CHANGCHAI COMPANY, LIMITED
INTERIM REPORT 2020
July 2020
Part I Important Notes, Table of Contents and Definitions
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misrepresentations, misleading statements or material omissions therein.
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ahnerdecboymgpulaertea.ntee that the Financial Statements carried in this Report are truthful, accurate
aAnlldtihtse sCumommpaarnyy. ’s directors have attended the Board meeting for the review of this Report
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sphraolml ibsees.sufficiently aware of the risk and shall differentiate between plans/forecasts and
The Company has no interim dividend plan, either in the form of cash or stock.
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shall prevail.
Table of Contents
Part I Important Notes, Table of Contents and Definitions........................................................... 2
Part II Corporate Information and Key Financial Information................................................... 5
Part III Business Summary............................................................................................................... 9
Part IV Operating Performance Discussion andAnalysis............................................................12
Part V Significant Events.................................................................................................................24
Part VI Share Changes and Shareholder Information................................................................. 33
Part VII Preferred Shares................................................................................................................39
Part VIII Convertible Corporate Bonds........................................................................................ 40
Part IX Directors, Supervisors and Senior Management.............................................................41
Part X Corporate Bonds.................................................................................................................. 43
Part XI Financial Statements.......................................................................................................... 44
Part XII Documents Available for Reference...............................................................................186
Definitions
Term Definition
““Cwhe”angchai”,the “Company” or sCuhbasnidgicahraieis,eCxocmepptawnyh,ereLtihmeicteodntexatnodtheirtwsisecorenqsouliirdeasted
Changchai Benniu Changzhou Changchai Benniu Diesel Engine Fittings Co.,Ltd.
Changchai Wanzhou Changchai Wanzhou Diesel Engine Co., Ltd.
Housheng Investment Changzhou Housheng Investment Co., Ltd.
Housheng Agricultural Equipment Changzhou Changchai Housheng Agricultural EquipmentCo.,Ltd.
Changchai Robin Changzhou Fuji Changchai Robin Gasoline Engine Co.,Ltd.
Changchai Machinery Jiangsu Changchai Machinery Co., Ltd.
Xingsheng Real Estate Management Changzhou Xingsheng Real Estate Management Co., Ltd.
RMB, RMB’0,000 Expressed in the Chinese currency of Renminbi, expressedintens of thousands of Renminbi
TPehreio“dR”eportingPeriod” or “Current The period from 1 January 2020 to 30 June 2020
Part II Corporate Information and Key Financial InformationI Corporate Information
Stockname Changchai, Changchai-B Stockcode 000570, 200570
Stockexchange forlisting Shenzhen StockExchange
Company name in Chinese 常柴股份有限公司
Abbr.(if any) 苏常柴
Company name in English (if CHANGCHAI COMPANY,LIMITED
any)
Abbr.(ifany) CHANGCHAI CO.,LTD.
Legalrepresentative Shi Xinkun
II Contact Information
Board Secretary Securities Representative
Name HeJianjiang
Officeaddress 123 Huaide Middle Road,
Changzhou, Jiangsu, China
Tel. （86）519-68683155
Fax （86）519-86630954
Emailaddress cchjj@changchai.com
III Other Information
1. Contact Information of the Company
Indicate by tick mark whether any change occurred to the registered address, office address and their zip codes,
website address and email address of the Company in the Reporting Period.
□ Applicable √ Not applicable
No change occurred to the said information in the Reporting Period, which can be found in the 2019 Annual
Report.
2. Media for Information Disclosure and Place where this Report is Lodged
Indicate by tick mark whether any change occurred to the information disclosure media and the place for lodging
the Company’s periodic reports in the Reporting Period.
□ Applicable √ Not applicable
The newspapers designated by the Company for information disclosure, the website designated by the CSRC for
disclosing the Company’s periodic reports and the place for lodging such reports did not change in the Reporting
Period. The said information can be found in the 2019 Annual Report.
IV Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
√ Yes □ No
Reason for retrospective restatement:
Correction of accounting error
H12020 H12019 Change (%)
Before Restated
Operating revenue 1,167,455,782.30 1,115,829,845.59 1,118,871,125.00 4.34%
(RMB)
Net profit attributable to
the listed company’s 27,690,311.06 19,058,025.07 19,117,635.69 44.84%
shareholders(RMB)
Net profit attributable to
the listed company’s
shareholders before 20,672,139.96 14,227,155.59 14,260,746.62 44.96%
exceptional gains and
losses(RMB)
Net cash generated
from/used in operating -20,354,729.25 -154,227,704.77 -153,321,492.87 ---
activities(RMB)
Basic earnings per share 0.0493 0.0339 0.0341 44.57%
(RMB/share)
Diluted earnings per 0.0493 0.0339 0.0341 44.57%
share(RMB/share)
Weighted average return 1.32% 0.97% 0.91% 0.41%
onequity(%)
30 June2020 31December 2019 Change (%)
Before Restated
Totalassets (RMB) 3,538,385,637.01 3,484,975,990.48 3,488,820,324.60 1.42%
Equity attributable to the
listed company’s 2,079,769,720.75 2,109,239,597.94 2,110,892,767.58 -1.47%
shareholders(RMB)
Reason for change in accounting policy and particulars about correction of accounting error:
For details, please refer to “1. Correction of Previous Accounting Error” under “XV Other Significant Events” of
“Part XI Financial Statements”.
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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.
VI Exceptional Gains and Losses
√ Applicable □ Not applicable
Unit: RMB
Item H12020 Note
Gain or loss on disposal of non-current assets (inclusive of impairment 9,252.03
allowance write-offs)
Government grants through profit or loss (exclusive of government grants
given in the Company’sordinary course of business at fixed quotas or amounts 2,657,218.07
asperthegovernment’suniform standards)
Capital occupation charges on non-financial enterprises that are through profit 257,714.14
orloss
Gain or loss on fair-value changes of held-for-trading and derivative financial
assets and liabilities & income from disposal of held-for-trading and derivative
financial assets and liabilities and other investments in debt obligations 5,384,597.04
(exclusive of the effective portion of hedges that arise in the Company’s
ordinarycourse ofbusiness)
Non-operating income andexpense otherthan theabove 95,387.43
Less:Income taxeffects 1,205,579.18
Non-controllinginterests effects(netoftax) 180,418.43
Total 7,018,171.10 --
Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined or 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.
Part III Business Summary
I Principal Activity of the Company in the Reporting Period
As a manufacturer, we specialize in the manufacture and sale of diesel engines, diesel engine fittings and castings,
gasoline engines, gasoline engine fittings, rotovators, walking tractors, molds and jigs as well as the assembly and
sale of diesel engine and gasoline engine supporting sets.
We mainly manufacture and sell small and medium-sized single-cylinder and multi-cylinder diesel engines under
the brand of “Changchai”, which are often used in tractors, combine-harvesters, light commercial vehicles,
agriculture equipment, small-sized engineering machinery, generator sets, marine engine, etc.
II Significant Changes in Major Assets
1. Significant Changes in MajorAssets
Major assets Main reasonforsignificant changes
Theending amount wasupbyRMB311,097,635.70(or74.19%) fromthebeginning
Accounts amount,primarily drivenbythepandemic andtheCompany’smove toproperlyallow
receivable customers’buying oncredit inorderformore markets, andthefactthatmulti-cylinder
dieselengine customers areusuallygiven longerpayment days forthey aremostly
supportingmanufacturers.
Othercurrent Theending amount wasupbyRMB2,155,687.32 (or33.57%) fromthebeginning amount,
assets primarily drivenbyanincrease inoverpaid VAT.
Investments in Theending amount wasdownbyRMB70,726,000.00 (or13.27%) fromthebeginning
otherequity amount,primarily drivenbydecreases intheprices oftheFotonandBank ofJiangsu
instruments stocksheld bytheCompany intheReporting Period.
Employee The ending amount was down by RMB25,601,360.24 (or 57.45%) from the beginning
benefitspayable amount, primarily driven by the partial payment in the current period of the accrued
salariesandbonuses inthepriorperiod.
2. Major Assets Overseas
□ Applicable √ Not applicable
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, ISO/TS16949 automotive product quality
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 “Jiangsu
Independent Industries Brand Top 50”for four years in a row. Also, it has been among the 10 users’ most satisfied
leading brands in “Jing Geng” competition for many years. In 2020, the Company was awarded the title of
“National Model Enterprise for Trustworthy Product and Service Quality”, among others. 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. Its 4G33TC diesel engine has been included in the provincial catalog of key new technologies and
products to be promoted. Its 4G33TC and 3M78 diesel engines have been recognized as “high-tech products” at
the provincial level. 4G33V16 has been recognized as an “Innovative Product of Changzhou Manufacturing”.
During the Reporting Period, the Company filed for 6 patents and was granted 11 patents. Currently, the Company
has a total of 139 patents granted by authorities at home and abroad, including 14 invention patents.
3. Advantages in Marketing
Changchai has built up a sales service network covering the whole country, with 5 sales business units, 27 sales
service centers, over 900 service stations and 750 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.
Changchai Company, Limited Interim Report 2020
Part IV Operating Performance Discussion and Analysis
I Overview
Agricultural equipment manufacturers suffered hardship in various degrees in the first half of 2020 due to the
COVID-19 pandemic. Under a severe market condition of complexity and volatility at home and abroad during
the Reporting Period, the Company sold 376,800 units of diesel engines, gasoline engines and related generator
sets, including 61,200 units of gasoline engines, generating total sales revenue of RMB1.167 billion, an increase
of 4.34% year-on-year. In the Reporting Period, the Company strengthened product advantages, accelerated
market expansion, and pushed forward product planning step by step. Also, it attached importance to service
management to increase service efficiency, and enhanced internal management for better cost efficiency. Through
these efforts, it has achieved the following results:
In terms of anti-pandemic efforts, the Company has set up a dedicated task force, which is responsible for the
implementation of anti-pandemic measures and the related daily work. The focus is on preparation and application
for resumption of work/production, as well as ensuring smooth logistics, component procurement and marketing
planning upon the resumption of work/production. Therefore, the pandemic did not have a significant impact on
the production and operation of the Company during the Reporting Period.
Concerning product development and innovation, the development of diesel engine under the National Emission
Standard IV for Non-Road Vehicles has been pushed forward. Meanwhile, the ongoing diesel outboard engine
program aims to develop lightweight, high-speed and low-emission diesel engine and steering gear for outboard
engines and fill the gap in respect of domestic diesel outboard engines.
With regard to quality management, the Company was ISO9001 and IATF16949 certified by China Jiuding
Automotive Supplier Certification Co., Ltd. in the first half of 2020.
In terms of marketing, the Company managed to make progress in respect of the domestic and overseas markets in
face of the significant challenges of the anti-pandemic work and seizing opportunities during the peak season for
sales. On the domestic market, the Company solidified its existing markets, worked harder on weaker markets,
and launched new products and explored new markets in different areas. As a result, the Company has maintained
its leading position industry-wide with a steadily enlarging market share. In addition, breakthrough was made in
respect of sales of key products in key markets. As for the overseas market, exports of diesel engines and the
Changchai Company, Limited Interim Report 2020
related generator sets saw a year-on-year increase. Meanwhile, the Company continued to expand the market
share of its strong products in major markets, as well as build trusted and harmonious partnerships with customers
and suppliers. Also, it actively dealt with market changes, grabbed market expansion opportunities, explored new
markets, and kept perfecting services. As a result, customer satisfaction is on the rise.
In terms of internal management, the Company reinforced the construction of internal control system and the
supervision of key projects. By deepening the medium-term special audit, it improved risk prevention and control
ability and the quality of internal audit work. As timely measures are taken to solve problems, operational
efficiency of the Company is improved.
During the Reporting Period, construction of Changchai Machinery was in full swing and proceeded smoothly. In
mid April, the Company launched a private placement project of 2020, and the plan was approved at a general
meeting on 8 May 2020.
II Core Business Analysis
See “I Overview” above.
Year-on-year changes in key financial data:
Unit: RMB
H1 2020 H12019 Change Mainreason
(%) forchange
Operatingrevenue 1,167,455,782.30 1,118,871,125.00 4.34%
Costofsales 985,842,718.68 972,984,773.54 1.32%
Sellingexpense 63,392,358.52 58,258,398.98 8.81%
Administrative expense 35,609,030.74 34,560,062.30 3.04%
Financecosts -719,659.98 -1,784,425.33 ---
Incometaxexpense 2,397,311.58 -2,994,995.32 ---
R&Dexpense 32,338,250.78 30,064,283.46 7.56%
Net cash generated from/used in -20,354,729.25 -153,321,492.87 ---
operatingactivities
Net cash generated from/used in -29,393,973.49 -19,266,446.34 ---
investingactivities
Net cash generated from/used in -2,212,485.64 -22,977,861.20 ---
financingactivities
Net increase in cash and cash -52,322,640.40 -195,565,800.41 ---
equivalents
Significant changes to the profit structure or sources of the Company in the Reporting Period:
Changchai Company, Limited Interim Report 2020
□ Applicable √ Not applicable
No such changes in the Reporting Period.
Breakdown of operating revenue:
Unit: RMB
H12020 H12019
As%of As%of
total total Change(%)
Operating revenue operating Operating revenue operating
revenue revenue (%)
(%)
Total 1,167,455,782.30 100% 1,118,871,125.00 100% 4.34%
Byoperating division
Internal
combustion 1,149,231,063.13 98.44% 1,099,044,681.77 98.23% 4.57%
engines
Other 18,224,719.17 1.56% 19,826,443.23 1.77% -8.08%
Byproduct category
Dieselengines 1,077,428,497.56 92.29% 1,030,299,707.19 92.08% 4.57%
Gasoline 62,530,025.78 5.36% 68,744,974.58 6.14% -9.04%
engines
Other 27,497,258.96 2.36% 19,826,443.23 1.77% 38.69%
Byoperating segment
Domestic 1,014,992,139.15 86.94% 965,909,049.72 86.33% 5.08%
Overseas 152,463,643.15 13.06% 152,962,075.28 13.67% -0.33%
Operating division, product category or operating segment contributing over 10% of operating revenue or
operating profit:
√ Applicable □ Not applicable
Unit: RMB
YoY YoY
Gross change in YoYchange changein
Operatingrevenue Cost ofsales profit operating incostof gross
margin revenue sales(%) profit
(%) margin
(%)
Byoperating division
Internal 1,149,231,063.13 974,846,243.01 15.17% 4.57% 1.66% 2.42%
combustion
Changchai Company, Limited Interim Report 2020
engines
Byproduct category
Denigesineels 1,077,428,497.56 913,843,345.73 15.18% 4.57% 1.36% 2.69%
Gasoline 62,530,025.78 50,693,980.80 18.93% -9.04% -11.63% 2.38%
engines
Byoperating segment
Domestic 1,014,992,139.10 837,693,796.58 17.47% 5.08% 1.63% 2.81%
Overseas 152,463,643.20 148,148,922.10 2.83% -0.33% -0.36% 0.03%
Any over 30% YoYmovements in the data above and why:
□ Applicable √ Not applicable
III Analysis of Non-Core Businesses
□ Applicable √ Not applicable
IV Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB
H1 2020 H12019 Changein Reason
As %of As%of foranypercentag
Amount total Amount total significante(%)
assets assets change
Monetary 600,274,769.45 16.96% 630,563,081.85 17.30% -0.34%
assets
Accounts 730,399,692.57 20.64% 743,300,388.85 20.39% 0.25%
receivable
Inventories 428,205,070.52 12.10% 480,126,259.50 13.17% -1.07%
Investment 47,343,496.43 1.34% 49,551,837.23 1.36% -0.02%
property
Fixedassets 437,411,354.41 12.36% 473,252,963.64 12.98% -0.62%
Construction in 103,006,376.02 2.91% 80,277,379.05 2.20% 0.71%
progress
Short-term 22,000,000.00 0.62% 22,000,000.00 0.60% 0.02%
borrowings
Changchai Company, Limited Interim Report 2020
2. Assets and Liabilities at Fair Value
√ Applicable □ Not applicable
Unit: RMB
Gain/loss Cumulativ Impairme Purchas
on e nt edin
Beginni fair-value fair-value allowance the Soldinthe Other Ending
Item ng changes changes madein Reporti Reporting changes amount
amount inthe through the ng Period
Reporting equity Reporting Period
Period Period
Financial
assets
1.
Held-for-t
rading
financial
assets 13,050, 17,722, 16,172,956. 14,600,000.0
(exclusive 000.00 956.16 16 0
of
derivative
financial
assets)
2.
Derivativ
efinancial
assets
3.Other
creditor's 77,952, 77,952,101.6
rights 101.63 3
investmen
t
4.
Investmen
tsinother 532,886 -70,235,0 302,776,50 491,000.00 462,160,000.
equity ,000.00 00.00 0.00 00
instrumen
ts
Subtotal
of 623,888 -70,235,0 302,776,50 0.00 17,722, 16,663,956. 0.00 554,712,101.
financial ,101.63 00.00 0.00 956.16 16 63
assets
Changchai Company, Limited Interim Report 2020
Total of 623,888 -70,235,0 302,776,50 0.00 17,722, 16,663,956. 0.00 554,712,101.
theabove ,101.63 00.00 0.00 956.16 16 63
Financial 0.00 0.00
liabilities
Significant changes to the measurement attributes of the major assets in the Reporting Period:
□ Yes √ No
3. Restricted Asset Rights as at the Period-End
Item Ending carrying amount Reasonfor restriction
Security depositforbank
Monetaryassets 106,637,411.65 acceptance bill,
environment-related security
deposit, etc.
Buildings 9,933,008.28 Collateral forbankloan
Landuseright 989,620.82 Collateral forbankloan
Plantandequipment 38,139,602.80 Collateral forbankloan
Total 155,699,643.55 --
V Investments Made
1. Total Investment Amount
√ Applicable □ Not applicable
Totalinvestment amount inthe Totalinvestment amount inthe Change
Reporting Period(RMB) same periodoflastyear (RMB)
35,000,000.00 10,000,000.00 250.00%
2. Major Equity Investments Made in the Reporting Period
√ Applicable □ Not applicable
Unit: RMB
Typ Inve Anti Inves Any Inde
Way Am The Ter eof stm cipa tmen legal Date x(if
Prin of ount Co Fun Co-i mof the ent ted t matte (if any)
Inve cipal inve of mpa ding nves inve inve pro retu inco r any) to
stee activ inve ny’s sour stee’ gres rn me/l invol ofstmetor stme discl
ity stme inter ce s sas on oss ved disclntnt osed
nt est prod of inve inthe or osure infor
ucts the stm Repo not mati
Changchai Company, Limited Interim Report 2020
bala ent rting on
nce Perio
shee d
t
date
Inter Inter
nal nal
Jian com com
gsu busti bust The
Cha on ion inpu
ngch engi Capi 35,0 engi t 26
ai ne, tal 00,0 100. Self Non Lon ne, has -674, Febr 2019
Mac relat incr 00.0 00% -fun e g-ter relat bee 0.00 563.2 Not uary -004
hiner ed ease 0 ded m ed n 3 2019
y gene gene mad
Co., rator rator e
Ltd. sets sets
and and
parts part
s
35,0 -674,
Total -- -- 00,0 -- -- -- -- -- -- 0.00 563.2 -- -- --
00.0 3
0
3. Major Non-Equity Investments Ongoing in the Reporting Period
□ Applicable √ Not applicable
4. Financial Assets at Fair Value
√ Applicable □ Not applicable
Unit: RMB
Goaninf/aloirssAccumulat Alcactuemdu
Initial value edfair Purchased SoldinTypeof return Ending Funding
assets iennvtecsotmstchinanthgeeschvaanlugeesReipnotrhteingRepthoertin on amount source
RePpeorirotidngreceoqrudietydin Period gPeriod inveensttm
Stock 59,874, -70,235,0 302,776,50 0.00 491,000. 0.00 362,160, Self-fun
500.00 00.00 0.00 00 000.00 ded
Total 59,874, -70,235,0 302,776,50 0.00 491,000. 0.00 362,160,
Changchai Company, Limited Interim Report 2020
500.00 00.00 0.00 00 000.00
5. Financial Investments
(1) Securities Investments
√ Applicable □ Not applicable
G/loasinsAccu
on mulaInitiaAcco
Varie Code Nam l ungtin Bnneignivfaaliureftaeidr PhausrecSionld G/loasinsEndi Acco
ty of of eof inves meas cagrry cgheasnvcahlaunedthien Rtehpeo tihne canrgryuntin Fund
secur secur secur tmen urem ing in ges Repo rting Repo ing g ing
ity ity ity tcost meoendtthaumnotRtehpeordeicenodrPrteidrnigoPedrio Prteirnigoaumnot title sours
Prteinrigoequit d
d y
Inves
tmen
Dom Foto 41,7 Fair 218, tin
estic/ 6001 n 84,0 value 302, -41,9 316, 260, other Self-
forei 66 Moto 00.0 meth 005, 05,0 000. 0.00 0.00 0.00 100, equit fund
gn r 0 od 000. 00.0 00 000. y ed
stock 00 0 00 instr
ume
nts
Inves
tmen
Dom Bank 18,0 Fair 84,0 tin
estic/ 6009 of 00,0 value 130, -28,2 60,0 102, other Self-
forei 19 Jiang 00.0 meth 320, 60,0 00.0 0.00 0.00 0.00 060, equit fund
gn su 0 od 000. 00.0 0 000. y ed
stock 00 0 00 instr
ume
nts
Inves
Dom Jiang Fair tmen
estic/ 6003 su 90,5 value 561, -70,0 400, 491, tin Self-
forei 77 Expr 00.0 meth 000. 00.0 500. 0.00 000. 0.00 0.00 other fund
gn essw 0 od 00 0 00 00 equit ed
stock ay yinstr
ume
Changchai Company, Limited Interim Report 2020
nts
59,8 432, -70,2 302, 362,
Total 74,5 -- 886, 35,0 776, 491, 0.00 160, -- --
00.0 000. 00.0 500. 0.00 000. 000.
0 00 0 00 00 00
(2) Investments in Derivative Financial Instruments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VI Sale of Major Assets and Equity Investments
1. Sale of Major Assets
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Sale of Major Equity Investments
□ Applicable √ Not applicable
VII Principal Subsidiaries and Joint Stock Companies
√ Applicable □ Not applicable
Principal subsidiaries and joint stock companies with an over 10% effect on the Company’s net profit:
Unit: RMB
RheiplawtioitnhsPrincipal Registere Total Net Operatin Operati
Name activity ng Netprofitthedcapital assets assets grevenue
Company profit
Productio
n of
Changchai Subsidiar diesel 55,063,0 164,355, 83,894,9 92,503,7 -1,831, -2,021,996.
Benniu y engine 00.00 399.94 20.92 40.84 537.46 78
accessori
es
Changchai Subsidiar Diesel 85,000,0 75,765,2 49,503,9 24,477,8 532,60 469,127.87
Changchai Company, Limited Interim Report 2020
Wanzhou y engine 00.00 27.77 99.68 50.44 4.77
assembly
External
Housheng Subsidiar investme 40,000,0 49,170,5 48,492,5 257,714. 478,88
Investment y ntand 00.00 24.30 67.66 14 0.89 462,854.73
consultin
g
agricultur
Housheng al
Agricultura Subsidiar machiner 10,000,0 29,435,9 243,296. 9,272,53 -203,34 -203,349.5
l y yproduct 00.00 71.32 31 9.79 9.52 2
Equipment ofrice
transplant
er etc.
Changchai Subsidiar Gasoline 37,250,0 107,835, 95,480,8 63,592,8 7,021,9 5,389,413.
Robin y engines 00.00 812.75 49.44 47.45 35.38 72
assembly
Internal
Changcha combusti
i Subsidiar onengine 300,000, 44,028,9 43,931,8 -666,98 -674,563.2
Machiner y and 000.00 90.43 40.43 0.00 4.39 3
y related
accessori
es
Xingsheng Real
RealEstate Subsidiar estate 1000,000 5,837,62 3,326,06 2,814,13 727,98 691,225.28
Manageme y service .00 9.06 1.10 2.29 9.50
nt
Subsidiaries obtained or disposed of in the Reporting Period:
□ Applicable √ Not applicable
VIII Structured Bodies Controlled by the Company
□ Applicable √ Not applicable
IX Operating Performance Forecast for January-September 2020
Warning of a forecast negative net profit for the January-September period of the current year or a considerable
YoY change therein, as well as the reasons:
□ Applicable √ Not applicable
Changchai Company, Limited Interim Report 2020
X Risks Facing the Company and Countermeasures
1. Market risk
With fierce competition, over-capacity of some traditional products and the total available market of the single
cylinder engine were in a decline tendency as well as the demand from the industry was insufficient. And the
profitability of the enterprises faced with rather great pressure. In the future, emission standards of internal
combustion engines will be further updated and air pollution control will be further stringent. Safety production
and environmental protection will be normalized, and the industry will still be in a period of deep adjustment.
Countermeasures: Firstly, to continue to optimize product and market structures and strengthen the market
foundation to domestic and foreign markets. Secondly, to dedicate to product development and upgrading and to
proactively expand new supporting areas. Thirdly, to fully focus on market quality matters and to improve market
reputation with sound measures. Fourthly, to continue to drive the progress of key technological improvement
projects and build Changchai Industry Park with high standards. Fifthly, to make tangible efforts to reinforce lean
management to promote quality improvement, cost reduction and efficiency enhancement. Sixthly, to make full
use of the capital market to perform capital operation and assist corporate development. Finally, to improve the
quality of employees and provide human resources support for company development.
2. Industrial risk:
The rapid development of new energy vehicles is bound to affect the traditional fuel automobile industry and its
industrial chain, specifically; it will directly affect the engine and gearbox manufacturing industry, and generate a
greater impact on the traditional gasoline and diesel engine industry. Although the maturity of related industries in
the field of new energy may take years, more than a decade or even longer for transition, the trend is inevitable. In
response to the upgrading of emission standards and the rapid development of new energy industries, enterprises
in the traditional internal-combustion engine industry need to seek new development opportunities to shift
industrial risks.。
Countermeasures: The first measure is to prepare layout in new energy industries in advance to seize the
opportunity for industry development. The second one is to increase the R&D intensity of new products that meets
the standards of non-road national Grade IV and other new products, increase product emission standards, and
take advanced diesel engine products as the basis of the Company to explore the development direction of new
industries and meet the industrial upgrading and transformation.
3. Policy risk:
Changchai Company, Limited Interim Report 2020
The macro-economic environment is complex and changeable, economic growth is slowing down. Influencing
factors are increasing due to the epidemic. and the policy on the diesel engine emissions is becoming stricter and
stricter, which increased the operating difficulties and the pressure. As such, the market demands for some
products of the Company will be affected to some extent.
Countermeasures: The Company will pay close attention to the government’s economic macro-control policies
and market developments. To promote the work such as “promote the products upgrade and quality enhancing”, to
embrace the upgrading of the engine emission standards, to accelerate the forging of the new “Standard V”
platform, and to execute the necessary products resources reserves in advance.
4. Foreign trade risk:
Against the backgrounds of complex and changeable global economic environment and increasing trade conflicts,
the epidemic brings more tough challenges to the operation of foreign trades. The export of products is affected to
some extent due to increasing unstable factors.
Countermeasures: The Company will timely pay attention to changes of global markets, communicate with
customers regarding countermeasures in time and reasonably avoid exchange rate risks.
5. Talent risk:
As the Company keeps, in recent years, improving operational efficiency and technological innovation to cope
with the increasingly fierce market competition and industry development trend, the demand for professional and
senior management personnel is greatly increased.
Countermeasures: Firstly, introduce all kinds of high-ranking talents through varieties of channels and strengthen
personnel training. Secondly, the Company also makes optimization in the performance appraisal system and
incentive pay system and strengthens the training of employees to reduce the loss of professionals and strengthens
personnel for the construction of talented personnel teams.
Changchai Company, Limited Interim Report 2020
Part V Significant Events
I Annual and Extraordinary General Meeting Convened during the Reporting Period
1. General Meetings Convened during the Reporting Period
Investor Indexto
Meeting Type participatio Dateofthemeeting Dateofdisclosure disclosed
nratio informati
on
TheFirst Extraordinary
Extraordinary General 31.35% 16April 2020 17April2020 2020-026
GeneralMeeting of Meeting
2020
The2019Annual Annual
GeneralMeeting General 34.88% 8May2020 9May2020 2020-036
Meeting
2. Extraordinary General Meetings Convened at the Request of Preference Shareholders with Resumed
Voting Rights
□ Applicable √ Not applicable
II Interim Dividend Plan
□ Applicable √ Not applicable
The Company has no interim dividend plan, either in the form of cash or stock.
AIIcIqCuoirmerms,itamsewnetsll oafs tthhee CCoommppaannyy’sItDseelfFaancdtoOCthoenrtrEonllteirti,eSshFaurlefhilolelddeirns,thReeRlaetepdorPtianrgtiPeserainodd
or Ongoing at the Period-End
√ Applicable □ Not applicable
Date Term
Type of of
Commitment Prom of Detailsofcommitment com com Fulfill
isor comm mitm mentmitm
itment ent ent
maki
Changchai Company, Limited Interim Report 2020
ng
RewardsPlan for Shareholders in Next
ThreeYears(2020-2022)
Under the premise of positive
distributive profit (remaining after-tax
profitsafter making up for the loss and
extractingfor the common reserves) in
Chan this year or half year and abundant
Other commitments gchai money flow and no influence on the 8 Year
made to minority pCaonmy,bonus following-up going concern after cash May 2020 Ongoi
shareholders Limit bevoenruys,yetahreshporuolfditns’tablelolcoawteedrthbayn1ca0s%h2020 2-202 ng
ed of the allocable profits from parent
company.Meanwhile, the accumulated
allocableprofits by cash in the arbitrary
continuous three accounting years
should not be lower than 30% of the
annualaverage allocable profits in those
threeyears.
Fulfilledon timeornot Yes
Specific reasons for
failing to fulfill
commitments on time N/A
and plans for next step
(ifany)
IV Engagement and Disengagement of Independent Auditor
Are the interim financial statements audited?
√ Yes □ No
Nameofthedomestic independent auditor GongzhengTianyeCertified PublicAccountants
(SpecialGeneral Partnership)
Feepayable bytheCompany tothedomestic independent
auditorfortheaudit oftheinterim financialstatements 50
(RMB’0,000)
Indicate by tick mark whether the independent auditor was changed for the interim financial statements compared
to the independent auditor for the 2019 annual financial statements.
