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苏常柴B:2019年半年度报告(英文版) 下载公告
公告日期:2019-08-29

CHANGCHAICOMPANY,LIMITED

INTERIMREPORT2019

August2019

PartIImportantNotes,TableofContentsandDefinitions

TheBoardofDirectors(orthe“Board”),theSupervisoryCommitteeaswellasthedirectors,supervisorsandseniormanagementofChangchaiCompany,Limited(hereinafterreferredtoasthe“Company”)herebyguaranteethefactuality,accuracyandcompletenessofthecontentsofthisReportanditssummary,andshallbejointlyandseverallyliableforanymisrepresentations,misleadingstatementsormaterialomissionstherein.ShiXinkun,theCompany’slegalrepresentative,ZhangXin,theCompany’sGeneralManager,andJiangHe,headoftheCompany’sfinancialdepartment(equivalenttofinancialmanager)herebyguaranteethattheFinancialStatementscarriedinthisReportarefactual,accurateandcomplete.AlltheCompany’sdirectorshaveattendedtheBoardmeetingforthereviewofthisReportanditssummary.Anyplansforthefutureandotherforward-lookingstatementsmentionedinthisReportanditssummaryshallNOTbeconsideredasabsolutepromisesoftheCompanytoinvestors.Investorsandotherstakeholdersshallbesufficientlyawareoftheriskandshalldifferentiatebetweenplans/forecastsandpromises.TheCompanyhasnointerimdividendplan,eitherintheformofcashorstock.ThisReportanditssummaryhavebeenpreparedinbothChineseandEnglish.Shouldtherebeanydiscrepanciesormisunderstandingsbetweenthetwoversions,theChineseversionsshallprevail.

TableofContents

PartIImportantNotes,TableofContentsandDefinitions ...... 2

PartIICorporateInformationandKeyFinancialInformation ...... 5

PartIIIBusinessSummary ...... 8

PartIVOperatingPerformanceDiscussionandAnalysis ...... 11

PartVSignificantEvents ...... 21

PartVIShareChangesandShareholderInformation ...... 29

PartVIIPreferredShares ...... 34

PartVIIIDirectors,Supervisors,SeniorManagementandStaff ...... 35

PartIXCorporateBonds ...... 36

PartXFinancialStatements ...... 37

PartXIDocumentsAvailableforReference ...... 151

Definitions

TermDefinition
“Changchai”,the“Company”or“we”ChangchaiCompany,Limitedanditsconsolidatedsubsidiaries,exceptwherethecontextotherwiserequires
ChangchaiBenniuChangzhouChangchaiBenniuDieselEngineFittingsCo.,Ltd.
ChangchaiWanzhouChangchaiWanzhouDieselEngineCo.,Ltd.
HoushengInvestmentChangzhouHoushengInvestmentCo.,Ltd.
HoushengAgriculturalEquipmentChangzhouChangchaiHoushengAgriculturalEquipmentCo.,Ltd.
ChangchaiRobinChangzhouFujiChangchaiRobinGasolineEngineCo.,Ltd.
ChangchaiMachineryJiangsuChangchaiMachineryCo.,Ltd.
RMB,RMB’0,000ExpressedintheChinesecurrencyofRenminbi,expressedintenthousandRenminbi
The“ReportingPeriod”or“CurrentPeriod”Theperiodfrom1January2019to30June2019

PartIICorporateInformationandKeyFinancialInformation

ICorporateInformation

StocknameChangchai,Changchai-BStockcode000570,200570
StockexchangeforstocklistingShenzhenStockExchange
CompanynameinChinese常柴股份有限公司
Abbr.(ifany)苏常柴
CompanynameinEnglish(ifany)CHANGCHAICOMPANY,LIMITED
Abbr.(ifany)CHANGCHAICO.,LTD.
LegalrepresentativeShiXinkun

IIContactInformation

BoardSecretarySecuritiesRepresentative
NameHeJianjiang
Address123HuaideMiddleRoad,Changzhou,Jiangsu,China
Tel.(86)519-68683155
Fax(86)519-86630954
Emailaddresscchjj@changchai.com

IIIOtherInformation

1.ContactInformationoftheCompanyIndicatebytickmarkwhetheranychangeoccurredtotheregisteredaddress,officeaddressandtheirzipcodes,websiteaddressandemailaddressoftheCompanyintheReportingPeriod.

