538,000.00 1,650,973.47 239,223,951.32
2. Increased amount of
2,572,402.01 2,572,402.01
the period
(1) Purchase 2,572,402.01 2,572,402.01
(2) Internal R&D
(3) Business
combination increase
3. Decreased amount of
9,000,000.00 9,000,000.00
the period
(1) Disposal 9,000,000.00 9,000,000.00
4. Ending balance 205,187,775.71 20,419,604.15 5,538,000.00 1,650,973.47 232,796,353.33
II. Accumulated
amortization
1. Beginning balance 63,832,525.74 14,396,059.27 3,246,750.17 356,398.60 81,831,733.78
2. Increased amount of
4,215,896.42 2,145,112.60 553,382.93 167,041.92 7,081,433.87
the period
(1) Withdrawal 4,215,896.42 2,145,112.60 553,382.93 167,041.92 7,081,433.87
(2) Combination
increase
3. Decreased amount of
4,575,000.00 4,575,000.00
the period
(1) Disposal 4,575,000.00 4,575,000.00
4. Ending balance 63,473,422.16 16,541,171.87 3,800,133.10 523,440.52 84,338,167.65
III. Depreciation
reserves
1. Beginning balance
2. Increased amount of
the period
(1) Withdrawal
3. Decreased amount of
the period
(1) Disposal
4. Ending balance
IV. Carrying value
165
Changchai Company, Limited Annual Report 2023
1. Ending carrying
141,714,353.55 3,878,432.28 1,737,866.90 1,127,532.95 148,458,185.68
value
2. Beginning carrying
150,355,249.97 3,451,142.87 2,291,249.83 1,294,574.87 157,392,217.54
value
Intangible assets formed through internal R&D accounted for 0% of the intangible asset balance at the end of the
period.
19. Long-term Prepaid Expenses
Unit: RMB
Beginning Amortized Ending
Item Increase Decrease
balance amount balance
Trademark renewal
201,970.32 92,108.91 25,871.11 268,208.12
fee
External power line
3,078,000.00 324,000.00 2,754,000.00
access project
Processing reserved
floor paving and
5,205,750.54 5,205,750.54
lighting installation
works
Total 3,279,970.32 5,297,859.45 349,871.11 8,227,958.66
20. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Deferred Income Tax Assets that Had not Been Off-set
Unit: RMB
Ending balance Beginning balance
Deductible Deductible
Item Deferred income Deferred income
temporary temporary
tax assets tax assets
difference difference
Bad debt provision 6,427,652.90 967,779.48 6,853,948.19 1,048,165.04
Deductible loss 149,230,051.55 24,713,867.00
Inventory falling
2,707,033.40 506,633.20 2,633,715.26 395,057.29
price reserves
Impairment of fixed
297,220.70 44,583.11 423,244.03 63,486.60
assets
Total 9,431,907.00 1,518,995.79 159,140,959.03 26,220,575.93
(2) Deferred Income Tax Liabilities Had Not Been Off-set
Unit: RMB
Item Ending balance Beginning balance
166
Changchai Company, Limited Annual Report 2023
Taxable temporary Deferred income Taxable temporary Deferred income
difference tax liabilities difference tax liabilities
Assets evaluation
appreciation for
business
5,489,891.06 823,483.65 5,677,718.36 851,657.75
combination not
under the same
control
Changes of fair
value of other
1,102,931,935.12 171,019,971.87 1,039,472,114.80 160,508,593.58
equity instrument
investments
Total 1,108,421,826.18 171,843,455.52 1,045,149,833.16 161,360,251.33
(3) List of Unrecognized Deferred Income Tax Assets
Unit: RMB
Item Ending balance Beginning balance
Bad debt provision 176,641,635.99 177,160,942.15
Falling price reserves of
39,274,116.98 36,829,892.48
inventories
Deductible loss 137,917,562.93 22,257,409.96
Total 353,833,315.90 236,248,244.59
(4) Deductible Losses of Unrecognized Deferred Income Tax Assets will Due in the Following Years
Unit: RMB
Years Ending amount Beginning amount Note
2023 1,146,746.13
2024 3,605,384.25 3,605,384.25
2025 5,250,820.81 5,250,820.81
2026 9,546,495.23 7,372,277.94
2027 68,877,350.74 4,882,180.83
2028 50,637,511.90
Total 137,917,562.93 22,257,409.96
21. Other Non-current Assets
Unit: RMB
Ending balance Beginning balance
Depreciati Depreciati
Item Carrying Carrying
on Carrying value on Carrying value
amount amount
reserves reserves
167
Changchai Company, Limited Annual Report 2023
Advances
payment of 2,578,776.77 2,578,776.77 670,735.93 670,735.93
equipments
Total 2,578,776.77 2,578,776.77 670,735.93 670,735.93
22. Assets with Restricted Ownership or Right of Use
Unit: RMB
Period-end Period-beginning
Item Carrying Carrying Type of Status of Carrying Carrying Type of Status of
amount value restriction restriction amount value restriction restriction
Bank Bank
acceptanc acceptanc
Monetary
e deposit, e deposit,
funds -- Occupied Occupied
76,238,44 76,238,44 environm 95,662,38 95,662,38 environm
other as cash as cash
3.41 3.41 ental 4.92 4.92 ental
monetary deposit deposit
performa performa
funds
nce bond, nce bond,
etc. etc.
Mortgage
Fixed ass
d for Mortgage
ets – ho
1,332,812 1,332,812 Mortgage issuing 1,530,890 1,530,890 Mortgage d for
uses and
.48 .48 d bank .90 .90 d bank
building
acceptanc loans
s
e bills
Mortgage
Intangible d for Mortgage
assets -- 847,162.2 847,162.2 Mortgage issuing 879,275.3 879,275.3 Mortgage d for
land use 8 8 d bank 5 5 d bank
rights acceptanc loans
e bills
Mortgage
Fixed ass
d for Mortgage
ets -- ma
23,728,73 23,728,73 Mortgage issuing 31,222,42 31,222,42 Mortgage d for
chinery a
3.18 3.18 d bank 0.22 0.22 d bank
nd equip
acceptanc loans
ment
e bills
Discounte
d by the
Notes rec Obligatio Company
eivable -- n to pay at the
outstand 110,000,0 110,000,0 bills period-en
ing disco 00.00 00.00 discounte d and not
unted not d before due on
es maturity the
balance
sheet date
Endorsed Endorsed
Notes rec by the by the
Obligatio Obligatio
eivable -- Company Company
n to pay n to pay
outstand 55,979,83 55,979,83 at the 66,395,23 66,395,23 at the
unexpired unexpired
ing transf 2.64 2.64 period-en 1.83 1.83 period-en
transferre transferre
erred not d and not d and not
d notes d notes
es due on due on
the the
168
Changchai Company, Limited Annual Report 2023
balance balance
sheet date sheet date
158,126,9 158,126,9 305,690,2 305,690,2
Total
83.99 83.99 03.22 03.22
23. Short-term Borrowings
(1) Category of Short-term Borrowings
Unit: RMB
Item Ending balance Beginning balance
Mortgage loans 0.00 7,000,000.00
Obligation to pay bills discounted
0.00 108,437,700.65
before maturity
Total 0.00 115,437,700.65
24. Notes Payable
Unit: RMB
Category Ending balance Beginning balance
Bank acceptance bill 528,139,582.33 471,876,397.72
Total 528,139,582.33 471,876,397.72
At the end of the current period, there were no notes payable due and not paid.
25. Accounts Payable
(1) List of Accounts Payable
Unit: RMB
Item Ending balance Beginning balance
Payment for goods 641,484,184.05 747,010,098.88
Total 641,484,184.05 747,010,098.88
(2) Significant Accounts Payable Aging over One Year or Overdue
Unit: RMB
Item Ending balance Unpaid/ Un-carry-over reason
Suspending cooperation with
Payment for goods 38,821,047.06
suppliers to liquidate the payment
Payment for equipment 4,684,372.75 Equipment warranty
Total 43,505,419.81
169
Changchai Company, Limited Annual Report 2023
26. Other Payables
Unit: RMB
Item Ending balance Beginning balance
Interest payable
Dividends payable 3,891,433.83 3,891,433.83
Other payables 155,131,948.98 156,155,449.10
Total 159,023,382.81 160,046,882.93
(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 2,671,042.33 4,293,474.88
Intercourse funds among units 11,107,514.80 7,831,477.01
Intercourse funds among
398,761.04 397,761.04
individuals
Sales discount and three
125,096,632.36 126,787,544.75
guarantees
Other 15,857,998.45 16,845,191.42
Total 155,131,948.98 156,155,449.10
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.
170
Changchai Company, Limited Annual Report 2023
27. Advances from Customers
(1) List of Advances from Customers
Unit: RMB
Item Ending balance Beginning balance
Rent received in advance 647,441.22 837,425.55
Land compensation received in
1,000,000.00
advance
Total 1,647,441.22 837,425.55
(2) There were no significant advances from customers aging over one year or overdue.
28. Contract Liabilities
Unit: RMB
Item Ending balance Beginning balance
Contract liabilities 33,352,877.66 32,843,692.83
Total 33,352,877.66 32,843,692.83
There were no significant contract liabilities aging over one year at the end of the period.