□ Yes √ No
Changchai Company, Limited Interim Report 2020
tVheEIxnpdlaenpaentidoennstGAivuednitobry'sth“eMBodoaifrieddoOf Dpiinrieocnto”rosnanthdetFheinSanucpiearlvSistoarteymCeonmtsmoifttteheeRReegpaorrdtiinngg
Period
□ Applicable √ Not applicable
V“MI oEdxifpileadnOatpioinnisonG”ivoennthbeyFitnhaencBioaal rSdtatoefmDenirtescotforLsasRt eYgeaarrding the Independent Auditor's
□ Applicable √ Not applicable
VII Insolvency and Reorganization
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VIII Legal Matters
Significant lawsuits and arbitrations:
√ Applicable □ Not applicable
Index
Involved Date to
General amount Provision Progress Decisionsand Execution of of disclos
information (RMB’0, effects decisions disclos ed
000) ure inform
ation
Aboutthelawsuit
caseofShandong
HongliGroupCo.,
Ltd.,theaccused Underthe
companyowed compulsory
accumulatively Judged executionby
RMB14.36million forthe thecourt and
totheCompany. 1,436 No N/A
TheCompany sued second intheprocess
toChangzhou trial ofliquidation
Intermediate and
People’sCourtin bankruptcy
2001andsued for
compulsory
executioninApril,
Changchai Company, Limited Interim Report 2020
2002.Currently,
thedefendant has
startedthe
bankruptcy
procedure.
Other legal matters:
□ Applicable √ Not applicable
IX Doubts from Media
□ Applicable √ Not applicable
The Company had no issues about which media generally raised doubts in the Reporting Period.
X Punishments and Rectifications
□ Applicable √ Not applicable
No such cases in the Reporting Period.
CXIonCtrroeldleirt Quality of the Company as well as its Controlling Shareholder and De Facto
√ 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.
XfoIrIEEmqpuliotyyeIenscentive Plans, Employee Stock Ownership Plans or Other Incentive Measures
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XIII Major Related-Party Transactions
1. Continuing Related-Party Transactions
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Changchai Company, Limited Interim Report 2020
2. Related-Party Transactions Regarding Purchase or Disposal of Assets or Equity Investments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Related-Party Transactions Regarding Joint Investments in Third Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Amounts Due to and from Related Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
5. Other Major Related-Party Transactions
□ Applicable √ Not applicable
No such cases in the Reporting Period.
RXIeVlateOdcPcuaprtaiteisonforofNothne-OCpoemraptianngy’PsurCpaopsietsal by the Controlling Shareholder or any of Its
□ 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
Changchai Company, Limited Interim Report 2020
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
(1) Guarantees
Unit: RMB'0,000
Guaranteesprovided by theCompany forexternal parties (exclusive ofthoseforsubsidiaries)
Disclos Actual Guara
uredate occurrence Havin ntee
Guarantee-rec ofthe Lineof date Actual Typeof Termof g fora
eivingentity guarant guarant guarantee guarantee guarantee expire related
ee line ee (agreement amount dor
anemnoeunntc sidgantien)g not opranrtoyt
Guaranteesprovided bytheCompany astheparent foritssubsidiaries
Disclos Actual Guara
uredate occurrence Havin ntee
Guarantee-rec ofthe Lineof date Actual Typeof Termof g fora
eivingentity geuealriannetguaereant (agreement gaumaroaunnteteguarantee guarantee exdpoirrerelated
announc signing not party
date) ornotement
Changzhou
Changchai 25
Housheng Novem 2,000 16April 2,000 Joint 1year No No
Agricultural ber 2020 liability
Equipment 2019
Co.,Ltd.
Total approved line for Total actual amount of
such guarantees in the 2,000 such guarantees in the 2,000
ReportingPeriod (B1) Reporting Period(B2)
Total approved line for 2,000 Total actual balance of 2,000
Changchai Company, Limited Interim Report 2020
such guarantees at the such guarantees at the
end of the Reporting end of the Reporting
Period(B3) Period(B4)
Guarantees between subsidiaries
Disclos Actual Guara
uredate occurrence Havin ntee
Guarantee-rec ofthe Lineof date Actual Typeof Termof g fora
eivingentity geuealriannetguaereant (agreement gaumaroaunnteteguarantee guarantee exdpoirrerelated
signing partyannouncnot
date) ornotement
Totalguarantee amount (totalofthethree kindsofguarantees above)
Total guarantee line Total actual guarantee
approved in the Reporting 2,000 amount in the Reporting 2,000
Period(A1+B1+C1) Period(A2+B2+C2)
Total approved guarantee Total actual guarantee
line at the end of the 2,000 balance at the end of the 2,000
Reporting Period Reporting Period
(A3+B3+C3) (A4+B4+C4)
Totalactualguarantee amount (A4+B4+C4) as%of 0.96%
theCompany’snetassets
Ofwhich:
Balance of guarantees provided for shareholders, 0
thedefacto controller andtheir related parties (D)
Balanceofdebtguarantees provided directly or
indirectly forentities withanover70% debt/asset 2,000
ratio(E)
Amountbywhich thetotalguarantee amount 0
exceeds50%oftheCompany’snetassets (F)
Totalofthethree amounts above (D+E+F) 2,000
Possibilityofhaving toexecute joint liability on N/A
outstandingguarantees (ifany)
Irregularities intheprovision ofguarantees to N/A
externalparties (ifany)
(2) Irregularities in the Provision of Guarantees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Changchai Company, Limited Interim Report 2020
3. Cash Entrusted for Wealth Management
√ Applicable □ Not applicable
Unit: RMB’0,000
Type Fundingsource Amount Undue amount Unrecovered
overdue amount
Brokerfinancial Self-funded 1,462.29 1,150 0
products
Total 1,462.29 1,150 0
High-risk wealth management transactions with a significant single amount, or with low security, low liquidity or
no principal protection:
□ Applicable √ Not applicable
Situation where the principal is expectedly irrecoverable or an impairment may be incurred:
□ Applicable √ Not applicable
4. Other Significant Contracts
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XVI Corporate Social Responsibility (CSR)
1. Major Environmental Issues
Is the Company or any of its subsidiaries identified as a key polluter by the environment authorities?
No.
The Company and its subsidiaries are not the major polluter identified by the environmental protection authorities
of China during the Reporting Period. The Company attaches great importance to the work of environmental
protection, and requires the subsidiaries to build corresponding environmental protection facilities according to
the actual situation of production and operation, strictly controlling the pollutants, like “waste gas, waste water,
and waste residue” generated from the production process.
2. Measures Taken for Targeted Poverty Alleviation
The Company did not take any targeted measures to help people lift themselves out of poverty during the
Reporting Period, also no subsequent plans.
Changchai Company, Limited Interim Report 2020
XVII Other Significant Events
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XVIII Significant Events of Subsidiaries
□ Applicable √ Not applicable
Changchai Company, Limited Interim Report 2020
Part VI Share Changes and Shareholder Information
I Share Changes
1. Share Changes
Unit: share
Before Increase/decrease intheReporting After
Period(+/-)
Sha
res
as Shares
divi as
den dividen S
Percenta New d d Ot u Percen
Number ge(%) issues con convert her bt Number tage
vert edfrom ot (%)
ed capital al
fro reserve
m s
pro
fit
1.Restricted shares 0 0.00% 0 0.00%
1.1 Shares held by 0 0.00% 0 0.00%
government
1.2 Shares held by 0 0.00% 0 0.00%
state-owned legal persons
1.3 Shares held by other 0 0.00% 0 0.00%
domesticinvestors
Among which: Shares
held by domestic legal 0 0.00% 0 0.00%
persons
Shares
held by domestic natural 0 0.00% 0 0.00%
persons
1.4 Shares held by 0 0.00% 0 0.00%
foreigninvestors
Among which: Shares
held by foreign legal 0 0.00% 0 0.00%
persons
Changchai Company, Limited Interim Report 2020
Shares
held by foreign natural 0 0.00% 0 0.00%
persons
2.Unrestricted shares 561,374,32 100.00% 561,374, 100.00
6 326 %
2.1 RMB-denominated 411,374,32 73.28% 411,374, 73.28
ordinaryshares 6 326 %
2.2 Domestically listed 150,000,00 26.72% 150,000, 26.72
foreignshares 0 000 %
2.3Oversea listed foreign 0 0.00% 0 0.00%
shares
2.4Other 0 0.00% 0 0.00%
3.Totalshares 561,374,32 100.00% 561,374, 100.00
6 326 %
Reasons for the share changes:
□ Applicable √ Not applicable
Approval of the share changes:
□ Applicable √ Not applicable
Transfer of share ownership:
□ Applicable √ Not applicable
Progress on any share repurchase:
□ Applicable √ Not applicable
Progress on reducing the repurchased shares by means of centralized bidding:
□ Applicable √ Not applicable
Effects of the 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
Changchai Company, Limited Interim Report 2020
II Issuance and Listing of Securities
□ Applicable √ Not applicable
III Shareholders and Their Holdings as at the Period-End
Unit: share
Number of ordinary 46,936 Number of preference shareholders 0
shareholders withresumed votingrights(ifany)
5% orgreater ordinary shareholders orthetop10ordinary shareholders
Increa Shares in
Shareh se/dec Unrestrict pledge or
Nameof Nature of olding Ordinary rease Restricted ed frozen
shareholder shareholder percent shares held inthe ordinary ordinary
age Repor shares held shares Sh
ting held Status are
Period s
Changzhou State-owned 170,845,23 170,845,2
Investment Group legal person 30.43% 6 36
Co.,Ltd
China
Construction
Bank
Corporation-First
StateCinda New Other 1.70% 9,554,765 9,554,765
EnergyIndustry
StockType
Securities
Investment Fund
KGIAsiaLimited Foreign 0.57% 3,189,845 3,189,845
legalperson
China
Construction
Bank
Corporation-First
StateCinda
Advanced Other 0.44% 2,488,474 2,488,474
Intelligent
Manufacturing
StockType
Securities
Investment Fund
Changchai Company, Limited Interim Report 2020
Bankof
Communications
Co.,Ltd.-First
StateCinda Core Other 0.30% 1,676,500 1,676,500
Technologies
MixedType
Securities
Investment Fund
Domestic
HuWenyong natural 0.28% 1,561,866 1,561,866
person
Domestic
LiSuinan natural 0.27% 1,540,400 1,540,400
person
Domestic
HuangGuoliang natural 0.27% 1,528,891 1,528,891
person
Domestic
XueHong natural 0.24% 1,332,700 1,332,700
person
Domestic
ChenHengjun natural 0.23% 1,276,500 1,276,500
person
Strategic investor or general
legal person becoming a top-10 None
ordinary shareholder in a rights
issue(ifany)
Related or acting-in-concert It is unknown whether there is among the top 10 public shareholders and
parties among the shareholders the top 10 unrestricted public shareholders any related parties or
above acting-in-concert parties as defined in the Administrative Measures for
InformationRegarding ShareholdingAlteration.
Top10unrestricted shareholders
Nameofshareholder Unrestricted ordinary sharesheld Shares byclass
Class Shares
ChangzhouInvestment Group 170,845,236 RMB-denominated 170,845,236
Co.,Ltd ordinary share
ChinaConstruction Bank
Corporation-First StateCinda 9,554,765 RMB-denominated 9,554,765
NewEnergyIndustry StockType ordinary share
Securities Investment Fund
Changchai Company, Limited Interim Report 2020
KGIAsiaLimited 3,189,845 Domestically listed 3,189,845
foreign share
ChinaConstruction Bank
Corporation-First StateCinda RMB-denominated
Advanced Intelligent 2,488,474 ordinary share 2,488,474
Manufacturing StockType
Securities Investment Fund
BankofCommunications Co.,
Ltd.-First State Cinda Core 1,676,500 RMB-denominated 1,676,500
TechnologiesMixedType ordinary share
Securities Investment Fund
HuWenyong 1,561,866 Domestically listed 1,561,866
foreign share
LiSuinan 1,540,400 Domestically listed 1,540,400
foreign share
HuangGuoliang 1,528,891 Domestically listed 1,528,891
foreign share
XueHong 1,332,700 Domestically listed 1,332,700
foreign share
ChenHengjun 1,276,500 RMB-denominated 1,276,500
ordinary share
Related or acting-in-concert
parties among the top 10 It is unknown whether there is among the top 10 public shareholders and
unrestricted ordinary the top 10 unrestricted public shareholders any related parties or
shareholders, as well as between acting-in-concert parties as defined in the Administrative Measures for
the top 10 unrestricted ordinary Information Regarding ShareholdingAlteration.
shareholders and the top 10
ordinaryshareholders
Top 10 ordinary shareholders
involved in securities margin None
trading(ifany)
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.
IV Change of the Controlling Shareholder or the De Facto Controller
Change of the controlling shareholder in the Reporting Period
Changchai Company, Limited Interim Report 2020
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Change of the de facto controller in the Reporting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Changchai Company, Limited Interim Report 2020
Part VII Preference Shares
□ Applicable √ Not applicable
No preference shares in the Reporting Period.
Changchai Company, Limited Interim Report 2020
Part VIII Convertible Corporate Bonds
□ Applicable √ Not applicable
No convertible corporate bonds in the Reporting Period.
Changchai Company, Limited Interim Report 2020
Part IX Directors, Supervisors and Senior Management
I Change in Shareholdings of Directors, Supervisors and Senior Management
□ Applicable √ Not applicable
No changes occurred to the shareholdings of the directors, supervisors and senior management in the Reporting
Period. See the 2019 Annual Report for more details.
II Change of Directors, Supervisors and Senior Management
√ Applicable □ Not applicable
Name Officetitle Typeof Dateofchange Reason forchange
change
Shi Director,Deputy Leaving for
Jianchun General expiration of 16April2020 Left forexpiration oftheterm
Manager theterm
Zhang Leaving for
Qiong Director expiration of 16April2020 Left forexpiration oftheterm
the term
Feng Independent Leaving for
Genfu Director expiration of 16April2020 Left forexpiration oftheterm
the term
Independent Leaving for
JiaBin Director expiration of 16April2020 Left forexpiration oftheterm
the term
Li Independent Leaving for
Minghui Director expiration of 16April2020 Left forexpiration oftheterm
the term
Leaving for
ZhuMin Supervisor expiration of 16April2020 Left forexpiration oftheterm
the term
Xie Leaving for
Guozho Supervisor expiration of 16April2020 Left forexpiration oftheterm
ng theterm
Liu DeputyGeneral Leaving for
Xiaoyun Manager expiration of 16April2020 Left forexpiration oftheterm
the term
Changchai Company, Limited Interim Report 2020
Wei DeputyGeneral Leaving for
Jinxiang Manager expiration of 16April2020 Left forexpiration oftheterm
the term
XuYi Director Appointment 16April2020 Elected
JiangHe Director,Chief Appointment 16April2020 Elected andrecruited
Accountant
Yang Director Appointment 16April2020 Elected
Feng
Wang Independent
Mancan Director Appointment 16April2020 Elected
g
Xing Independent Appointment 16April2020 Elected
Min Director
Zhang Independent Appointment 16April2020 Elected
Yan Director
Chen Supervisor Appointment 16April2020 Elected
Lijia
Ge Supervisor Appointment 16April2020 Elected
Jiangli
Xie DeputyGeneral
Guozho Manager Recruitment 16April2020 Recruited
ng
Sun DeputyGeneral
Jianzhon Manager Recruitment 16April2020 Recruited
g
Changchai Company, Limited Report 2020 Interim
Part X Corporate Bonds
Does the Company have any corporate bonds publicly offered on the stock exchange, which were
outstanding before the date of this Report’s approval or were due but could not be redeemed in full?
No.
Changchai Company, Limited Report 2020 Interim
Part XI Financial Statements
I Independent Auditor’s Report
Are these interim financial statements audited by an independent auditor?
√ Yes □ No
Typeoftheaudit opinion Unmodified unqualified opinion
Dateofsigningtheindependent auditor’sreport 29July 2020
Nameoftheaudit firm GongzhengTianyeCertified PublicAccountants
(Special General Partnership)
Referencenumber oftheindependent auditor’sreport SGW[2020]A1166
Nameofthecertified public accountants DaiWeizhongandXuWenxiang
Is the independent auditor’s report modified?
□ Yes √ No
II Financial Statements
Currency unit for the financial statements and the notes thereto: RMB
1. Consolidated Balance Sheet
Prepared by Changchai Company, Limited
30 June 2020
Unit: RMB
Item 30June2020 31December 2019
Currentassets:
Monetaryassets 600,274,769.45 638,589,260.09
Settlementreserve
Interbankloansgranted
Held-for-trading financial 14,600,000.00 13,050,000.00
assets
Derivativefinancial assets
Notesreceivable 508,401,509.54 606,283,023.05
Accountsreceivable 730,399,692.57 419,302,056.87
Changchai Company, Limited Report 2020 Interim
Accounts receivable
financing
Prepayments 10,208,446.08 12,968,746.16
Premiumsreceivable
Reinsurancereceivables
Receivable reinsurance
contractreserve
Otherreceivables 10,280,692.50 9,703,390.94
Including:Interest
receivable
Dividends
receivable
Financial assets purchased
underresale agreements
Inventories 428,205,070.52 473,359,168.90
Contractassets
Assetsheldforsale
Current portion of
non-currentassets
Othercurrent assets 8,576,962.79 6,421,275.47
Totalcurrent assets 2,310,947,143.45 2,179,676,921.48
Non-currentassets:
Loans and advances to
customers
Investmentsindebt
obligations
Investmentsinother debt
obligations
Long-termreceivables
Long-termequity investments
Investmentsinother equity 462,160,000.00 532,886,000.00
instruments
Othernon-current financial 77,952,101.63 77,952,101.63
assets
Investmentproperty 47,343,496.43 48,447,666.83
Fixedassets 437,411,354.41 457,722,667.32
Changchai Company, Limited Report 2020 Interim
Constructioninprogress 103,006,376.02 91,358,156.24
Productiveliving assets
Oilandgasassets
Right-of-useassets
Intangibleassets 97,374,195.14 99,699,450.26
Developmentcosts
Goodwill
Long-termprepaid expense 33,595.50 53,497.80
Deferredincome taxassets 1,979,974.43 1,023,863.04
Othernon-current assets 177,400.00
Totalnon-current assets 1,227,438,493.56 1,309,143,403.12
Totalassets 3,538,385,637.01 3,488,820,324.60
Currentliabilities:
Short-termborrowings 22,000,000.00 22,000,000.00
Borrowings from the central
bank
Interbankloansobtained
Held-for-tradingfinancial
liabilities
Derivativefinancial liabilities
Notespayable 479,515,000.00 403,035,000.00
Accountspayable 580,840,786.08 525,625,016.89
Advancesfromcustomers 31,789,001.78
Contractliabilities 31,527,438.40
Financial assets sold under
repurchaseagreements
Customer deposits and
interbankdeposits
Payables for acting trading of
securities
Payables for underwriting of
securities
Employeebenefits payable 18,957,655.55 44,559,015.79
Taxespayable 8,253,042.15 9,094,382.58
Otherpayables 190,736,737.19 205,064,145.10
Changchai Company, Limited Report 2020 Interim
Including:Interest payable
Dividends 3,891,433.83 3,891,433.83
payable
Handling charges and
commissions payable
Reinsurancepayables
Liabilities directly associated
withassets held forsale
Current portion of
non-currentliabilities
Othercurrent liabilities 2,240,843.08 1,177,712.38
Totalcurrent liabilities 1,334,071,502.45 1,242,344,274.52
Non-currentliabilities:
Insurancecontract reserve
Long-termborrowings
Bondspayable
Including:Preferred shares
Perpetual bonds
Leaseliabilities
Long-termpayables
Long-term employee benefits
payable
Provisions
Deferredincome 58,331,924.41 58,864,111.22
Deferred income tax 46,398,724.72 57,082,890.27
liabilities
Othernon-current liabilities
Totalnon-current liabilities 104,730,649.13 115,947,001.49
Totalliabilities 1,438,802,151.58 1,358,291,276.01
Owners’equity:
Sharecapital 561,374,326.00 561,374,326.00
Otherequity instruments
Including:Preferred shares
Perpetual bonds
Capitalreserves 164,328,665.43 164,328,665.43
Changchai Company, Limited Report 2020 Interim
Less:Treasurystock
Othercomprehensive income 257,019,600.00 317,059,775.00
Specificreserve 18,438,650.51 17,560,202.07
Surplusreserves 322,228,533.72 322,228,533.72
Generalreserve
Retainedearnings 756,379,945.09 728,341,265.36
Total equity attributable to
owners of the Company as the 2,079,769,720.75 2,110,892,767.58
parent
Non-controlling interests 19,813,764.68 19,636,281.01
Totalowners’equity 2,099,583,485.43 2,130,529,048.59
Total liabilities and owners’ 3,538,385,637.01 3,488,820,324.60
equity
Legal representative: Shi Xinkun General Manager: Zhang
Xin
Head of the accounting department: Jiang He
2. Balance Sheet of the Company as the Parent
Unit: RMB
Item 30June2020 31December 2019
Currentassets:
Monetaryassets 537,280,656.10 584,957,678.96
Held-for-trading financial
assets
Derivativefinancial assets
Notesreceivable 472,217,227.54 576,948,023.05
Accountsreceivable 644,643,117.23 337,447,538.04
Accounts receivable
financing
Prepayments 4,990,201.79 6,386,284.14
Otherreceivables 22,243,041.97 22,741,542.22
Including:Interest
receivable
Dividends
Changchai Company, Limited Report 2020 Interim
receivable
Inventories 311,044,719.11 368,653,472.39
Contractassets
Assetsheldforsale
Current portion of
non-currentassets
Othercurrent assets 3,217,463.57 3,898,333.51
Totalcurrent assets 1,995,636,427.31 1,901,032,872.31
Non-currentassets:
Investmentsindebt
obligations
Investmentsinother debt
obligations
Long-termreceivables
Long-termequity investments 287,752,730.03 252,752,730.03
Investmentsinother equity 462,160,000.00 532,886,000.00
instruments
Othernon-current financial 50,000,000.00 50,000,000.00
assets
Investmentproperty 47,343,496.43 48,447,666.83
Fixedassets 348,701,107.11 364,071,199.07
Constructioninprogress 73,761,874.14 89,330,161.60
Productiveliving assets
Oilandgasassets
Right-of-useassets
Intangibleassets 68,543,680.83 70,169,770.91
Developmentcosts
Goodwill
Long-termprepaid expense
Deferredincome taxassets 1,926,498.14 970,026.67
Othernon-current assets
Totalnon-current assets 1,340,189,386.68 1,408,627,555.11
Totalassets 3,335,825,813.99 3,309,660,427.42
Currentliabilities:
Changchai Company, Limited Report 2020 Interim
Short-termborrowings 5,000,000.00 5,000,000.00
Held-for-tradingfinancial
liabilities
Derivativefinancial liabilities
Notespayable 467,515,000.00 392,105,000.00
Accountspayable 523,091,443.14 481,854,210.18
Advancesfromcustomers 28,673,664.87
Contractliabilities 27,529,799.73
Employeebenefits payable 12,316,392.34 39,125,477.30
Taxespayable 4,913,254.33 5,952,664.10
Otherpayables 176,944,594.03 192,046,130.29
Including:Interest payable
Dividends 3,243,179.97 3,243,179.97
payable
Liabilities directly associated
withassets held forsale
Current portion of
non-currentliabilities
Othercurrent liabilities
Totalcurrent liabilities 1,217,310,483.57 1,144,757,146.74
Non-currentliabilities:
Long-termborrowings
Bondspayable
Including:Preferred shares
Perpetual bonds
Leaseliabilities
Long-termpayables
Long-term employee benefits
payable
Provisions
Deferredincome 58,331,924.41 58,864,111.22
Deferred income tax 45,356,400.00 55,951,725.00
liabilities
Othernon-current liabilities
Totalnon-current liabilities 103,688,324.41 114,815,836.22
Changchai Company, Limited Report 2020 Interim
Totalliabilities 1,320,998,807.98 1,259,572,982.96
Owners’equity:
Sharecapital 561,374,326.00 561,374,326.00
Otherequity instruments
Including:Preferred shares
Perpetual bonds
Capitalreserves 183,071,147.70 183,071,147.70
Less:Treasurystock
Othercomprehensive income 257,019,600.00 317,059,775.00
Specificreserve 18,438,650.51 17,560,202.07
Surplusreserves 322,228,533.72 322,228,533.72
Retainedearnings 672,694,748.08 648,793,459.97
Totalowners’equity 2,014,827,006.01 2,050,087,444.46
Total liabilities and owners’ 3,335,825,813.99 3,309,660,427.42
equity
Legal representative: Shi Xinkun General Manager: Zhang
Xin
Head of the accounting department: Jiang He
3. Consolidated Income Statement
Unit: RMB
Item H12020 H12019
1.Revenue 1,167,455,782.30 1,118,871,125.00
Including:Operating revenue 1,167,455,782.30 1,118,871,125.00
Interest income
Insurance premium income
Handling chargeandcommission income
2.Costs andexpenses 1,123,014,304.27 1,099,092,785.90
Including:Costofsales 985,842,718.68 972,984,773.54
Interest expense
Handling chargeandcommission expense
Surrenders
Changchai Company, Limited Report 2020 Interim
Net insurance claims paid
Net amount provided as insurance contract
reserve
Expenditure onpolicydividends
Reinsurance premium expense
Taxes andsurcharges 6,551,605.53 5,009,692.95
Selling expense 63,392,358.52 58,258,398.98
Administrative expense 35,609,030.74 34,560,062.30
R&D expense 32,338,250.78 30,064,283.46
Finance costs -719,659.98 -1,784,425.33
Including: Interest expense 3,340,575.91 1,567,625.50
Interestincome 2,792,152.75 1,647,206.24
Add:Otherincome 2,677,964.82 134,037.71
Returnoninvestment (“-”forloss) 5,384,597.04 184,349.63
Including:Share of profit or loss of joint ventures
andassociates
Incomefrom the derecognition of financial assets
atamortized cost(“-”forloss)
Exchangegain (“-”forloss)
Netgainonexposurehedges (“-”forloss)
Gainon changes infair value(“-”forloss)
Creditimpairment loss(“-”forloss) -5,979,021.29 -5,252,610.74
Assetimpairment loss(“-”forloss) -16,343,805.00 -26,096.43
Assetdisposal income (“-”forloss) 10,977.61 988,535.95
3.Operating profit(“-”forloss) 30,192,191.21 15,806,555.22
Add:Non-operating income 468,290.78 582,937.48
Less:Non-operating expense 395,375.68 217,837.98
4.Profitbefore tax(“-”forloss) 30,265,106.31 16,171,654.72
Less:Income tax expense 2,397,311.58 -2,994,995.32
5.Netprofit (“-”fornetloss) 27,867,794.73 19,166,650.04
5.1Byoperating continuity
5.1.1Net profit from continuing operations (“-” for net 27,867,794.73 19,166,650.04
loss)
5.1.2 Net profit from discontinued operations (“-” for
Changchai Company, Limited Report 2020 Interim
netloss)
5.2Byownership
5.2.1Net profit attributable to owners of the Company 27,690,311.06 19,117,635.69
astheparent
5.2.1Netprofitattributable tonon-controlling interests 177,483.67 49,014.35
6.Othercomprehensive income, netoftax -59,691,806.33 87,330,700.00
Attributabletoowners oftheCompany astheparent -59,691,806.33 87,330,700.00
6.1Itemsthatwillnotbereclassified toprofitorloss -59,691,806.33 87,330,700.00
6.1.1Changes caused by remeasurements on defined
benefitschemes
6.1.2 Other comprehensive income that will not be
reclassifiedtoprofitorlossundertheequity method
6.1.3 Changes in the fair value of investments in -59,691,806.33 87,330,700.00
otherequity instruments
6.1.4Changes in the fair value arising from changes
inowncredit risk
6.1.5Other
6.2Itemsthatwillbereclassified toprofitorloss
6.2.1 Other comprehensive income that will be
reclassifiedtoprofitorlossundertheequity method
6.2.2 Changes in the fair value of investments in
otherdebt obligations
6.2.3Other comprehensive income arising from the
reclassification offinancial assets
6.2.4Credit impairment allowance for investments in
otherdebt obligations
6.2.5Reserve forcashflowhedges
6.2.6 Differences arising from the translation of
foreigncurrency-denominated financial statements
6.2.7Other
Attributabletonon-controlling interests
7.Totalcomprehensive income -31,824,011.60 106,497,350.04
Attributabletoowners oftheCompany astheparent -32,001,495.27 106,448,335.69
Attributabletonon-controlling interests 177,483.67 49,014.35
8.Earnings pershare
8.1Basicearnings pershare 0.0493 0.0341
8.2Diluted earnings pershare 0.0493 0.0341
Changchai Company, Limited Report 2020 Interim
Legal representative: Shi Xinkun General Manager: Zhang
Xin
Head of the accounting department: Jiang He
4. Income Statement of the Company as the Parent
Unit: RMB
Item H12020 H12019
1.Operating revenue 1,081,469,803.12 1,033,329,175.58
Less:Cost ofsales 923,422,022.77 907,286,315.49
Taxesandsurcharges 5,359,697.76 3,963,893.19
Sellingexpense 57,376,397.80 53,346,830.95
Administrativeexpense 26,796,437.18 25,476,365.88
R&Dexpense 31,647,738.36 27,891,685.42
Financecosts -1,390,764.55 -3,010,192.35
Including:Interest expense 2,303,571.52 1,314,360.50
Interest income 2,529,399.84 1,165,423.09
Add:Otherincome 1,931,604.92 129,300.00
Returnoninvestment (“-”forloss) 4,983,988.73
Including:Share of profit or loss of joint ventures
andassociates
Incomefrom the derecognition of financial assets
atamortized cost(“-”forloss)
Netgainonexposurehedges (“-”forloss)
Gainon changes infair value(“-”forloss)
Creditimpairment loss(“-”forloss) -5,440,782.47 -5,260,420.00
Assetimpairment loss(“-”forloss) -15,816,298.12 -26,096.43
Assetdisposal income (“-”forloss) 10,781.75 988,535.95
2.Operating profit(“-”forloss) 23,927,568.61 14,205,596.52
Add:Non-operating income 238,948.92 230,353.36
Less:Non-operating expense 4,025.58 166,954.64
3.Profitbefore tax(“-”forloss) 24,162,491.95 14,268,995.24
Less:Income tax expense 609,572.51 -4,118,680.40
4.Netprofit (“-”fornetloss) 23,552,919.44 18,387,675.64
Changchai Company, Limited Report 2020 Interim
4.1Netprofitfromcontinuing operations (“-”fornetloss) 23,552,919.44 18,387,675.64
4.2 Net profit from discontinued operations (“-” for net
loss)
5.Othercomprehensive income, netoftax -59,691,806.33 87,330,700.00
5.1Itemsthatwillnotbereclassified toprofitorloss -59,691,806.33 87,330,700.00
5.1.1 Changes caused by remeasurements on defined
benefitschemes
5.1.2 Other comprehensive income that will not be
reclassifiedtoprofitorlossundertheequity method
5.1.3Changes in the fair value of investments in other -59,691,806.33 87,330,700.00
equityinstruments
5.1.4Changes in the fair value arising from changes in
owncredit risk
5.1.5Other
5.2Itemsthatwillbereclassified toprofit orloss
5.2.1 Other comprehensive income that will be
reclassifiedtoprofitorlossundertheequity method
5.2.2Changes in the fair value of investments in other
debtobligations
5.2.3 Other comprehensive income arising from the
reclassification offinancial assets
5.2.4 Credit impairment allowance for investments in
otherdebt obligations
5.2.5Reserveforcash flowhedges
5.2.6Differences arising from the translation of foreign
currency-denominated financial statements
5.2.7Other
6.Totalcomprehensive income -36,138,886.89 105,718,375.64
7.Earnings pershare
7.1Basic earnings pershare
7.2Diluted earnings pershare
Legal representative: Shi Xinkun General Manager: Zhang
Xin
Head of the accounting department: Jiang He
Changchai Company, Limited Report 2020 Interim
5. Consolidated Cash Flow Statement
Unit: RMB
Item H12020 H12019
1.Cash flowsfromoperating activities:
Proceedsfromsaleofcommodities andrendering ofservices 860,915,528.67 925,855,455.10
Netincrease incustomer depositsandinterbank deposits
Netincrease inborrowings fromthecentral bank
Netincrease inloansfromother financial institutions
Premiumsreceived onoriginalinsurance contracts
Netproceeds fromreinsurance
Netincrease indepositsand investments ofpolicy holders
Interest,handling chargesandcommissions received
Netincrease ininterbank loans obtained
Netincrease inproceeds fromrepurchase transactions
Netproceeds fromacting trading ofsecurities
Taxrebates 13,166,033.29 21,598,658.84
Cashgenerated fromother operating activities 7,744,404.19 8,402,843.81
Subtotalofcashgenerated fromoperating activities 881,825,966.15 955,856,957.75
Paymentsforcommodities andservices 657,759,091.59 900,048,290.07
Netincrease inloansand advances tocustomers
Net increase in deposits in the central bank and in interbank
loansgranted
Paymentsforclaims onoriginal insurance contracts
Netincrease ininterbank loans granted
Interest,handling chargesandcommissions paid
Policydividends paid
Cashpaid toandforemployees 152,057,875.00 152,284,424.64
Taxespaid 19,245,929.17 18,008,386.04
Cashusedinother operating activities 73,117,799.64 38,837,349.87
Subtotalofcashused inoperating activities 902,180,695.40 1,109,178,450.62
Netcashgenerated from/used inoperating activities -20,354,729.25 -153,321,492.87
2.Cash flowsfrominvesting activities:
Changchai Company, Limited Report 2020 Interim
Proceedsfromdisinvestment 3,550,487.00 7,900,000.00
Returnon investment 5,384,597.04 184,349.63
Net proceeds from the disposal of fixed assets, intangible assets 108,370.88 988,535.95
andother long-lived assets
Netproceeds from thedisposal of subsidiaries and other business
units
Cashgenerated fromother investing activities 97,150.00
Subtotalofcashgenerated frominvesting activities 9,140,604.92 9,072,885.58
Payments for the acquisition of fixed assets, intangible assets 33,004,278.41 11,800,890.16
andother long-lived assets
Paymentsforinvestments 4,600,000.00 16,538,441.76
Netincrease inpledged loansgranted
Net payments for the acquisition of subsidiaries and other
businessunits
Cashusedinother investing activities 930,300.00
Subtotalofcashused ininvesting activities 38,534,578.41 28,339,331.92
Netcashgenerated from/used ininvesting activities -29,393,973.49 -19,266,446.34
3.Cash flowsfromfinancing activities:
Capitalcontributions received
Including:Capital contributions bynon-controlling interests to
subsidiaries
Borrowingsraised 10,000,000.00 12,000,000.00
Cashgenerated fromother financing activities
Subtotalofcashgenerated fromfinancing activities 10,000,000.00 12,000,000.00
Repaymentofborrowings 10,000,000.00 19,000,000.00
Interestanddividends paid 2,212,485.64 15,977,861.20
Including: Dividends paid by subsidiaries to non-controlling
interests
Cashusedinother financing activities
Subtotalofcashused infinancing activities 12,212,485.64 34,977,861.20
Netcashgenerated from/used infinancing activities -2,212,485.64 -22,977,861.20
4. Effect of foreign exchange rates changes on cash and cash -361,452.02
equivalents
5.Netincrease incashand cashequivalents -52,322,640.40 -195,565,800.41
Add:Cash andcashequivalents, beginning oftheperiod 545,959,998.20 691,266,373.34
Changchai Company, Limited Report 2020 Interim
6.Cash andcash equivalents, endoftheperiod 493,637,357.80 495,700,572.93
Legal representative: Shi Xinkun General Manager: Zhang
Xin
Head of the accounting department: Jiang He
6. Cash Flow Statement of the Company as the Parent
Unit: RMB
Item H12020 H12019
1.Cash flowsfromoperating activities:
Proceedsfromsaleofcommodities andrendering ofservices 731,880,356.33 825,164,929.97
Taxrebates 8,380,462.40 16,338,954.71
Cashgenerated fromother operating activities 6,294,839.20 5,103,265.56
Subtotalofcashgenerated fromoperating activities 746,555,657.93 846,607,150.24
Paymentsforcommodities andservices 566,778,723.71 834,695,159.25
Cashpaid toandforemployees 130,215,884.89 127,977,021.88
Taxespaid 12,974,529.61 9,992,032.82
Cashusedinother operating activities 65,655,389.30 30,159,658.65
Subtotalofcashused inoperating activities 775,624,527.51 1,002,823,872.60
Netcashgenerated from/used inoperating activities -29,068,869.58 -156,216,722.36
2.Cash flowsfrominvesting activities:
Proceedsfromdisinvestment 500,487.00
Returnon investment 4,983,988.73
Net proceeds from the disposal of fixed assets, intangible assets 107,470.88 988,535.95
andother long-lived assets
Netproceeds from the disposal of subsidiaries and other business
units
Cashgenerated fromother investing activities
Subtotalofcashgenerated frominvesting activities 5,591,946.61 988,535.95
Paymentsfor the acquisition of fixed assets, intangible assets and 2,365,851.07 9,220,626.97
otherlong-lived assets
Paymentsforinvestments 35,000,000.00 10,000,000.00
Net payments for the acquisition of subsidiaries and other
businessunits
Changchai Company, Limited Report 2020 Interim
Cashusedinother investing activities
Subtotalofcashused ininvesting activities 37,365,851.07 19,220,626.97
Netcashgenerated from/used ininvesting activities -31,773,904.46 -18,232,091.02
3.Cash flowsfromfinancing activities:
Capitalcontributions received
Borrowingsraised 5,000,000.00 5,000,000.00
Cashgenerated fromother financing activities
Subtotalofcashgenerated fromfinancing activities 5,000,000.00 5,000,000.00
Repaymentofborrowings 5,000,000.00 10,000,000.00
Interestanddividends paid 914,216.00 15,404,432.84
Cashusedinother financing activities
Subtotalofcashused infinancing activities 5,914,216.00 25,404,432.84
Netcashgenerated from/used infinancing activities -914,216.00 -20,404,432.84
4. Effect of foreign exchange rates changes on cash and cash -491,932.82
equivalents
5.Netincrease incashand cashequivalents -62,248,922.86 -194,853,246.22
Add:Cash andcashequivalents, beginning oftheperiod 497,777,104.81 651,854,206.79
6.Cash andcash equivalents, endoftheperiod 435,528,181.95 457,000,960.57
Legal representative: Shi Xinkun General Manager: Zhang
Xin
Head of the accounting department: Jiang He
Changchai Company, Limited Interim Report 2020
7. Consolidated Statements of Changes in Owners’ Equity
H1 2020
Unit: RMB
H12020
Equityattributable toowners oftheCompany astheparent
Other equity Non-co
Item instruments Other Retaine ntrollin TotalShareCapital Less: Specifi Surplus Genera
caplita PrrreefdeePteuraplOthe resesrve Tyrsetaoscukrhcoenmspivreeresecrve resesrve reselrve earnding Other Subltota integrest ’oewqnueitrys
share bond r income s s
s s
1. Balance as at the 561,3 164,32 317,05 17,560, 322,22 726,68 2,109,2 19,636, 2,128,8
end of the prior 74,32 8,665.4 9,775.0 202.07 6,700.3 9,929.1 39,597. 281.01 75,878.