□Applicable√NotapplicableNochangeoccurredtothesaidinformationintheReportingPeriod,whichcanbefoundinthe2018AnnualReport.

2.MediaforInformationDisclosureandPlacewherethisReportisKeptIndicatebytickmarkwhetheranychangeoccurredtotheinformationdisclosuremediaandtheplaceforkeeping

theCompany’speriodicreportsintheReportingPeriod.

□Applicable√NotapplicableThenewspapersdesignatedbytheCompanyforinformationdisclosure,thewebsitedesignatedbytheCSRCfordisclosingtheCompany’speriodicreportsandtheplaceforkeepingsuchreportsdidnotchangeintheReportingPeriod.Thesaidinformationcanbefoundinthe2018AnnualReport.

IVKeyFinancialInformation

Indicatebytickmarkwhetherthereisanyretrospectivelyrestateddatuminthetablebelow.

□Yes√No

H12019H12018Change(%)
Operatingrevenue(RMB)1,115,829,845.591,186,760,892.26-5.98%
Netprofitattributabletothelistedcompany’sshareholders(RMB)19,058,025.0718,638,557.662.25%
Netprofitattributabletothelistedcompany’sshareholdersbeforeexceptionalgainsandlosses(RMB)14,227,155.5917,262,823.25-17.59%
Netcashgeneratedfrom/usedinoperatingactivities(RMB)-154,227,704.77-5,608,853.15-
Basicearningspershare(RMB/share)0.03390.03322.11%
Dilutedearningspershare(RMB/share)0.03390.03322.11%
Weightedaveragereturnonequity(%)0.97%0.86%0.11%
30June201931December2018Change(%)
Totalassets(RMB)3,640,229,950.933,542,019,195.752.77%
Equityattributabletothelistedcompany’sshareholders(RMB)2,135,662,393.662,043,308,026.744.52%

VAccountingDataDifferencesunderChineseAccountingStandards(CAS)andInternationalFinancialReportingStandards(IFRS)andForeignAccountingStandards

1.NetProfitandNetAssetDifferencesunderCASandIFRS

□Applicable√NotapplicableNosuchdifferencesfortheReportingPeriod.

2.NetProfitandNetAssetDifferencesunderCASandForeignAccountingStandards

□Applicable√NotapplicableNosuchdifferencesfortheReportingPeriod.

XIExceptionalGainsandLosses

√Applicable□Notapplicable

Unit:RMB

ItemReportingPeriodNote
Gainorlossondisposalofnon-currentassets(inclusiveofimpairmentallowancewrite-offs)988,535.95
Governmentsubsidieschargedtocurrentprofitorloss(exclusiveofgovernmentsubsidiesgivenintheCompany’sordinarycourseofbusinessatfixedquotasoramountsasperthegovernment’suniformstandards)129,300.00
Gainorlossonfair-valuechangesintradingandderivativefinancialassetsandliabilities&incomefromdisposaloftradingandderivativefinancialassetsandliabilitiesandotherinvestmentsindebtobligations(exclusiveoftheeffectiveportionofhedgesthatariseintheCompany’sordinarycourseofbusiness)179,073.85
Reversedportionsofimpairmentallowancesforloanbymandatewhicharetestedindividuallyforimpairment4,000,000.00
Non-operatingincomeandexpenseotherthantheabove349,093.41
Less:Incometaxeffects822,508.89
Non-controllinginterestseffects(netoftax)-7,375.16
Total4,830,869.48--

ExplanationofwhytheCompanyreclassifiesasrecurrentanexceptionalgain/lossitemdefinedorlistedintheExplanatoryAnnouncementNo.1onInformationDisclosureforCompaniesOfferingTheirSecuritiestothePublic—ExceptionalGain/LossItems:

□Applicable√NotapplicableNosuchcasesfortheReportingPeriod.