29. Payroll Payable
(1) List of Payroll Payable
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
I. Short-term salary 49,151,022.47 276,664,221.67 278,076,360.57 47,738,883.57
II.Post-employment
benefit-defined 32,642,608.82 32,642,608.82
contribution plans
III. Termination
200,000.00 200,000.00
benefits
IV. Current portion
of other benefits
Total 49,351,022.47 309,306,830.49 310,918,969.39 47,738,883.57
(2) List of Short-term Salary
Unit: RMB
Beginning
Item Increase Decrease Ending balance
balance
171
Changchai Company, Limited Annual Report 2023
1. Salary, bonus,
40,883,518.77 230,395,729.07 231,082,308.43 40,196,939.41
allowance, subsidy
2.Employee welfare 1,592.74 3,770,067.21 3,770,067.21 1,592.74
3. Social insurance 17,930,988.64 17,930,988.64
Of which: Medical
14,582,048.07 14,582,048.07
insurance premiums
Work-related injury
1,822,382.77 1,822,382.77
insurance
Maternity insurance 1,526,557.80 1,526,557.80
4. Housing fund 19,978,775.41 19,978,775.41
5.Labor union budget
and employee education 8,265,910.96 4,476,279.74 5,201,839.28 7,540,351.42
budget
6. Short-term absence
with salary
7. Short-term profit
sharing scheme
Other short-term
112,381.60 112,381.60
compensation
Total 49,151,022.47 276,664,221.67 278,076,360.57 47,738,883.57
(3) List of Defined Contribution Plans
Unit: RMB
Beginning
Item Increase Decrease Ending balance
balance
1. Basic pension
31,658,782.33 31,658,782.33
benefits
2. Unemployment
983,826.49 983,826.49
insurance
3. Enterprise annuities
Total 32,642,608.82 32,642,608.82
30. Taxes Payable
Unit: RMB
Item Ending balance Beginning balance
VAT 189,045.23 2,240,512.82
Corporate income tax 1,686,812.32 1,272,876.86
Personal income tax 312,930.09 68,629.73
Urban maintenance and construction tax 881,885.27 1,151,395.75
Property tax 1,678,590.95 1,172,973.71
Land use tax 943,261.64 1,041,594.39
Stamp duty 349,554.08 286,018.61
172
Changchai Company, Limited Annual Report 2023
Education Surcharge 36,841.50 229,345.14
Comprehensive fees 120,291.58 1,075,134.76
Environmental protection tax 31,957.08 31,693.62
Total 6,231,169.74 8,570,175.39
31. Other Current Liabilities
Unit: RMB
Item Ending balance Beginning balance
Sale service fee 393,790.53 806,555.29
Transportation storage fee 830,881.27 597,090.12
Electric charge 1,457,500.39 1,467,332.18
Tax to be transferred 2,830,696.17 2,821,340.54
Estimated share value added tax 2,230,084.52 1,909,715.09
Obligation to pay bills transferred
55,979,832.64 66,395,231.83
before maturity
Other withholding expenses 3,347,180.44 4,648,476.11
Total 67,069,965.96 78,645,741.16
32. Deferred Income
Unit: RMB
Beginning Reason for
Item Increase Decrease Ending balance
balance formation
Government Government
36,205,625.94 3,409,729.46 32,795,896.48
grants appropriation
Total 36,205,625.94 3,409,729.46 32,795,896.48 --
Liability items involving government grants
Amount
recorded into
Related to
Beginning Amount of other income
Item Ending balance assets/related
balance new subsidy in the
income
Reporting
Period
National major project
special allocations- Flexible
processing production line 11,521,101.00 1,519,266.00 10,001,835.00 Related to assets
for cylinders of diesel
engines
Remove compensation 17,847,790.36 665,973.62 17,181,816.74 Related to assets
Research and development
and industrialization 6,836,734.58 1,224,489.84 5,612,244.74 Related to assets
allocations of national III/IV
173
Changchai Company, Limited Annual Report 2023
standard high-powered
efficient diesel engine for
agricultural use
Total 36,205,625.94 3,409,729.46 32,795,896.48
33. Share Capital
Unit: RMB
Increase/decrease (+/-)
Beginning Bonus Ending
New shares Bonus
balance issue from Other Subtotal balance
issued shares
profit
The sum of 705,692,50 705,692,50
shares 7.00 7.00
34. Capital Reserves
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Capital premium
620,338,243.21 620,338,243.21
(premium on stock)
Other capital reserves 19,795,719.80 375,712.83 20,171,432.63
Total 640,133,963.01 375,712.83 640,509,675.84
Other notes, including changes and reasons thereof:
Increase in this period: The parent company acquired 7.5% equity of its subsidiary Zhenjiang Siyang Diesel
Engine Manufacturing Co., Ltd. The difference of RMB375,712.83 between the long-term equity investment cost
newly acquired by the parent company and the identifiable net asset share that should be enjoyed by the subsidiary
from the purchase date (or merger date) calculated based on the new shareholding percentage was debited to
capital reserve.
35. Other Comprehensive Income
Unit: RMB
Reporting Period
Less: Less: Attri
Attribu
Recorded Record butab
Income table to
in other ed in le to
before Less: the
Beginni comprehe other non-
taxatio Income Compa Ending
Item ng nsive compre contr
n in the tax ny as balance
balance income in hensiv ollin
Curren expens the
prior e g
t e parent
period income inter
Period after
and in prior ests
tax
transferre period after
174
Changchai Company, Limited Annual Report 2023
d in and tax
profit or transfe
loss in rred in
the retaine
Current d
Period earning
s in the
Curren
t
Period
I. Other comprehensive 667,18
655,341, 13,927,7 2,089,1 11,838,
income that will not be 0,321.8
704.07 85.59 67.84 617.75
reclassified to profit or loss 2
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 667,18
655,341, 13,927,7 2,089,1 11,838,
other equity instrument 0,321.8
704.07 85.59 67.84 617.75
investment 2
Changes in fair value of
corporate credit risk
II. Other comprehensive
income that may
subsequently be
reclassified to profit or loss
Of which: Share of other
comprehensive income of
investees that will be
reclassified to profit or loss
under equity method
Changes in fair value of
investment in other debt
obligations
Amount of financial assets
reclassified to other
comprehensive income
Credit depreciation
reserves of investment in
175
Changchai Company, Limited Annual Report 2023
other debt obligations
Reserves for cash flow
hedges
Differences arising from
translation of foreign
currency-denominated
financial statements
667,18
Total of other 655,341, 13,927,7 2,089,1 11,838,
0,321.8
comprehensive income 704.07 85.59 67.84 617.75
2
Other notes, including the adjustment of the effective gain/loss on cash flow hedges to the initial recognized
amount: None
36. Specific Reserve
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Safety production
18,848,856.75 5,136,988.70 4,553,755.93 19,432,089.52
cost
Total 18,848,856.75 5,136,988.70 4,553,755.93 19,432,089.52
37. Surplus Reserves
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Statutory surplus
336,040,867.82 14,497,866.62 350,538,734.44
reserves
Discretional surplus
13,156,857.90 13,156,857.90
reserves
Total 349,197,725.72 14,497,866.62 363,695,592.34
38. Retained Earnings
Unit: RMB
Item Reporting Period Same period of last year
Beginning balance of retained earnings before
915,495,909.35 872,212,354.88
adjustments
Total retained earnings at the beginning of the
adjustment period (“+” means up, “-” means
down)
Beginning balance of retained earnings after
915,495,909.35 872,212,354.88
adjustments
176
Changchai Company, Limited Annual Report 2023
Add: Net profit attributable to owners of the
108,495,607.05 76,684,796.91
Company as the parent
Less: Withdrawal of statutory surplus reserves 14,497,866.62 15,053,237.26
Withdrawal of discretional surplus
reserves
Withdrawal of general reserve
Dividend of ordinary shares payable 7,056,925.07 18,348,005.18
Dividends of ordinary shares transferred as
share capital
Ending retained earnings 1,002,436,724.71 915,495,909.35
List of adjustment of beginning retained earnings:
(1) RMB0.00 beginning retained earnings was affected by retrospective adjustment conducted according to the
Accounting Standards for Business Enterprises and relevant new regulations.
(2) RMB0.00 beginning retained earnings was affected by changes in accounting policies.
(3) RMB0.00 beginning retained earnings was affected by correction of significant accounting errors.
(4) RMB0.00 beginning retained earnings was affected by changes in combination scope arising from same
control.
(5) RMB0.00 beginning retained earnings was affected totally by other adjustments.
39. 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 2,110,376,920.43 1,813,233,693.78 2,145,567,983.95 1,924,209,350.48
Other operations 45,321,867.06 25,522,137.63 36,475,111.66 24,467,686.04
Total 2,155,698,787.49 1,838,755,831.41 2,182,043,095.61 1,948,677,036.52
Whether the lower of the audited net profit before and after deduction of non-recurring gains and losses is
negative
√ Yes □ No
Unit: RMB
Item 2023 Specific deduction 2022 Specific deduction
The main business The main business
of the Company is of the Company is
the production and the production and
Operating revenue 2,155,698,787.49 2,182,043,095.61
sales of diesel sales of diesel
engines and engines and
gasoline engines gasoline engines
Total operating Other business Other business
income with 45,321,867.06 income other than 36,475,111.66 income other than
deduction main operations main operations
The proportion of
total operating income
2.10% 1.67%
with deduction in
operating revenue
I. Business income not
177
Changchai Company, Limited Annual Report 2023
related to the main
business
1. Other business
income outside
normal business. E.g.,
income from the lease
of fixed assets,
intangible assets,
packaging materials,
sales materials,
Income from sales Income from sales
non-monetary asset
of materials, of materials,
exchange with 45,321,867.06 36,475,111.66
housing rental housing rental
materials and
fees, property and fees, property and
operation of entrusted
utility charges utility charges
management business,
and income that is
included in the
income from primary
business but is outside
the normal business of
the listed company.