year 6.00 3 0 4 0 94 95
Add: Adjustment
for change in
accountingpolicy
Adjustment for 1,833.3 1,651,3 1,653,1 1,653,1
correction of 8 36.26 69.64 69.64
previouserror
Adjustment for
business
combination under
commoncontrol
Other
Changchai Company, Limited Interim Report 2020
adjustments
2. Balance as at the 561,3 164,32 317,05 17,560, 322,22 728,34 2,110,8 19,636, 2,130,5
beginning of the 74,32 8,665.4 9,775.0 202.07 8,533.7 1,265.3 92,767. 281.01 29,048.
year 6.00 3 0 2 6 58 59
3. Increase/ -30,94
decrease in the -60,040 878,44 28,038, -31,123 177,48 5,563.1
period (“-” for ,175.00 8.44 679.73 ,046.83 3.67 6
decrease)
3.1 Total -59,691 27,690, -32,001 177,48 -31,82
comprehensive ,806.33 311.06 ,495.27 3.67 4,011.6
income 0
3.2 Capital
increased and
reducedbyowners
3.2.1
Ordinaryshares
increased by
owners
3.2.2Capital
increased by
holdersofother
equityinstruments
3.2.3
Share-based
paymentsincluded
inowners’equity
3.2.4Other
Changchai Company, Limited Interim Report 2020
3.3 Profit
distribution
3.3.1
Appropriation to
surplusreserves
3.3.2
Appropriation to
generalreserve
3.3.3
Appropriation to
owners (or
shareholders)
3.3.4Other
3.4 Transfers -348,36 348,36
within owners’ 8.67 8.67
equity
3.4.1 Increase
in capital (or share
capital) from
capitalreserves
3.4.2 Increase
in capital (or share
capital) from
surplusreserves
3.4.3 Loss
offset by surplus
reserves
3.4.4 Changes
Changchai Company, Limited Interim Report 2020
in defined benefit
schemes
transferred to
retainedearnings
3.4.5 Other
comprehensive
income transferred
to retained
earnings
3.4.6Other -348,36 348,36
8.67 8.67
3.5 Specific 878,44 878,44 878,44
reserve 8.44 8.44 8.44
3.5.1 Increase 1,883,1 1,883,1 1,883,1
intheperiod 45.87 45.87 45.87
3.5.2 Used in 1,004,6 1,004,6 1,004,6
theperiod 97.43 97.43 97.43
3.6Other
4. Balance as at the 561,3 164,32 257,01 18,438, 322,22 756,37 2,079,7 19,813, 2,099,5
endoftheperiod 74,32 8,665.4 9,600.0 650.51 8,533.7 9,945.0 69,720. 764.68 83,485.
6.00 3 0 2 9 75 43
H1 2019
Unit: RMB
Item H12019
Equity attributable toowners oftheCompany astheparent Non-con Total
Changchai Company, Limited Interim Report 2020
Other equity Other trolling owners’
Share instruments Capital Less: compre Specifi Surplu Genera Retaine interests equity
Prefe Perp s d Subtotcapitareserve Treasur hensiv c l Other
rred etual reserve earning allOther s ystock e reserve reserve
share bond s sincome
s s
1. Balance as at 561,3 164,32 264,40 15,182, 320,13 717,88 2,043, 19,618,4 2,062,92
the end of the 74,32 8,665.4 5,675.0 958.83 3,050.1 3,351.3 308,02 80.11 6,506.85
prioryear 6.00 3 0 5 3 6.74
Add: Adjustment
for change in
accountingpolicy
Adjustment for 1,364.0 1,619,8 1,621, 1,621,22
correction of 8 64.82 228.90 8.90
previouserror
Adjustment for
business
combination
under common
control
Other
adjustments
2. Balance as at 561,3 164,32 264,40 15,182, 320,13 719,50 2,044, 19,618,4 2,064,54
the beginning of 74,32 8,665.4 5,675.0 958.83 4,414.2 3,216.1 929,25 80.11 7,735.75
theyear 6.00 3 0 3 5 5.64
3. Increase/ 87,330, 5,083,2 92,413 49,014.3 92,462,9
decrease in the 700.00 77.54 ,977.5 5 91.89
Changchai Company, Limited Interim Report 2020
period (“-” for 4
decrease)
3.1 Total 87,330, 19,117, 106,44 49,014.3 106,497,
comprehensive 700.00 635.69 8,335. 5 350.04
income 69
3.2 Capital
increased and
reduced by
owners
3.2.1
Ordinaryshares
increased by
owners
3.2.2Capital
increased by
holdersofother
equityinstruments
3.2.3
Share-based
payments
includedin
owners’equity
3.2.4Other
3.3 Profit -14,034 -14,03 -14,034,
distribution ,358.15 4,358. 358.15
15
3.3.1
Changchai Company, Limited Interim Report 2020
Appropriation to
surplusreserves
3.3.2
Appropriation to
generalreserve
3.3.3 -14,03
Appropriation to -14,034 4,358. -14,034,
owners (or ,358.15 15 358.15
shareholders)
3.3.4Other
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
Changchai Company, Limited Interim Report 2020
defined benefit
schemes
transferred to
retainedearnings
3.4.5 Other
comprehensive
income
transferred to
retainedearnings
3.4.6Other
3.5 Specific
reserve
3.5.1
Increase in the
period
3.5.2Used in
theperiod
3.6Other
4. Balance as at 561,3 164,32 351,73 15,182, 320,13 724,58 2,137, 19,667,4 2,157,01
the end of the 74,32 8,665.4 6,375.0 958.83 4,414.2 6,493.6 343,23 94.46 0,727.64
period 6.00 3 0 3 9 3.18
Legal representative: Shi Xinkun General Manager: Zhang Xin Head of the accounting department: Jiang He
8. Statements of Changes in Owners’ Equity of the Company as the Parent
H1 2020
Changchai Company, Limited Interim Report 2020
Unit: RMB
H12020
Item Share PreOftehrerereqPuietrypeintustrumentsCapital TrLeeasssu:rycoOmtphreerheSpecific Surplus Retdaine Other owTontearls’
capital d al Other reserves nsive reserve reserves earningstock equity
shares bonds income s
1. Balance as at the 561,374 183,071,1 317,059,7 17,560,20 322,226,7 648,776 2,050,069,1
endoftheprioryear ,326.00 47.70 75.00 2.07 00.34 ,959.53 10.64
Add: Adjustment
for change in
accountingpolicy
Adjustment for 16,500.
correction of 1,833.38 44 18,333.82
previouserror
Other
adjustments
2. Balance as at the 561,374 183,071,1 317,059,7 17,560,20 322,228,5 648,793 2,050,087,4
beginning of the ,326.00 47.70 75.00 2.07 33.72 ,459.97 44.46
year
3. Increase/
decrease in the -60,040,1 878,448.4 23,901, -35,260,438
period (“-” for 75.00 4 288.11 .45
decrease)
3.1 Total -59,691,8 23,552, -36,138,886
comprehensive 06.33 919.44 .89
income
3.2 Capital
Changchai Company, Limited Interim Report 2020
increased and
reducedbyowners
3.2.1Ordinary
sharesincreased by
owners
3.2.2Capital
increased by
holdersofother
equityinstruments
3.2.3
Share-based
paymentsincluded
inowners’equity
3.2.4Other
3.3 Profit
distribution
3.3.1
Appropriation to
surplusreserves
3.3.2
Appropriation to
owners (or
shareholders)
3.3.3Other
3.4 Transfers -348,368. 348,368
within owners’ 67 .67
equity
Changchai Company, Limited Interim Report 2020
3.4.1 Increase
in capital (or share
capital) from capital
reserves
3.4.2 Increase
in capital (or share
capital) from
surplusreserves
3.4.3 Loss
offset by surplus
reserves
3.4.4 Changes
in defined benefit
schemes transferred
toretained earnings
3.4.5 Other
comprehensive -348,368. 348,368
income transferred 67 .67
toretained earnings
3.4.6Other
3.5 Specific 878,448.4 878,448.44
reserve 4
3.5.1 Increase 1,883,145 1,883,145.8
intheperiod .87 7
3.5.2 Used in 1,004,697 1,004,697.4
theperiod .43 3
3.6Other
Changchai Company, Limited Interim Report 2020
4. Balance as at the 561,374 183,071,1 257,019,6 18,438,65 322,228,5 672,694 2,014,827,0
endoftheperiod ,326.00 47.70 00.00 0.51 33.72 ,748.08 06.01
H1 2019
Unit: RMB
H1 2019
Item Share POretfheerrrequPietyrpientstrumentsCapital TrLeeasssu:rycoOmthpererhSpecific Surplus Retained Other Totalowners’
capital ed ual Other reserves ensive reserve reserves earnings equitystock
shares bonds income
1. Balance as at 561,37 183,071, 264,405, 15,182,95 320,133, 643,980,74 1,988,147,90
the end of the 4,326.0 147.70 675.00 8.83 050.15 2.64 0.32
prioryear 0
Add: Adjustment
for change in
accountingpolicy
Adjustment for
correction of 1,364.08 1,364.08
previouserror
Other
adjustments
2. Balance as at 561,37 183,071, 264,405, 15,182,95 320,134, 643,980,74 1,988,149,26
the beginning of 4,326.0 147.70 675.00 8.83 414.23 2.64 4.40
theyear 0
3. Increase/ 87,330,7 4,358,502. 91,689,202.1
decrease in the 00.00 17 7
period (“-” for
Changchai Company, Limited Interim Report 2020
decrease)
3.1 Total 87,330,7 18,392,860 105,723,560.
comprehensive 00.00 .32 32
income
3.2 Capital
increased and
reducedbyowners
3.2.1
Ordinaryshares
increased by
owners
3.2.2Capital
increased by
holdersofother
equityinstruments
3.2.3
Share-based
paymentsincluded
inowners’equity
3.2.4Other
3.3 Profit -14,034,35 -14,034,358.
distribution 8.15 15
3.3.1
Appropriation to
surplusreserves
3.3.2 -14,034,35 -14,034,358.
Appropriation to 8.15 15
owners (or
Changchai Company, Limited Interim Report 2020
shareholders)
3.3.3Other
3.4 Transfers
within owners’
equity
3.4.1Increase
in capital (or share
capital) from
capitalreserves
3.4.2Increase
in capital (or share
capital) from
surplusreserves
3.4.3 Loss
offset by surplus
reserves
3.4.4
Changes in
defined benefit
schemes
transferred to
retainedearnings
3.4.5 Other
comprehensive
income transferred
to retained
earnings
3.4.6Other
Changchai Company, Limited Interim Report 2020
3.5 Specific
reserve
3.5.1Increase
intheperiod
3.5.2 Used in
theperiod
3.6Other
4. Balance as at 561,37 183,071, 351,736, 15,182,95 320,134, 648,339,24 2,079,838,46
the end of the 4,326.0 147.70 375.00 8.83 414.23 4.81 6.57
period 0
Legal representative: Shi Xinkun General Manager: Zhang Xin Head of the accounting department: Jiang He
Changchai Company, Limited Interim Report 2020
III. Company Profile
Changchai Company, Limited (hereinafter referred to as “the Company”) was founded on 5 May 1994,
which is a company limited by shares promoted solely by Changzhou Diesel Engine Plant through the
approval by the State Commission for Restructuring the Economic Systems with document TGS [1993] No.
9 on 15 January 1993 by way of public offering of shares. With the approved of the People’s Government
of Jiangsu Province SZF [1993] No. 67, as well as reexamined and approved by China Securities
Regulatory Commission (“CSRC”) through document ZJFSZ (1994) No. 9, the Company initially issued A
shares to the public from 15 March 1994 to 30 March 1994. As approved by the Shenzhen Stock Exchange
through document SZSFZ (1994) No. 15, such tradable shares of the public got listing on 1 July 1994 at
Shenzhen Stock Exchange with “Su Changchai A” for short of stock, as well as “0570” as stock code
(present stock code is “000570”).
In 1996, with the recommendation of the Office of the People’s Government of Jiangsu Province SZBH
[1996] No. 13, as well as first review by Shenzhen Municipal Securities Administration Office through
SZBZ [1996] No. 24, and approval of the State Council Securities Commission ZWF [1996] No. 27, the
Company issued 100 million B shares to qualified investors on 27 August 1996 to 30 August 1996, getting
listed on 13 September 1996.
On 9 June 2006, the Company held a shareholders’ general meeting related to A shares market to examine
and approve share merger reform plan, and performed the share merger reform on 19 June 2006.
As examined and approved at the 2nd Extraordinary General Meeting of 2009 in September 2009, based on
the total share capital of 374,249,551 shares as at 30 June 2009, the Company implemented the profit
distribution plan, i.e. to distribute 5 bonus shares and cash of RMB0.80 for every 10 shares, with registered
capital increased by RMB187,124,775.00, as well as registered capital of RMB561,374,326.00 after
change. As at 31 December 2015, the total share capital of the Company is 561,374,326.00 shares, as well
as registered capital of RMB561,374,326.00, which verified by Jiangsu Gongzheng Tianye Certified
Public Accountants Company Limited with issuing Capital Verification Report SGC [2010] No. B002. And
the unified social credit code of the enterprise business license of the Company is 91320400134792410W.
The Company’s registered address is situated at No. 123 Huaide Middle Road, Changzhou, Jiangsu, as
well as its head office located at No. 123 Huaide Middle Road, Changzhou, Jiangsu.
The Company belongs to manufacturing with business scope including manufacturing and sale of diesel
engine, diesel engines part and casting, grain harvesting machine, rotary cultivators, walking tractor, mould
and fixtures, assembling and sale of diesel generating set and pumping unit. The Company mainly engaged
in the production and sales of small and medium-sized single cylinders and multi-cylinder diesel engine
with the label of Changchai Brand. The diesel engine produced and sold by the Company were mainly
used in tractors, combine harvest models, light commercial vehicle, farm equipment, small-sized
construction machinery, generating sets and marine engine and equipment, etc. The Company’s
corebusiness remained unchanged in the Reporting Period.
The Company established the Shareholders’ General Meeting, the Board of Directors and the Supervisory
Committee, Corporate office, Financial Department, Political Department, Investment and Development
Department, Audit Department, Human Recourses Department, Production Department, Procurement
Department, Sales Company, Chief Engineer Office, Technology Center, QA Department, Foundry Branch,
Changchai Company, Limited Interim Report 2020
Machine Processing Branch, Single-cylinder Engine branch, Multi-cylinder Engine Branch and Overseas
Business Department in the Company.
The financial report has been approved to be issued by the Board of Directors on 29 July 2020.
The consolidated scope of the Company of the Reporting Period includes the Company as the parent and 7
subsidiaries. For the details of the consolidated scope of the Reporting Period and the changes situation,
please refer to the changes of the consolidated scope of the notes to the financial report and the notes to the
equities among other entities.
IV. Basis for Preparation of the Financial Report
1. Basis for Preparation
With the going-concern assumption as the basis and based on transactions and other events that actually
occurred, the Group prepared financial statements in accordance with The Accounting Standards for
Business Enterprises—Basic Standard issued by the Ministry of Finance with Decree No. 33 and revised
with Decree No. 76, the various specific accounting standards, the Application Guidance of Accounting
Standards for Business Enterprises, the Interpretation of Accounting Standards for Business Enterprises
and other regulations issued and revised from 15 February 2006 onwards (hereinafter jointly referred to as
“the Accounting Standards for Business Enterprises”, “China Accounting Standards” or “CAS”), as well as
the Rules for Preparation Convention of Disclosure of Public Offering Companies No.15 – General
Regulations for Financial Reporting (revised in 2014) by China Securities Regulatory Commission.
In accordance with relevant provisions of the Accounting Standards for Business Enterprises, the Group
adopted the accrual basis in accounting. Except for some financial instruments, where impairment occurred
on an asset, an impairment reserve was withdrawn accordingly pursuant to relevant requirements.
2. Continuation
The Company comprehensively evaluated the information acquired recently that there would be no such
factors in the 12 months from the end of the Reporting Period that would obviously influence the
continuation capability of the Company and predicted that the operating activities would continue in the
future 12 months of the Company. The financial statement compiled base on the continuous operation.
V. Important Accounting Policies and Estimations
Notification of specific accounting policies and accounting estimations:
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.
Changchai Company, Limited Interim Report 2020
1. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Group are in compliance with in compliance with the Accounting
Standards for Business Enterprises, which factually and completely present the Company’s and the
Group’s financial positions, business results and cash flows and other relevant information.
2. Fiscal Period
The fiscal periods are divided into fiscal year and metaphase, the fiscal year is from January 1 to December
31 and as the metaphase included monthly, quarterly and semi-yearly periods.
3. Operating Cycle
A normal operating cycle refers to a period from the Group purchasing assets for processing to realizing
cash or cash equivalents. An operating cycle for the Group is 12 months, which is also the classification
criterion for the liquidity of its assets and liabilities.
4. Currency Used in Bookkeeping
Renminbi is functional currency of the Company.
5. Accounting Methods for Business Combinations under the Same Control and Business
Combinations not under the Same Control
(1) Business combinations under the same control:
A business combination under the same control is a business combination in which all of the combining
enterprises are ultimately controlled by the same party or the same parties both before and after the
business combination and on which the control is not temporary.
For the merger of enterprises under the same control, if the consideration of the merging enterprise is that it
makes payment in cash, transfers non-cash assets or bear its debts, it shall, on the date of merger, regard
the share of the book value of the owner's equity of the merged enterprise as the initial cost of the
long-term equity investment. The difference between the initial cost of the long-term equity investment and
the payment in cash, non-cash assets transferred as well as the book value of the debts borne by the
merging party shall offset against the capital reserve. If the capital reserve is insufficient to dilute, the
retained earnings shall be adjusted.
If the consideration of the merging enterprise is that it issues equity securities, it shall, on the date of
merger, regard the share of the book value of the owner's equity of the merged enterprise as the initial cost
of the long-term equity investment. The total face value of the stocks issued shall be regarded as the capital
stock, while the difference between the initial cost of the long-term equity investment and total face value
of the shares issued shall offset against the capital reserve. If the capital reserve is insufficient to dilute, the
retained earnings shall be adjusted.
All direct costs for the business combination, including expenses for audit, evaluating and legal services
Changchai Company, Limited Interim Report 2020
shall be recorded into the profits and losses at the current period. The expenses such as the handling
charges and commission etc, premium income of deducting the equity securities, and as for the premium
income was insufficient to dilute, the retained earnings shall be written down.
Owning to the reasons such as the additional investment, for the equity investment held before acquiring
the control right of the combined parties, the confirmed relevant gains and losses, other comprehensive
income and the changes of other net assets since the date of the earlier one between the date when
acquiring the original equity right and the date when the combine parties and combined ones were under
the same control to the combination date, should be respectively written down and compared with the
beginning balance of retained earnings or the current gains and losses during the statement period.
(2) Business combinations not under the same control
A business combination not under the same control is a business combination in which the combining
enterprises are not ultimately controlled by the same party or the same parties both before and after the
business combination.
The combination costs of the acquirer and the identifiable net assets obtained by the acquirer in a business
combination shall be measured at the fair values. The acquirer shall recognize the positive balance between
the combination costs and the fair value of the identifiable net assets it obtains forms the acquiree as
business reputation. The direct relevant expenses occurred from the enterprise combination should be
included in the current gains and losses when occurred. The combination costs of the acquirer and the
identifiable net assets obtained by it in the combination shall be measured according to their fair values at
the acquiring date. The difference between the fair value of the assets paid out by the Company and its
book value should be included in the current gains and losses. The purchase date refers to the date that the
purchaser acquires the control right of the acquiree.
For the business combinations not under the same control realized through step by step multiple
transaction, as for the equity interests that the Group holds in the acquiree before the acquiring date, they
shall be re-measured according to their fair values at the acquiring date; the positive difference between
their fair values and carrying amounts shall be recorded into the investment gains for the period including
the acquiring date. The equity holed by the acquiree which involved with the other comprehensive income
and the other owners’ equities changes except for the net gains and losses, other comprehensive income
and the profits distribution and other related comprehensive gains and other owners’ equities which in
relation to the equity interests that the Group holds in the acquiree before the acquiring date should be
transferred into the current investment income on the acquiring date, except for the other comprehensive
income occurred from the re-measurement of the net profits of the defined benefit plans or the changes of
the net assets of the investees.
6. Methods for Preparing Consolidated Financial Statements
The Company confirms the consolidated scope based on the control and includes the subsidiaries with
actual control right into the consolidated financial statement.
The consolidated financial statement of the Company is compiled according to the regulations of No. 33 of
ASBE-Consolidated Financial Statement and the relevant regulations and as for the whole significant
come-and-go balance, investment, transaction and the unrealized profits should be written off when
compiling the consolidated financial statement. The portion of a subsidiary’s shareholders’ equity and the
Changchai Company, Limited Interim Report 2020
portion of a subsidiary’s net profits and losses for the period not held by the Group are recognized as
minority interests and minority shareholder profits and losses respectively and presented separately under
shareholders’ equity and net profits in the consolidation financial statements. The portion of a subsidiary’s
net profits and losses for the period that belong to minority interests is presented as the item of “minority
shareholder profits and losses” under the bigger item of net profits in the consolidated financial statements.
Where the loss of a subsidiary shared by minority shareholders exceeds the portion enjoyed by minority
shareholders in the subsidiary’s opening owners’ equity, minority interests are offset.
The accounting policy or accounting period of each subsidiary is different from which of the Company,
which shall be adjusted as the Company; or subsidiaries shall prepare financial statement again required by
the Company when preparing the consolidated financial statements.