PartIIIBusinessSummary

IPrincipalActivityoftheCompanyintheReportingPeriod

IstheCompanysubjecttoanyindustry-specificdisclosurerequirements?No.Asamanufacturer,wespecializeinthemanufactureandsaleofdieselengines,dieselenginefittingsandcastings,gasolineengines,gasolineenginefittings,rotovators,walkingtractors,moldsandjigsaswellastheassemblyandsaleofdieselengineandgasolineenginesupportingsets.Wemainlymanufactureandsellsmallandmedium-sizedsingle-cylinderandmulti-cylinderdieselenginesunderthebrandof“Changchai”,whichareoftenusedintractors,combine-harvesters,lightcommercialvehicles,agricultureequipment,small-sizedengineeringmachinery,generatorsets,shipmachines,etc.

IISignificantChangesinMajorAssets

1.SignificantChangesinMajorAssets

MajorassetsMainreasonforsignificantchanges
OthercurrentassetsTheendingamountwasdownby17,988,799.29(or52.36%)fromthebeginningamount,primarilydrivenbyadeclineinoverpaidVAT.
AccountsreceivableTheendingamountwasupbyRMB364,413,521.17(or96.19%)fromthebeginningamount,primarilydrivenbytheCompany’smovetoproperlyallowcustomers’buyingoncreditinorderformoremarkets,andthefactthatmulti-cylinderdieselenginecustomersareusuallygivenlongerpaymentdaysfortheyaremostlysupportingmanufacturers.
AdvancesfromcustomersTheendingamountwasupbyRMB24,309,044.71(or70.46%)fromthebeginningamount,primarilydrivenbyariseinadvancesfromcustomers.

2.MajorAssetsOverseas

□Applicable√NotapplicableIIICoreCompetitivenessAnalysisIstheCompanysubjecttoanyindustry-specificdisclosurerequirements?No.

1.AdvantagesinBrand

Changchaiisanationalindustrialenterprisewithahistoryofoveronehundredyears.ItisoneoftheearliestprofessionalmanufacturersofinternalcombustionenginesinChina.Thebrand"Changchai"istheearliestdomestictrademarkofproductiongoodsknownasChina'swell-knowntrademarks.Thedieselengineof"Changchai"brandisChina'sbrand-nameproduct.TheenterprisehasbeencertifiedbyISO9001andIATF16949qualitysystems,ISO14001environmentalmanagementsystem,ISO/TS16949automotiveproductqualitymanagementsystem,andaccessedtothenationalexport-freeenterprisequalification.Changchaiwashonorablyrankedamong“theTopOneHundredChineseEnterprisesinEngineeringIndustry”and“ChinaPacesetterEnterpriseofIndustrialIndustry”forseveraltimes,andwasawardedthehonorarytitleof“State-levelEnterpriseofObservingContractsandKeepingPromise”,“China'sAgriculturalMachineryPartsandComponentsLeadingEnterprises”,“China'sAgriculturalMachineryAAACreditEnterprise”,“QualityManagementExcellenceAwardofJiangsuProvince”and“MayorQualityAwardofChangzhouCity”.TheCompanyhasbeenamongthe“JiangsuIndependentIndustriesBrandTop50”forfouryearsinarow.Also,ithasbeenamongthe10users’mostsatisfiedleadingbrandsin“JingGeng”competitionformanyyears.In2019,theCompanyonceagainwasgiventhetitleof“Top50IndustrialBrandsofJiangsuProvince”,amongothers.Formanyyears,intheprocessofachievingsteadyeconomicdevelopmentoftheenterprise,wedevelopedinasoundmannerandcultivatedthe“Changchai”brand,afamoussmalldieselenginebrandofChinawithindependentintellectualpropertyrights.

2.AdvantagesinTechnologyTheCompanyhasastate-leveltechnologycenterandpost-doctoralresearchstation,andaresearchcenterofsmallandmedium-powerinternalcombustionengineengineeringandtechnologyinJiangsuProvince.Currently,itismainlyengagedinproductionofsmallandmedium-powersingle-cylinderandmulti-cylinderdieselengine.Ithasacompleteproductrange,awidepowerlevelcoverage,ahighreputationandintellectualpropertyrightsforitsmainproducts.Its4G33TCdieselenginehasbeenincludedintheprovincialcatalogofkeynewtechnologiesandproductstobepromoted.Its4G33TCand3M78dieselengineshavebeenrecognizedas“high-techproducts”attheprovinciallevel.Its4G33multi-cylinderdieselengineshavewontheAnnualInnovativeProductAwardintheagriculturalmachineryindustry.Andits3M78lightenginewontheNewProprietaryProductGoldenAwardforEquipmentManufacturingSectorattheprovinciallevel.DuringtheReportingPeriod,theCompanyfiledfor1patentandwasgranted5patents.Currently,theCompanyhasatotalof144patentsgrantedbyauthoritiesathomeandabroad,including14inventionpatents.