Income from sales Income from sales
Subtotal of business of materials, of materials,
income not related to 45,321,867.06 housing rental 36,475,111.66 housing rental
the main business fees, property and fees, property and
utility charges utility charges
II. Income without
commercial substance
Subtotal of income
without commercial 0.00 None 0.00 None
substance
III. Other income not
related to the main
0.00 None 0.00 None
business or without
commercial substance
Sales of diesel and Sales of diesel and
Operating revenue gasoline engines gasoline engines
2,110,376,920.43 2,145,567,983.95
after deduction and other products and other products
and accessories and accessories
Breakdown information of operating income and operating cost:
Unit: RMB
Category of Segment 1 Total
contracts Operating Revenue Operating cost Operating Revenue Operating cost
Business Type
Of which:
Single-cylinder
898,804,550.09 777,396,329 47 898,804,550.09 777,396,329 47
diesel engines
Multi-cylinder
796,114,105.16 713,613,118.19 796,114,105.16 713,613,118.19
diesel engines
Other products 246,884,141.39 189,693,819.70 246,884,141.39 189,693,819.70
Fittings 124,949,724.48 132,530,426.42 124,949,724.48 132,530,426.42
Classification by
operating region
178
Changchai Company, Limited Annual Report 2023
Of which:
Sales in domestic
1,732,696,737.12 1,465,335,809.67 1,732,696,737.12 1,465,335,809.67
market
Export sales 377,680,183.31 347,897,884.11 377,680,183.31 347,897,884.11
Total 2,110,376,920.43 1,813,233,693.78 2,110,376,920.43 1,813,233,693.78
Information in relation to the transaction price apportioned to the residual contract performance obligation:
The amount of revenue corresponding to performance obligations of contracts signed but not performed or not
fully performed yet was RMB0 at the period-end.
40. Taxes and Surtaxes
Unit: RMB
Item Reporting Period Same period of last year
Urban maintenance and
1,195,680.92 2,905,289.19
construction tax
Education surcharge 854,061.84 2,073,990.11
Property tax 7,027,411.47 6,312,819.28
Land use tax 4,209,985.02 4,474,736.13
Vehicle and vessel use tax 2,803.52 3,092.64
Stamp duty 1,546,467.17 898,751.20
Environment tax 204,264.65 293,572.90
Other 16,723.66 10,944.81
Total 15,057,398.25 16,973,196.26
41. Administrative Expense
Unit: RMB
Item Reporting Period Same period of last year
Employee benefits 51,674,294.80 62,242,258.03
Office expenses 10,787,236.38 9,510,389.69
Depreciation and amortization 24,825,227.36 16,116,539.74
Safety expenses 4,782,552.29 4,877,232.12
Repair charge 741,750.01 1,736,442.58
Inventory scrap and inventory loss
6,291,477.71 -333,858.14
(profit)
Other 24,878,795.44 25,362,185.70
Total 123,981,333.99 119,511,189.72
42. Selling Expense
Unit: RMB
Item Reporting Period Same period of last year
Employee benefits 42,024,752.56 41,414,480.36
179
Changchai Company, Limited Annual Report 2023
Office expenses 10,212,761.75 9,191,582.99
Three guarantees 45,920,031.28 50,709,187.02
Other 1,445,736.57 1,314,973.34
Total 99,603,282.16 102,630,223.71
43. Development Costs
Unit: RMB
Item Reporting Period Same period of last year
Direct input expense 51,504,815.69 43,996,939.37
Employee benefits 24,744,156.04 24,608,063.95
Depreciation and amortization 4,895,983.48 4,570,577.95
Entrusted development charges 684,195.77 6,509,898.89
Other 8,509,953.35 1,554,116.90
Total 90,339,104.33 81,239,597.06
44. Finance Costs
Unit: RMB
Item Reporting Period Same period of last year
Interest expense 1,825,195.98 1,993,453.71
Less: Interest income 9,008,657.82 12,804,077.19
Net foreign exchange gains or
-4,234,188.82 -10,929,750.57
losses
Other 132,973.74 150,669.42
Total -11,284,676.92 -21,589,704.63
45. Other Income
Unit: RMB
Sources Reporting Period Same period of last year
Government grants directly
recorded into the current profit or 3,009,573.87 3,749,273.00
loss
Government grants related to
3,409,729.46 3,409,729.46
deferred income
Others 368,808.64 25,025.59
List of other income:
Category Reporting Period Same period of last year
Subsidies for stabilizing, increasing and
771,481.00 2,396,713.00
retaining job positions
180
Changchai Company, Limited Annual Report 2023
Category Reporting Period Same period of last year
Membership dues return 4,860.00 4,760.00
Special funds for high-quality industrial
25,000.00
development
Subsidies for skill enhancement training
20,000.00 50,000.00
and technical improvement reward
Special funds for promoting high-quality
development through technological 513,000.00
innovation
Special funds for talents 60,000.00 170,000.00
Incentives and subsidies for earlier
phase-out and scrapping of 19,500.00 59,800.00
high-emission old cars in Changzhou
Employment and apprenticeship
49,706.25 11,000.00
subsidies
High-tech enterprise recognition bonus
80,000.00 247,000.00
and R&D investment incentives
Municipal science and technology
innovation and incentive funds, Science 543,026.62 341,000.00
and Technology Program Funding
Subsidies for high-quality invention 30,000.00 2,000.00
Special funds for business development 841,500.00 104,300.00
Intellectual property funding and
1,500.00
rewards
Rewards for district engineering
50,000.00
technology research centre in 2023
Support Funds for Agricultural
Machinery Guild in Zhonglou District of 250,000.00
Changzhou in 2022
Municipal special funds for
10,000.00
environmental protection
Incentives for provincial technology
27,700.00
transfer acceptor
Tax Contribution Award 30,000.00
181
Changchai Company, Limited Annual Report 2023
Category Reporting Period Same period of last year
Subsidies for work-based training 45,000.00
Demolition compensation (replacing Zou
267,333.48 267,333.48
Village with Hehai Road)
Demolition compensation - main
398,640.14 398,640.14
workshops in the base in Hehai Road
The national major special project - the
flexible processing production line for 1,519,266.00 1,519,266.00
diesel engine cylinder blocks
National III/IV Appropriation for the
research and development and
industrialization of standard 1,224,489.84 1,224,489.84
high-horsepower high-efficiency
agricultural diesel engine
Value Added Tax (VAT) Deductions and
294,256.13
Benefits
Individual tax handling fees 74,552.51 25,025.59
Total 6,788,111.97 7,184,028.05
46. Gain on Changes in Fair Value
Unit: RMB
Sources Reporting Period Same period of last year
Held-for-trading financial assets 10,401,521.88 -40,756,542.83
Other non-current financial assets 39,414,576.80 186,000,000.00
Total 49,816,098.68 145,243,457.17
47. 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
3,820,476.37 12,262.47
financial assets
182
Changchai Company, Limited Annual Report 2023
Dividend income from holding of other equity
11,482,380.00 9,360,000.00
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
1,463,921.82 1,411,361.54
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
Dividend income from holding of held-for-trading
343,730.00 296,740.00
financial assets
Income from refinancing operations 28,498.48 136,003.96
Investment income from financial products 7,673,218.19 5,995,552.35
Accounts receivable financing-discount interest of
-5,709,875.91 -9,242,453.13
bank acceptance bills
Total 19,102,348.95 7,969,467.19
48. Credit Impairment Loss
Unit: RMB
Item Reporting Period Same period of last year
Bad debt loss of other receivables -3,133,215.40 172,411.52
Bad debt loss of accounts
2,961,043.75 -3,126,152.25
receivable
Total -172,171.65 -2,953,740.73
49. Asset Impairment Loss
Unit: RMB
Item Reporting Period Same period of last year
I. Loss on inventory valuation and contract
-27,893,895.75 -14,367,197.27
performance cost
Total -27,893,895.75 -14,367,197.27
50. Asset Disposal Income
Unit: RMB
Sources Reporting Period Same period of last year
Disposal income of fixed assets
105,702,551.01 393,161.73
and intangible assets
Other notes: The People's Government of Zhonglou District, Changzhou City has decided to expropriate the
houses within the expropriation scope of the bus plant area (Phases 1 and 2) project, including Changzhou Wuxing
183
Changchai Company, Limited Annual Report 2023
Branch of Changchai Co., Ltd., in accordance with the Announcement of the People's Government of Zhonglou
District, Changzhou City on the Decision on the Housing Expropriation on State-owned Land
(ChangZhongZhengGao [2023] No. 10). On 14 June 2023, the Company signed the Agreement on Housing
Expropriation on Changzhou State-owned Land and Compensation with the Housing and Urban-Rural
Development Bureau of Zhonglou District, Changzhou City, with a total compensation amount of RMB117
million. The Company received compensation of RMB70 million on 28 June 2023 and RMB47 million on 9
January 2024, respectively. The Company transferred a net fixed asset value of RMB7,761,500 (including
RMB7,376,600 for real estate property and RMB384,900 for equipment), a net intangible asset value of
RMB4,425,000, and a revenue of RMB571,800 from equipment sales due to the demolition project, resulting in a
disposal income of RMB105,385,300.