As for the added subsidiary company not controlled by the same enterprise preparing the consolidated
financial statement, shall adjust individual financial statement based on the fair value of the identifiable net
assets on the acquisition date; as for the added subsidiary companies controlled by the same enterprise
preparing the financial statement, shall not adjust the financial statement of the subsidiaries, namely
survived by integration as participating in the consolidation when the final control party starts
implementing control and should adjust the period-begin amount of the consolidated balance sheet and at
the same time adjust the relevant items of the compared statement.
As for the disposed subsidiaries, the operation result and the cash flow should be included in the
consolidated income statement and the consolidated cash flow before the disposing date; the disposed
subsidiaries of the current period, should not be adjusted the period-begin amount of the consolidated
balance sheet.
Where the Group losses control on its original subsidiaries due to disposal of some equity investments or
other reasons, the residual equity interests are re-measured according to the fair value on the date when
such control ceases. The summation of the consideration obtained from the disposal of equity interests and
the fair value of the residual equity interests, minus the portion in the original subsidiary’s net assets
measured on a continuous basis from the acquisition date that is enjoyable by the Group according to the
original shareholding percentage in the subsidiary, is recorded in investment gains for the period when the
Group’s control on the subsidiary ceases. Other comprehensive incomes in relation to the equity
investment and the other owners’ equities changes except for the net gains and losses, other comprehensive
income and profits distribution in the original subsidiary are treated on the same accounting basis as the
acquiree directly disposes the relevant assets or liabilities (that is, except for the changes in the net
liabilities or assets with a defined benefit plan resulted from re-measurement of the original subsidiary, the
rest shall all be transferred into current investment gains) when such control ceases. And subsequent
measurement is conducted on the residual equity interests according to the No.2 Accounting Standard for
Business Enterprises-Long-term Equity Investments or the No.22 Accounting Standard for Business
Enterprises-Recognition and Measurement of Financial Instruments.
For the disposal of equity investment belongs to a package deal, should be considered as a transaction and
conduct accounting treatment. However, Before losing control, every disposal cost and corresponding net
assets balance of subsidiary of disposal investment are confirmed as other comprehensive income in
consolidated financial statements, which together transferred into the current profits and losses in the loss
of control, when the Group losing control on its subsidiary.
Changchai Company, Limited Interim Report 2020
For the disposal of the equity investment not belongs to a package deal, should be executed accounting
treatment according to the relevant policies of partly disposing the equity investment of the subsidiaries
under the situation not lose the control right before losing the control right; when losing the control right,
the former should be executed accounting treatment according to the general disposing method of the
disposal of the subsidiaries.
7. Classification of Joint Arrangements and Accounting Treatment of Joint Operations
The Group classifies joint arrangements into joint operations and joint ventures.
A joint operation refers to a joint arrangement where the Group is the joint operations party of the joint
arrangement and enjoys assets and has to bear liabilities related to the arrangement. The Company
confirms the following items related to the interests share among the joint operations and executes
accounting treatment according to the regulations of the relevant ASBE:
(1) Recognizes the assets that it holds and bears in the joint operation and recognizes the jointly-held assets
according to the Group’s stake in the joint operation;
(2) Recognizes the liabilities that it holds and bears in the joint operation and recognizes the jointly-held
liabilities according to the Group’s stake in the joint operation;
(3) Recognizes the income from sale of the Group’s share in the output of the joint operation
(4) Recognizes the income from sale of the joint operation’s outputs according to the Group’s stake in it
(5) Recognizes the expense solely incurred to the Group and the expense incurred to the joint operation
according to the Group’s stake in it.
8. Recognition Standard for Cash and Cash Equivalents
In the Group’s understanding, cash and cash equivalents include cash on hand, any deposit that can be used
for cover, and short-term (usually due within 3 months since the day of purchase) and high circulating
investments, which are easily convertible into known amount of cash and whose risks in change of value
are minimal.
9. Foreign Currency Businesses and Translation of Foreign Currency Financial Statements
(1) Foreign currency business
Concerning the foreign-currency transactions that occurred, the foreign currency shall be converted into
the recording currency according to the middle price of the market exchange rate disclosed by the People’s
Bank of China on the date of the transaction. Among the said transactions that occurred, those involving
foreign exchanges shall be converted according to the exchange rates adopted in the actual transactions.
On the balance sheet date, the foreign-currency monetary assets and the balance of the liability account
shall be converted into the recoding currency according to the middle price of the market exchange rates
disclosed by the People’s Bank of China on the Balance Sheet Date. The difference between the
recording-currency amount converted according to the exchange rate on the Balance Sheet Date and the
original book recording-currency amount shall be recognized as gains/losses from foreign exchange. And
the exchange gain/loss caused by the foreign-currency borrowings related to purchasing fixed assets shall
Changchai Company, Limited Interim Report 2020
be handled according to the principle of capitalizing borrowing expenses; the exchange gain/loss incurred
in the establishment period shall be recorded into the establishment expense; others shall be recorded into
the financial expenses for the current period.
On the balance sheet date, the foreign-currency non-monetary items measured by historical cost shall be
converted according to the middle price of the market exchange disclosed by the People’s Bank of China
on the date of the transaction, with no changes in the original recording-currency amount; while the
foreign-currency non-monetary items measured by fair value shall be converted according to the middle
price of the market exchange disclosed by the People’s Bank of China on the date when the fair value is
recognized, and the exchange gain/loss caused thereof shall be recognized as the gain/loss from fair value
changes and recorded into the gain/loss of the current period.
(2) Translation of foreign currency
The assets and liabilities items among the balance sheet of the foreign operation shall be translated at a
spot exchange rate on the balance sheet date. Among the owner’s equity items, except for the items as
“undistributed profits”, other items shall be translated at the spot exchange rate at the time when they are
incurred. And the revenues and expenses items among the balance sheet of the foreign operation shall be
translated at the approximate exchange rate of the transaction date. The difference caused from the above
transaction of the foreign currency statement should be listed in the other comprehensive income among
the owners’ equities.
10. Financial Instruments
(1) Classification of Financial Instruments
The Company classifies the financial assets when initially recognized into the following three categories
based on the business model for financial assets management and characteristics of contractual cash flow
of financial assets: financial assets measured at amortized cost, financial assets at fair value through other
comprehensive income (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
Changchai Company, Limited Interim Report 2020
of the financial assets shall be at fair value and changes of fair value except for interest calculated with
actual rates, impairment losses or gains and exchange gains or losses shall be recorded into other
comprehensive income. When derecognized, the accumulated gains or losses originally recorded into other
comprehensive income shall be transferred into the current profit or loss.
③ Financial assets at fair value through other comprehensive income (equity instruments)
Financial assets at fair value through other comprehensive income (equity instruments) include investment
in other equity instruments, etc. which are initially measured at fair value and related transaction cost shall
be recorded into the initial recognized amount. The subsequent measurement of the financial assets shall be
at fair value and changes of fair value shall be recorded into other comprehensive income. The dividends
obtained shall be recorded into the current profit or loss. When derecognized, the accumulated gains or
losses originally recorded into other comprehensive income shall be transferred into retained earnings.
④ Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include held-for-trading financial assets, derivative
financial assets and other non-current financial assets which are initially measured at fair value and the
related transaction cost shall be recorded into the current profit or loss. The subsequent measurement of the
financial assets shall be at fair value and the changes of fair value shall be recorded into the current profit
or loss.
⑤ Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include held-for-trading financial liabilities and
derivative financial liabilities which are initially measured at fair value and the related transaction cost
shall be recorded into the current profit or loss. The subsequent measurement of the financial liabilities
shall be at fair value and the changes of fair value shall be recorded into the current profit or loss. When
derecognized, the difference between the carrying value and the paid consideration shall be recorded into
the current profit or loss.
⑥ Financial liabilities at amortized cost
Financial liabilities at amortized cost include short-term borrowings, notes payable, accounts payable,
other payables, long-term borrowings, bonds payable and long-term payables which are initially measured
at fair value and the related transaction cost shall be recorded into the initial recognized amount. The
interest calculated with actual rates for the holding period shall be recorded into the current profit or loss.
When derecognized, the 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
Changchai Company, Limited Interim Report 2020
and recognize the relevant liability accordingly.
If the transfer of an entire financial asset satisfies the conditions for stopping recognition, the difference
between the amounts of the following 2 items shall be recorded in the profits and losses of the current
period: (1) The carrying value of the transferred financial asset on the derecognition date; (2) The sum of
consideration received from the transfer of financial assets, and derecognition amount among the
accumulative amount of the changes of the fair value originally recorded in the other comprehensive
income (the financial assets involve transfer are investments in debt instruments at fair value through other
comprehensive income. If the transfer of partial financial asset satisfies the conditions to stop the
recognition, the entire carrying value of the transferred financial asset shall, between the portion whose
recognition has been stopped and the portion whose recognition has not been stopped, be apportioned
according to their respective relative fair value on the transfer date, and the difference between the
amounts of the following two items shall be included into the profits and losses of the current period:
(1)The carrying value of the portion whose recognition has been stopped; (2)The sum of consideration of
the portion whose recognition has been stopped, and derecognition amount among the accumulative
amount of the changes of the fair value originally recorded in the other comprehensive income (the
financial assets involve transfer are investments in debt instruments at fair value through other
comprehensive income.
(4) Derecognition Basis of Financial Liabilities
A financial liability or part of it can be derecognized after its current obligation has been relieved in full or
in part.
(5) Recognition of Fair Value of Financial Assets and Financial Liabilities
The fair value of financial instruments with an active market is determined by the quoted price in the
active market. For financial instruments without active market, the fair value is determined by valuation
techniques. The Company adopts the valuation techniques applicable to the current conditions which are
supported by sufficient data and other information for valuation, and selects the input values consistent
with the characteristics of assets or liabilities considered by market participants in asset or liability
transactions, with priority to observable input values. Unobservable input values are used only when
relevant observable input values are not available or practical.
(6) Impairment of financial instrument
① Impairment measurement and accounting handling of financial instrument
Based on expected credit loss, the Company conducts impairment handling and confirms credit
impairment loss for financial assets which is measured by amortized cost, debt instrument investment
which is measured by fair value and whose change is calculated into other comprehensive profits, financial
guarantee contract.
Expected credit loss refers to weighted average of credit loss of financial instrument which takes the risk of
contract breach occurrence as the weight. Credit loss refers to the difference between all contract cash flow
which is converted into cash according to actual interest rate and receivable according to contract and all
cash flow which to be charged as expected, i.e. current value of all cash shortage. Among it, as for
financial asset purchased or original which has had credit impairment, it should be converted into cash
according actual interest rate of this financial asset after credit adjustment.
As for financial asset purchased or original which has had credit impairment, the Company only confirms
cumulative change of expected credit loss within the whole duration after initial confirmation on the
Changchai Company, Limited Interim Report 2020
balance sheet date as loss reserve.
As for accounts receivable which don’t include major financing contents or the Company does not
consider financing contents in contract which is less than one year, the Company applies simplified
measurement method, and measures loss reserve according to amount of expected credit loss within the
whole duration.
As for account receivable of rental and accounts receivable including major financing contents, the
Company applies simplified measurement method, and measure loss reserve according to amount of
expected credit loss within the whole duration.
As for financial asset beyond above mentioned measurement methods, the Company evaluates whether its
credit risk has increased obviously since the initial confirmation on each balance sheet date. In case credit
risk has increased obviously, the Company measures the loss reserve according to amount of expected
credit loss within the whole duration; in case the credit risk does not increase obviously, the Company
measures loss reserve according to the amount of expected credit loss in next 12 months.
By utilizing obtainable rational and well grounded information, including forward-looking information,
comparing the risk of contract breach on balance sheet date and risk of contract breach on initial
confirmation date, the Company confirms whether the credit risk of financial instrument has increased
obviously from initial confirmation.
On balance sheet date, in case the Company judges that the financial instrument just has relatively low
credit risk, then it will be assumed that credit risk of the financial instrument has not increased obviously.
Based on single financial instrument or financial portfolio, the Company evaluates expected credit risk and
measures expected credit loss. When based on financial instrument portfolio, the Company takes common
risk characteristics as the basis, and divides financial instruments into different portfolios.
The Company measures expected credit loss again on each balance sheet date, the increase of loss reserve
or amount which is transfer back generated by it is calculated into current profits and losses as impairment
profits or losses. As for financial asset which is measured by amortized cost, loss reserve offsets the
carrying value of the financial asset listed in the balance sheet; as for debt investment which is measured
by fair value and whose change is calculated into other comprehensive profits, the Company confirms its
loss reserve in other comprehensive profits and does not offset the carrying value of the financial asset.
② For notes receivable, accounts receivable, other receivables and long-term receivables with objective
evidence indicating impairment and those suitable for individual evaluation, the Company carries out
impairment test separately to confirm expected credit loss and prepare provision for impairment of single
items. For notes receivable, accounts receivable and other receivables without objective evidence of
impairment, or a single financial asset with expected credit loss impossible to be assessed at a reasonable
cost, the Company divides the receivables into groups according to the characteristics of credit risk, and
calculates the expected credit loss based on receivable groups.
Accounts receivable with expected credit losses measured by groups
Specific groups and method of measuring expected credit loss
Item Recognition basis Methodofmeasuringexpectedcreditlosses
Bank’sacceptance bills Consulting historical experience in credit losses,
receivable Billtype combining current situation and prediction for future
economic situation, the expected credit loss shall be
Tradeacceptance bills accounted through exposure at default and the expected
Changchai Company, Limited Interim Report 2020
receivable creditlossrateovertheentirelife
Accounts Aginggroup Prepare the comparative list between aging of accounts
receivable-credit risk receivable and expected credit loss rate over the entire life
characteristicsgroup and calculate the expected credit loss by consulting
historical experience in credit losses, combining current
situationandpredictionforfutureeconomic situation
Accounts Consulting historical experience in credit losses,
receivable-intercourse Relatedpartywithinthe combining current situation and prediction for future
funds among related party consolidation scope economic situation, the expected credit loss shall be
group within the accounted through exposure at default and the expected
consolidationscope creditlossrateovertheentirelife
Acrcecdoitulnotsssrreacteeiovvaberlet-htheeenctoirmepliafreative list between aging of credit risk characteristic group and expected
Aging Withdrawal
proportion
Within 1year 2.00%
1 to2years 5.00%
2 to3years 15.00%
3 to4years 30.00%
4 to5years 60.00%
Over 5years 100.00%
Other receivables with expected credit losses measured by groups
Specific groups and method of measuring expected credit loss
Item Recognition basis Method ofmeasuring expected credit losses
Consulting historical experience in credit losses,
combining current situation and prediction for future
Other receivables-aging Aging group economic situation, the expected credit loss shall be
analysisgroup accounted through exposure at default and the expected
credit loss rate within the next 12 months or over the
entirelife
Other Consulting historical experience in credit losses,
receivables-intercourse Related party within combining current situation and prediction for future
funds among related party the consolidation economic situation, the expected credit loss shall be
group within the scope accounted through exposure at default and the expected
consolidationscope credit lossrateovertheentire life
For the measurement of impairment loss of other receivables, refer to the aforesaid measurement of
Changchai Company, Limited Interim Report 2020
impairment loss of accounts receivable.
11. Notes Receivable
See “10. Financial Instruments”.
12. Accounts Receivable
See “10. Financial Instruments”.
13. Inventory
(1) Category of Inventory
Inventory refers to the held-for-sale finished products or commodities, goods in process, materials
consumed in the production process or the process providing the labor service etc. Inventory is mainly
including the raw materials, low priced and easily worn articles, unfinished products, inventories and work
in process–outsourced etc.
(2) Pricing method
Purchasing and storage of the various inventories should be valued according to the planed cost and the
dispatch be calculated according to the weighted average method; carried forward the cost of the finished
products according to the actual cost of the current period and the sales cost according to the weighted
average method.
(3) Determination basis of the net realizable value of inventory and withdrawal method of the provision for
falling price of inventory
At the balance sheet date, inventories are measured at the lower of the costs and net realizable value. When
all the inventories are checked roundly, for those which were destroyed, outdated in all or in part, sold at a
loss, etc, the Company shall estimate the irrecoverable part of its cost and withdrawal the inventory falling
price reserve at the year-end. Where the cost of the single inventory item is higher than the net realizable
value, the inventory falling price reserve shall be withdrawn and recorded into profits and losses of the
current period. Of which: in the normal production and operating process, as for the commodities
inventory directly for sales such as the finished products, commodities and the materials for sales, should
recognize the net realizable value according to the amount of the estimated selling price of the inventory
minuses the estimated selling expenses and the relevant taxes; as for the materials inventory needs to be
processed in the normal production and operating process, should recognize its net realizable value
according to the amount of the estimated selling price of the finished products minuses the cost predicts to
be occur when the production completes and the estimated selling expenses as well as the relevant taxes;
on the balance sheet date, for the same inventory with one part agreed by the contract price and other parts
not by the contract price, should be respectively recognized the net realizable value. For items of
inventories relating to a product line that are produced and marketed in the same geographical area, have
the same or similar end users or purposes, and cannot be practicably evaluated separately from other items
in that product line provision for decline in value is determined on an aggregate basis; for large quantity
and low value items of inventories, provision for decline in value is made based on categories of
Changchai Company, Limited Interim Report 2020
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.
Changchai Company, Limited Interim Report 2020
14. Contract Assets
Contract Assets means that the Company is endowed with the right to charge the consideration through
transferring any commodity or service to the client, and such right depends on other factors except the
passing of time. The Company’s unconditional right (only depending on the passing of time) of charging
the consideration from the client shall be separately presented as receivables.
The recognition method and accounting treatment method of the estimated credit loss of contract assets are
consistent with that specified in Notes V.12.
15. Contract Costs
(1) Costs from Acquiring Contract
If the incremental cost resulting from the Company’s acquiring of contract (namely costs merely resulting
from the acquiring of contract) is predicted to be retrieved, it shall be recognized as an assets, amortized by
adopting the same basis with the recognition of commodities or service revenues related to the assets and
included into the current profit and loss. If the assets’ amortization period does not exceed one year, it shall
be immediately included into the current profit and loss. Other expenses resulting from the Company’s
acquiring of contract shall also be included into the current profit and loss unless it is explicitly borne by
the client.
(2) Costs from Executing Contract
The Company’s costs from executing contract is not covered by other ASBE except for Revenue Standards,
and when the following situations are met, such costs can be recognized as an assets: ① the costs are
directly related to a current or predicted contract; ② the costs increase the Company’s resources applied to
fulfill performance obligations in the future; ③ the costs are predicted to be retrieved. The recognized
assets shall be amortized by adopting the same basis with the recognition of commodities or service
revenues related to the assets and included into the current profit and loss.
If the book value of contract costs is higher than the difference of the following two items, corresponding
depreciation reserves shall be counted and withdrawn and it shall be recognized as the assets depreciation
loss: ① the residual consideration predicted to be acquired by transferring commodities related to the
assets;② the costs predicted to occur due to the transfer of related commodities.
If the difference between ① and ② is higher than the book value of contract costs due to any change in
various factors causing depreciation in previous periods, it shall be restituted to the withdrawn assets
depreciation reserves and included in the current profit and loss. However, the book value of restituted
contract costs shall not exceed the book value of the assets on the day of restitution based on the
hypothesis that depreciation reserves are not counted and withdrawn.
16. Assets Held for Sale
The Company recognizes the components (or the non-current assets) which meet with the following
conditions as assets held for sale:
(1) The components must be immediately sold only according to the usual terms of selling this kind of
Changchai Company, Limited Interim Report 2020
components under the current conditions;
(2) The Company had made solutions on disposing the components (or the non-current assets), for example,
the Company should gain the approval from the shareholders according to the regulations and had acquired
the approved from the Annual General Meeting or the relevant authority institutions;
(3) The Company had signed the irrevocable transformation agreement with the transferee;
(4) The transformation should be completed within 1 year.
17. Long-term Equity Investments
(1) Judgment standard of joint control and significant influences
Joint control, refers to the control jointly owned according to the relevant agreement on an arrangement by
the Company and the relevant activities of the arrangement should be decided only after the participants
which share the control right make consensus. Significant influence refers to the power of the Company
which could anticipate in the finance and the operation polices of the investees, but could not control or
jointly control the formulation of the policies with the other parties.
(2) Recognition for initial investment cost
The initial investment cost of the long-term equity investment shall be recognized by adopting the
following ways in accordance with different methods of acquisition:
1) As for those forms under the same control of the enterprise combine, if the combine party takes the cash
payment, non-cash assets transformation, liabilities assumption or equity securities issuance as the
combination consideration, should take the shares of the book value by the ultimate control party in the
consolidate financial statement of the owners’ equities of the combiners acquired on the merger date as the
initial investment cost. The difference between the initial investment cost and the book value of the paid
combination consideration or the total amount of the issued shares of the long-term equity investment
should be adjusted the capital reserve; If the capital reserve is insufficient to dilute, the retained earnings
shall be adjusted. To include each direct relevant expense occurred when executing the enterprise merger
into the current gains and losses; while the handling charges and commission occurs from the issuing the
equity securities or the bonds for the enterprise merger should be included in the initial measurement
amount of the shareholders’ equities or the liabilities.
2) As for long-term equity investment acquired through the merger of enterprises not under the same
control, its initial investment cost shall regard as the combination cost calculated by the fair value of the
assets, equity instrument issued and liabilities incurred or undertaken on the purchase date adding the
direct cost related with the acquisition. The identifiable assets of the combined party and the liabilities
(including contingent liability) undertaken on the combining date shall be measured at the fair value
without considering the amount of minority interest. The acquirer shall recognize the positive balance
between the combination costs and the fair value of the identifiable net assets it obtains from the acquiree
as business reputation. The acquirer shall record the negative balance between the combination costs and
the fair value of the identifiable net assets it obtains from the acquiree into the consolidated income
statement directly. The agent expense and other relevant management expenses such as the audit, legal
service and evaluation consultation occurs from the enterprise merger, should be included in the current
gains and losses when occur; while the handling charges and commission occurs from the issuing the
equity securities or the bonds for the enterprise merger should be included in the initial measurement
amount of the shareholders’ equities or the liabilities.
Changchai Company, Limited Interim Report 2020
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 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.
Changchai Company, Limited Interim Report 2020
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 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
Changchai Company, Limited Interim Report 2020
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 investees, should be transferred
into the current investment income with full amount when terminate adopting the equity method.
18. Investment Real Estate
Measurement mode of investment real estate:
Measurement of cost method
Depreciation or amortization method
The investment real estate shall be measured at its cost. Of which, the cost of an investment real estate by
acquisition consists of the acquisition price, relevant taxes, and other expense directly relegated to the asset;
the cost of a self-built investment real estate composes of the necessary expenses for building the asset to
the hoped condition for use. The investment real estate invested by investors shall be recorded at the value
stipulated in the investment contracts or agreements, but the unfair value appointed in the contract or
agreement shall be entered into the account book at the fair value.
As for withdrawal basis of provision for impairment of investment real estates, please refer to withdrawal
method for provision for impairment of fixed assets.
Changchai Company, Limited Interim Report 2020
19. Fixed Assets
(1) Recognition Conditions
Fixed assets refers to the tangible assets that simultaneously possess the features as follows: (a) they are
held for the sake of producing commodities, rendering labor service, renting or business management; and
(b) their useful life is in excess of one fiscal year. The fixed assets are only recognized when the relevant
economic benefits probably flow in the Company and its cost could be reliable measured.
(2) Depreciation Method
Category offixed assets Method Useful life Annualdeprecation
Housingandbuilding Average method of 20-40 2.50%-5%
usefullife
Machinery equipment Average method of 6-15 6.67%-16.67%
usefullife
Transportation Average method of 5-10 10%-20%
equipment useful life
Otherequipment Average method of 5-10 10%-20%
usefullife
(3) Recognition Basis, Pricing and Depreciation Method of Fixed Assets by Finance Lease
The Company recognizes those meet with the following one or certain standards as the fixed assets by
finance lease:
1) The leasing contract had agreed that (or made the reasonable judgment according to the relevant
conditions on the lease starting date) when the lease term expires, the ownership of leasing the fixed assets
could be transferred to the Company;
2) The Company owns the choosing right for purchasing and leasing the fixed assets, with the set purchase
price which is estimated far lower than the fair value of the fixed assets by finance lease when executing
the choosing right, so the Company could execute the choosing right reasonably on the lease starting date;
3) Even if the ownership of the fixed assets not be transferred, the lease period is of 75% or above of the
useful life of the lease fixed assets;
4) The current value of the minimum lease payment on the lease starting date of the Company is equal to
90% or above of the fair value of the lease fixed assets on the lease starting date; the current value of the
minimum lease receipts on the lease starting date of the leaser is equal to 90% or above of the fair value of
the lease fixed assets on the lease starting date;
5) The nature of the lease assets is special that only the Company could use it if not execute large
transformation.
The fixed assets by finance lease should take the lower one between the fair value of the leasing assets and
the current value of the minimum lease payment on the lease starting date as the entry value. As for the
minimum lease payment which be regarded as the entry value of the long-term accounts payable, its
Changchai Company, Limited Interim Report 2020
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
20. Construction in Progress
(1) Valuation of the progress in construction
Construction in progress shall be measured at actual cost. Self-operating projects shall be measured at
direct materials, direct wages and direct construction fees; construction contract shall be measured at
project price payable; project cost for plant engineering shall be recognized at value of equipments
installed, cost of installation, trail run of projects. Costs of construction in process also include borrowing
costs and exchange gains and losses, which should be capitalized.
(2) Standardization on construction in process transferred into fixed assets and time point
The construction in process, of which the fixed assets reach to the predicted condition for use, shall carry
forward fixed assets on schedule. The one that has not audited the final accounting shall recognize the cost
and make depreciation in line with valuation value. The construction in process shall adjust the original
valuation value at its historical cost but not adjust the depreciation that has been made after auditing the
final accounting.
21. Borrowing Costs
(1) Recognition principle of capitalization of borrowing costs
The borrowing costs shall include the interest on borrowings, amortization of discounts or premiums on
borrowings, ancillary expenses, and exchange balance on foreign currency borrowings. Where the
borrowing costs occurred belong to specifically borrowed loan or general borrowing used for the
acquisition and construction of investment real estates and inventories over one year (including one year)
shall be capitalized, and record into relevant assets cost. Other borrowing costs shall be recognized as
expenses on the basis of the actual amount incurred, and shall be recorded into the current profits and
losses. The borrowing costs shall not be capitalized unless they simultaneously meet the following three
requirements: (1) The asset disbursements have already incurred; (2) The borrowing costs have already
incurred; and (3) The acquisition and construction or production activities which are necessary to prepare
the asset for its intended use or sale have already started.
(2) The period of capitalization of borrowing costs
The borrowing costs arising from acquisition and construction of fixed assets, investment real estates and
inventories, if they meet the above-mentioned capitalization conditions, the capitalization of the borrowing
costs shall be measured into asset cost before such assets reach to the intended use or sale, Where
acquisition and construction of fixed assets, investment real estates and inventories is interrupted
Changchai Company, Limited Interim Report 2020
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.
22. Intangible Assets
(1) Pricing Method, Service Life, and Impairment Test
(1) Pricing method of intangible assets
Intangible assets purchased should take the actual payment and the relevant other expenses as the actual
cost.
For the intangible assets invested by the investors should be recognized the actual cost according to the
value of the investment contracts or agreements, however, for the value of the contracts or agreements is
not fair, the actual cost should be recognized according to the fair value.
For the intangible assets acquires from the exchange of the non-currency assets, if own the commercial
nature, should be recorded according to the fair value of the swap-out assets; for those not own the
commercial nature, should be recorded according to the book value of the swap-out assets.
For the intangible assets acquires from the debts reorganization should be recognized by the fair value.
(2) Amortization method and term of intangible assets
As for the intangible assets with limited service life, which are amortized by straight-line method when it
is available for use within the service period, shall be recorded into the current profits and losses. The
Company shall, at least at the end of each year, check the service life and the amortization method of
intangible assets with limited service life. When the service life and the amortization method of intangible
assets are different from those before, the years and method of the amortization shall be changed.
Intangible assets with uncertain service life may not be amortized. However, the Company shall check the
service life of intangible assets with uncertain service life during each accounting period. Where there are
evidences to prove the intangible assets have limited service life, it shall be estimated of its service life,
and be amortized according to the above method mentioned.
The rights to use land of the Company shall be amortized according to the rest service life.
Changchai Company, Limited Interim Report 2020
(2) Accounting Polices of Internal R & D Costs
The internal research and development projects of an enterprise shall be classified into research phase and
development phase: the term “research” refers to the creative and planned investigation to acquire and
understand new scientific or technological knowledge; the term “development” refers to the application of
research achievements and other knowledge to a certain plan or design, prior to the commercial production
or use, so as to produce any new material, device or product, or substantially improved material, device
and product.
The Company collects the costs of the corresponding phases according to the above standard of classifying
the research phase and the development phase. The research expenditures for its internal research and
development projects of an enterprise shall be recorded into the profit or loss for the current period. The
development costs for its internal research and development projects of an enterprise may be capitalized
when they satisfy the following conditions simultaneously: it is feasible technically to finish intangible
assets for use or sale; it is intended to finish and use or sell the intangible assets; the usefulness of methods
for intangible assets to generate economic benefits shall be proved, including being able to prove that there
is a potential market for the products manufactured by applying the intangible assets or there is a potential
market for the intangible assets itself or the intangible assets will be used internally; it is able to finish the
development of the intangible assets, and able to use or sell the intangible assets, with the support of
sufficient technologies, financial resources and other resources; the development costs of the intangible
assets can be reliably measured.
23. Impairment of Long-term Assets
For non-current financial Assets of fixed Assets, projects under construction, intangible Assets with limited
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
Changchai Company, Limited Interim Report 2020
book value, it should determine the impairment loss. Impairment loss amount should firstly be deducted
and shared to the book value of business reputation of asset group or asset group combination, then deduct
book value of all assets according to proportions of other book value of above assets in asset group or asset
group combination except business reputation.
After the asset impairment loss is determined, recoverable value amounts would not be returned in future.
24. Long-term Deferred Expenses
Long-term deferred expanses of the Company shall be recorded in light of the actual expenditure, and
amortized averagely within benefit period. In case of no benefit in the future accounting period, the
amortized value of such project that fails to be amortized shall be transferred into the profits and losses of
the current period.
25. Contract Liabilities
Contract liabilities refer to the Company’s obligations in transferring commodities or services to the client
for the received or predicted consideration. Contract assets and contract liabilities under the same contract
shall be presented based on the net amount.