3.AdvantagesinMarketingChangchaihasbuiltupasalesservicenetworkcoveringthewholecountry,with5salesbusinessunits,27sales

servicecenters,over900servicestationsand750designatedmaintenancestations.Inaddition,inordertomeettheNationalEmissionStandardIVforNon-RoadVehiclesandprovidebetterafter-salesserviceforcustomers,aservicemonitoringplatformwithChangchaicharacteristicshasbeenputinplace.Withaperfectdieselsalesservicenetworksystem,theCompanyisabletoprovidehighquality,efficientandtimelyservicesforcustomers.

PartIVOperatingPerformanceDiscussionandAnalysisIOverview

Thefirsthalfof2019sawatroughoftheagriculturalmachinerymarket,whichisexpectedtocontinue.Duringthisperiod,theCompanysold361,100unitsofdieselengines,gasolineenginesandrelatedgeneratorsets,including69,300unitsofgasolineengines,generatingtotalsalesrevenueofRMB1,115,829,845.59,adropof

5.98%year-on-year.IntheReportingPeriod,theCompanystrengthenedproductadvantages,acceleratedmarketexpansion,andpushedforwardproductplanningstepbystep.Also,itattachedimportancetoservicemanagementtoincreaseserviceefficiency,andenhancedinternalmanagementforbettercostefficiency.Throughtheseefforts,ithasachievedthefollowingresults:

ProductR&Dandinnovation:TheCompanycontinuedtodrivetheR&Dandreserveofdieselenginefornon-roadvehiclesprojectunderChina’sMotorVehicleEmissionStandardsIVanddieselengineforautomotiveuseprojectunderChina’sMotorVehicleEmissionStandardsVI.Thedevelopmentandapplicationoftheremotemonitoringplatformenteredthestageofsoftwaredeployment,andtheplatformprovidedfavorablesupporttothereductionintheCompany’sservicecostsof“threeguarantees”.Qualitymanagement:Inlightoftheadjustmenttoitsorganizationalstructure,theCompanyreviseditssystemdocuments,whichpassedtheinternalauditinApril2019.InJune,theCompanypassedtheexternalauditofitsISO9001andIATF16949qualitymanagementsystemsbyCASCandthespotcheckbyChinaNationalAccreditationServiceforConformityAssessment.Marketingmanagement:TheCompanysolidifiedtheexistingadvantagesandenlargedtheshareofsuperiorproducts.Itkeptimprovingservicecapabilitiesbybuildinggoodcooperativepartnershipwithcustomersandsuppliers,adaptingtomarketchangesforopportunitiestoexpandthemarketandpromotingnewareasofsupportingproducts.Asaresult,customersatisfactionkeptrising.Internalmanagement:TheCompanyreinforcedtheconstructionofinternalcontrolsystemandthesupervisionofkeyprojects.Bydeepeningthemedium-termspecialaudit,itimprovedriskpreventionandcontrolabilityandthequalityofinternalauditwork.Astimelymeasuresaretakentosolveproblems,operationalefficiencyoftheCompanyisimproved.Market:Intraditionalagriculturesector,facingincreasingmarketcompetition,theCompanyestablishedasales

policyofstabilizingthemarketsharesofitstwomainenginefactorieswhiledevelopingnewmarketsandnewfieldswithtargetedmarketinginkeyregions,whichledtosomeachievements.Althoughthetotalmarketofsinglecylinderengineindustryfellsubstantially,declineintheCompany’ssalesofsinglecylinderengineswaslowerthantheindustrialaverage.Changchaimaintaineditsindustrialtoppositionintermsofitsmarketshareofsinglecylinderengines.Innon-roadsector,anincreasewasseenintheCompany’smarketshareofmulti-cylinderenginesintractors,harvesters,cornharvesters,withadvantagedfieldsbeingfurtherstrengthened.Furthermore,inlightofthecontinuousdeclineinagriculturesector,theCompanycontinuedtoexpandnon-agriculturemarketbystrivingtodevelopmarketsharesinsuchsupportingmarketsascoastal,projectinfrastructureandsmallprojectmachinery,inadditiontostabilizingitsmarketshareofconstructionmachineryandprospectingmachinery.Outboundinvestment:InFebruary2019,theCompanyfoundedJiangsuChangchaiMachineryCo.,Ltd.,awhollyownedsubsidiaryoftheCompany,whichengagesinproductionprojectsoflightenginesandcastings.Asaresult,thenumberoftheCompany’smajority-ownedsubsidiarieshasincreasedtosix.IIAnalysisofCoreBusinessesSee“IOverview”above.Year-on-yearchangesinkeyfinancialdata:

Unit:RMB

H12019H12018Change(%)Mainreasonforchange
Operatingrevenue1,115,829,845.591,186,760,892.26-5.98%
Costofsales970,438,847.361,034,354,908.99-6.18%
Sellingexpense58,258,398.9852,228,075.8611.55%
Administrativeexpense34,102,694.8628,367,615.3120.22%
Financecosts-1,780,811.62-132,337.12-
Incometaxexpense-2,998,475.834,352,526.65-Thisismainlybecausethecompanyreceived6,700,210.88yuanofcorporateincometaxrefundin2018inJune2019.
R&dspending30,064,283.4634,066,872.15-11.75%
Netcashgenerated-154,227,704.77-5,608,853.15-Thisismainlydue
from/usedinoperatingactivitiestotheincreaseofaccountsreceiveableinthecurrentreportingperiod.
Netcashgeneratedfrom/usedininvestingactivities-16,253,804.42-29,078,866.20-
Netcashgeneratedfrom/usedinfinancingactivities-22,977,861.20-8,263,008.91-
Netincreaseincashandcashequivalents-193,459,370.39-42,950,728.26-

MaterialchangestotheprofitstructureorsourcesoftheCompanyintheReportingPeriod:

□Applicable√NotapplicableNosuchchangesintheReportingPeriod.Breakdownofcorebusinesses:

Unit:RMB

OperatingrevenueCostofsalesGrossprofitmarginYoYchangeinoperatingrevenue(%)YoYchangeincostofsales(%)YoYchangeingrossprofitmargin(%)
Byoperatingdivision
Internalcombustionengines1,099,044,681.77958,911,511.1712.75%-6.08%-6.10%0.01%
Byproductcategory
Dieselengines1,030,299,707.19901,543,063.2612.50%-6.96%-6.6%-2.64%
Gasolineengines68,744,974.5857,368,447.9116.55%9.44%2.5%5.65%
Byoperatingsegment
Domestic946,082,606.49810,225,144.2014.36%-4.70%-4.50%-0.18%
Overseas152,962,075.28148,686,366.972.80%-13.82%-13.93%0.13%

IIIAnalysisofNon-CoreBusinesses

□Applicable√Notapplicable

IVAnalysisofAssetsandLiabilities

1.MaterialChangesinAssetComposition

Unit:RMB

30June201930June2018Changeinpercentage(%)Reasonformaterialchange
AmountAs%oftotalassetsAmountAs%oftotalassets
Monetarycapital628,482,778.1217.26%445,858,926.1712.07%5.19%
Accountsreceivable743,272,680.2820.42%809,459,781.2521.91%-1.49%
Inventories480,107,549.1213.19%406,509,269.6011.00%2.19%
Investmentproperty49,551,837.231.36%51,760,178.031.40%-0.04%
Long-termequityinvestments0.000.00%0.000.00%0.00%
Fixedassets473,064,733.7313.00%525,895,299.4214.23%-1.23%
Constructioninprogress80,277,379.052.21%86,375,849.202.34%-0.13%
Short-termborrowings22,000,000.000.60%28,700,000.000.78%-0.18%
Long-termborrowings0.00%21,500,000.000.58%-0.58%
Non-currentliabilitiesduewithinoneyear18,500,000.000.51%0.000.00-Thisismainlyduetothetransferoflong-termborrowingsof18.5millionyuanintonon-currentliabilitiesduewithinoneyearduringthereportingperiod