51. 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 disposal of
222,436.80 236,284.29 222,436.80
fixed assets
Income from penalty 10,840.00 93,140.00 10,840.00
Accounts not required to
263,791.00 1,714,502.08 263,791.00
be paid
Negative goodwill
generated from 1,904,132.58
consolidated subsidiaries
Other 430,925.85 309,883.70 430,925.85
Total 927,993.65 4,257,942.65 927,993.65
52. Non-operating Expense
Unit: RMB
Amount recorded in the
Item Reporting Period Same period of last year current non-recurring
profit or loss
Loss on disposal of fixed
206,219.59 148,926.11 206,219.59
assets
Compensation for quality 208,884.78
Donation 150,000.00 168,300.00 150,000.00
Other 826,317.95 92,352.67 826,317.95
Total 1,182,537.54 618,463.56 1,182,537.54
184
Changchai Company, Limited Annual Report 2023
53. Income Tax Expense
(1) List of Income Tax Expense
Unit: RMB
Item Reporting Period Same period of last year
Current income tax expense 3,737,806.63 1,267,934.70
Deferred income tax expense 33,095,616.49 1,930,017.97
Adjustment of income tax of prior
803,234.91 -733,872.93
years
Total 37,636,658.03 2,464,079.74
(2) Adjustment Process of Accounting Profit and Income Tax Expense
Unit: RMB
Item Reporting Period
Profit before taxation 152,335,013.59
Current income tax expense accounted at statutory/applicable tax rate 22,850,252.04
Influence of applying different tax rates by subsidiaries -4,659,894.28
Influence of income tax before adjustment 803,234.91
Influence of non-taxable income -1,824,729.50
Influence of non-deductable costs, expenses and losses 3,084,261.69
Influence of deductable losses of unrecognized deferred income tax at the
11,073,313.06
beginning of the Reporting Period
Influence of deductable temporary difference or deductable losses of
12,433,943.21
unrecognized deferred income tax assets in the Reporting Period
Tax preference from eligible expenditures -6,123,723.10
Income tax expense 37,636,658.03
54. Other Comprehensive Income
See Note 35 for details.
55. Cash Flow Statement
(1) Cash Related to Operating Activities
Cash Generated from Other Operating Activities
Unit: RMB
Item Reporting Period Same period of last year
Subsidy and appropriation 3,084,694.38 3,751,451.59
Other intercourses in cash 2,744,200.31 4,962,530.66
Interest income 9,008,657.82 12,804,077.19
185
Changchai Company, Limited Annual Report 2023
Recovery of time deposits at
24,000,000.00
maturity
Other 1,245,299.28 1,472,234.00
Total 40,082,851.79 22,990,293.44
Cash Used in Other Operating Activities
Unit: RMB
Item Reporting Period Same period of last year
Selling and administrative expense
113,682,364.61 89,311,871.19
paid in cash
Handling charges 1,235,742.92 1,212,912.33
Other 1,632,848.89 16,260,652.67
Time deposits withdrawn 36,000,000.00
Other transactions 1,580,265.70 1,405,188.05
Total 154,131,222.12 108,190,624.24
(2) Cash Related to Investing Activities
Cash Generated from Other Investing Activities
Unit: RMB
Item Reporting Period Same period of last year
Cash and cash equivalents from
11,400,123.61
consolidated subsidiary
Total 11,400,123.61
(3) Cash Related to Financing Activities
Cash Generated from Other Financing Activities
Unit: RMB
Item Reporting Period Same period of last year
Discount of bank acceptance bills
128,437,700.65
with low credit rating
Total 128,437,700.65
Cash Used in Other Financing Activities
Unit: RMB
Item Reporting Period Same period of last year
Cash paid for acquiring equity of
7,170,000.00
minority shareholders of subsidiaries
Discount of bank acceptance bills with
110,000,000.00 83,623,545.07
low credit rating
Total 117,170,000.00 83,623,545.07
Changes in liabilities arising from financing activities
186
Changchai Company, Limited Annual Report 2023
√Applicable □Not applicable
Unit: RMB
Increase Decrease
Beginning Ending
Item Non-cash Non-cash
balance Cash changes Cash changes balance
changes changes
Short-term 115,437,700. 117,138,475.
1,700,774.35
borrowings 65 00
Other
payables-divi
3,891,433.83 7,056,925.07 7,056,925.07 3,891,433.83
dends
payable
119,329,134. 124,195,400.
Total 8,757,699.42 3,891,433.83
48 07
(4) Significant Activities and Financial Impact that Do Not Involve Current Cash Receipts and
Disbursements but Affect the Company's Financial Position or May Affect the Company's Cash Flows in
the Future
Unit: RMB
Item Reporting Period Same period of last year
Amount of endorsed and transferred notes
389,860,848.07 464,117,398.34
receivable
Of which: payment for goods 374,911,776.69 454,244,525.52
Payment for acquisition of
14,949,071.38 9,872,872.82
long-term assets including fixed assets
56. Supplemental Information for Cash Flow Statement
(1) Supplemental Information for Cash Flow Statement
Unit: RMB
Same period of
Supplemental information Reporting Period
last year
1. Reconciliation of net profit to net cash flows generated from
-- --
operating activities
Net profit 114,698,355.56 79,246,132.46
Add: Provision for impairment of assets 28,066,067.40 17,320,938.00
Depreciation of fixed assets, of oil and gas assets, of productive
88,980,118.41 79,926,656.97
living assets
Depreciation of right-of-use assets
Amortization of intangible assets 7,081,433.87 5,824,591.44
Amortization of long-term deferred expenses 349,871.11 175,893.01
Losses on disposal of fixed assets, intangible assets and other
-105,702,551.01 -393,161.73
long-term assets (gains by “-”)
Losses on the scrapping of fixed assets (gains by “-”) -16,217.21 -87,358.18
187
Changchai Company, Limited Annual Report 2023
Losses on the changes in fair value (gains by “-”) -49,816,098.68 -145,243,457.17
Financial expenses (gains by “-”) -644,213.13 2,146,237.77
Investment losses (gains by “-”) -24,812,224.86 -17,211,920.32
Decrease in deferred income tax assets (increase by “-”) 24,701,580.14 -15,400,115.80
Increase in deferred income tax liabilities (decrease by “-”) 8,394,036.35 17,330,133.77
Decrease in inventory (increase by “-”) -245,117,199.69 89,813,152.96
Decrease in accounts receivable from operating activities (increase
27,662,484.38 -33,140,187.50
by “-”)
Increase in payables from operating activities (decrease by “-”) 263,364,384.71 286,526,874.74
Other -1,904,132.58
Net cash flows generated from operating activities 137,189,827.35 364,930,277.84
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 971,629,523.46 810,350,966.05
Less: Beginning balance of cash 810,350,966.05 562,402,221.59
Add: Ending balance of cash equivalents
Less: Beginning balance of cash equivalents
Net increase in cash and cash equivalents 161,278,557.41 247,948,744.46
(2) Cash and Cash Equivalents
Unit: RMB
Item Ending balance Beginning balance
I. Cash 971,629,523.46 810,350,966.05
Including: Cash on hand 157,238.05 251,965.06
Bank deposit on demand 963,604,998.68 806,914,999.19
Other monetary assets on demand 7,867,286.73 3,184,001.80
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
971,629,523.46 810,350,966.05
equivalents
188
Changchai Company, Limited Annual Report 2023
Of which: Cash and cash equivalents with
restriction in use for the Company as the
parent or subsidiaries of the Group
(3) Monetary Assets Not Classified as Cash and Cash Equivalents
Unit: RMB
Amount during
Reason for not classifying the item as
Item the current Previous period
cash and cash equivalents
period
Time deposits in banks not held to meet
Bank deposits-fixed time
36,000,000.00 24,000,000.00 short-term cash requirements for external
deposits over 3 months
payments
Other monetary assts-cash Banker's acceptance deposit,
76,238,443.41 95,662,384.92
deposit environmental performance bonds, etc.
Total 112,238,443.41 119,662,384.92
57. 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 13,417,315.17 7.0827 95,030,818.16
HKD 330,722.07 0.9062 299,700.34
Accounts receivable
Of which: USD 7,812,701.09 7.0827 55,335,018.01
GBP -67,212.27 9.0411 -607,672.85
Accounts payable
Of which: USD 302.60 7.0827 2,143.23
Contract liabilities
Of which: USD 521,382.67 7.0827 3,692,797.06
EUR 117,145.84 7.8592 920,672.58
(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
189
Changchai Company, Limited Annual Report 2023
58. Lease
(1) The Company Was Lessee:
√Applicable Not applicable
Variable lease payments not included in the measurement of lease liabilities
Applicable √Not applicable
Simplified handling of short-term leasing or leasing costs for low value assets
√Applicable Not applicable
The simplified leasing method adopted by our company is mainly for leased properties. Due to the short lease
term and low individual leasing costs, in accordance with the new leasing standards, our company has not
recognized the right of use assets and leasing liabilities for the aforementioned leasing activities.