26. Employee Benefits
(1) Accounting Treatment of Short-term Compensation
Short-term compensation mainly including salary, bonus, allowances and subsidies, employee services and
benefits, medical insurance premiums, birth insurance premium, industrial injury insurance premium,
housing fund, labor union expenditure and personnel education fund, non-monetary benefits etc. The
short-term compensation actually happened during the accounting period when the active staff offering the
service for the Company should be recognized as liabilities and is included in the current gains and losses
or relevant assets cost. Of which the non-monetary benefits should be measured according to the fair value.
(2) Accounting Treatment of the Welfare after Demission
The Company classifies the welfare plans after demission into defined contribution plans and defined
benefit plans. Welfare plans after demission refers to the agreement on the welfare after demission reaches
between the Company and the employees, or the regulations or methods formulated by the Company for
providing the welfare after demission for the employees. Of which, defined contribution plans refers to the
welfare plans after demission that the Company no more undertake the further payment obligations after
the payment of the fixed expenses for the independent funds; defined benefit plans, refers to the welfare
plans after demission except for the defined contribution plans.
Defined contribution plans
During the accounting period that the Company providing the service for the employees, the Company
should recognize the liabilities according to the deposited amount calculated by defined contribution plans,
and should be included in the current gains and losses or the relevant assets cost.
(3) Accounting Treatment of the Demission Welfare
The Company should recognize the payroll payment liabilities occur from the demission welfare according
Changchai Company, Limited Interim Report 2020
to the earlier date between the following two conditions and include which in the current gains and losses
when providing the demission welfare for the employees: the Company could not unilaterally withdraw the
demission welfare owning to the relieve plans of the labor relationship or reduction; when the Company
recognizing the costs or expenses related to the reorganization involves with the demission welfare
payments.
27. Provisions
(1) Criteria of provisions
Only if the obligation pertinent to a contingencies shall be recognized as an estimated debts when the
following conditions are satisfied simultaneously:
1) That obligation is a current obligation of the Company;
2) It is likely to cause any economic benefit to flow out of the Company as a result of performance of the
obligation;
3) The amount of the obligation can be measured in a reliable way.
(2) Measurement of provisions
The Company shall measure the provisions in accordance with the best estimate of the necessary expenses
for the performance of the current obligation.
The Company shall check the book value of the provisions on the Balance Sheet Date. If there is any
conclusive evidence proving that the said book value can’t truly reflect the current best estimate, the
Company shall, subject to change, make adjustment to carrying value to reflect the current best estimate.
28. Revenue
Accounting policies for recognition and measurement of revenue:
When the Company fulfills its due performance obligations (namely when the client obtains the control
over related commodities or services), revenues shall be recognized based on the obligation’s amortized
transaction price. Performance Obligation refers to the Company’s promise of transferring commodities or
services that can be clearly defined to the client. Transaction Price refers to the consideration amount duly
charged by the Company 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
or at a certain time. 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.
Changchai Company, Limited Interim Report 2020
The Company shall adopt the Input Method to determine the Performance Schedule. Namely, the
Performance Schedule shall be determined according to the Company’s input for fulfilling performance
obligations. When the Performance Schedule cannot be reasonably determined and all resulting costs are
predicted to be compensated, the Company shall recognize the revenue based on the resulting cost amount
till the Performance Schedule can be reasonably determined.
When the contract involves two or more than two performance obligations, the transaction price shall be
amortized to each single performance obligation on the contract commencement day according to the
relative proportion of the independent selling price of commodities or services under each single
performance obligation. If any solid evidence proves that the contract discount or variable consideration
only relates to one or more than one (not all) performance obligation under the contract, the Company shall
amortize the contract discount or variable consideration to one or more than one related performance
obligations. Independent selling price refers to the price adopted by the Company to independently sell
commodities or services to the client. However, independent selling price cannot be directly observed. The
Company shall estimate the independent selling price by comprehensively considering all related
information that can be reasonably obtained and maximally adopting the observable input value.
Variable Consideration
If any variable consideration exists in the contract, the Company shall determine the optimal estimation of
the variable consideration based on the expected values or the most possible amount. The variable
consideration’s transaction price shall be included without exceeding the total revenue amount recognized
without the risk of significant restitution when all uncertainties are eliminated. On each balance sheet day,
the Company shall re-estimate the variable consideration amount to be included in the transaction price.
Consideration Payable to the Client
If any consideration payable to the client exists in the contract, the Company shall use such consideration
to offset the transaction price unless such consideration is paid for acquiring other clearly-defined
commodities or services from the client, and write down the current revenue at the later time between the
time of recognizing relevant revenues and the time of paying (or promising the payment) the consideration
to the client.
Sales with the Quality Assurance
For sales with the Quality Assurance, if the Quality Assurance involves another separate service except for
the guarantee of all sold commodities or services meeting all established standards, the Quality Assurance
shall constitute a single Performance Obligation; otherwise, the Company shall make corresponding
accounting treatment to the Quality Assurance according to ASBE No.13--Contingency.
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
Changchai Company, Limited Interim Report 2020
amount or proportion.
Interest Revenue
Interest Revenue shall be determined according to the time of the Company’s use of monetary capital and
the actual interest rate.
Rental Income
The rental income from operating lease shall be recognized during each lease period according to the
straight-line method, and the contingent rent shall be included into the current profit and loss without
delay.
29. Government Grants
(1) Type
A government grant means the monetary or non-monetary assets obtained free by an enterprise from the
government. Government grants consist of the government grants pertinent to assets and government
grants pertinent to income according to the relevant government documents.
For those the government documents not definite stipulate the assistance object, the judgment basis of the
Company classifies the government grants pertinent to assets and government subsidies pertinent to
income is: whether are used for purchasing or constructing or for forming the long-term assets by other
methods.
(2) Recognition of Government Subsidies
The government subsidies should be recognized only when meet with the attached conditions of the
government grants as well as could be acquired.
If the government grants are the monetary assets, should be measured according to the received or
receivable amount; and for the government grants are the non-monetary assets, should be measured by fair
value.
(3) Accounting Treatment
The government grants pertinent to assets shall be recognized as deferred income, and included in the
current gains and losses or offset the book value of related assets within the useful lives of the relevant
assets with a reasonable and systematic method. Government grants pertinent to income used to
compensate the relevant costs, expenses or losses of the Company in the subsequent period shall be
recognized as deferred income, and shall be included in the current profit and loss during the period of
confirming the relevant costs, expenses or losses; those used to compensate the relevant costs, expenses or
losses of the Company already happened shall be included in the current gains and losses or used to offset
relevant costs directly.
For government grants that include both assets-related and income-related parts, they should be
distinguished separately for accounting treatment; for government subsidies that are difficult to be
distinguished, they should be classified as income-related.
Government grants related to the daily activities of the Company shall be included into other income or
used to offset relevant costs by the nature of economic business; those unrelated shall be included into
non-operating income.
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
Changchai Company, Limited Interim Report 2020
gains and losses or adjusting the book value of assets for the government grants assets-related that offset
the book value of relevant assets when they are initially recognized; those belong to other cases shall be
directly included in the current gains and losses.
30. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Basis of recognizing the deferred income tax assets
According to the difference between the book value of the assets and liabilities and their tax basis, a
deferred tax asset shall be measured in accord with the tax rates that are expected to apply to the period
when the asset is realized or the liability is settled.
The recognition of the deferred income tax assets is limited by the income tax payable that the Company
probably gains for deducting the deductible temporary differences. At the balance sheet date, where there
is strong evidence showing that sufficient taxable profit will be available against which the deductible
temporary difference can be utilized, the deferred tax asset unrecognized in prior period shall be
recognized.
The Company assesses the carrying amount of deferred tax asset at the balance sheet date. If it’s probable
that sufficient taxable profit will not be available against which the deductible temporary difference can be
utilized, the Company shall write down the carrying amount of deferred tax asset, or reverse the amount
written down later when it’s probable that sufficient taxable profit will be available.
(2) Basis of recognizing the deferred income tax liabilities
According to the difference between the book value of the assets and liabilities and their tax basis, A
deferred tax liability shall be measured in accord with the tax rates that are expected to apply to the period
when the asset is realized or the liability is settled.
31. Lease
(1) Accounting Treatment of Operating Lease
Lessee in an operating lease shall treat the lease payment under an operating lease as a relevant asset cost
or the current profit or loss on a straight-line basis over the lease term. The initial direct costs incurred shall
be recognized as the current profit or loss; Contingent rents shall be charged as expenses in the periods in
which they are incurred.
Lessors in an operating lease shall be recognized as the current profit or loss on a straight-line basis over
the lease term; Initial direct costs incurred by lessors shall be recognized as the current profit or loss; the
initial direct expenses occur should be directly included in the current gains and losses except for those
with larger amount and be capitalized as well as be included in the gains and losses by stages. Contingent
rents shall be charged as expenses in the periods in which they are incurred.
(2) Accounting Treatments of Financial Lease
When the Company as the lessee, On the lease beginning date, the Company shall record the lower one of
the fair value of the leased asset and the present value of the minimum lease payments on the lease
Changchai Company, Limited Interim Report 2020
beginning date as the entering value in an account, recognize the amount of the minimum lease payments
as the entering value in an account of long-term account payable, and treat the balance between the
recorded amount of the leased asset and the long-term account payable as unrecognized financing charges
and the occurred initial direct expenses, should be recorded in the lease assets value. During each lease
period, should recognize the current financing expenses by adopting the actual interest rate.
When the Company as the leasor and on the beginning date of the lease term, the Company shall recognize
the sum of the minimum lease receipts on the lease beginning date and the initial direct costs as the
entering value in an account of the financing lease values receivable, and record the unguaranteed residual
value at the same time. The balance between the sum of the minimum lease receipts, the initial direct costs
and the unguaranteed residual value and the sum of their present values shall be recognized as unrealized
financing income. During each lease period, should recognize the current financing revenues adopting the
actual interest rate.
32. Other Significant Accounting Policies and Estimates
(1) Operation termination
Operation termination refers to the compose part that meet with one of the following conditions which had
been disposed by the Group or be classified to held-to-sold as well as could be individually distinguished
in operating and compiling the financial statement:
1) The compose part represents an individual main business or a main operation area;
2) The compose part is a part intends to dispose and plan an individual main business or a main operation
area;
3) The compose part is a subsidiary which be acquired only for resold.
(2) Hedging accounting
The term “hedging” refers to one or more hedging instruments which are designated by an enterprise for
avoiding the risks of foreign exchange, interest rate, commodity price, stock price, credit and etc., and
which is expected to make the changes in fair value or cash flow of hedging instrument(s) to offset all or
part of the changes in the fair value or cash flow of the hedged item.
The term “hedging instrument” shall refer to a derivative instrument which is designated by an enterprise
for hedging and by which it is expected that changes in its fair value or cash flow can offset the changes in
fair value or cash flow of the hedged item. For a hedging of foreign exchange risk, a non-derivative
financial asset or non-derivative financial liability may be used as a hedging instrument.
The “hedged item” shall refer to the following items which make an enterprise faced to changes in fair
value or cash flow and are designated as the hedged objectives.
The hedging should be executed by the hedging accounting methods when satisfying the following
conditions at the same time:
1) At the commencement of the hedging, the enterprise shall specify the hedging relationship formally
(namely the relationship between the hedging instrument and the hedged item) and prepare a formal
written document on the hedging relationship, risk management objectives and the strategies of hedging.
2) The hedging expectation is highly efficient and meets the risk management strategy, which is confirmed
for the hedging relationship by enterprise at the very beginning.
3) For a cash flow hedging of forecast transaction, the forecast transaction shall be likely to occur and shall
Changchai Company, Limited Interim Report 2020
make the enterprise faced to the risk of changes in cash flow, which will ultimately affect the profits and
losses.
4) The effectiveness of hedging can be reliably measured.
5) The hedging is highly effective in accounting period in which the hedging relationship is specified.
33. Changes in Main Accounting Policies and Estimates
(1) Change of Accounting Policies
√ Applicable □ Not applicable
Changestotheaccounting policies andwhy Approval process Remark
The Ministry of Finance issued the Notice on On 28 April 2020, the
Revising and Printing the Accounting Standards for Company held the 2nd Meeting
Business Enterprises No.14-Revenue of the 9th Board of Directors
(CK[2017]No.22) (hereinafter referred to as the and the 2nd Meeting of the 9th
“New Standards governing Revenue”) in July 2017 Supervisory Committee and
and required all domestically listed companies to approved the Proposal on
implement itsince 1January2020. Changes of Some Accounting
Policies
(1) Influence of Implementing the New Standards Governing Revenue
Affected items in the consolidated balance sheet and amount thereof:
Item 31December 2019 Affectedby classification and 1January 2020
measurement
Advances from31,789,001.78 -31,789,001.78
customers
Contract liabilities 31,789,001.78
Affected items in the balance sheet of the Company as the parent and amount thereof:
Item 31December 2019 Affectedby classification and 1January 2020
measurement
Advances from28,673,664.87 -28,673,664.87
customers
Contract liabilities 28,673,664.87
(2) Changes in Accounting Estimates
□ Applicable √ Not applicable
(3) Adjustments to the Financial Statements at the Beginning of the First Execution Year of any New
Standards Governing Revenue or Leases since 2020
Applicable
Changchai Company, Limited Interim Report 2020
Consolidated Balance Sheet
Unit: RMB
Item 31December 2019 1January 2020 Adjusted
Currentassets:
Monetaryassets 638,589,260.09 638,589,260.09
Settlementreserve
Interbankloansgranted
Held-for-trading financial 13,050,000.00 13,050,000.00
assets
Derivativefinancial assets
Notesreceivable 606,283,023.05 606,283,023.05
Accountsreceivable 419,302,056.87 419,302,056.87
Accounts receivable
financing
Prepayments 12,968,746.16 12,968,746.16
Premiumsreceivable
Reinsurancereceivables
Receivable reinsurance
contractreserve
Otherreceivables 9,703,390.94 9,703,390.94
Including:Interest
receivable
Dividends
receivable
Financial assets purchased
underresale agreements
Inventories 473,359,168.90 473,359,168.90
Contractassets
Assetsheldforsale
Current portion of
non-currentassets
Othercurrent assets 6,421,275.47 6,421,275.47
Totalcurrent assets 2,179,676,921.48 2,179,676,921.48
Non-currentassets:
Changchai Company, Limited Interim Report 2020
Loans and advances to
customers
Investmentsindebt
obligations
Investmentsinother debt
obligations
Long-termreceivables
Long-term equity
investments
Investmentsinother
equityinstruments 532,886,000.00 532,886,000.00
Othernon-current 77,952,101.63 77,952,101.63
financialassets
Investmentproperty 48,447,666.83 48,447,666.83
Fixedassets 457,722,667.32 457,722,667.32
Constructioninprogress 91,358,156.24 91,358,156.24
Productiveliving assets
Oilandgasassets
Right-of-useassets
Intangibleassets 99,699,450.26 99,699,450.26
Developmentcosts
Goodwill
Long-term prepaid
expense 53,497.80 53,497.80
Deferred income tax
assets 1,023,863.04 1,023,863.04
Othernon-current assets
Totalnon-current assets 1,309,143,403.12 1,309,143,403.12
Totalassets 3,488,820,324.60 3,488,820,324.60
Currentliabilities:
Short-termborrowings 22,000,000.00 22,000,000.00
Borrowings from the
centralbank
Interbankloansobtained
Held-for-tradingfinancial
Changchai Company, Limited Interim Report 2020
liabilities
Derivative financial
liabilities
Notespayable 403,035,000.00 403,035,000.00
Accountspayable 525,625,016.89 525,625,016.89
Advancesfromcustomers 31,789,001.78 -31,789,001.78
Contractliabilities 31,789,001.78 31,789,001.78
Financial assets sold
underrepurchase agreements
Customer deposits and
interbankdeposits
Payables for acting
tradingofsecurities
Payables for underwriting
ofsecurities
Employee benefits
payable 44,559,015.79 44,559,015.79
Taxespayable 9,094,382.58 9,094,382.58
Otherpayables 205,064,145.10 205,064,145.10
Including:Interest
payable
Dividends 3,891,433.83 3,891,433.83
payable
Handling charges and
commissions payable
Reinsurancepayables
Liabilities directly
associated with assets held
forsale
Current portion of
non-currentliabilities
Othercurrent liabilities 1,177,712.38 1,177,712.38
Totalcurrent liabilities 1,242,344,274.52 1,242,344,274.52
Non-currentliabilities:
Insurancecontract reserve
Long-termborrowings
Changchai Company, Limited Interim Report 2020
Bondspayable
Including: Preferred
shares
Perpetual
bonds
Leaseliabilities
Long-termpayables
Long-term employee
benefitspayable
Provisions
Deferredincome 58,864,111.22 58,864,111.22
Deferred income tax 57,082,890.27 57,082,890.27
liabilities
Other non-current
liabilities
Totalnon-current liabilities 115,947,001.49 115,947,001.49
Totalliabilities 1,358,291,276.01 1,358,291,276.01
Owners’equity:
Sharecapital 561,374,326.00 561,374,326.00
Otherequity instruments
Including: Preferred
shares
Perpetual
bonds
Capitalreserves 164,328,665.43 164,328,665.43
Less:Treasurystock
Other comprehensive 317,059,775.00 317,059,775.00
income
Specificreserve 17,560,202.07 17,560,202.07
Surplusreserves 322,228,533.72 322,228,533.72
Generalreserve
Retainedearnings 728,341,265.36 728,341,265.36
Total equity attributable to
owners of the Company as 2,110,892,767.58 2,110,892,767.58
theparent
Changchai Company, Limited Interim Report 2020
Non-controlling interests 19,636,281.01 19,636,281.01
Totalowners’equity 2,130,529,048.59 2,130,529,048.59
Total liabilities and owners’ 3,488,820,324.60 3,488,820,324.60
equity
Balance Sheet of the Company as the Parent
Unit: RMB
Item 31December 2019 1January 2020 Adjusted
Currentassets:
Monetaryassets 584,957,678.96 584,957,678.96
Held-for-trading financial
assets
Derivativefinancial assets
Notesreceivable 576,948,023.05 576,948,023.05
Accountsreceivable 337,447,538.04 337,447,538.04
Accounts receivable
financing
Prepayments 6,386,284.14 6,386,284.14
Otherreceivables 22,741,542.22 22,741,542.22
Including:Interest
receivable
Dividends
receivable
Inventories 368,653,472.39 368,653,472.39
Contractassets
Assetsheldforsale
Current portion of
non-currentassets
Othercurrent assets 3,898,333.51 3,898,333.51
Totalcurrent assets 1,901,032,872.31 1,901,032,872.31
Non-currentassets:
Investmentsindebt
obligations
Investmentsinother debt
obligations
Changchai Company, Limited Interim Report 2020
Long-termreceivables
Long-term equity
investments 252,752,730.03 252,752,730.03
Investmentsinother
equityinstruments 532,886,000.00 532,886,000.00
Othernon-current 50,000,000.00 50,000,000.00
financialassets
Investmentproperty 48,447,666.83 48,447,666.83
Fixedassets 364,071,199.07 364,071,199.07
Constructioninprogress 89,330,161.60 89,330,161.60
Productiveliving assets
Oilandgasassets
Right-of-useassets
Intangibleassets 70,169,770.91 70,169,770.91
Developmentcosts
Goodwill
Long-term prepaid
expense
Deferred income tax
assets 970,026.67 970,026.67
Othernon-current assets
Totalnon-current assets 1,408,627,555.11 1,408,627,555.11
Totalassets 3,309,660,427.42 3,309,660,427.42
Currentliabilities:
Short-termborrowings 5,000,000.00 5,000,000.00
Held-for-tradingfinancial
liabilities
Derivative financial
liabilities
Notespayable 392,105,000.00 392,105,000.00
Accountspayable 481,854,210.18 481,854,210.18
Advancesfromcustomers 28,673,664.87 -28,673,664.87
Contractliabilities 28,673,664.87 28,673,664.87
Changchai Company, Limited Interim Report 2020
Employee benefits 39,125,477.30 39,125,477.30
payable
Taxespayable 5,952,664.10 5,952,664.10
Otherpayables 192,046,130.29 192,046,130.29
Including:Interest
payable
Dividends
payable 3,243,179.97 3,243,179.97
Liabilities directly
associated with assets held
forsale
Current portion of
non-currentliabilities
Othercurrent liabilities
Totalcurrent liabilities 1,144,757,146.74 1,144,757,146.74
Non-currentliabilities:
Long-termborrowings
Bondspayable
Including: Preferred
shares
Perpetual
bonds
Leaseliabilities
Long-termpayables
Long-term employee
benefitspayable
Provisions
Deferredincome 58,864,111.22 58,864,111.22
Deferred income tax
liabilities 55,951,725.00 55,951,725.00
Other non-current
liabilities
Totalnon-current liabilities 114,815,836.22 114,815,836.22
Totalliabilities 1,259,572,982.96 1,259,572,982.96
Owners’equity:
Sharecapital 561,374,326.00 561,374,326.00
Changchai Company, Limited Interim Report 2020
Otherequity instruments
Including: Preferred
shares
Perpetual
bonds
Capitalreserves 183,071,147.70 183,071,147.70
Less:Treasurystock
Other comprehensive 317,059,775.00 317,059,775.00
income
Specificreserve 17,560,202.07 17,560,202.07
Surplusreserves 322,228,533.72 322,228,533.72
Retainedearnings 648,793,459.97 648,793,459.97
Totalowners’equity 2,050,087,444.46 2,050,087,444.46
Total liabilities and owners’ 3,309,660,427.42 3,309,660,427.42
equity
(4) Retroactive Adjustments to Comparative Data of Prior Years when First Execution of any New
Standards Governing Revenue or Leases since 2020
□ Applicable √ Not applicable
VI. Taxation
1. Main Taxes and Tax Rate
Categoryoftaxes Taxbasis Taxrate
VAT Payabletosales revenue 13%,9%,6%
Urbanmaintenance and Taxableturnover amount Taxpaidinaccordance with thetax
constructiontax regulations oftaxunitslocation
Enterpriseincome tax Taxableincome 25%or15%
Educationsurcharge Taxableturnover amount 5%
Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate
Name Income taxrate
ChangchaiCompany,Limited 15%
ChangchaiWanzhouDieselEngine Co.,Ltd. 15%
ChangzhouChangchai Benniu DieselEngine Fittings Co.,Ltd. 25%
Changchai Company, Limited Interim Report 2020
ChangzhouHousheng Investment Co., Ltd. 5%
ChangzhouChangchai HoushengAgricultural Equipment Co., Ltd. 25%
ChangzhouFujiChangchai Robin Gasoline EngineCo., Ltd. 25%
JiangsuChangchai Machinery Co., Ltd. 25%
ChangzhouXingsheng RealEstate Management Co.,Ltd. 25%
ChangzhouXingsheng RealEstate Management Co.,Ltd. 5%
2. Tax Preference
On 24 October 2018, the Company obtained the Certificates for High-tech Enterprises again, and it still
enjoys 15-percent preferential rate for corporate income tax during the Reporting Period; the Company’s
controlling subsidiary-Changchai Wanzhou Diesel Engine Co., Ltd., the controlling subsidiary company,
shall pay the corporate income tax at tax rate 15% from 1 January 2011 to 31 December 2020 in
accordance with the Notice of the Ministry of Finance, the General Administration of Customs of PRC and
the National Administration of Taxation about the Preferential Tax Policies for the Western Development.
The wholly-owned subsidiaries Changzhou Housheng Investment Co., Ltd. and Changzhou Xingsheng
Real Estate Management Co., Ltd. are eligible small enterprises with low profits and shall pay the
corporate income tax at the tax rate from 5% to 10% for small enterprises with low profits during the
Reporting Period.
VII. Notes to Major Items in the Consolidated Financial Statements of the Company
1. Monetary Assets
Unit: RMB
Item Endingbalance Beginning balance
Cashonhand 348,885.71 181,115.21
Bankdeposits 489,583,551.02 545,271,159.50
Othermonetary assets 110,342,332.72 93,136,985.38
Total 600,274,769.45 638,589,260.09
Ofwhich:Totalamount deposited
overseas
Totalamount of
restrictioninuse byguaranteed,
pledgedorfrozen
At the period-end, the restricted monetary assets of the Company was RMB106,637,411.65, of which
RMB105,752,474.15 was the cash deposit for bank acceptance bills, and RMB884,937.50 was cash
deposit for environment.
Changchai Company, Limited Interim Report 2020
2. Trading Financial Assets
Unit: RMB
Item Endingbalance Beginning balance
Financialassets atfair value 14,600,000.00 13,050,000.00
throughprofitorloss
Ofwhich: Financial products 14,600,000.00 13,050,000.00
Total 14,600,000.00 13,050,000.00
3. Notes Receivable
(1) Notes Receivable Listed by Category
Unit: RMB
Item Ending balance Beginning balance
Bankacceptance bill 508,401,509.54 606,283,023.05
Total 508,401,509.54 606,283,023.05
(2) There Were No Notes Receivable Pledged by the Company at the Period-end
(3) Notes Receivable which Had Endorsed by the Company or had Discounted but had not Due on
the Balance Sheet Date at the Period-end
Unit: RMB
Item Amountofrecognition termination Amount ofnotterminated
at theperiod-end recognition attheperiod-end
Bankacceptance bill 372,860,750.83
Total 372,860,750.83
(4) There Were No Notes Transferred to Accounts Receivable because Drawer of the Notes Failed to
Execute the Contract or Agreement at the Period-end
4. Accounts Receivable
(1) Accounts Receivable Classified by Category
Unit: RMB
Category Ending balance Beginning balance
Changchai Company, Limited Interim Report 2020
Carrying Baddebt Carrying Baddebt
amount provision Carryi amount provision
Withd Withd Carryinng
Amou Propo Amou rawal value Amou Propor Amou rawal gvalue
nt rtion nt propo nt tion nt propor
rtion tion
Accounts
receivablefor 35,35 33,45 1,895, 35,53 33,449
whichbad debt 4,686. 9,099. 586.8 4,574. 5.31 ,794.4 2,084,7
provision 26 3.85 42 94.64 4 55 1 94.13 80.14
separately
accrued
Ofwhich:
Accounts
receivable with
significant 30,51 28,61 1,895, 30,64 28,557
amount for 5,544. 9,957. 586.8 2,717. 4.58 ,937.4 2,084,7
which bad debt 63 3.32 79 93.79 4 62 8 93.20 80.14
provision
separately
accrued
Accounts
receivable with
insignificant 4,839, 4,839, 4,891,
amount for 141.6 141.6 100.0 0.00 856.9 0.73 4,891, 100.0 0.00
which bad debt 3 0.53 3 0 3 856.93 0
provision
separately
accrued
Accounts
receivablefor 882,7 154,2 728,5 633,0 215,84
whichbad debt 96,35 92,25 04,10 62,36 94.69 5,088. 417,217
provision 6.12 96.15 0.39 17.48 5.73 5.04 31 34.10 ,276.73
accruedby
group
Ofwhich:
Accounts 882,7 154,2 728,5 633,0 215,84 417,217
receivablefor 96,35 92,25 04,10 62,36 94.69 5,088.96.1517.48 34.10 ,276.73
whichbad debt 6.12 0.39 5.73 5.04 31
Changchai Company, Limited Interim Report 2020
provision
accruedby
creditrisk
featuresgroup
918,1 100.0 187,7 730,3 668,5 249,29 419,302
Total 51,04 0 51,34 20.45 99,69 96,93 100.00 4,882. 37.29 ,056.87
2.38 9.81 2.57 9.59 72
Account receivables withdrawn bad debt provision separately with significant amount at the period end:
Unit: RMB
Ending balance
Name Carrying amount Baddebt provision Withdrawal Reasonof
proportion withdrawal
Customer1 Expected to
1,470,110.64 1,470,110.64 100.00% difficultlyrecover
Customer2 1,902,326.58 1,902,326.58 100.00% Difficulttorecover
Customer3 6,215,662.64 6,215,662.64 100.00% Difficulttorecover
Customer4 Expected to
2,254,860.60 2,175,814.37 96.49% difficultlyrecover
Customer5 Expected to
3,633,081.23 1,816,540.62 50.00% difficultlyrecover
Customer6 Expected to
3,279,100.00 3,279,100.00 100.00% difficultlyrecover
Customer7 Expected to
2,068,377.01 2,068,377.01 100.00% difficultlyrecover
Customer8 5,359,381.00 5,359,381.00 100.00% Difficulttorecover
Customer9 2,584,805.83 2,584,805.83 100.00% Difficulttorecover
Customer10 1,747,839.10 1,747,839.10 100.00% Difficulttorecover
Total 30,515,544.63 28,619,957.79 -- --
Accounts receivable for which bad debt provision accrued by credit risk features group:
Unit: RMB
Aging Ending balance
Carrying amount Baddebt provision Withdrawalproportion
Within1year 723,172,550.57 14,463,451.49 2.00
1to2years 11,827,502.09 591,375.09 5.00
2to3years 7,877,220.88 1,181,583.14 15.00
Changchai Company, Limited Interim Report 2020
3to4years 1,938,785.27 581,635.58 30.00
4to5years 1,265,230.57 759,138.34 60.00
Over5years 136,715,066.75 136,715,066.75 100.00
Total 882,796,356.12 154,292,250.39 --
Notes of the basis of determining the group:
The accounts receivable was adopted the aging analysis based on the months when the accounts incurred
actually, among which the accounts incurred earlier will be priority to be settled in terms of the capital
turnover.
Explanation of the input value and assumption adopted to determine the withdrawal amount of bad debt
provision on the Current Period: With reference to the experience of the historical credit loss, combining
with the prediction of the present status and future financial situation, the comparison table was prepared
between the aging of the accounts receivable and estimated credit loss rate in the duration and to calculate
the estimated credit loss.
Please refer to the relevant information of disclosure of bad debt provision of other accounts receivable if
adopting the general mode of expected credit loss to withdraw bad debt provision of accounts receivable.
□ Applicable √ Not applicable
Disclosure by aging
Unit: RMB
Aging Carryingamount
Within1year(including 1year) 723,172,550.56
1to2years 12,928,501.44
2to3years 11,061,670.64
Over3years 170,988,319.74
3to4years 5,336,135.78
4to5years 2,864,816.64
Over5years 162,787,367.32
Total 918,151,042.38
(2) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
Information of bad debt provision withdrawn:
Unit: RMB
Beginning Changes intheReporting Period
Category Reversal or Ending balancebalanceWithdrawal Write-off
recovery
Changchai Company, Limited Interim Report 2020
Baddebt
provision 33,449,794.41 65,231.52 55,926.51 33,459,099.42
withdrawn
separately
Baddebt
provision 215,845,088.31 6,592,063.00 68,144,900.92 154,292,250.39
withdrawnby
group
Total 249,294,882.72 6,657,294.52 55,926.51 68,144,900.92 187,751,349.81
Of which bad debt provision reversed or recovered with significant amount in the Reporting Period: No.