2.AssetsandLiabilitiesatFairValue

√Applicable□Notapplicable

Unit:RMB

ItemBeginningamountGain/lossonfair-valuechangesintheReportingPeriodCumulativefair-valuechangeschargedtoequityImpairmentallowancefortheReportingPeriodPurchasedintheReportingPeriodSoldintheReportingPeriodEndingamount
Financialassets
Otherinvestmentinequityinstruments370,940,000.00351,736,375.00473,682,000.00
Totalofabove370,940,000.00351,736,375.00473,682,000.00
Financialliabilities0.000.000.000.00

SignificantchangestothemeasurementattributesofthemajorassetsintheReportingPeriod:

□Yes√No

3.RestrictedAssetRightsasofEndofReportingPeriod

ItemEndingcarryingvalueReasonsforrestriction
Monetarycapital134,862,508.92Cashdepositsofbankacceptancebill
Housebuilding2,936,446.13Pledgeforbankloans
Landuseright995,328.00Pledgeforbankloans
Machineryequipment48,181,935.62Pledgeforbankloans
Total186,976,218.67

VInvestmentsMade

1.TotalInvestmentAmount

√Applicable□Notapplicable

Investmentduringreportingperiod(RMB)Investmentinthesameperiodoflastyear(RMB)Change
10,000,000.000.00-

2.MajorEquityInvestmentsMadeintheReportingPeriod

√Applicable□Notapplicable

NameofinvestedcompanyThemainbusinessInvestmentwayInvestmentamountstakeSourcesoffundingpartnerInvestmenthorizonTheproducttypeProgressasofbalancesheetdateExpectedearningsCurrentinvestmentprofitandlossWhetherornotitDateofdisclosure(ifany)Disclosureindex(ifany)
Jiangsuchangchaimachineryco.LTDInternalcombustionengineandsupportingunits,etcSetup10,000,000.00100.00%ownfundsnolong-termDieselenginefittingsIndustrialandcommercialregistrationhasbeencompleted0.00-94,337.74noFebruary26,20192019-004
Total----10,000,000.00------------0.00-94,337.74------

3.MajorNon-EquityInvestmentsOngoingintheReportingPeriod

□Applicable√Notapplicable

4.FinancialInvestments

(1)SecuritiesInvestments

□Applicable√Notapplicable

NosuchcasesintheReportingPeriod.

(2)InvestmentsinDerivativeFinancialInstruments

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.VISaleofMajorAssetsandEquityInterests

1.SaleofMajorAssets

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

2.SaleofMajorEquityInterests

□Applicable√NotapplicableVIIMainControlledandJointStockCompanies

√Applicable□NotapplicableMainsubsidiariesandjointstockcompanieswithanover10%influenceontheCompany’snetprofit

Unit:RMB

NameRelationshipwiththeCompanyPrincipalactivityRegisteredcapitalTotalassetsNetassetsOperatingrevenueOperatingprofitNetprofit
ChangchaiBenniuSubsidiaryProductionofdieselengineaccessories55,063,000.00167,463,298.3688,092,596.7782,967,069.94-1,910,681.66-1,687,454.30
ChangchaiWanzhouSubsidiaryDieselengineassembly85,000,000.00139,319,910.91116,731,410.2223,600,857.49334,830.50257,014.16
HoushengInvestmentSubsidiaryExternalinvestmentandconsulting40,000,000.0047,362,830.3546,587,114.76273,786.40189,266.31170,512.15
HoushengSubsidiaragricultur10,000,034,370,5803,456.6,815,42-643,24-570,014.5
AgriculturalEquipmentyalmachineryproductofricetransplanteretc.00.0057.22643.915.337
ChangchaiRobinSubsidiaryGasolineenginesassembly37,250,000.0097,572,124.7980,992,921.0468,744,974.584,558,034.063,428,638.44
ChangchaiMachinerySubsidiaryInternalcombustionengineandaccessoriesthereof300,000,000.009,907,374.879,905,662.260.00-94,337.74-94,337.74

SubsidiariesobtainedordisposedintheReportingPeriod:

√Applicable□Notapplicable

SubsidiaryHowsubsidiarywasobtainedordisposedintheReportingPeriodEffectsonoveralloperationsandoperatingperformance
JiangsuChangchaiMachineryCo.,Ltd.Set-upItconformstothelong-termdevelopmentplanningoftheCompanyaswellastheinterestsofallshareholdersandtheCompany.ItisestimatedthatnomaterialeffectsontheCompany’sfinancialconditionandoperatingperformancewillbegenerated.