Situations involving after-sales leaseback transactions:Not applicable
(2) The Company Was Lessor:
Operating leases with the Company as lessor
√Applicable Not applicable
Unit: RMB
Of which: income related to
Item Rental income variable lease payments not
included in lease receipts
Lease income 3,279,654.67
Total 3,279,654.67
Finance leases with the Company as lessor
Applicable √Not applicable
Undiscounted lease receipts for each of the next five years
Applicable √Not applicable
Reconciliation of undiscounted lease receipts to net investment in leases: Not applicable
(3) Recognition of Gain or Loss on Sales under Finance Leases with the Company as a Manufacturer or
Distributor
□Applicable √Not applicable
VIII. Research and Development Expenditure
Unit: RMB
Item Amount for the current period Amount for the previous period
Direct input 51,504,815.69 43,996,939.37
Employee remuneration 24,744,156.04 24,608,063.95
Depreciation and amortization 4,895,983.48 4,570,577.95
Outsourcing development fees 684,195.77 6,509,898.89
Others 8,509,953.35 1,554,116.90
Total 90,339,104.33 81,239,597.06
190
Changchai Company, Limited Annual Report 2023
Of which: Expensed research and
90,339,104.33 81,239,597.06
development expenditure
Capitalized research
and development expenditure
IX. Equity in Other Entities
1. Equity in Subsidiary
(1) Subsidiaries
Natur Holding percentage
Main Registrat
Registered e of (%) Way of
Name operatin ion
capital busin Indirectl gaining
g place place Directly
ess y
Changchai Wanzhou 85,000,00 Chongq Chongqi Indus
60.00% Set-up
Diesel Engine Co., Ltd. 0.00 ing ng try
Changzhou Changchai
55,063,00 Changz Changzh Indus
Benniu Diesel Engine 99.00% 1.00% Set-up
0.00 hou ou try
Fittings Co., Ltd.
Changzhou Horizon 40,000,00 Changz Changzh Servi
100.00% Set-up
Investment Co., Ltd. 0.00 hou ou ce
Changzhou Changchai
10,000,00 Changz Changzh Indus
Horizon Agricultural 75.00% 25.00% Set-up
0.00 hou ou try
Equipment Co., Ltd.
Changzhou Fuji
Combination
Changchai Robin 37,250,00 Changz Changzh Indus
100.00% not under the
Gasoline Engine Co., 0.00 hou ou try
same control
Ltd.
Jiangsu Changchai 300,000,0 Changz Changzh Indus
100.00% Set-up
Machinery Co., Ltd. 00.00 hou ou try
Changzhou Xingsheng
1,000,000. Changz Changzh Servi
Property Management 100.00% Set-up
00 hou ou ce
Co., Ltd.
Zhenjiang Siyang Diesel 2,000,000. Combination
Zhenjia Zhenjian Indus
Engine Manufacturing 49.00% not under the
00 ng g try
Co., Ltd. same control
191
Changchai Company, Limited Annual Report 2023
Explanation: the Company originally holds 41.5% of the shares in Zhenjiang Siyang Diesel Engine Manufacturing
Co., Ltd., and currently holds 49% of shares in it after acquisition of 7.5% of shares originally held by other
shareholders in this year. Our company is the largest shareholder, and the other shareholders are relatively
scattered. Among the 7 members of the board of directors of Zhenjiang Siyang, 4 are dispatched by our company.
The chairman of Zhenjiang Siyang is dispatched by our company, and our company is the actual controller of
Zhenjiang Siyang, which constitutes the conditions for merger.
(2) Significant Non-wholly-owned Subsidiary
Unit: RMB
Declaring
Shareholding The profit or loss Balance of
dividends
proportion of attributable to the non-controlling
Name distributed to
non-controlling non-controlling interests at the
non-controlling
interests interests period-end
interests
Changchai
Wanzhou Diesel 40.00% 104,717.86 19,810,361.11
Engine Co., Ltd.
Zhenjiang Siyang
Diesel Engine
51.00% 6,098,030.65 51,310,847.24
Manufacturing 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 41,17 22,35 63,53 13,58 13,58 47,13 23,22 70,36 21,09 21,09
Diese 9,375 1,977 1,353 4,154 4,154 3,617 8,110. 1,727 7,619 7,619
l .84 .78 .62 .77 .77 .16 09 .25 .13 .13
Engin
e Co.,
Ltd.
192
Changchai Company, Limited Annual Report 2023
Zhenj
iang
Siyan
g
Diese
l 94,74 26,46 121,2 20,29 20,60 82,69 28,04 110,7 20,23 20,55
310,8 322,7
Engin 7,199 8,620 15,82 5,436 6,316 7,983 5,494 43,47 5,256 7,957
e 79.17 01.42
.90 .63 0.53 .96 .13 .58 .39 7.97 .17 .59
Manu
factur
ing
Co.,
Ltd.
Unit: RMB
Reporting Period Same period of last year
Cash Cash
Total Total
flows flows
Name Operating comprehe Operating comprehe
Net profit from Net profit from
revenue nsive revenue nsive
operating operating
income income
activities activities
Changcha
i
Wanzhou 43,364,24 261,794.6 261,794.6 -8,451,01 34,281,25 -652,107. -652,107. 650,437.0
Diesel 6.66 4 4 3.52 2.72 80 80 3
Engine
Co., Ltd.
Zhenjian
g Siyang
Diesel 66,935,15 10,423,98 10,423,98 1,349,693 35,440,98 4,824,237 4,824,237 -9,291,53
Engine
Manufact 6.33 4.02 4.02 .24 3.37 .05 .05 7.82
uring
Co., Ltd.
2. The Transaction of the Company with Its Owner's Equity Share Changing but the Company Still
Controls the Subsidiary
(1) Note to the Owner's Equity Share Changed in Subsidiary
The Company’s shareholding in Zhenjiang Siyang Diesel Engine Manufacturing Co., Ltd. was originally 41.5%,
and now stands at 49% after acquiring 7.5% of other shareholders’ equity during the Reporting Period.
(2) The Transaction’s Influence on the Equity of Non-controlling Interests and the Owner's Equity
Attributable to the Company as the Parent
Unit: RMB
Item Amount
Purchase cost/disposal consideration 7,170,000.00
-Cash 7,170,000.00
193
Changchai Company, Limited Annual Report 2023
-Fair value of non-cash assets
Total purchase cost/disposal consideration 7,170,000.00
Less: Share of net assets of subsidiaries based on
7,545,712.83
percentage of equity acquired/disposed of
Difference -375,712.83
Of which: Adjusting capital reserve -375,712.83
Adjusting surplus reserve
Adjusting retained earnings
3. 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 respectively added. Partnership Shares transfer was made on 29 December
2022 and 10 October 2023. 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, Anhui Haiyunzhou
Equity Investment Partnership Enterprise (Limited), Shenzhen Jiaxin One Venture Capital Partnership (limited
partnership),Zhong Wende and Qingdao Yinjiahui Industrial Investment Partnership Enterprise (Limited
Partnership). 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.
X. Government Grants
1. Government Grants Recognized at the End of the Reporting Period at the Amount Receivable
□Applicable Not applicable
Reasons for failing to receive government grants in the estimated amount at the estimated point in time
□Applicable Not applicable
2. Liability Items Involving Government Grants
Applicable □Not applicable
Amount
Amount
recorded
recorded
into
Amount of into other Related to
Accounting Beginning non-operati Other Ending
new income in assets/relat
items balance ng income changes balance
subsidy the ed income
in the
Reporting
Reporting
Period
Period
Deferred 36,205,625 3,409,729. 32,795,896 Related to
194
Changchai Company, Limited Annual Report 2023
income .94 46 .48 assets
3. Government Grants Recognized as Current Profit or Loss
Applicable □Not applicable
Unit: RMB
Accounting items Amount for the current period Amount for the previous period
Other income 6,419,303.33 7,159,002.46
XI. The Risk Related to Financial Instruments
1. Various Types of Risks Arising from Financial Instruments
The goal of the Company’s risk management was gaining the balance between the risk and income, and reduced
the negative impact to the operation performance of the Company in the lowest level and maximized the interests
of shareholders and other equity investors. Base on the risk management goal, the basis strategy of the Company’s
risk management was to recognized and analyze all kinds of risk that the Company faced, set up suitable risk
bottom line and conduct risk management, and supervised the risks timely and reliably and control the risk within
the limited scope.
The main risks of the Company due to financial instruments were credit risk, liquidity risk and market risk. The
management level had reviewed and approved the policies to manage the risks, which summarized as follows:
(I) Credit Risk
Credit risk was one party of the contract failed to fulfill the obligations and causes loss of financial assets of the
other party.
The credit of risk of the Company mainly was related to account receivable, in order to control the risk, the
Company conduct the following methods.
The Company only conducts related transaction with approved and reputable third party, in line with the policy of
the Company, the Company need to conduct credit-check for the clients adopting way of credit to conduct
transaction. In addition, the Company continuously monitors the balance of account receivable to ensure the
Company would not face the significant bad debt risk.
(II) Liquidity Risk
Liquidity risk is referred to the risk of incurring capital shortage when performing settlement obligation in the way
of cash payment or other financial assets. The policies of the Company are to ensure that there was sufficient cash
to pay the due liabilities.
The liquidity risk was centralized controlled by the financial department of the Company. The financial
departments through supervising the balance of the cash and securities can be convert to cash at any time and the
rolling prediction of cash flow in future 12 months to ensure the Company has sufficient cash to pay the liabilities
under the case of all reasonable prediction.
(III) Market Risk
Market risk is refer to risk of the fair value or future cash flow of financial instrument changed due to the change
of market price, including foreign exchange rate risk, interest rate risk.
1. Interest Rate Risk
Interest rate risk is refers to fluctuation risk of the fair value or future cash flow of financial instrument change due
to the change of market price.
195
Changchai Company, Limited Annual Report 2023
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.