(3) Accounts Receivable with Actual Verification during the Reporting Period
Unit: RMB
Item Verifiedamount
Accountsreceivable with actual verification 68,144,900.92
Of which the verification of significant accounts receivable:
Unit: RMB
Natureofthe Verification Arising from
Nameofthe accounts Verifiedamount Reasonfor procedures related-party
entity receivable verification performed transactions or
not
WuweiJinwa The aging of TheCompany
Vehicle 10,000,000.00 canceled held the3rd
Manufacturing receivables Meeting ofthe
Co.,Ltd. shall exceed 5 9thBoardof
Xuzhou years and result Directors and
Zhengda from fruitless the3rdMeeting
Agricultural 7,583,232.65 collection, and ofthe9th
Machinery Baddebt losses if any single Supervisory Not
Company client’s large Committee on
Shandong amount is 28 June2020
Agricultural involved andapproved
Machinery without any theProposal on
GroupHeze 4,581,880.41 business Verificationof
Agricultural transaction with SomeAccounts
Machinery the Company Receivable.
Company for over ten
Changchai Company, Limited Interim Report 2020
SichuanTiantai years, the
Electromechani client’s
calAgricultural 3,600,000.00 qualification for
Machinery Co., business
Ltd. operation shall
PuyangShifeng be canceled or
Agricultural 2,752,840.00 the insolvency
Machinery liquidation is
Company afinnyishepdrowduitchtioount
JiningWater and operation
Conservancy activities.
Drilling 2,450,966.67
Machinery
Factory
Zhanjiang
Agricultural 2,180,243.72
Machinery
Company
KaifengTractor
Manufacturing 1,976,282.47
Factory
Linyi
Agricultural
Machinery 1,860,830.82
Group
Corporation
HenanZhongcu
Industrial 1,758,686.48
Corporation
Shanxi
Jiaocheng 1,662,052.98
XinyuanIron
Factory
Ganyu
Agricultural 1,285,160.60
Machinery Co.,
Ltd.
Nanning 1,236,225.30
Changshunrong
Changchai Company, Limited Interim Report 2020
Agricultural
Machinery Co.,
Ltd.
Longma
Agricultural 1,235,170.95
VehicleCo.,
Ltd.
XinjiangKorla
Feihong
Agricultural 1,200,000.00
Machinery Co.,
Ltd.
Gaotang
Raoyang
County 1,149,217.70
Agricultural
Machinery City
HainingBus 848,158.92
GeneralFactory
Yunnan
Nanping
Agricultural 841,642.86
Machinery
Management
Tongshan
Dongfang
Agricultural 830,000.00
Machinery
Sales
Department
JuningHuaihai
Agricultural
Machinery 800,000.00
Trading
Company
JiangxiLida
Agricultural 797,786.72
Machinery
SalesCo., Ltd.
Changchai Company, Limited Interim Report 2020
Shenyang
Fusang
Agricultural 796,226.73
Machinery
Corporation
AnhuiGuoyang
Agricultural 760,197.20
Machinery
Corporation
Tai’anGuotai 728,666.36
TractorFactory
LijinYongxing
Agricultural 677,250.00
Machinery
SalesCo., Ltd.
HefeiXinfa
MaterialsCo., 551,305.36
Ltd.
Changqing
County
Agricultural 549,800.00
Machinery
Company
HenanBoai
Agricultural 537,698.10
Machinery
Company
Shandong
ShuangliGroup 12,343,782.28
Co.,Ltd.
Shandong
Dongchang
GroupLabor 520,892.51
Service
Corporation
Total -- 68,096,197.79 -- -- --
Changchai Company, Limited Interim Report 2020
(4) Top 5 of the Ending Balance of the Accounts Receivable Collected according to the Arrears Party
Unit: RMB
Endingbalance of Proportiontototal ending Ending balanceofbaddebt
Nameoftheentity accountsreceivable balance ofaccounts provision
receivable
Customer1 376,475,098.82 41.00% 7,529,501.98
Customer2 54,293,467.67 5.91% 1,085,869.35
Customer3 32,287,845.17 3.52% 763,817.03
Customer4 21,395,243.36 2.33% 427,904.87
Customer5 18,593,170.87 2.03% 371,863.42
Total 503,044,825.89 54.79%
At the end of the period, the sum of the top five accounts receivable collected according to the arrearsamounted to RMB 503,044,825.89, accounting for54.79% of the total balance at the end of the period. Thecorresponding ending balance of bad debt provision is RMB10,178,956.65 .
5. Prepayments
(1) List by Aging Analysis
Unit: RMB
Aging Endingbalance Beginning balance
Amount Proportion Amount Proportion
Within1year 8,202,915.10 80.36% 10,857,776.65 83.72%
1to2years 769,139.60 7.53% 993,030.99 7.66%
2to3years 233,809.27 2.29% 115,335.90 0.89%
Over3years 1,002,582.11 9.82% 1,002,602.62 7.73%
Total 10,208,446.08 -- 12,968,746.16 --
There was no prepayment with significant amount aging over one year as of the period-end.
(2) Top 5 of the Ending Balance of the Prepayments Collected according to the Prepayment Target
At the period-end, the total top 5 of the ending balance of the prepayments collected according to the
prepayment target was RMB5,352,129.27 accounting for 52.43% of the total ending balance of
prepayments.
Changchai Company, Limited Interim Report 2020
6. Other Receivables
Unit: RMB
Item Endingbalance Beginning balance
Interestreceivable 0.00 0.00
Dividendreceivable 0.00 0.00
Otherreceivables 10,280,692.50 9,703,390.94
Total 10,280,692.50 9,703,390.94
(1) Other Receivables
1) Other Receivables Classified by Accounts Nature
Unit: RMB
Nature Ending carrying value Beginning carrying value
Marginand cashpledge 4,200.00 7,758.60
Intercoursefunds 27,822,768.62 24,536,151.71
Pettycashandborrowings by employees 1,600,421.35 3,208,541.67
Other 13,654,933.26 15,374,916.41
Total 43,082,323.23 43,127,368.39
2) Withdrawal of Bad Debt Provision
Unit: RMB
Firststage Secondstage Third stage
Bad debtprovision Expected credit Exdpuercatteidonlo(scsreindittheExpected lossinthe Total
loss ofthenext impairment not duration (credit
12months occurred) impairment occurred)
Balanceof1 33,423,977.45 33,423,977.45
January2020
Balanceof1
January2020inthe —— ——
CurrentPeriod
--Transferto
Secondstage
Changchai Company, Limited Interim Report 2020
--TransfertoThird
stage
--Reverse to
Secondstage
--Reverse toFirst
stage
Withdrawal ofthe 26,813.06 26,813.06
CurrentPeriod
Reversalofthe 649,159.78 649,159.78
CurrentPeriod
Write-offsofthe
CurrentPeriod
Verification ofthe
CurrentPeriod
Otherchanges
Balanceof30June 32,801,630.73 32,801,630.73
2020
Changes of carrying amount with significant amount changed of loss provision in the current period
□ Applicable √ Not applicable
Disclosure by aging
Unit: RMB
Aging Endingbalance
Within1year(including 1year) 5,923,228.62
1to2years 3,274,854.15
2to3years 605,754.36
Over3years 33,278,486.10
3to4years 1,014,471.63
4to5years 190,365.24
Over5years 32,073,649.23
Total 43,082,323.23
3) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
Information of withdrawal of bad debt provision:
Changchai Company, Limited Interim Report 2020
Unit: RMB
ChangesintheReporting Period
Category Beginning balance Withdrawal Reversal or Write- Other Endingbalance
recovery off
Baddebt 5,042,448.58 25,814.56 5,068,263.14
provisionfor
whichaccrued
separately
Baddebt 28,381,528.87 998.50 649,159.78 27,733,367.59
provisionfor
whichaccrued by
group
Total 33,423,977.45 26,813.06 649,159.78 32,801,630.73
4) There Was No Particulars of the Actual Verification of Other Receivables during the Reporting
Period
5) Top 5 of the Ending Balance of the Other Receivables Collected according to the Arrears Party
Unit: RMB
Proportion to Endingbalance
Name oftheentity Nature Ending balance Aging ending balance ofbaddebt
of other provision
receivables
ChangzhouChangjiang Intercourse 5,000,000.00 Within1 11.61% 100,000.00
CastingMaterials Co., funds year
Ltd.
Changzhou Intercourse 2,940,000.00 Over 5 6.82% 2,940,000.00
Compressors Factory funds years
ChangchaiGroupImp. Intercourse 2,853,188.02 Over 5 6.62% 2,853,188.02
&Exp. Co.,Ltd. funds years
ChangzhouNew Intercourse 1,626,483.25 Over 5 3.78% 1,626,483.25
DistrictAccounting funds years
Centre
ChangchaiGroup Intercourse 1,140,722.16 Over 5 2.65% 1,140,722.16
Settlement Centre funds years
Total -- 13,560,393.43 -- 31.48% 8,660,393.43
Changchai Company, Limited Interim Report 2020
7. Inventory
Whether the Company needs to comply with the requirements of real estate industry
No
(1) Category of Inventory
Unit: RMB
Ending balance Beginning balance
Item Carrying Falling price Carrying Carrying Falling price Carrying
amount reserves value amount reserves value
Raw 126,396,694. 7,158,592.68 119,238,102. 125,757,856. 6,539,831.39 119,218,025.
materials 75 07 89 50
Materials 12,579,124.5 12,396,013.2 12,444,566.4 183,111.28 12,261,455.1
processedon 0 183,111.28 2 1 3
commission
Goods in 120,787,978. 25,872,020.6 94,915,957.9 142,399,981. 26,985,350.1 115,414,631.
process 56 6 0 66 4 52
Finished 215,181,247. 15,698,168.0 199,483,079. 239,701,513. 15,404,153.2 224,297,359.
goods 70 5 65 09 9 80
Low priced 3,373,235.80 1,205,538.85 2,167,696.95
and easily 3,377,456.53 1,205,538.85 2,171,917.68
wornarticles
Total 478,322,502. 50,117,431.5 428,205,070. 523,677,153. 50,317,984.9 473,359,168.
04 2 52 85 5 90
(2) Falling Price Reserves
Unit: RMB
Beginning Increase Decrease
Item Reversal or Ending balancebalanceWithdrawal Other Other
write-off
Rawmaterials 6,539,831.39 661,773.68 43,012.40 7,158,592.67
Materials
processedon 183,111.28 183,111.28
commission
Goods in 26,985,350.14 9,115,845.06 10,229,174.54 25,872,020.66
process
Changchai Company, Limited Interim Report 2020
Finishedgoods 15,404,153.29 6,566,186.26 6,272,171.49 15,698,168.06
Low priced and
easily worn 1,205,538.85 1,205,538.85
articles
Total 50,317,984.95 16,343,805.00 16,544,358.43 50,117,431.52
(3) There Was No Capitalized Borrowing Expense in the Ending Balance of Inventories
8. Other Current Assets
Unit: RMB
Item Ending balance Beginning balance
TheVATtaxcredits 7,748,855.06 6,043,473.29
Prepaidexpense 802,628.31 98,856.26
Other 25,479.42 278,945.92
Total 8,576,962.79 6,421,275.47
9. Long-term Equity Investment
Unit: RMB
Increase/decrease
Gain Adjust EndinBeginCash Endin
or loss ment Withd gningbonus g
Invest baleanc Additi Reduc reiczoedgnotohfer Chang or raowfal balanc baelaonfc
ees (carryi inovneasltinevdest under compr oetshienrapnronfoiutdeprec Other (caerryi deprec
the ehensi iation iationngment ment equity nced ng
value) emqeutihtyoincvoem to reseesrv value) reseesrv
d e issue
II.Associated enterprises
Changchai Company, Limited Interim Report 2020
Beijin
g
Tsingh
ua
Indust
rial 0 0 44,182
Invest .50
ment
Mana
gemen
t Co.,
Ltd.
Subtot 0 0 44,182
al .50
Total 0 0 44,1.5820
10. Other Equity Instrument Investment
Unit: RMB
Item Ending balance Beginning balance
ChangzhouSynergetic Innovation PrivateEquity 100,000,000.00 100,000,000.00
Fund(Limited Partnership)
Otherequity instrumentinvestment measured by 362,160,000.00 432,886,000.00
fairvalue
Total 462,160,000.00 532,886,000.00
Non-trading equity instrument investment disclosed by category
Unit: RMB
Amount of Reasonforassigning Reasonfor
Accu other tomeasure byfair other
Dividend Accumulative mulat comprehensiv valueofwhich comprehensi
Item income gains ive etransferred changes beincluded to veincome
recognized losses toretained othercomprehensive transferred to
earnings income retained
earnings
Foton Motor Co., 39,015,000.00 Non-trading equity
Ltd. investment
Changchai Company, Limited Interim Report 2020
Bank ofJiangsu 4,865,000.00 27,725,000.00 Non-trading equity
investment
Changzhou
Synergetic
Innovation Non-trading equity
Private Equity investment
Fund (Limited
Partnership)
Total 4,865,000.00 66,740,000.00
Other notes:
n(1o)n-Ttrhaedinstgocekqsuiotyf ilnisvteedstmceonmt.paTnhieersefsourceh, tahse FinovtoesntmMenottowr aCsod.,ivLidtded. hinetlod tbhye tfhineanCcoiamlpaasnsyetsbealsosniggnetod
measured by fair value and the changes be included in the other comprehensive income.
o(2f)FTohtoencMorpootorratCeos.e,cLutrdit.ieasndof1,a9c0c0o,m00m0oodfatBioannkbuosfiJnieasnsgsstuil.l on lending at the period-end: 7,183,900 shares
12. Other Non-current Financial Assets
Unit: RMB
Item Ending balance Beginning balance
JiangsuLiance Electromechanical TechnologyCo., 7,200,000.00 7,200,000.00
Ltd.
KailongHighTechnologyCo., Ltd. 20,001,268.00 20,001,268.00
GuizhouWarmenPharmaceutical Co,Ltd. 200,104.80 200,104.80
GuizhouAndaEnergyTechnologyCo., Ltd. 195,297.49 195,297.49
HenanLantian GasCo., Ltd. 160,744.76 160,744.76
HebeiSongheRecycling Resources Co., Ltd. 104,699.44 104,699.44
AnhuiHofoElectromechanical Co., Ltd. 89,987.14 89,987.14
JiangsuHousheng NewEnergyTechnologyCo., Ltd. 50,000,000.00 50,000,000.00
Total 77,952,101.63 77,952,101.63
12. Investment Property
(1) Investment Property Adopting the Cost Measurement Mode
√ Applicable □ Not applicable
Unit: RMB
Changchai Company, Limited Interim Report 2020
Item Houses andbuildings Total
I.Original carrying value
1.Beginning balance 87,632,571.14 87,632,571.14
2.Increasedamount oftheperiod
(1)Outsourcing
(2) Transfer from inventories/fixed
assets/construction inprogress
(3)Enterprise combination increase
3.Decreased amount oftheperiod
(1)Disposal
(2)Othertransfer
4.Ending balance 87,632,571.14 87,632,571.14
II. Accumulative depreciation and
accumulative amortization
1.Beginning balance 39,184,904.31 39,184,904.31
2.Increasedamount oftheperiod 1,104,170.40 1,104,170.40
(1)Withdrawaloramortization 1,104,170.40 1,104,170.40
3.Decreased amount oftheperiod
(1)Disposal
(2)Othertransfer
4.Ending balance 40,289,074.71 40,289,074.71
III.Depreciation reserves
1.Beginning balance
2.Increasedamount oftheperiod
(1)Withdrawal
3.Decreased amount oftheperiod
(1)Disposal
(2)Othertransfer
4.Ending balance
IV.Carryingvalue
1.Endingcarrying value 47,343,496.43 47,343,496.43
2.Beginning carrying value 48,447,666.83 48,447,666.83
Changchai Company, Limited Interim Report 2020
13. Fixed Assets
Unit: RMB
Item Endingbalance Beginning balance
Fixedassets 437,411,354.41 457,722,667.32
Disposaloffixed assets
Total 437,411,354.41 457,722,667.32
(1) List of Fixed Assets
Unit: RMB
Item Housesand Machinery Transportation Other Total
buildings equipment equipment equipment
I.Original
carryingvalue
1.Beginning 448,688,661.22 956,138,240.18 17,283,169.54 42,791,587.37 1,464,901,658.31
balance
2.Increased
amountofthe 16,099,288.86 1,086,367.26 1,088,767.65 307,824.30 18,582,248.07
period
(1)Purchase 418,626.65 77,522.12 243,538.31 196,178.30 935,865.38
(2)Transfer
from 15,680,662.21 1,008,845.14 845,229.34 111,646.00 17,646,382.69
constructionin
progress
(3)Enterprise
combination
increase
3.Decreased
amountofthe - 10,459,143.75 1,595,757.66 327,228.60 12,382,130.01
period
(1)Disposal or - 10,459,143.75 1,595,757.66 327,228.60 12,382,130.01
scrap
4.Ending 464,787,950.08 946,765,463.69 16,776,179.53 42,772,183.07
balance 1,471,101,776.37
II.Accumulative
depreciation
Changchai Company, Limited Interim Report 2020
1.Beginning 281,666,582.26 674,545,182.51 13,892,318.80 35,580,792.42
balance 1,005,684,875.99
2.Increased
amountofthe 8,083,059.02 30,085,167.12 558,563.27 90,156.56 38,816,945.97
period
(1)Withdrawal 8,083,059.02 30,085,167.12 558,563.27 90,156.56 38,816,945.97
3.Decreased
amountofthe 1,235.25 10,459,143.75 1,520,233.58 324,902.42 12,305,515.00
period
(1)Disposal or 1,235.25 10,459,143.75 1,520,233.58 324,902.42 12,305,515.00
scrap
4.Ending 289,748,406.03 694,171,205.88 12,930,648.49 35,346,046.56
balance 1,032,196,306.96
III.Depreciation
reserves
1.Beginning 1,494,115.00 1,494,115.00
balance
2.Increased
amountofthe
period
(1)Withdrawal
3.Decreased
amountofthe
period
(1)Disposal or
scrap
4.Ending 1,494,115.00 1,494,115.00
balance
IV.Carrying
value
1.Ending 175,039,544.05 251,100,142.81 3,845,531.04 7,426,136.51 437,411,354.41
carryingvalue
2.Beginning 167,022,078.96 280,098,942.67 3,390,850.74 7,210,794.95 457,722,667.32
carryingvalue
Changchai Company, Limited Interim Report 2020
14. Construction in Progress
Unit: RMB
Item Endingbalance Beginning balance
Construction inprogress 71,668,151.01 63,216,445.03
Engineeringmaterials 31,338,225.01 28,141,711.21
Total 103,006,376.02 91,358,156.24
(1) List of Construction in Progress
Unit: RMB
Ending balance Beginning balance
Item Carrying Depreciatio Carrying Carrying Depreciati Carrying
amount nreserves value amount on reserves value
Expansion
capacity of
multi-cylinde 1,097,435.90 1,097,435.90 11,375,531.74 11,375,531.74
r (The 2nd
Period)
Diesel
Engine
Cylinder
Body 38,444,213.42 38,444,213.42 38,266,788.31 38,266,788.31
Flexible
Manufacturin
gLine
35KV 1,321,959.41 1,321,959.41
Substation
Oily water
separating 340,800.00 340,800.00 340,800.00 340,800.00
equipment
Relocation
project of 28,903,701.88 28,903,701.88 1,687,194.64 1,687,194.64
light engine
andcasting
Changchai Company, Limited Interim Report 2020
Equipment to
be installed 2,881,999.81 2,881,999.81 10,224,170.93
and payment 10,224,170.93
forprojects
Total 71,668,151.01 71,668,151.01 63,216,445.03 63,216,445.03
(2) Changes in Significant Construction in Progress during the Reporting Period
Unit: RMB
Propo Of
rtion which Capit
of Accu : alizati
accu mulat Amo on
Trans Other mulat ed untof rate
Begin Incre ferred decre Endin ed Job amou capita of Capit
Item Budg ning ased in ased g invest sched ntof lized intere al
et balan amou fixed amou balan ment ule intere intere sts for resou
ce nt assets nt ce in st stsfor the rces
constr capita the Repor
uctio lizati Repor ting
ns to on ting Perio
budge Perio d
t d
Expa
nsion
capac
ity of
multi- 79,00 11,37 10,27 1,097 Unco Self-f
cylin 0,000 5,531 8,095 ,435. mplet unded
der .00 .74 .84 90 ed
(The
2nd
Perio
d)
Changchai Company, Limited Interim Report 2020
Diese
l
Engin
e
Cylin
der 116,0 38,26 217,7 40,34 38,44 Unco Self-f
Body 40,00 6,788 69.94 4.83 4,213 mplet unded
Flexi 0.00 .31 .42 ed
ble
Manu
factur
ing
Line
35KV 73,29 1,321 390,6 1,712 Self-f
Subst 0,000 ,959. 76.04 ,635. 0.00 unded
ation .00 41 45
Reloc
ation
proje
ct of 452,8 1,687 27,21 28,90 6.38 Unco Self-f
light 63,80 ,194. 6,507 3,701 % mplet unded
engin 0.00 64 .24 .88 ed
e and
castin
g
721,1 52,65 27,82 12,03 68,44
Total 93,80 1,474 4,953 1,076 5,351 -- -- --
0.00 .10 .22 .12 .20
(3) Engineering Materials
Unit: RMB
Endingbalance Beginning balance
Item Carrying Deporenciati Carrying Carrying Depreciation Carrying
amount reserves value amount reserves value
Engineerin 31,338,225.01 31,338,225.01 28,141,711.21 28,141,711.21
gmaterials
Total 31,338,225.01 31,338,225.01 28,141,711.21 28,141,711.21
Changchai Company, Limited Interim Report 2020
15. Intangible Assets
(1) List of Intangible Assets
Unit: RMB
Item Landuse right Patent right License fee Total
I.Original carrying value
1.Beginning balance 144,770,507.8 12,866,992.58 5,488,000.00 163,125,500.43
5
2.Increased amount ofthe
period
(1)Purchase
(2)InternalR&D
(3)Business combination
increase
3.Decreased amount ofthe
period
(1)Disposal
4.Ending balance 144,770,507.8 12,866,992.58 5,488,000.00 163,125,500.43
5
II.Accumulated amortization
1.Beginning balance 51,100,000.82 10,771,116.13 1,554,933.22 63,426,050.17
2.Increased amount ofthe 1,485,989.14 564,866.00 274,399.98 2,325,255.12
period
(1)Withdrawal 1,485,989.14 564,866.00 274,399.98 2,325,255.12
3.Decreased amount ofthe
period
(1)Disposal
4.Ending balance 52,585,989.96 11,335,982.13 1,829,333.20 65,751,305.29
III.Depreciation reserves
1.Beginning balance
2.Increased amount ofthe
period
(1)Withdrawal
Changchai Company, Limited Interim Report 2020
3.Decreased amount ofthe
period
(1)Disposal
4.Ending balance
IV.Carryingvalue
1.Ending carrying value 92,184,517.89 1,531,010.45 3,658,666.80 97,374,195.14
2.Beginning carrying value 93,670,507.03 2,095,876.45 3,933,066.78 99,699,450.26
16. Long-term Prepaid Expenses
Item BbaelgainncneingIncrease AammoourntitzedDecrease Ebanldainncge
Femurpnliotuyreeeof 53,497.80 19,902.30 33,595.50
dormitory,etc.
Total 53,497.80 19,902.30 33,595.50
17. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Deferred Income Tax Assets that Had not Been Off-set
Unit: RMB
Endingbalance Beginning balance
Item DteemdpuoctriabrlyeDeferredincome DteemdpuoctriabrlyeDeferredincome
difference taxassets difference taxassets
Provision for
impairment of 13,050,698.84 1,979,974.43 6,682,294.34 1,023,863.04
assets
Total 13,050,698.84 1,979,974.43 6,682,294.34 1,023,863.04
(2) Deferred Income Tax Liabilities Had Not Been Off-set
Unit: RMB
Endingbalance Beginning balance
Item Taxabletemporary Deferredincome Taxabletemporary Deferredincome
difference taxliabilities difference taxliabilities
Changchai Company, Limited Interim Report 2020
Changesinfair
valueofother 302,376,000.00 45,356,400.00 373,011,500.00 55,951,725.00
equityinstrument
investment
Assetsevaluation
appreciation for
business 4,169,298.89 1,042,324.72 4,524,661.07 1,131,165.27
combination not
underthesame
control
Total 306,545,298.89 46,398,724.72 377,536,161.07 57,082,890.27
(3) List of Unrecognized Deferred Income Tax Assets
Unit: RMB
Item Ending balance Beginning balance
Baddebt provision 207,502,281.70 276,036,565.83
Fallingpricereserves ofinventories 50,117,431.52 50,317,984.95
Total 257,619,713.22 326,354,550.78
18. Other Non-current Assets
Unit: RMB
Ending balance Beginning balance
Item Carrying Depreciatio Carrying Carrying Depreciation Carryingvalue
amount nreserves value amount reserves
Advances
payment of 177,400.00 177,400.00
equipments
Total 177,400.00 177,400.00
19. Short-term Borrowings
(1) Category of Short-term Borrowings
Unit: RMB
Item Ending balance Beginning balance
Guaranteed loans 10,000,000.00 10,000,000.00
Changchai Company, Limited Interim Report 2020
Mortgageloans 7,000,000.00 7,000,000.00
Creditloans 5,000,000.00 5,000,000.00
Total 22,000,000.00 22,000,000.00
(2) There Was No Short-term Borrowings Overdue but Unpaid.
20. Notes Payable
Unit: RMB
Category Ending balance Beginning balance
Bankacceptance bill 479,515,000.00 403,035,000.00
Total 479,515,000.00 403,035,000.00
21. Accounts Payable
(1) List of Accounts Payable
Unit: RMB
Item Ending balance Beginning balance
Loans 580,840,786.08 525,625,016.89
Total 580,840,786.08 525,625,016.89
(2) There Was No Significant Accounts Payable Aging over One Year
22. Contract Liabilities
Unit: RMB
Item Ending balance Beginning balance
Contractliabilities 31,527,438.40 31,789,001.78
Total 31,527,438.40 31,789,001.78
Refer to “V Significant Accounting Policies, Estimates-33(1) Changes to Significant Accounting Policies”
for the difference between the beginning balance and ending balance of prior period (31 December 2019).
23. Payroll Payable
(1) List of Payroll Payable
Unit: RMB
Changchai Company, Limited Interim Report 2020
Item Beginning balance Increase Decrease Ending balance
I.Short-term salary 44,559,015.79 117,786,801.08 143,388,161.32 18,957,655.55
II.Post-employment
benefit-defined 8,626,798.61 8,626,798.61
contribution plans
III.Termination 306,693.00 306,693.00
benefits
Total 44,559,015.79 126,720,292.69 152,321,652.93 18,957,655.55
(2) List of Short-term Salary
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
1. Salary, bonus, 36,894,953.71 98,842,788.54 124,423,164.48 11,314,577.77
allowance,subsidy
2.Employeewelfare 1,592.74 1,451,667.16 1,451,667.16 1,592.74
3.Social insurance 5,601,857.94 5,601,857.94
Of which: Medical
insurance 4,466,934.01 4,466,934.01
premiums
Work-related injury 388,321.79 388,321.79
insurance
Maternityinsurance 746,602.14 746,602.14
4.Housing fund 9,419,253.40 9,419,253.40
5.Labor union
budget and 7,662,469.34 2,471,234.04 2,492,218.34 7,641,485.04
employee education
budget
6.Short-term
absencewithsalary
7.Short-term profit
sharingscheme
Total 44,559,015.79 117,786,801.08 143,388,161.32 18,957,655.55
(3) List of Defined Contribution Plans
Unit: RMB
Changchai Company, Limited Interim Report 2020
Item Beginning balance Increase Decrease Ending balance
1.Basic pension 8,207,802.43 8,207,802.43
benefits
2.Unemployment 257,200.18 257,200.18
insurance
3.Enterprise 161,796.00 161,796.00
annuities
Total 8,626,798.61 8,626,798.61
24. Taxes Payable
Unit: RMB
Item Ending balance Beginning balance
VAT 532,081.43 1,290,060.47
Corporate income tax 5,430,266.89 5,090,781.18
Personalincome tax 88,470.51 367,624.40
Urbanmaintenance and 886,662.32
constructiontax 970,067.92
Propertytax 94,257.18 94,257.20
Landuse tax 100,135.19 100,135.19
Stampduty 5,554.00 6,282.95
EducationSurcharge 160,541.11 99,824.96
Comprehensive fees 954,843.18 1,075,134.76
Environmental protection tax 230.34 213.55
Total 8,253,042.15 9,094,382.58
25. Other Payables
Unit: RMB
Item Ending balance Beginning balance
Interestpayable
Dividendspayable 3,891,433.83 3,891,433.83
Otherpayables 186,845,303.36 201,172,711.27
Total 190,736,737.19 205,064,145.10
Changchai Company, Limited Interim Report 2020
(1) Dividends Payable
Unit: RMB
Item Ending balance Beginning balance
Ordinaryshare dividends 3,243,179.97 3,243,179.97
Interestofpreferred shares/
perpetualbondclassified asequity
instrument
Dividendsfornon-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 Endingbalance Beginning balance
Margin&cash pledged 3,574,326.23 3,271,541.83
Intercoursefunds among units 10,501,265.91 11,321,462.95
Intercoursefunds among individuals 423,702.83 430,612.05
Salesdiscount andthree guarantees 133,978,988.49 143,497,522.22
Other 38,367,019.90 42,651,572.22
Total 186,845,303.36 201,172,711.27
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.