2. Financial Assets
(1) Classification of Transfer Methods
Applicable □Not applicable
Unit: RMB
Basis for
Transfer Nature of transferred Amount of transferred Recognition
recognition
method financial assets financial assets termination or not
termination
The Company
retains substantially
Endorsement all of the risks and
Notes receivable 55,979,832.64 Not derecognized
/discount rewards, including
the risk of default
associated with its
The Company
Endorsement Accounts receivable transfers almost all
567,763,410.38 Derecognized
/discount financing the risks and
rewards
Total 623,743,243.02
(2) Financial Assets Derecognized due to Transfer
Applicable □Not applicable
Unit: RMB
Transfer method of Amount of derecognized Gains or losses related to
Item
financial assets financial assets derecognization
Accounts
receivable Endorsement 163,147,260.38
financing
Accounts
receivable Discount 404,616,150.00 -5,709,875.91
financing
Total 567,763,410.38 -5,709,875.91
(3) Continued Involvement in the Transfer of Assets Financial Assets
Applicable □Not applicable
Unit: RMB
Transfer method of Amount of assets resulting from Amount of liabilities resulting
Item
assets continued involvement from continued involvement
Notes receivable Endorsement 55,979,832.64 55,979,832.64
Total 55,979,832.64 55,979,832.64
196
Changchai Company, Limited Annual Report 2023
XII. 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 items measurement items measurement items Total
at level 1 at level 2 at level 3
I. Consistent fair
-- -- -- --
value measurement
(I) Trading financial
85,295,021.00 140,346,408.94 225,641,429.94
assets
1. Financial assets
at fair value through 85,295,021.00 140,346,408.94 225,641,429.94
profit or loss
(1) Debt instrument
investment
(2) Equity
instrument 85,295,021.00 85,295,021.00
investment
(3) Derivative
financial assets
Wealth
management 140,346,408.94 140,346,408.94
investments
2. Financial assets
designated to be
measured at fair
value and the
changes included
into the current
profit or loss
(1) Debt instrument
investment
(2) Equity
instrument
investment
(II) Other
investments in debt
obligations
(III)Other equity
instrument 551,031,000.00 418,457,025.67 969,488,025.67
investment
(IV) Investment
197
Changchai Company, Limited Annual Report 2023
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
Accounts receivable
195,875,948.92 195,875,948.92
financing
Other non-current
412,914,576.80 412,914,576.80
financial assets
Total assets
consistently
636,326,021.00 140,346,408.94 1,027,247,551.39 1,803,919,981.33
measured by fair
value
(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
198
Changchai Company, Limited Annual Report 2023
Total assets
inconsistently
measured by fair
value
Total liabilities
inconsistently
measured by fair
value
2. Market Price Recognition Basis for Consistent and Inconsistent Fair Value Measurement Items at Level
1
For the listed company stocks held by the company in the held-for-trading financial assets measured at fair value,
the closing market price on the balance sheet date was the basis for the measurement of fair value.
3. Valuation Technique Adopted and Nature and Amount Determination of Important Parameters for
Consistent and Inconsistent Fair Value Measurement Items at Level 2
Wealth management and investment: The underlying assets of investment in wealth management products include
bond assets, deposit assets, fund assets, etc. The portfolio of investment assets should be dynamically managed.
The fair value of wealth management products should be adjusted according to the yield 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) Accounts receivable financing: Accounts receivable financing is a bank acceptance with high credit rating,
short maturity and low risk. The par amount is close to the fair value and is used as the fair value.
(2) Among the 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 2023,
and confirmed the premium rate of capital increase based on the appreciation rate of the equity value. The
company’s new investors signed the capital increase agreements on 27 September 2023. Therefore, the fair value
of the equity investment had been adjusted and confirmed accordingly based on the premium rate of the new
round of financing. And an appraisal agency was hired to conduct an appraisal to confirm
(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) had increased the equity of partners at the end of the year due to the change in fair value of the equity
held by it. 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
199
Changchai Company, Limited Annual Report 2023
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
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.
XIII. Related Party and Related-party Transactions
1. Information Related to the Company as the Parent of the Company
Proportion of Proportion of
Name share held by voting rights
Registration Nature of Registered the Company as owned by the
place business capital the parent Company as the
against the parent against
Company the Company
Investment and
Changzhou operations of
Investment Changzhou state-owned RMB1.2 billion 32.26% 32.26%
Group Co., Ltd. assets, assets
management
200
Changchai Company, Limited Annual Report 2023
(excluding
financial
business),
investment
consulting
(excluding
consulting on
investment in
securities and
options), etc.
Notes: Information on the Company as the parent
The parent company of the Company is Changzhou Investment Group Co., Ltd. According to the guiding
principle of the Notice of Provincial Government on Issuing the Implementation Plan for Transferring Part of
State-owned Capital to Boost Social Security Fund in Jiangsu Province (SZF [2020] No. 27), the Notice on
Transferring Part of State-owned Capital to Cities and Counties to Boost Social Security Fund (SCGM [2020] No.
139) from the Department of Finance of Jiangsu Province and other five departments and the Notice on
Transferring Part of State-owned Capital at Urban (District) Level to Boost Social Security Fund (CCGM [2020]
No. 4) from Changzhou Finance Bureau and other four departments, the 10% state-owned equity of the
Investment Group held by Changzhou Municipal People's Government is transferred to the Department of
Finance of Jiangsu Province free of charge. After the share transfer, Changzhou People’s Government holds 90%
state-owned equity of the Investment Group and the Department of Finance of Jiangsu Province holds 10%
state-owned equity of the Investment Group. In accordance with Changzhou People’s Government Document
(CZF [2006] No. 62), Changzhou Investment Group Co., Ltd. is an enterprise which Changzhou People’s
Government authorizes Changzhou Government State-owned Assets Supervision and Administration Commission
to perform duties of investors. Thus, 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 IX for details.
3、Situation of joint ventures and associated enterprises of the company
None
4. 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
201
Changchai Company, Limited Annual Report 2023
5. Related Party Transactions
(1)Compensation for key management personnel
Unit: RMB
Amount incurred in the previous
Item Current amount incurred
period
Compensation for key
7,820,700.00 7,110,100.00
management personnel
XIV. Commitments and Contingency
1. Significant Commitments
Significant commitments on balance sheet date
As of 31 December 2023, there was no significant commitment for the Company to disclose.
2. Contingency
(1) Significant Contingency on Balance Sheet Date
None
(2) In Despite of no Significant Contingency to Disclose, the Company Shall Also Make Relevant Statements
There was no significant contingency in the Company.
XV. Events after Balance Sheet Date
1. Profit Distribution
Unit: RMB
Dividend to be distributed for every 10 shares (RMB) 0.47
Bonus shares to be distributed for every 10 shares
0
(share)
Additional shares to be converted from capital reserve
0
for every 10 shares (share)
Dividend for every 10 shares (RMB) declared after
0.47
review and approval
Bonus shares to be distributed for every 10 shares
0
(share) declared after review and approval
Additional shares to be converted from capital reserve
for every 10 shares (share) declared after review and 0
approval
Based on the total share capital of the company as of
Profit distribution plan December 31, 2023, a cash dividend of RMB0.47
(including tax) will be distributed to all shareholders
202
Changchai Company, Limited Annual Report 2023
for every 10 shares. A total of RMB33167547.83
(including tax) will be distributed without bonus
shares or conversion of reserve funds to share capital.
The above plan still requires approval from the
shareholders' meeting.
2. Sales Return
None
3. Notes to Other Events after Balance Sheet Date
There was no other event after balance sheet date.
XVI. Other Significant Events
1. The Accounting Errors Correction in Previous Period
(1) Retrospective Restatement
None
(2) Prospective Application
None
2. Debt Restructuring
Not applicable
3. Assets Replacement
Not applicable
4. Pension Plans
Not applicable
5. Discontinued Operations
Not applicable
6. 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
203
Changchai Company, Limited Annual Report 2023
management, and did not divide business unit, so the Company only made single branch report.
7. Other Significant Transactions and Events with Influence on Investors’ Decision-making
The People's Government of Xinbei District, Changzhou City decided to expropriate the houses within the
expropriation scope of the old city renovation project on the land of the single-cylinder engine plant of Changchai
Co., Ltd. (hereinafter referred to as the "Company"), namely, Changzhou Sanjing Branch of Changchai Co., Ltd.,
in accordance with the Announcement of the People's Government of Xinbei District, Changzhou City on the
Decision on the Housing Expropriation on State-owned Land (ChangZhongZhengGao [2022] No. 6). On 29
November 2023, the Company signed the compensation agreement with the Housing and Urban-Rural
Development Bureau of Changzhou National High-tech Industrial Development Zone and the Housing
Expropriation and Compensation Service Centre of Sanjing Street, Xinbei District, Changzhou City (hereinafter
referred to as "Sanjing Street"). The total compensation amount under the agreement was RMB99,929,868.
According to the payment method stipulated in the compensation agreement, the Company received the first
compensation payment (30% of the compensation) of RMB30,000,000 (including RMB1,000,000 received on 29
December 2023 (Presented in advance receipts on account) and RMB29,000,000 received on 3 January 2024).