26. Other Current Liabilities
Unit: RMB
Item Ending balance Beginning balance
Saleservice fee 229,387.96
Changchai Company, Limited Interim Report 2020
Transportationstoragefee 132,551.86
Electriccharge 2,147,922.70 815,772.56
Rentalexpense 92,920.38
Total 2,240,843.08 1,177,712.38
27. Deferred Income
Unit: RMB
Item Beginning Increase Decrease Ending balance Reasonfor
balance formation
Government 58,864,111.22 532,186.81 58,331,924.41 Government
grants appropriation
Total 58,864,111.22 532,186.81 58,331,924.41 --
Item involving government grants:
Unit: RMB
Amount Amount
recorded recorded Amount
into into offset Related
Beginning Amount non-oper other costin Other Ending to
Item balance ofnew ating income the changes balance assets/rel
subsidy income inthe Reportin ated
in the Reportin gPeriod income
Reportin gPeriod
g Period
Changchai Company, Limited Interim Report 2020
Electric
control
of diesel
engine
research
and 248,400.00 199,200. 49,200.00 Related
develop 00 toassets
ment and
industrial
ization
allocatio
ns
National
major
project 28,770,000. 28,770,000. Related
special 00 00 toassets
allocatio
ns
Remove 19,845,711. 332,986. 19,512,724. Related
compens 22 81 41 toassets
ation
Changchai Company, Limited Interim Report 2020
Research
and
develop
mentand
industrial
ization
allocatio
nsof
national 10,000,000. 10,000,000. Related
III/IV 00 00 toassets
standard
high-po
wered
efficient
diesel
engine
for
agricultu
raluse
Total 58,864,111. 532,186. 58,331,924.
22 81 41
28. Share Capital
Unit: RMB
Increase/decrease (+/-)
Beginning Bonus Ending
balance NeiwssusheadresBshoanruessissue from Other Subtotal balance
profit
Thesum of 561,374,32 561,374,32
shares 6.00 6.00
29. Capital Reserves
Unit: RMB
Changchai Company, Limited Interim Report 2020
Item Beginning balance Increase Decrease Ending balance
Capitalpremium 143,990,690.24 143,990,690.24
(premiumonstock)
Othercapital reserves 20,337,975.19 20,337,975.19
Total 164,328,665.43 164,328,665.43
30. Other Comprehensive Income
Unit: RMB
ReportingPeriod
Less:
Record
Less: edin
Recorded other
inother compre
comprehe hensiv Attribu
Income nsive e tableto Attribu
Beginni before income in income Less: owners table to Endin
Item ng taxatio prior inprior Income ofthe non-co g
balance ninthe period period tax Compa ntrollin balan
Curren and and expens nyas g ce
t transferre transfe e the interest
Period din rredin parent safter
profit or retaine after tax
loss in d tax
the earning
Current sinthe
Period Curren
t
Period
I. Other comprehensive 317,059, -70,22 348,36 -10,53 -60,04 257,0
income that will not be 775.00 5,654.5 8.67 3,848.1 0,175.0 19,60
reclassified toprofitorloss 0 7 0 0.00
Of which: Changes caused
by re-measurements on
defined benefit pension
schemes
Changchai Company, Limited Interim Report 2020
Share of other
comprehensive income of
investees that will not be
reclassified to profit or loss
underequity method
Changes in fair value of 317,059, -70,22 348,36 -10,53 -60,04 257,0
other equity instrument 775.00 5,654.5 8.67 3,848.1 0,175.0 19,60
investment 0 7 0 0.00
Changesinfairvalueof
corporatecredit risk
II. Other comprehensive
income that may
subsequently be
reclassifiedtoprofitorloss
Of which: Share of other
comprehensive income of
investees that will be
reclassified to profit or loss
underequity 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
otherdebt obligations
Reserves for cash flow
hedges
Differences arising from
translation of foreign
currency-denominated
financialstatements
Total of other 317,059, -70,22 348,36 -10,53 -60,04 257,0
comprehensive income 775.00 5,654.5 8.67 3,848.1 0,175.0 19,60
0 7 0 0.00
Changchai Company, Limited Interim Report 2020
31. Specific Reserve
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Safety production 17,560,202.07 1,883,145.87 1,004,697.43 18,438,650.51
cost
Total 17,560,202.07 1,883,145.87 1,004,697.43 18,438,650.51
32. Surplus Reserves
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Statutory surplus 309,071,675.82 309,071,675.82
reserves
Discretional surplus 13,156,857.90 13,156,857.90
reserves
Total 322,228,533.72 322,228,533.72
33. Retained Earnings
Unit: RMB
Item Reporting Period Sameperiodoflastyear
Beginning balance of retained earnings before 726,689,929.10 717,883,351.33
adjustments
Totalretained earnings atthebeginning ofthe
adjustment period(“+”means up,“-”means 1,651,336.26 1,619,864.82
down)
Beginning balance of retained earnings after 728,341,265.36 719,503,216.15
adjustments
Add:Netprofitattributable toowners ofthe 27,690,311.06 24,966,526.85
Companyastheparent
Less:Withdrawalofstatutory surplus reserves 2,094,119.49
Withdrawalofdiscretional surplus
reserves
Withdrawalofgeneral reserve
Dividendofordinary shares payable 14,034,358.15
Changchai Company, Limited Interim Report 2020
Dividendsofordinary shares transferred as
sharecapital
Recordedinother comprehensive income
inpriorperiodandtransferred inretained profits 348,368.67
intheCurrent Period
Endingretained earnings 756,379,945.09 728,341,265.36
The retained earnings at the beginning of the adjustment period due to the accounting errors correction in
previous period: RMB1,651,336.26 at the period-beginning of 2020, and RMB1,619,864.82 at the
period-beginning of 2019.
34. Operating Revenue and Cost of Sales
Unit: RMB
Item Reporting Period Sameperiodoflastyear
Operating revenue Costofsales Operating revenue Costofsales
Mainoperations 1,149,231,063.13 974,846,243.01 1,099,044,681.77 958,911,511.17
Otheroperations 18,224,719.17 10,996,475.67 19,826,443.23 14,073,262.37
Total 1,167,455,782.30 985,842,718.68 1,118,871,125.00 972,984,773.54
Information related to performance obligations: performing according to the contract offer
Information related to transaction value assigned to residual performance obligations:
The amount of revenue corresponding to performance obligations of contracts signed but not performed or
not fully performed yet was RMB0 at the period-end.
35. Taxes and Surtaxes
Unit: RMB
Item Reporting Period Sameperiod oflastyear
Urbanmaintenance andconstruction tax 1,188,616.29 581,717.24
Educationsurcharge 849,011.61 271,520.11
Propertytax 2,212,278.84 1,986,524.35
Landuse tax 1,804,439.63 1,713,504.95
Vehicleandvessel use tax 300.00
Stampduty 394,779.95 456,518.80
Environmenttax 60,179.21
Other 42,000.00 -92.50
Total 6,551,605.53 5,009,692.95
Changchai Company, Limited Interim Report 2020
36. Selling Expense
Unit: RMB
Item Reporting Period Sameperiod oflast year
Officeexpenses 4,629,025.89 2,915,326.32
Employeebenefits 13,886,073.89 12,563,212.25
Salespromotional expense 5,545,750.00 3,165,350.00
Threeguarantees 27,893,180.55 31,616,012.47
Transportcharge 3,641,245.55 1,767,281.30
Other 7,797,082.64 6,231,216.64
Total 63,392,358.52 58,258,398.98
37. Administrative Expense
Unit: RMB
Item Reporting Period Sameperiod oflast year
Officeexpenses 6,035,491.45 6,839,822.78
Employeebenefits 17,294,526.56 11,909,173.93
Depreciationand amortization 5,263,681.34 7,665,203.65
Transportfees 1,073,680.39 1,205,423.26
Repaircharge 138,950.52 992,564.62
Safetyexpenses 1,883,145.87 1,005,623.68
Other 3,919,554.61 4,942,250.38
Total 35,609,030.74 34,560,062.30
38. Development Costs
Unit: RMB
Item Reporting Period Sameperiod oflast year
Directinput expense 19,721,929.05 19,912,601.44
Employeebenefits 9,551,798.98 8,459,434.34
Depreciationand amortization 2,063,723.78 1,367,141.44
Entrusteddevelopment charges 32,231.13
Other 968,567.84 325,106.24
Changchai Company, Limited Interim Report 2020
Total 32,338,250.78 30,064,283.46
39. Finance Costs
Unit: RMB
Item Reporting Period Sameperiod oflast year
Interestexpense 3,340,575.91 1,567,625.50
Interestincome 2,792,152.75 1,647,206.24
Netforeignexchange gainsorlosses -1,097,813.30 -1,047,246.55
Other -170,269.84 -657,598.04
Total -719,659.98 -1,784,425.33
40. Other Income
Unit: RMB
Sources Reporting Period Sameperiod oflastyear
Governmentgrants 2,657,218.07 134,037.71
Other(Additional deduction ofinput tax) 20,746.75
41. Investment Income
Unit: RMB
Item Reporting Period Sameperiod oflast year
Long-termequityinvestment income accounted by
equitymethod
Investmentincome fromdisposaloflong-term
equityinvestment
Investmentincome fromholding oftrading
financialassets
Investmentincome fromdisposaloftrading
financialassets
Dividendincome fromholding ofother equity 4,983,988.73
instrumentinvestment
Investmentincome fromholding ofheld-to
–maturityinvestment
Changchai Company, Limited Interim Report 2020
Investmentincome fromholding of
available-for-salefinancial assets
Investmentincome fromdisposalof
available-for-salefinancial assets
Investmentincome fromdisposalofheld-to
–maturityinvestment
Incomefromre-measurement ofresidual stock
rightsatfairvalue afterlosing controlpower
Interestincome fromholding ofinvestment indebt
obligations
Interestincome fromholding ofinvestment in
otherdebt obligations
Investmentincome fromdisposalofinvestment in
otherdebt obligations
Investmentincome fromholding ofother 149,121.58
non-currentfinancial assets
Investmentincome fromdisposaloffinancial 251,486.73 184,349.63
productsofsecurities company
Total 5,384,597.04 184,349.63
42. Credit Impairment Loss
Unit: RMB
Item Reporting Period Sameperiod oflast year
Baddebt lossofother receivables 622,346.72 4,859.68
Baddebt lossofaccounts receivable -6,601,368.01 -9,257,470.42
Impairment lossofentrusted loan 4,000,000.00
Total -5,979,021.29 -5,252,610.74
43. Asset Impairment Loss
Unit: RMB
Item Reporting Period Sameperiod oflast year
I.Baddebt loss
Changchai Company, Limited Interim Report 2020
II.Loss oninventory valuation and contract -16,343,805.00 -26,096.43
performance cost
III.Impairment lossonlong-term equity investment
IV.Impairment lossoninvestment property
V.Impairment loss onfixed assets
VI.Impairment lossonengineering materials
VII.Impairment lossonconstruction inprogress
VIII.Impairment lossonproductiveliving assets
IX.Impairment lossonoiland gasassets
X.Impairment lossonintangible assets
XI.Impairment lossongoodwill
XII.Other
Total -16,343,805.00 -26,096.43
44. Asset Disposal Income
Unit: RMB
Sources Reporting Period Sameperiod oflast year
Disposalincome offixed assets 10,977.61 988,535.95
45. Non-operating Income
Unit: RMB
Amount recorded inthe
Item Reporting Period Same periodoflastyear currentnon-recurring
profit orloss
Incomefrompenalty 181,076.00 181,076.00
Incomegenerated from 324,516.28
disposalofcurrent assets
Other 287,214.78 258,421.20 287,214.78
Total 468,290.78 582,937.48 468,290.78
46. Non-operating Expense
Unit: RMB
Changchai Company, Limited Interim Report 2020
Amount recorded inthe
Item Reporting Period Same periodoflastyear currentnon-recurring
profit orloss
Retirementlossof 1,725.58 215,077.98 1,725.58
non-currentassets
Other 393,650.10 2,760.00 393,650.10
Total 395,375.68 217,837.98 395,375.68
47. Income Tax Expense
(1) List of Income Tax Expense
Unit: RMB
Item Reporting Period Sameperiod oflast year
Currentincome taxexpense 3,442,263.52 -2,995,296.80
Deferredincome taxexpense -1,044,951.94 301.48
Total 2,397,311.58 -2,994,995.32
(2) Adjustment Process of Accounting Profit and Income Tax Expense
Unit: RMB
Item Reporting Period
Profitbeforetaxation 30,265,106.31
Currentincome taxexpense accounted atstatutory/applicable taxrate 4,539,765.95
Influenceofapplying differenttaxratesby subsidiaries 708,102.34
Influenceofincome taxbeforeadjustment -717,080.73
Influenceofnon-taxable income
Influenceofnon-deductable costs, expenses andlosses -1,249,574.37
Influence of deductable losses of unrecognized deferred income tax at the -27,842.32
beginningoftheReporting Period
Influence of deductable temporary difference or deductable losses of -729,438.12
unrecognized deferred income taxassetsintheReporting Period
Taxpreference generated fromeligible expense -126,621.17
Incometaxexpense 2,397,311.58
Changchai Company, Limited Interim Report 2020
48. Cash Flow Statement
(1) Cash Generated from Other Operating Activities
Unit: RMB
Item Reporting Period Sameperiod oflast year
Subsidy andappropriation 2,125,031.26 129,300.00
Other intercourses incash 2,450,124.78 6,626,337.57
Interest income 2,792,152.75 1,647,206.24
Other 377,095.40
Total 7,744,404.19 8,402,843.81
(2) Cash Used in Other Operating Activities
Unit: RMB
Item Reporting Period Sameperiod oflast year
Selling expensepaid incash 42,790,201.08 22,265,032.54
Administrative expensepaid incash 28,635,717.97 15,932,156.09
Handling charges 850,745.30 276,917.44
Other 841,135.29 363,243.80
Total 73,117,799.64 38,837,349.87
(3) Cash Generated from Other Investing Activities
Item Reporting Period Sameperiodoflastyear
Performance bond 97,150.00
Total 97,150.00
(4) Cash Used in Other Investing Activities
Item Reporting Period Sameperiodoflastyear
Product margin 930,300.00
Total 930,300.00
Changchai Company, Limited Interim Report 2020
49. Supplemental Information for Cash Flow Statement
(1) Supplemental Information for Cash Flow Statement
Unit: RMB
Supplementalinformation Reporting Period Sameperiod oflast
year
1.Reconciliation ofnetprofittonetcashflows generated -- --
fromoperating activities
Netprofit 27,867,794.73 19,166,650.04
Add:Provision forimpairment ofassets 22,322,826.29 5,278,707.17
Depreciationoffixed assets, ofoil andgas assets,of 39,921,116.37 45,097,580.24
productiveliving assets
Depreciationofright-of-use assets
Amortization ofintangible assets 2,325,255.12 2,667,349.89
Amortization oflong-term deferred expenses 19,902.30 19,902.30
Lossesondisposal offixed assets, intangible assets andother -10,977.61 -988,535.95
long-termassets (gainsby“-”)
Lossesonthescrapping offixed assets(gains by“-”) 1,725.58
Lossesonthechanges infairvalue(gains by“-”)
Financialexpenses (gains by“-”) 3,702,027.93 -1,780,811.62
Investmentlosses (gains by“-”) -5,384,597.04 -5,275.78
Decreaseindeferred income taxassets (increase by “-”) -956,111.39 301.48
Increaseindeferred income taxliabilities (decrease by “-”) -88,840.55
Decreaseininventory (increase by“-”) 28,810,293.38 77,790,426.75
Decreaseinaccounts receivable fromoperating activities -219,167,832.28 -399,676,635.32
(increaseby “-”)
Increaseinpayables fromoperating activities (decrease by 93,944,576.05 102,084,867.92
“-”)
Other -13,661,888.13 -2,976,019.99
Netcashflows generated fromoperating activities -20,354,729.25 -153,321,492.87
2.Investing andfinancing activities thatdonotinvolving cash -- --
receiptsandpayment:
Debttransferred ascapital
Convertible corporate bondduewithinone year
Changchai Company, Limited Interim Report 2020
Fixedassets fromfinancing lease
3.Netincrease incashand cashequivalents -- --
Endingbalanceofcash 493,637,357.80 495,700,572.93
Less:Beginning balance ofcash 545,959,998.20 691,266,373.34
Add:Endingbalance ofcashequivalents
Less:Beginning balance ofcashequivalents
Netincrease incash andcashequivalents -52,322,640.40 -195,565,800.41
(2) Cash and Cash Equivalents
Unit: RMB
Item Endingbalance Beginning balance
I.Cash 493,637,357.80 545,959,998.20
Including:Cash onhand 348,885.71 181,115.21
Bankdeposit ondemand 489,583,551.02 545,271,159.5
Othermonetary assets ondemand 3,704,921.07 507,723.49
Accountsdeposited inthecentral bankavailable for payment
Depositsinother banks
Accountsofinterbank
II.Cash equivalents
Ofwhich: Bondinvestment expired within three months
III.Endingbalance ofcashandcashequivalents 493,637,357.80 545,959,998.20
Of which: Cash and cash equivalents with restriction in use
fortheCompany astheparent orsubsidiaries oftheGroup
50. Assets with Restricted Ownership or Right to Use
Unit: RMB
Item Ending carrying value Reasonforrestriction
Monetaryassets 106,637,411.65 As cash deposit for bank acceptance bill
andenvironment
Housesandbuildings 9,933,008.28 Mortgaged forborrowings frombanks
Landuse right 989,620.82 Mortgaged forborrowings frombanks
Machinery equipment 38,139,602.80 Mortgaged forborrowings frombanks
Total 155,699,643.55 --
Changchai Company, Limited Interim Report 2020
51. Foreign Currency Monetary Items
(1) Foreign Currency Monetary Items
Unit: RMB
Item Endingforeign currency Exchange rate Ending balance
balance converted toRMB
Monetaryassets -- -- 88,036,406.31
Ofwhich: USD 12,318,549.63 7.0795 87,209,172.11
EUR
HKD 285,400.46 0.9134 260,684.78
SGD 54,427.95 5.0813 276,564.74
JPY 4,407,062.00 0.0658 289,984.68
Accountsreceivable -- -- 56,189,918.16
Ofwhich: USD 7,936,989.64 7.0795 56,189,918.16
Accountspayable 2,142.26
Ofwhich: USD 302.60 7.0795 2,142.26
(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
52. Government Grants
(1) Basic Information on Government Grants
Unit: RMB
Category Amount Listed items Amountrecorded inthe
current profitorloss
Subsidyforstabilizing posts 1,462,592.43 Otherincome 1,462,592.43
Patentrewards 100,000.00 Otherincome 100,000.00
Thefirst-year fundfordistrict-level
demonstration base fortraining 20,000.00 Otherincome 20,000.00
high-levelskilled personnel in2019
High-skilledpersonnel training award 15,000.00 Otherincome 15,000.00
Changchai Company, Limited Interim Report 2020
Taxaward 50,000.00 Otherincome 50,000.00
Individualincome taxcommission 8,587.83 Otherincome 8,587.83
Specialfund forbusiness development 10,600.00 Otherincome 10,600.00
Innovation-driven rewards 6,000.00 Otherincome 6,000.00
Fundsofdevelopment ofinternational 14,200.00 Otherincome 14,200.00
marketproject
SubsidyfundofNewDistrict Finance 7,882.00 Otherincome 7,882.00
Bureauaward
Provincial-level special fundfor
industrialandinformation industry 150,000.00 Otherincome 150,000.00
transformation andupgrading
Specialaward andsubsidy funds usedto 230,169.00 Otherincome 230,169.00
stabilizeemployment
Relocation compensation 332,986.81 Otherincome 332,986.81
R&Dandindustrialization ofoff-road 199,200.00 Otherincome 199,200.00
dieselengine controlled byelectricity
Talentspecial fund 50,000.00 Otherincome 50,000.00
Additionaldeduction ofinput tax 20,746.75 Otherincome 20,746.75
cAopnptrroolplreidatbioyneloefctorifcf-irtyoaddiesel engine 49,200.00 Deferred income
Nationalmajor special appropriation 28,770,000.00 Deferred income
Relocation compensation 19,512,724.41 Deferred income
Appropriation or research and
development and industrialization
allocations of national III/IV standard 10,000,000.00 Deferred income
high-powered efficient diesel engine for
agricultural use
Return of Government Grants
□ Applicable √ Not applicable
VIII. Changes of Consolidation Scope
None
Changchai Company, Limited Interim Report 2020
IX. Equity in Other Entities
1. Equity in Subsidiary
(1) Subsidiaries
Main Registrat Holding percentage
Name operatin ion Nature of (%) Wayof
gplace place business Directly Indirect gaining
ly
ChangchaiWanzhouDieselEngine Chongq Chongqi Industry 60.00% Set-up
Co.,Ltd. ing ng
ChangzhouChangchai Benniu Diesel Changz Changzh Industry 99.00% 1.00% Set-up
EngineFittings Co., Ltd. hou ou
ChangzhouHousheng Investment Changz Changzh Service 100.00% Set-up
Co.,Ltd. hou ou
ChangzhouChangchai Housheng Changz Changzh Industry 70.00% 25.00% Set-up
AgriculturalEquipment Co.,Ltd. hou ou
Combinati
ChangzhouFujiChangchai Robin Changz Changzh onnot
GasolineEngine Co., Ltd. hou ou Industry 100.00% underthe
same
control
JiangsuChangchai Machinery Co., Changz Changzh Industry 100.00% Set-up
Ltd. hou ou
ChangzhouXingsheng Property Changz Changzh Service 100.00% Set-up
ManagementCo., Ltd. hou ou
(2) Significant Non-wholly-owned Subsidiary
Unit: RMB
Shareholding Theprofitorloss Declaring Balance of
proportion of attributable tothe dividends non-controlling
Name non-controlling non-controlling distributed to interests atthe
interests interests non-controlling period-end
interests
Changchai
WanzhouDiesel 40.00% 187,651.15 19,801,599.87
EngineCo.,Ltd.
Changchai Company, Limited Interim Report 2020
Changzhou
Changchai
Housheng 5.00% -10,167.48 12,164.81
Agricultural
Equipment Co.,
Ltd.
Holding proportion of non-controlling interests in subsidiary different from voting proportion: Not
applicable
(3) The Main Financial Information of Significant Not Wholly-owned Subsidiary
Unit: RMB
Endingbalance Beginning balance
Non- Curre Non- Non- Curre Non-
Name Cunrtre curre Total nt cunrtre lTiaobtailliCunrtre curre Total nt cunrtre lTiaobtailli
assets nt assets liabili liabili ties assets nt assets liabili liabili ties
assets ties ty assets ties ty
Chan
gchai
Wanz
hou 50,39 25,36 75,76 26,26 26,26 43,80 25,82 69,62 20,59 20,59
Diese 6,468 8,758 5,227 1,228 1,228 7,991 1,314 9,305 4,433 4,433
l .90 .87 .77 .09 .09 .71 .00 .71 .90 .90
Engin
eCo.,
Ltd.
Chan
gzhou
Chan
gchai
Hous
heng 28,97 464,3 29,43 29,19 29,19 28,57 514,6 29,08 28,64 28,64
Agric 1,588 82.91 5,971 2,675 2,675 3,892 69.94 8,562 1,916 1,916
ultura .41 .32 .01 .01 .12 .06 .23 .23
l
Equip
ment
Co.,
Ltd.
Changchai Company, Limited Interim Report 2020
Unit: RMB
Reporting Period Sameperiod oflast year
Total Cash Total Cash
Name Operating Netprofit comprehe fflroowmsOperating Netprofit comprehe fflroowms
revenue nsive operating revenue nsive operating
income activities income activities
Changcha
i
Wanzhou 24,477,85 469,127.8 469,127.8 1,744,069 23,600,85 257,014.1 257,014.1 -862,600.
Diesel 0.44 7 7 .06 7.49 6 6 33
Engine
Co.,Ltd.
Changzh
ou
Changcha
i
Houshen 9,272,539 -203,349. -203,349. -784,927. 6,815,423 -570,014. -570,014. -1,101,48
g
Agricultu .79 52 52 87 .91 57 57 9.23
ral
Equipme
ntCo.,
Ltd.
2. Equity in the Structured Entity Excluded in the Scope of Consolidated Financial Statements
Notes to the structured entity excluded in the scope of consolidated financial statements:
In 2017, the Company set up Changzhou Xietong Private Equity Fund (Limited Partnership) together with
Synergetic Innovation Fund Management Co., Ltd. through joint investment. On 18 October 2018, new
partners were added. In line with the revised Partnership Agreement, the general partner is Synergetic
Innovation Fund Management Co., Ltd., and the limited partners are Changchai Company, Limited,
Changzhou Zhongyou Petroleum Sales Co., Ltd., Changzhou Fuel Co., Ltd., Tong Yinzhu and Tong Yinxin.
In accordance with the Partnership Agreement, the limited partner does not execute the partnership affairs.
Thus, the Company does not control Changzhou Xietong Private Equity Fund (Limited Partnership) and
did not include it into the scope of consolidated financial statements.
X. The Risk Related to Financial Instruments
The goal of the Company’s risk management was gaining the balance between the risk and income, and
Changchai Company, Limited Interim Report 2020
reduced the negative impact to the operation performance of the Company in the lowest level and
maximized the interests of shareholders and other equity investors. Base on the risk management goal, the
basis strategy of the Company’s risk management was to recognized and analyze all kinds of risk that the
Company faced, set up suitable risk bottom line and conduct risk management, and supervised the risks
timely and reliably and control the risk within the limited scope.
The main risks of the Company due to financial instruments were credit risk, liquidity risk and market risk.
The management level had reviewed and approved the policies to manage the risks, which summarized as
follows:
(I) Credit Risk
Credit risk was one party of the contract failed to fulfill the obligations and causes loss of financial assets
of the other party.
The credit of risk of the Company mainly was related to account receivable, in order to control the risk, the
Company conduct the following methods.
The Company only conducts related transaction with approved and reputable third party, in line with the
policy of the Company, the Company need to conduct credit-check for the clients adopting way of credit to
conduct transaction. In addition, the Company continuously monitors the balance of account receivable to
ensure the Company would not face the significant bad debt risk.
(II) Liquidity Risk
Liquidity risk is referred to the risk of incurring capital shortage when performing settlement obligation in
the way of cash payment or other financial assets. The policies of the Company are to ensure that there was
sufficient cash to pay the due liabilities.
The liquidity risk was centralized controlled by the financial department of the Company. The financial
departments through supervising the balance of the cash and securities can be convert to cash at any time
and the rolling prediction of cash flow in future 12 months to ensure the Company has sufficient cash to
pay the liabilities under the case of all reasonable prediction.
(III) Market Risk
Market risk is refer to risk of the fair value or future cash flow of financial instrument changed due to the
change of market price, including foreign exchange rate risk, interest rate risk.
1. Interest Rate Risk
Interest rate risk is refers to fluctuation risk of the fair value or future cash flow of financial instrument
change due to the change of market price.
2. Foreign Exchange Risk
Foreign exchange rate risk is referred to the risk incurred form the change of exchange rate. As for the
Company’s export business, customers will be given a certain credit term, if the RMB appreciates against
the dollar, the company's accounts receivable will incur foreign currency exchange loss.
XI. The Disclosure of Fair Value
1. Ending Fair Value of Assets and Liabilities at Fair Value
Unit: RMB
Changchai Company, Limited Interim Report 2020
Endingfairvalue
Item Fairvalue mFeaaisruvreamlueentFairvalue
measurement itemsatlevel measurement Total
itemsatlevel 1 2 itemsatlevel 3
I.Consistent fairvalue -- -- -- --
measurement
(I)Financial assetsatfair value 362,160,000.00 192,552,101.63 554,712,101.63
throughprofitorloss
1.Tradingfinancial assets 92,552,101.63 92,552,101.63
(1)Debtinstrument investment 14,600,000.00 14,600,000.00
(2)Equity instrument investment 77,952,101.63 77,952,101.63
(3)Derivative financial assets
2.Financial assets designated tobe
measuredatfairvalue andthe
changesincluded intothecurrent
profitorloss
(1)Debtinstrument investment
(2)Equity instrument investment
(II)Otherbondinvestment
(III)Otherequityinstrument 362,160,000.00 100,000,000.00 462,160,000.00
investment
(2)Equity instrument investment
(IV)Investment property
1.Land useright forlease
2.Buildings leasedout
3.Land useright heldandplanned
tobetransferred onceappreciating
(V)Living assets
1.Consumptive living assets
2.Productive living assets
Totalassets consistently measured 362,160,000.00 192,552,101.63 554,712,101.63
byfairvalue
(VI)Tradingfinancial liabilities
Changchai Company, Limited Interim Report 2020
Ofwhich: Issued tradingbonds
Derivativefinancial
liabilities
Other
(VII)Financial liabilities designated
tobemeasured atfair valueandthe
changesrecorded into thecurrent
profitorloss
Totalliabilities consistently
measuredbyfair value
II.Inconsistent fairvalue -- -- -- --
measurement
(1)Assetsheld forsale
Totalassets inconsistently measured
byfairvalue
Totalliabilities inconsistently
measuredbyfair value
2. Market Price Recognition Basis for Consistent and Inconsistent Fair Value Measurement Items at
Level 1
The available-for-sale financial assets measured at fair value of the Company were shares with the closing
price as the basis of fair value calculation at period-end.
3. Valuation Technique Adopted and Nature and Amount Determination of Important Parameters
for Consistent and Inconsistent Fair Value Measurement Items at Level 3
(1) In terms of trading financial assets held by the Company, as the underlying assets through financial
products investment include cash, bond repurchase, bank deposit, interbank loan, national bank and central
bank bill, etc., the assets portfolio invested were executed dynamic management, while the fair value of
financial products is difficult to measure, so the fair value shall be recognized by adopting cost amount.
(2) In terms of non-trading financial assets, with regard to the equity instrument investment without active
market transactions, including the capital investment to Jiangsu Housheng New Energy Technology Co.,
Ltd., Jiangsu Liance Electromechanical Technology Co., Ltd. and Kailong High Technology Co., Ltd., and
no significant impact due to the low equity of the invested companies held by the Company, so the
appraisement to the invested companies by income or market approach was unfeasible. Therefore, the
investment cost shall be treated as reasonable estimation of fair value to measure at the period-end.
In terms of shares of NEEQ unlisted public companies held by the Company, as for the equity instrument
investment with inactive market transactions, due to the market value of shares cannot be reflected by the
Changchai Company, Limited Interim Report 2020
market transaction price with the low volume of holding, so the appraisement to the invested companies by
income or market approach was unfeasible. Therefore, the investment cost shall be treated as reasonable
estimation of fair value to measure at the period-end.