XVII. Notes of Main Items in the Financial Statements of the Company as the Parent
1. Accounts Receivable
(1) Disclosure by Aging
Unit: RMB
Aging Ending carrying amount Beginning carrying amount
Within one year (including 1 year) 289,665,029.12 304,249,429.01
One to two years 1,642,898.19 25,731,843.18
Two to three years 4,274,309.13 4,391,594.73
More than three years 103,238,762.39 105,760,358.81
Three to four years 4,376,325.51 2,917,847.46
Four to five years 1,398,123.34 2,658,953.02
Over 5 years 97,464,313.54 100,183,558.33
Total 398,820,998.83 440,133,225.73
(2) Disclosure by Withdrawal Methods for Bad Debts
Unit: RMB
Ending balance Beginning balance
Carrying Bad debt Carrying Bad debt
amount provision amount provision
Withd Carryi Withd
Category Carryin
Amou Propo Amou rawal ng Amou Propor Amou rawal g value
value
nt rtion nt propo nt tion nt propor
rtion tion
204
Changchai Company, Limited Annual Report 2023
Accounts
receivable
withdrawal of 21,05 21,05 27,36 21,607
100.0 78.96 5,756,6
Bad debt 8,702. 5.28% 8,702. 4,067. 6.22% ,429.5
provision 0% % 37.84
18 18 34 0
separately
accrued
Of which:
Accounts
receivable 377,7 85,76 291,9 412,7 89,464
withdrawal of 94.72 22.70 93.78 21.67 323,304
62,29 5,458. 96,83 69,15 ,855.7
bad debt % % % % ,302.66
provision of by 6.65 71 7.94 8.39 3
group
Of which:
Accounts
receivable for
which bad debt 377,7 85,76 291,9 412,7 89,464
94.72 22.70 93.78 21.67 323,304
provision 62,29 5,458. 96,83 69,15 ,855.7
% % % % ,302.66
accrued by 6.65 71 7.94 8.39 3
credit risk
features group
398,8 106,8 291,9 440,1 111,07
100.0 26.78 100.00 25.24 329,060
Total 20,99 24,16 96,83 33,22 2,285.
0% % % % ,940.50
8.83 0.89 7.94 5.73 23
Number of categories of bad debt provision by individual item: 1
Bad debt provision separately accrued: RMB21,058,702.18, of which: RMB19,019,243.10 for large impairment
risk items
Unit: RMB
Beginning balance Ending balance
Withdraw
Reason
Name Carrying Bad debt Carrying Bad debt al
for
amount provision amount provision proportio
withdraw
n
Difficult
Customer 1 1,470,110.64 1,470,110.64 1,470,110.64 1,470,110.64 100.00%
to recover
Difficult
Customer 2 1,902,326.58 1,902,326.58 1,902,326.58 1,902,326.58 100.00%
to recover
Difficult
Customer 3 6,215,662.64 6,215,662.64 6,215,662.64 6,215,662.64 100.00%
to recover
Difficult
Customer 4 2,797,123.26 2,194,980.28 2,797,123.26 2,797,123.26 100.00%
to recover
Difficult
Customer 5 3,633,081.23 2,122,165.73 2,322,278.50 2,322,278.50 100.00 %
to recover
Difficult
Customer 6 2,584,805.83 2,584,805.83 2,584,805.83 2,584,805.83 100.00%
to recover
205
Changchai Company, Limited Annual Report 2023
Difficult
Customer 7 1,731,493.71 1,731,493.71 1,726,935.65 1,726,935.65 100.00%
to recover
Total 20,334,603.89 18,221,545.41 19,019,243.10 19,019,243.10 -- --
Number of categories of bad debt provision by group: 1
Withdrawal of bad debt provision by group: the bad debt provision of RMB85,765,458.71 withdrawn according to
credit risk characteristic group, as shown below
Unit: RMB
Ending balance
Item
Carrying amount Bad debt provision Withdrawal proportion
Within 1 year 289,665,029.12 5,793,300.58 2.00 %
1 to 2 years 1,642,898.19 82,144.91 5.00 %
2 to 3 years 3,732,046.47 559,806.97 15.00%
3 to 4 years 4,376,325.51 1,312,897.65 30.00%
4 to 5 years 821,721.89 493,033.13 60.00%
Over 5 years 77,524,275.47 77,524,275.47 100.00%
Total 377,762,296.65 85,765,458.71
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
(3) Bad Debt Provision Withdrawal, Reversed or Recovered in the Current Period
Unit: RMB
Changes in the current period
Beginning
Category Reversed or Ending balance
balance Withdrawal Verification Others
recovered
Bad debt
provision
21,607,429.50 190,820.08 37,668.24 701,879.16 21,058,702.18
accrued by
item
Withdrawal
of bad debt
89,464,855.73 3,283,503.08 415,893.94 85,765,458.71
provision by
group
Total 111,072,285.23 190,820.08 3,321,171.32 1,117,773.10 106,824,160.89
Of which significant amount of recovered or transferred-back bad debt provision for the current period: None
(4) Accounts Receivable Written-off in Current Period
Unit: RMB
Item Written-off amount
Accounts receivable with actual verification 1,117,773.10
Of which the verification of significant accounts receivable:
Unit: RMB
Amount Performan Whet
Name of the entity Nature Reason
verified ce of her
206
Changchai Company, Limited Annual Report 2023
verificatio gener
n ated
procedures from
relate
d-par
ty
trans
actio
n
Reorganiz
Customer 1 42,099.41 Debt reorganisation ation
agreement
Accou Reorganiz
Customer 2 nts 659,779.75 Debt reorganisation ation
agreement
receiv
With accounts receivable aging over 5 Not
able
years, the debtors have no assets for Minutes of
for
Long term receivables debt extinguishment due to the the
goods 415,893.94
from 94 customers counterpart company being revoked or executive
cancelled, or debt reorganisation, office
bankruptcy clearing.
Total 1,117,773.10 -- -- --
(5) Top 5 of the Ending Balance of Accounts Receivable Collected according to the Arrears Party
Unit: RMB
Ending balance
Proportion to of bad debt
Ending balance total ending provision of
Ending balance Ending balance
Name of the of accounts balance of accounts
of accounts of contract
entity receivable and accounts receivable and
receivable assets
contract assets receivable and impairment
contract assets provision for
contract assets
Customer 1 155,981,057.12 0.00 155,981,057.12 39.11% 3,119,621.14
Customer 2 35,865,520.31 0.00 35,865,520.31 8.99% 717,310.41
Customer 3 30,056,545.72 0.00 30,056,545.72 7.54% 601,130.91
Customer 4 18,140,927.66 0.00 18,140,927.66 4.55% 362,818.55
Customer 5 13,769,193.20 0.00 13,769,193.20 3.45% 275,383.86
Total 253,813,244.01 0.00 253,813,244.01 63.64% 5,076,264.87
2. Other Receivables
Unit: RMB
Item Ending balance Beginning balance
Other receivables 399,142,024.92 179,596,495.57
Total 399,142,024.92 179,596,495.57
207
Changchai Company, Limited Annual Report 2023
(1) Other Receivable
1) Other Receivables Classified by Account Nature
Unit: RMB
Nature Ending carrying amount Beginning carrying amount
Cash deposit and Margin 1,300.00 1,300.00
Intercourse funds among units 433,589,441.68 214,624,107.53
Petty cash and borrowings by
884,233.75 671,817.84
employees
Other 13,638,079.94 13,635,256.64
Total 448,113,055.37 228,932,482.01
2) Disclosure by Aging
Unit: RMB
Aging Ending carrying amount Beginning carrying amount
Within one year (including 1 year) 308,824,779.36 182,815,353.08
One to two years 113,974,034.71 16,778,473.11
Two to three years 12,802.00 99,076.00
More than three years 25,301,439.30 29,239,579.82
Three to four years 30,000.00 420,716.17
Four to five years 333,939.40
Over 5 years 25,271,439.30 28,484,924.25
Total 448,113,055.37 228,932,482.01
3) Disclosure by Withdrawal Methods for Bad Debts
Withdrawal of bad debt provision by adopting the general mode of expected credit loss:
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 in the next duration (credit
impairment not
12 months impairment occurred)
occurred)
Balance of 1
26,186.99 209,876.70 49,099,922.75 49,335,986.44
January 2023
Balance of 1
January 2023 in the —— —— —— ——
Current Period
--Transfer to
Second stage
-- Transfer to Third
stage
208
Changchai Company, Limited Annual Report 2023
-- Reverse to
Second stage
-- Reverse to First
stage
Withdrawal of the
20,686.21 20,686.21
Current Period
Reversal of the
193,167.60 192,474.60 385,642.20
Current Period
Write-offs of the
Current Period
Verification of the
Current Period
Other changes
Balance of 31
46,873.20 16,709.10 48,907,448.15 48,971,030.45
December 2023
Changes of carrying amount with significant amount changed of loss provision in the Current Period
□ Applicable √ Not applicable
4) 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
25,757,409.37 3,912,775.31 21,844,634.06
withdrawn
separately
Bad debt
provision
23,578,577.07 3,547,819.32 27,126,396.39
withdrawn by
group
Total 49,335,986.44 3,547,819.32 3,912,775.31 48,971,030.45
Of which the bad debt provision recovered or transferred-back with significant amount during the current period:
Unit: RMB
Basis and
rationality of
Amount reversed or determining the
Name of the entity Reason for reversal Way of recovery
recovered original withdrawal
proportion of bad
debt provision
Changzhou 3,679,061.18 Repayment Cash Subsidiary is
209
Changchai Company, Limited Annual Report 2023
Changchai Horizon insolvent
Agricultural
Equipment Co.,
Ltd.
Total 3,679,061.18
5) There Were No Other Receivables with Actual Verification during the Reporting Period
6) Top 5 of the Ending Balance of Other Receivables Collected according to the Arrears Party
Unit: RMB
Proportion to
Ending
total ending
balance of
Name of the entity Nature Ending balance Aging balance of
bad debt
other
provision
receivables
Within 1 year:
Interco
Jiangsu Changchai 245703369.25;
urse 340,703,369.25 76.03%
Machinery Co., Ltd. 1-2 years:
funds
95000000.00
Compe
nsation
for land
Changzhou Zhonglou acquisit
District Housing and ion of
47,000,000.00 Within 1 year 10.49%
Urban-Rural Wuxin
Development Bureau g bus
plant
area
plot
Within 1 year:
Changzhou Changchai Interco
6683804.04;
Horizon Agricultural urse 16,542,062.75 3.69% 16,542,062.75
1-2 years:
Equipment Co., Ltd. funds
9858258.71
Interco
Changzhou Changniu
urse 9,000,000.00 1-2 years 2.01%
Machinery Co., Ltd.
funds
Interco
Changzhou Compressors
urse 2,940,000.00 Over 5 years 0.66% 2,940,000.00
Factory
funds
Total -- 416,185,432.00 92.88% 19,482,062.75
3. Long-term Equity Investment
Unit: RMB
210
Changchai Company, Limited Annual Report 2023
Ending balance Beginning balance
Item Carrying Depreciation Carrying Carrying Depreciation Carrying
amount reserves value amount reserves value
Investment to 583,443,530. 576,443,530. 576,273,530. 569,273,530.
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
583,487,712. 576,443,530. 576,317,712. 569,273,530.
Total 7,044,182.50 7,044,182.50
53 03 53 03
(1) Investment to Subsidiaries
Unit: RMB
Increase/decrease for the current period
Beginnin Ending
Beginning Withdra
g balance Ending balance
balance Addition wal of
of Reduced balance of
Investee al impairm
(carrying depreciat investme Others (Carrying depreciat
investme ent
ion nt value) ion
value) nt provisio
reserve reserve
n
Changchai
Wanzhou
51,000,00 51,000,00
Diesel
0.00 0.00
Engine Co.,
Ltd.
Changzhou
Changchai
Benniu
96,466,50 96,466,50
Diesel
0.00 0.00
Engine
Fittings Co.,
Ltd.
Changzhou
Horizon 40,000,00 40,000,00
Investment 0.00 0.00
Co., Ltd.
Changzhou
Changchai
Horizon 7,000,00 7,000,00
0.00 0.00
Agricultural 0.00 0.00
Equipment
Co., Ltd.
211
Changchai Company, Limited Annual Report 2023
Changzhou
Fuji
Changchai
47,286,23 47,286,23
Robin
0.03 0.03
Gasoline
Engine Co.,
Ltd.
Jiangsu
Changchai 300,000,0 300,000,0
Machinery 00.00 00.00
Co., Ltd.
Changzhou
Xingsheng
1,000,000. 1,000,000.
Property
00 00
Managemen
t Co., Ltd.
Zhenjiang
Siyang
Diesel 33,520,80 7,170,00 40,690,80
Engine 0.00 0.00 0.00
Manufacturi
ng Co., Ltd.
569,273,5 7,000,00 7,170,00 576,443,5 7,000,00
Total
30.03 0.00 0.00 30.03 0.00
(2) Investment to Joint Ventures and Associated Enterprises
Unit: RMB
Increase/decrease for the current period
Begin Gains Endin
Adjus Cash
Begin ning and Endin g
tment bonus Withd
ning balan losses g balan
of or rawal
balan ce of Addit Redu recog Chan balan ce of
Invest other profit of
ce depre ional ced nized ges of Other ce depre
ee comp s impai
(carry ciatio invest invest under other s (Carr ciatio
rehen annou rment
ing n ment ment the equity ying n
sive nced provis
value) reserv equity value) reserv
incom to ion
e metho e
e issue
d
I. Joint ventures
Subto
0.00 0.00 0.00 0.00
tal
II. Associated enterprises
Beijin
g
44,18 44,18
Tsing 0.00 0.00
2.50 2.50
hua
Xingy
212
Changchai Company, Limited Annual Report 2023
e
Indust
rial
Invest
ment
Mana
geme
nt
Co.,
Ltd.
Subto 44,18 44,18
0.00 0.00
tal 2.50 2.50
44,18 44,18
Total 0.00 0.00
2.50 2.50
The recoverable amount is determined based on the net amount of the fair value minus disposal costs
□ Applicable √ Not applicable
The recoverable amount is determined by the present value of the forecasted future cash flow.
□ Applicable √ Not applicable
The reason for the discrepancy between the foregoing information and the information used in the impairment
tests in prior years or external information: Not applicable
The reason for the discrepancy between the information used in the Company's impairment tests in prior years and
the actual situation of those years: Not applicable
4. Operating Revenue and Cost of Sales
Unit: RMB
Reporting Period Same period of last year
Item
Operating revenue Cost of sales Operating revenue Cost of sales
Main operations 1,978,548,527.91 1,726,267,965.41 1,937,402,949.98 1,743,767,173.55
Other operations 78,572,385.42 61,861,919.26 51,070,094.57 40,578,530.55
Total 2,057,120,913.33 1,788,129,884.67 1,988,473,044.55 1,784,345,704.10
Breakdown information of operating income and operating cost:
Unit: RMB
Category of Segment 1 Total
contracts Operating Revenue Operating cost Operating Revenue Operating cost
Business Type
Of which:
Single-cylinder
1,099,244,653.24 938,065,401.52 1,099,244,653.24 938,065,401.52
diesel engines
Multi-cylinder
796,114,105.16 713,613,118.19 796,114,105.16 713,613,118.19
diesel engines
Other products 47,669,282.15 41,574,102.80 47,669,282.15 41,574,102.80
Fittings 35,520,487.36 33,015,342.90 35,520,487.36 33,015,342.90
213
Changchai Company, Limited Annual Report 2023
Classification by
operating region
Of which:
Sales in domestic
1,695,721,360.88 1,458,279,907.37 1,695,721,360.88 1,458,279,907.37
market
Export sales 282,827,167.03 267,988,058.04 282,827,167.03 267,988,058.04
Total 1,978,548,527.91 1,726,267,965.41 1,978,548,527.91 1,726,267,965.41
Information in relation to the transaction price apportioned to the residual contract performance obligation:
The amount of revenue corresponding to performance obligations of contracts signed but not performed or not
fully performed yet was RMB0 at the period-end.
5. Investment Income
Unit: RMB
Item Reporting Period Same period of last year
Dividend income from holding of other equity
11,482,380.00 9,360,000.00
instrument investment
Income from refinancing operations 28,498.48 136,003.96
Dividends under cost accounting 28,800,000.00
Interest income from holding of debt obligation
1,463,921.82 1,411,361.54
investments
Investment income from disposal of
7,022,401.48 5,408,606.17
held-for-trading financial assets
Accounts receivable financing-discount interest of
-4,894,619.98 -8,511,313.05
bank acceptance bills
Total 15,102,581.80 36,604,658.62
XVIII. Supplementary Materials
1. Items and Amounts of Non-recurring Profit or Loss
√ Applicable □ Not applicable
Unit: RMB
Item Amount Note
Due to the expropriation of houses on
the state-owned land of Changzhou
Gain or loss on disposal of non-current assets 105,702,551.01
Wuxing Branch during the Reporting
Period
Government grants charged to current
Government subsidies charged to current profit
profit and loss amounted to
or loss (exclusive of government subsidies
RMB6,419,303.33, the amount
given in the Company’s ordinary course of 3,009,573.87
deducting deferred income and charged
business at fixed quotas or amounts as per the
to current profit and loss was
government’s uniform standards)
RMB3,409,729.46.
214
Changchai Company, Limited Annual Report 2023
Increase in the fair value of the stocks
of Jiangsu Horizon New Energy
Technology Co., Ltd. held by the
Gain/loss from change of fair value of trading
Company, sales of stocks of Guilin
financial assets and liabilities, and investment
Stars Science and Technology Co., Ltd.
gains from disposal of trading financial assets
by the Company’s wholly-owned
and liabilities, and derivative financial assets 74,628,323.54
subsidiary Horizon Investment and
and liabilities, and available-for-sale financial
price rising of stocks of Jiangsu Liance
assets, other than valid hedging related to the
Electromechanical Technology Co.,
Company’s common businesses
Ltd. and Kailong High Technology Co.,
Ltd. held by the Company during the
Reporting Period
Reverse of provision for impairment of accounts
receivable individually conducting impairment 21,618.24
test
Other non-operating income and expenses other
-254,543.89
than the above
Less: Income tax effects 27,193,473.11
Non-controlling interests effects (after tax) -47,741.93
Total 155,961,791.59 --
Others that meets the definition of non-recurring gain/loss:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Explain the reasons if the Company classifies any extraordinary gain/loss item mentioned in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the
Public—Non-recurring Gains and Losses 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
3.19% 0.1537 0.1537
shareholders of the Company
Net profit attributable to ordinary
shareholders of the Company after
-1.40% -0.0676 -0.0676
deduction of non-recurring profit
or loss
215
Changchai Company, Limited Annual Report 2023
3. Differences between Accounting Data under Domestic and Overseas Accounting Standards
(1) Differences between Disclosed Net Profits and Net Assets in Financial Report in accordance with
International Accounting Standards and Chinese Accounting Standards
□ Applicable Not applicable
(2) Differences between Disclosed Net Profits and Net Assets in Financial Report in accordance with
Overseas Accounting Standards and Chinese Accounting Standards
□ Applicable Not applicable
(3) Explain Reasons for the Differences between Accounting Data Under Domestic and Overseas
Accounting Standards; for Any Adjustment Made to the Difference Existing in the Data Audited by the
Foreign Auditing Agent, Such Foreign Auditing Agent's Name Shall Be Clearly Stated
□ Applicable Not applicable
The Board of Directors
Changchai Company, Limited
12 April 2024
216