(3) In terms of other equity instrument investment, there was no significant changes in business
environment and circumstance and financial condition of Changzhou Synergetic Innovation Private Equity
Fund (Limited Partnership), and thus the investment cost shall be treated as reasonable estimation of fair
value to measure at the period-end. As for other equity instrument, the investment in Chengdu Changwan
Diesel Engine Distribution Co., Ltd., Chongqing Changwan Diesel Engine Accessories Co., Ltd.,
Changzhou Economic and Technological Development Co., Ltd., Changzhou Tractor Co., Ltd., Changzhou
Economic and Industrial Fund Mutual-aid Association, Beijing Engineering Machinery Agricultural
Machinery Co., Ltd. totals RMB1,210,000.00, and because the investment is difficult to recover, the fair
value is RMB0.00.
XII. Related Party and Related-party Transactions
1. Information Related to the Company as the Parent of the Company
Proportion of Proportion of
share heldby votingrights
Name Registration Nature of Registered theCompany as owned bythe
place business capital theparent Company asthe
against the parentagainst
Company theCompany
Investment and
operations of
state-owned
assets, assets
management
(excluding
Changzhou financial
Investment Changzhou business), RMB1.2billion 30.43% 30.43%
GroupCo.,Ltd. investment
consulting
(excluding
consulting on
investment in
securities and
options), etc.
Notes: Information on the Company as the parent
On 22 November 2018, Changzhou Government State-owned Assets Supervision and Administration
Commission transferred all 170,845,236 shares of the Company (accounting for 30.43% of the total share
Changchai Company, Limited Interim Report 2020
capital of the Company) to Changzhou Investment Group Co., Ltd. for free. In accordance with Changzhou
People’s Government Document (CZF [2006] No. 62), both the Company and Changzhou Investment
Group Co., Ltd. are enterprises which Changzhou People’s Government authorizes Changzhou
Government State-owned Assets Supervision and Administration Commission to perform duties of
investors. Thus, after the sharer transfer, Changzhou Investment Group Co., Ltd. is the controlling
shareholder of the Company and Changzhou Government State-owned Assets Supervision and
Administration Commission is still the actual controller of the Company. The final controller of the
Company is Changzhou Government State-owned Assets Supervision and Administration Commission.
2. Subsidiaries of the Company
Refer to Note IX for details.
3. Information on Other Related Parties
Name Relationship withtheCompany
SynergeticInnovation Fund Management Co.,Ltd. Thedirector oftheCompany serves asthesenior
management ofthecompany
Changzhou Synergetic Innovation Private Equity Participated inestablishing theindustrial investment
Fund(Limited Partnership) fund
Jiangsu Housheng New EnergyTechnologyCo.,Ltd. Shareholding enterprise oftheCompany
DonghaiSecurities Co., Ltd. ControlledbythesameCompany astheparent
4. Related-party Transactions
(1) Other Related-party Transaction
On 28 June 2020, the 3rd Meeting of the 9th Board of Directors approved the Proposal on Signature of Joint
Sponsorship Underwriting Agreement of the Private Placement of A shares and Related-party Transaction,
which allowed the Company signing the joint sponsorship underwriting agreement with Industrial
Securities Co., Ltd. (hereinafter referred to as “Industrial Securities”) and Donghai Securities Co., Ltd.
(hereinafter referred to as “Donghai Securities”), and appointing Industrial Securities and Donghai
Securities as the co-sponsor underwriters for the private placement of A shares of the Company with
sponsor fee of RMB3 million to Industrial Securities and Donghai Securities and the underwriting fee of
no more than RMB11 million (inclusive of RMB11 million).
Changchai Company, Limited Interim Report 2020
XIII. Commitments and Contingency
1. Significant Commitments
Significant commitments on balance sheet date
As of 30 June 2020, there was no significant commitment for the Company to disclose.
2. Contingency
(1) Significant Contingency on Balance Sheet Date
Previous litigations continuing to the Reporting Period the Company involved:
Name ofdefendant Dateof Nameofthelitigation or Amount involved Remark
accepted arbitration institutions (RMB’0,000)
Shandong Hongli GroupCo., 27June2001 Changzhou Intermediate 1,436.00 Underthe
Ltd. People’sCourt bankruptcy and
liquidation
Notes:
About the lawsuit case of Shandong Hongli Group Co., Ltd., the accused company owed accumulatively
RMB14.36 million to the Company. The Company sued to Changzhou Intermediate People’s Court in
2001 and sued for compulsory execution in April 2002. Currently, the defendant has started the bankruptcy
procedure. The aforesaid payment has arranged for the full provision for bad debts.
XIV. Events after Balance Sheet Date
1. Profit Distribution
Unit: RMB
Profitsordividends tobedistributed 0
2. Notes to Other Events after Balance Sheet Date
bAaslaonfcethseheaeptpdraotveatlhaistssuhealdlabtee doifscflionsaendc.ial statements, there was no significant event after
Changchai Company, Limited Interim Report 2020
XV. Other Significant Events
1. Correction of Previous Accounting Error
(1) Retrospective Restatement
Unit: RMB
Content Processing Affectedfinancial statement lineitems ofthe Cumulative
procedure comparative periods effects
Consolidated Balance Sheetin2019-Mnetary assets 1,375,254.03
Consolidated Balance Sheetin2019-Trading 3,050,000.00
financial assets
Changzhou CreocnesivoalibdlaetedBalance Sheetin2019-Accounts 6,391.36
Xingsheng Consolidated Balance Sheetin2019-Prepayment 38,200.00
Property
Management Consolidated Balance Sheetin2019-Other -893,682.24
Co.,Ltd. that receivables
wasnot Consolidated Balance Sheetin2019-Inventories 7,158.32
includedin The4thMeeting Consolidated Balance Sheetin2019-Other current
thescopeof ofthe9thBoard assets 67,355.14
consolidated ofDirectors held
statements on29July2020 Consolidated Balance Sheetin2019-Totalofcurrent 4,632,342.79
beforehas reviewed and assets
been approved the Consolidated Balance Sheetin2019-Fixed assets 140,153.19
conducted Proposal on Consolidated Balance Sheetin2019-Long-term
accounting Accounting prepaid expenses 53,497.80
treatment ErrorsCorrection
accordingto inPrevious Consolidated Balance Sheetin2019-Deferred 6.52
the Period. income taxassets
provisionsof Consolidated Balance Sheetin2019-Totalof 193,657.51
the non-current assets
accounting Consolidated Balance Sheetin2019-Totalassets 4,826,000.30
standards Consolidated Balance Sheetin2019-Accounts
duringthe 14,760.00payable
Reporting
Period. CcuosntosomliedrastedBalance Sheetin2019-Advances from 952,386.57
Consolidated Balance Sheetin2019-Other payables 1,224,017.91
Consolidated Balance Sheetin2019-Totalofcurrent 2,191,164.48
liabilities
Changchai Company, Limited Interim Report 2020
Consolidated Balance Sheetin2019-Totalliabilities 2,191,164.48
Consolidated Balance Sheetin2019-Surplus 163,483.58
reserves
Consolidated Balance Sheetin2019-Retained 1,471,352.24
earnings
Consolidated Balance Sheetin2019-Totalequity 2,634,835.82
attributable toownersoftheCompany astheparent
Consolidated Balance Sheetin2019-Totalowners’ 2,634,835.82
equity
Consolidated Balance Sheetin2019-Totalliabilities 4,826,000.30
and owners’equity
Consolidated Income Statement in2019-Revenue 5,687,083.80
Consolidated Income Statement in2019-Operating 5,687,083.80
revenue
Consolidated Income Statement in2019-Operating 5,726,254.73
costs
Consolidated Income Statement in2019-Costof 4,884,089.75
sales
Consolidated Income Statement in2019-Taxesand 21,043.17
surtaxes
Consolidated Income Statement in2019- 832,824.01
Administrative expense
Consolidated Income Statement in2019-Finance -11,702.20
costs
Consolidated Income Statement in2019-Interest 13,193.10
income
Consolidated Income Statement in2019-Other 12,063.29
income
Consolidated Income Statement in2019-Investment 58,549.24
income
Consolidated Income Statement in2019-Credit 7,317.61
impairment loss
Consolidated Income Statement in2019-Operating 38,759.21
profit
Consolidated Income Statement in2019- 16,006.10
Non-operating income
Changchai Company, Limited Interim Report 2020
Consolidated Income Statement in2019- 12,597.35
Non-operating expense
Consolidated Income Statement in2019-Profit 42,167.96
before taxation
Consolidated Income Statement in2019-Income tax 10,227.22
Consolidated Income Statement in2019-Net profit 31,940.74
Consolidated Income Statement in2019-Netprofit 31,940.74
from continuing operations
Consolidated Income Statement in2019-Netprofit 31,940.74
attributable toownersoftheCompany astheparent
Consolidated Income Statement in2019-Total 31,940.74
comprehensive income
Consolidated Income Statement in2019- 31,940.74
Attributable toowners oftheCompany astheparent
Consolidated Income Statement in2019-Earnings 0.00005
per share
Consolidated Income Statement in2019-Diluted 0.00005
earnings pershare
Consolidated Cash Flow Statement in
2019-Proceeds fromsaleofcommodities and 6,150,306.39
rendering ofservices
Consolidated Cash Flow Statement in2019- Cash 110,627.50
generated fromother operating activities
Consolidated Cash Flow Statement in2019-Subtotal 6,260,933.89
of cash usedinoperating activities
Consolidated Cash Flow Statement in2019- 4,051,587.11
Payments forcommodities andservices
Consolidated Cash Flow Statement in2019-Cash 1,415,158.29
paid toandforemployees
Consolidated Cash Flow Statement in2019-Taxes 223,381.96
paid
Consolidated Cash Flow Statement in2019-Cash 353,138.57
used inotheroperating activities
Consolidated Cash Flow Statement in2019-Subtotal 6,043,265.93
of cash usedinoperating activities
Consolidated Cash Flow Statement in2019-Net 217,667.96
Changchai Company, Limited Interim Report 2020
cash generated from/used inoperating activities
Consolidated Cash Flow Statement in 3,900,000.00
2019-Proceeds fromdisinvestments
Consolidated Cash Flow Statement in2019- 58,549.24
Investment income
Consolidated Cash Flow Statement in2019-Subtotal 3,958,549.24
of cash generated frominvesting activities
Consolidated Cash Flow Statement in
2019-Payments foracquisition offixed assets, 37,696.92
intangible assets andother long-lived assets
Consolidated Cash Flow Statement in2019- 6,950,000.00
Payments forinvestments
Consolidated Cash Flow Statement in2019-Subtotal 6,987,696.92
of cash usedininvesting activities
Consolidated Cash Flow Statement in2019-Net -3,029,147.68
cash generated from/used ininvesting activities
Consolidated Cash Flow Statement in2019- Cash -2,811,479.72
and cash equivalents, endoftheperiod
2. Segment Information
(1) Determination Basis and Accounting Policies of Reportable Segment
Due to the operation scope of the Company and subsidiaries were similar, the Company conducts common
management, and did not divide business unit, so the Company only made single branch report.
3. Other Significant Transactions and Events with Influence on Investors’ Decision-making
None
XVI. Notes of Main Items in the Financial Statements of the Company as the Parent
1. Accounts Receivable
(1) Accounts Receivable Classified by Category
Unit: RMB
Category Ending balance Beginning balance
Changchai Company, Limited Interim Report 2020
Carrying Baddebt Carrying Baddebt
amount provision Carryi amount provision
Withd Withd Carryinng
Amou Propo Amou rawal value Amou Propor Amou rawal gvalue
nt rtion nt propo nt tion nt propor
rtion tion
Accounts
receivablefor 35,35 33,45 1,895, 37,51 33,788
whichbad debt 4,686. 4.37% 9,099. 94.64 586.8 0,056. ,291.8 90.08 3,721,7
provision 26 43 % 3 90 6.66% 6 % 65.04
separately
accrued
Ofwhich:
Accounts
receivablewith
significant 30,51 28,61 1,895, 32,61 28,896
singleamount 5,544. 3.77% 9,957. 93.79 586.8 8,199. ,434.9 88.59 3,721,7
forwhich bad 63 80 % 3 97 5.79% 3 % 65.04
debtprovision
separately
accrued
Accounts
receivablewith
insignificant 4,839, 4,839, 4,891,
singleamount 141.6 0.60% 141.6 100.0 856.9 4,891, 100.0
forwhich bad 3 3 0% 3 0.87% 856.93 0%
debtprovision
separately
accrued
Accounts
receivablefor 773,1 130,4 642,7 525,8 192,14
whichbad debt 93,38 95.63 45,85 16.87 47,53 74,42 93.34 8,650. 36.54 333,725
provision 2.27 % 1.87 % 0.40 3.56 % 56 % ,773.00
accruedby
group
Ofwhich:
Changchai Company, Limited Interim Report 2020
Accounts
receivablefor
whichbad debt 773,1 95.63 130,4 16.87 642,7 525,8 192,14 36.54 333,725
provision 93,38 % 45,85 % 47,53 74,42 93.34 8,650. % ,773.00
accruedby 2.27 1.87 0.40 3.56 % 56
creditrisk
featuresgroup
808,5 100.0 163,9 20.27 644,6 563,3 100.00 225,93 40.10 337,447
Total 48,06 0% 04,95 % 43,117 84,48 % 6,942. % ,538.04
8.53 1.30 .23 0.46 42
Accounts receivable with significant single amount for which bad debt provision separately accrued at the
end of the period:
Unit: RMB
Ending balance
Name Carrying amount Baddebt provision Withdrawal Withdrawalreason
proportion
Customer1 Expected to
1,470,110.64 1,470,110.64 100.00% difficultlyrecover
Customer2 1,902,326.58 1,902,326.58 100.00% Difficulttorecover
Customer3 6,215,662.64 6,215,662.64 100.00% Difficulttorecover
Customer4 Expected to
2,254,860.60 2,175,814.38 96.49% difficultlyrecover
Customer5 Expected to
3,633,081.23 1,816,540.62 50.00% difficultlyrecover
Customer6 Expected to
3,279,100.00 3,279,100.00 100.00% difficultlyrecover
Customer7 Expected to
2,068,377.01 2,068,377.01 100.00% difficultlyrecover
Customer8 5,359,381.00 5,359,381.00 100.00% Difficulttorecover
Customer9 2,584,805.83 2,584,805.83 100.00% Difficulttorecover
Customer10 1,747,839.10 1,747,839.10 100.00% Difficulttorecover
Total 30,515,544.63 28,619,957.80 -- --
Accounts receivable for which bad debt provision accrued by credit risk features group
Unit: RMB
Name Ending balance
Carrying amount Baddebt provision Withdrawalproportion
Changchai Company, Limited Interim Report 2020
Within1year 642,166,048.04 12,843,320.94 2.00%
1to2years 8,755,103.78 437,755.18 5.00%
2to3years 4,792,557.78 718,883.67 15.00%
3to4years 1,052,669.09 315,800.73 30.00%
4to5years 742,280.57 445,368.34 60.00%
Over5years 115,684,723.01 115,684,723.01 100.00%
Total 773,193,382.27 130,445,851.87 -
Notes to the basis for the determination of the groups:
The accounts receivable was adopted the aging analysis based on the months when the accounts occurred
actually, among which the accounts occurred earlier will be priority to be settled in terms of the capital
turnover. Explanation of the input value and assumption adopted to determine the withdrawal amount of
bad debt provision on the Current Period: With reference to the experience of the historical credit loss,
combining with the prediction of the present status and future financial situation, the comparison table was
prepared between the aging of the accounts receivable and estimated credit loss rate in the duration and to
calculate the estimated credit loss.
Please refer to the relevant information of disclosure of bad debt provision of other accounts receivable if
adopting the general mode of expected credit loss to withdraw bad debt provision of accounts receivable.
□ Applicable √ Not applicable
Disclosure by aging
Unit: RMB
Aging Carryingamount
Within1year(including 1year) 642,166,048.04
1to2years 9,856,103.13
2to3years 7,977,007.54
Over3years 148,548,909.82
3to4years 4,450,019.60
4to5years 2,341,866.64
Over5years 141,757,023.58
Total 808,548,068.53
(2) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
Unit: RMB
Beginning Changes intheReporting Period
Category Reversal or Write-o EndingbalancebalanceWithdrawal Other
recovery ff
Changchai Company, Limited Interim Report 2020
Baddebt
provision 33,788,291.86 65,231.52 272,117.93 33,581,405.45
withdrawn
separately
Baddebt
provision 192,148,650.56 6,319,796.20 68,144, 130,323,545.84
withdrawn 900.92
bygroup
Total 225,936,942.42 6,385,027.72 272,117.93 68,144, 163,904,951.29
900.92
Of which bad debt provision reversed or recovered with significant amount in the Reporting Period: No.
(3) There Was No Particulars of the Actual Verification of Accounts Receivable during the
Reporting Period
Unit: RMB
Item Amount
Actualverification ofaccounts receivable 68,144,900.92
Of which the verification of significant accounts receivable:
Unit: RMB
Performanc Whether
Name oftheentity Nature Amount Reason e of generated from
verified verification related-party
procedures transaction
WuweiGoldenFrog The aging of The 3rd
VehicleManufacturing 10,000,000.00 canceled Meeting of
Co.,Ltd. receivables the 9th
XuzhouZhengda shall exceed 5 Board of
AgriculturalMachinery 7,583,232.65 years and result Directors
Co.,Ltd. from fruitless and the 3rd
ShandongAgricultural Baddebtloss collection, and Meeting of No
Machinery GroupHeze 4,581,880.41 if any single the 9th
AreaAgricultural client’s large Supervisor
Machinery Co.,Ltd. amount is y
SichuanTiantai involved Committee
Electromechanical 3,600,000.00 without any held on 26
AgriculturalMachinery business June 2020
Co.,Ltd. transaction reviewed
Changchai Company, Limited Interim Report 2020
PuyangShifeng with the and
AgriculturalMachinery 2,752,840.00 Company for approved
Co.,Ltd. over ten years, the
JiningHydraulic 2,450,966.67 the client’s Proposal
DrillingPlant qfouralificbautisoinnessVonerificatio
ZhanjiangAgricultural 2,180,243.72 operation shall n of Partial
MachineryCo.,Ltd. be canceled or Accounts
KaifengTractor 1,976,282.47 the insolvency Receivable
Factory liquidation is .
LinyiAgricultural finished
MachineryGroup 1,860,830.82 without any
Corporation oprpoedrautcitoinonand
HenanZhongjian 1,758,686.48 activities.
IndustrialCo., Ltd.
ShanxiJiaocheng 1,662,052.98
XinyuanIron Factory
GanyuAgricultural 1,285,160.60
MachineryCo.,Ltd.
Nanning
Changshunrong 1,236,225.30
AgriculturalMachinery
Co.,Ltd.
LongmaAgricultural 1,235,170.95
VehicleCo., Ltd.
XinjiangKorlaFeihong
AgriculturalMachinery 1,200,000.00
Co.,Ltd.
GaotangRaoyang
CountyAgricultural 1,149,217.70
MachineryCity
HainingBusGeneral 848,158.92
Factory
YunnanNanping
AgriculturalMachinery 841,642.86
Management
TongshanDongfang
AgriculturalMachinery 830,000.00
SalesDepartment
Changchai Company, Limited Interim Report 2020
JuningHuaihai
AgriculturalMachinery 800,000.00
TradingCo.,Ltd.
JiangxiLida
AgriculturalMachinery 797,786.72
SalesCo., Ltd.
ShenyangFusang
AgriculturalMachinery 796,226.73
Co.,Ltd.
AnhuiWoyang
AgriculturalMachinery 760,197.20
Co.,Ltd.
Tai'anGuotaiTractor 728,666.36
Factory
LijinYongxing
AgriculturalMachinery 677,250.00
SalesCo., Ltd.
HefeiXinfaMaterials 551,305.36
Co.,Ltd.
ChangqingCounty
AgriculturalMachinery 549,800.00
Company
HenanBoai
AgriculturalMachinery 537,698.10
Co.,Ltd.
ShandongShuangli 12,343,782.28
GroupCo.,Ltd.
ShandongDongchang
GroupLabor Service 520,892.51
Co.,Ltd.
Total -- 68,096,197.79 -- -- --
(4) Top 5 of the Ending Balance of Other Receivables Collected according to the Arrears Party
Unit: RMB
Endingbalance of Proportion tototalending Endingbalance ofbad
Nameoftheentity accounts receivable balance ofaccounts debt provision
receivable
Changchai Company, Limited Interim Report 2020
Customer1 376,475,098.82 46.56% 7,529,501.98
Customer2 54,293,467.67 6.71% 1,085,869.35
Customer3 32,287,845.17 3.99% 763,817.03
Customer4 21,395,243.36 2.65% 427,904.87
Customer5 18,593,170.87 2.30% 371,863.42
Total 503,044,825.89 62.22%
At the end of the period, the sum of the top five accounts receivable collected according to the arrears
amounted to RMB 503,044,825.89, accounting for 62.22% of the total balance at the end of the period.
The corresponding ending balance of bad debt provision is RMB10,178,956.65.
2. Other Receivables
Unit: RMB
Item Endingbalance Beginning balance
Otherreceivables 22,243,041.97 22,741,542.22
Total 22,243,041.97 22,741,542.22
(1) Other Receivable
1) Other Receivables Classified by Account Nature
Unit: RMB
Nature Endingcarrying amount Beginning carrying amount
Cashdepositand Margin 4,200.00 4,200.00
Intercoursefunds among units 38,118,999.36 37,618,642.29
Pettycashandborrowings by employees 671,871.57 624,083.07
Other 13,654,433.26 15,373,206.41
Total 52,449,504.19 53,620,131.77
2) Withdrawal of Bad Debt Provision
Unit: RMB
Bad debtprovision Firststage Secondstage Third stage Total
Changchai Company, Limited Interim Report 2020
Expectedcredit Expected lossinthe Expected lossinthe
loss ofthenext duration (credit duration (credit
12months impairment not impairment occurred)
occurred)
Balanceof1 30,878,589.55 30,878,589.55
January2020
Balanceof1
January2020inthe —— —— —— ——
CurrentPeriod
--Transferto
Secondstage
--TransfertoThird
stage
--Reverse to
Secondstage
--Reverse toFirst
stage
Withdrawal ofthe 25,814.56 25,814.56
CurrentPeriod
Reversalofthe 697,941.89 697,941.89
CurrentPeriod
Write-offsofthe
CurrentPeriod
Verification ofthe
CurrentPeriod
Otherchanges
Balanceof30June 30,206,462.22 30,206,462.22
2020
Changes of carrying amount with significant amount changed of loss provision in the Current Period
□ Applicable √ Not applicable
Disclosure by aging
Unit: RMB
Aging Carryingamount
Within1year(including 1year) 19,721,955.40
1to2years 1,720,886.24
Changchai Company, Limited Interim Report 2020
2to3years 592,647.80
Over3years 30,414,014.75
3to4years 1,007,667.17
4to5years 178,915.24
Over5years 29,227,432.34
Total 52,449,504.19
3) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
Information of bad debt provision withdrawn:
Unit: RMB
Beginning Changes intheReporting Period
Category Reversal or Write-of Ending balancebalanceWithdrawal Other
recovery f
Baddebt
provision 5,042,448.58 25,814.56 5,068,263.14
withdrawn
separately
Baddebt
provision 25,836,140.97 697,941.89 25,138,199.08
withdrawnby
group
Total 30,878,589.55 25,814.56 697,941.89 30,206,462.22
4) Particulars of the Actual Verification of Other Receivables during the Reporting Period: No.
5) Top 5 of the Ending Balance of Other Receivables Collected according to the Arrears Party
Unit: RMB
Proportion to
totalending Ending balance
Nameoftheentity Nature Endingbalance Aging balanceof ofbad debt
other provision
receivables
ChangzhouChangchai Interco
BenniuDieselEngine urse 10,000,000.00 Within1year 19.07% 200,000.00
FittingsCo., Ltd. funds
Changchai Company, Limited Interim Report 2020
Within 1 year
with
RMB8,125,173.7
ChangzhouChangchai Interco 9, 1 to 2 years
HoushengAgricultural urse 9,415,165.78 with 17.95% 235,305.55
Equipment Co.,Ltd. funds RMB1,206,967.2
8, 2 to 3 years
with
RMB83,024.71.
ChangzhouCompressors Interco
Factory urse 2,940,000.00 Over5years 5.61% 2,940,000.00
funds
ChangchaiGroupImp. Interco
&Exp. Co.,Ltd. urse 2,853,188.02 Over5years 5.44% 2,853,188.02
funds
ChangzhouNewDistrict Interco
AccountingCentre urse 1,626,483.25 Over5years 3.10% 1,626,483.25
funds
Total -- 26,834,837.05 -- 51.16% 7,854,976.82
3. Long-term Equity Investment
Unit: RMB
Ending balance Beginning balance
Item Carrying Depreciation Carrying Carrying Depreciation Carrying
amount reserves value amount reserves value
Investmentto 287,752,730. 287,752,730. 252,752,730. 252,752,730.
subsidiaries 03 03 03 03
Investmentto
jointventures
and 44,182.50 44,182.50 44,182.50 44,182.50
associated
enterprises
Total 287,796,912. 44,182.50 287,752,730. 252,796,912. 44,182.50 252,752,730.
53 03 53 03
(1) Investment to Subsidiaries
Unit: RMB
Changchai Company, Limited Interim Report 2020
Beginning Increase/decrease Ending Ending
Investee balance Withdrawa balance balance of
(carrying Additional Reduced lof Other (carrying depreciatio
value) investment investment dneprreesceiravteio value) nreserve
Changchai
Wanzhou 51,000,000 51,000,000
Diesel .00 .00
EngineCo.,
Ltd.
Changzhou
Changchai
Benniu 96,466,500 96,466,500
Diesel .00 .00
Engine
FittingsCo.,
Ltd.
Changzhou
Housheng 40,000,000 40,000,000
Investment .00 .00
Co.,Ltd.
Changzhou
Changchai
Housheng 7,000,000. 7,000,000.
Agricultural 00 00
Equipment
Co.,Ltd.
Changzhou
Fuji
Changchai 47,286,230 47,286,230
Robin .03 .03
Gasoline
EngineCo.,
Ltd.
Jiangsu
Changchai 10,000,000 35， 45,000,000
Machinery .00 000,000.00 .00
Co.,Ltd.
Changchai Company, Limited Interim Report 2020
Changzhou
Xingsheng 1,000,000. 1,000,000.
Property 00 00
Managemen
tCo., Ltd.
Total 252,752,73 35,000,000 287,752,73 0.00
0.03 .00 0.03
(2) Investment to Joint Ventures and Associated Enterprises
Unit: RMB
Increase/decrease
Begin Gains Adjust Endin
ning and ment Cash Withd Endin g
Investbalanc Additi Reduc rleocsosegsnof Chang boonrus rawal balganc baelaonfc
ee e onal ed ized other esof profits of e deprec
(carryi compr impair Otherinvestinvest under other annou (carryi
vanluge)ment ment eqthueityehveensi equity nctoed pmroevnits vanluge) rieastieornv
metho incom issue ion e
d e
II.Associated enterprises
Beijin
g
Tsingh
ua
Xingy
e
Indust 0.00 0.00 44,182
rial .50
Invest
ment
Mana
gemen
t Co.,
Ltd.
Subtot 0.00 0.00 44,182
al .50
Changchai Company, Limited Interim Report 2020
Total 0.00 0.00 44,182
.50
4. Operating Revenue and Cost of Sales
Unit: RMB
Item Reporting Period Sameperiod oflast year
Operating revenue Costofsales Operating revenue Costofsales
Mainoperations 1,066,808,215.93 914,519,611.82 1,016,544,011.76 895,758,979.30
Otheroperations 14,661,587.19 8,902,410.95 16,785,163.82 11,527,336.19
Total 1,081,469,803.12 923,422,022.77 1,033,329,175.58 907,286,315.49
Information related to performance obligations: performing according to the contract offer
Information related to transaction value assigned to residual performance obligations:
The amount of revenue corresponding to performance obligations of contracts signed but not performed or
not fully performed yet was RMB0 at the period-end.
5. Investment Income
Unit: RMB
Item Reporting Period Same periodoflastyear
Dividendincome fromholding ofother equity 4,865,000.00
instrumentinvestment
Investmentincome fromholding of
available-for-salefinancial assets
Investmentincome fromdisposalof
available-for-salefinancial assets
Incomefromtransferring toaccommodation 118,988.73
business
Total 4,983,988.73
XVII. Supplementary Materials
1. Items and Amounts of Non-recurring Profit or Loss
√ Applicable □ Not applicable
Unit: RMB
Item Amount Note
Changchai Company, Limited Interim Report 2020
Gainorlossondisposalofnon-current assets 9,252.03
Government subsidies charged to current profit or loss
(exclusive of government subsidies given in the 2,657,218.07
Company’s ordinary course of business at fixed quotas
oramounts asperthegovernment’suniform standards)
Capital occupation charges on non-financial enterprises 257,714.14
thatarerecorded intocurrent gains andlosses
Gain/loss from change of fair value of trading financial
assets and liabilities, and derivative financial assets and
liabilities, and investment gains from disposal of trading
financial assets and liabilities, and derivative financial 5,384,597.04
assets and liabilities, and investment in other debt
obligations, other than valid hedging related to the
Company’scommon businesses
Other non-operating income and expenses other than the 95,387.43
above
Less:Income tax effects 1,205,579.18
Non-controlling interests effects 180,418.43
Total 7,018,171.10 --
Explain the reasons if the Company classifies an item as an non-recurring gain/loss according to the
definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering
Their Securities to the Public—Non-recurring Gains and Losses, or classifies any extraordinary gain/loss
item mentioned in the said explanatory announcement as a recurrent gain/loss item.
□ Applicable √ Not applicable
2. Return on Equity and Earnings Per Share
Profit asofReporting Period Weightedaverage ROE (%) EPS (Yuan/share)
EPS-basic EPS-diluted
Net profit attributable to
ordinary shareholders of the 1.32 0.0493 0.0493
Company
Net profit attributable to
ordinary shareholders of the 0.99 0.0368 0.0368
Company after deduction of
non-recurringprofit orloss
Changchai Company, Limited Interim Report 2020
Part XII Documents Available for Reference
(I) The financial statements signed and sealed by the Company’s legal representative,
General Manager and head of the financial department (accountant in charge).
(II) The originals of all the Company’s documents and announcements which were
disclosed on the website designated by the CSRC during the Reporting Period.
(III) The Interim Report disclosed in other securities markets.
The above-mentioned documents available for reference are all kept in the Secretariat
of the Board of Directors of the Company and the Shenzhen Stock Exchange.
This Interim Report has been prepared in both Chinese and English. Should there be
any discrepancies or misunderstandings between the two versions, the Chinese
version shall prevail.
The Board of DirectorsChangchai Company, Limited
31 July 2020
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