Informationaboutmajormajority-andminority-ownedsubsidiaries:

(1)Onthe15

th

Meetingofthe8

th

BoardofDirectorsoftheCompanyheldon27November2018,theProposalonIncreasingCapitalofWholly-OwnedSubsidiarieswasconsideredandapproved.TheproposalplannedtoincreasethecapitalofChangzhouHoushengInvestmentCo.,Ltd.(hereinafterreferredtoas“HoushengInvestment”),awholly-ownedsubsidiaryoftheCompany,withaself-ownedfundofRMB10million.Afterthecapitalincrease,HoushengInvestment’sregisteredcapitalwouldincreasefromRMB30milliontoRMB40million.On14February2019,HoushengInvestmentcompletedtheproceduresofchangeinbusinessregistrationforthecapitalincreaseandobtainedthenewBusinessLicenseissuedbyChangzhouAdministrationforIndustry&Commerce.Formoredetails,pleaserefertotheAnnouncementonIncreasingCapitalofWholly-OwnedSubsidiaries(AnnouncementNo.:2018-034)andtheAnnouncementontheProgressofIncreasingCapitalofWholly-OwnedSubsidiaries(AnnouncementNo.2019-002)publishedonSecuritiesTimes,HongKongTaKungPaoandwww.cninfo.com.cnon29November2018andon15February2019.

(2)On26December2018,theCompanyofficiallyenteredintotheInvestmentAgreementwiththeHi-TechZoneofChangzhou.Accordingtotheagreement,theCompanywouldcontributeacapitalofRMB300milliontoestablishawholly-ownedsubsidiarytoengageinproductionprojectsoflightenginesandcastings.TheCompany

convenedanon-scheduledmeetingoftheBoardofDirectorson25February2019,wheretheProposalonEstablishingaWholly-OwnedSubsidiarytoImplementProductionProjectsofLightEnginesandCastingswasapproved.Businessregistrationproceduresforthewholly-ownedsubsidiarywerecompletedon6March2019,withtheobtainmentoftheBusinessLicenseissuedbythebureauofadministrativeapprovaloftheNationalHi-TechIndustryDevelopmentZone(XinbeiDistrict)ofChangzhou.Formoredetails,pleaserefertotheAnnouncementonOutboundInvestmentandProposaltoEstablishaWholly-OwnedSubsidiary(AnnouncementNo.2019-004)andtheAnnouncementontheProgressoftheOutboundInvestmentandProposaltoEstablishaWholly-OwnedSubsidiary(AnnouncementNo.2019-005)publishedonSecuritiesTimes,TaKungPaoandwww.cninfo.com.cnon26February2019andon7March2019.

VIIIStructuredBodiesControlledbytheCompany

□Applicable√NotapplicableIXPerformanceForecastforJanuary-September2019WarningofpossiblelossorconsiderableYoYchangeintheaccumulativenetprofitmadeduringtheperiod-beginningtotheendofthenextreportingperiod,aswellasthereasons:

□Applicable√Notapplicable

XRisksFacingtheCompanyandCountermeasures

1.MarketriskTheCompany’smainbusinesslacksdiversity,facesincreasingpressurefromemissionupgradingandthereplacementofnewenergyindustry,andischallengedbyevenbiggerdifficultiesinmarketingonthecurrentbackdropofdeepadjustmenttoagriculturalmachineryindustry.Countermeasures:Intermsofmainbusiness,theCompanyshouldmakeitscurrentadvantagedproductsstronger,expandsupportingfieldsanddevelopnewmarkets;itshouldworkhardontechnicalupgradingandR&D,andtakeadvantageoftheopportunitybroughtbyChina’sMotorVehicleEmissionStandardsIVtoovertakeatthecorner,rapidlymakeplansinadvanceandinvolveinnewindustries,inanefforttotranslatetechnologyedgesintoproductandcompetitiveedges.Intermsofmarketing,theCompanyshouldstrengthenthedevelopmentoftheT-Boxagriculturalmachinerymonitoringplatformandfurtherreduceservicecostsandincreaseserviceefficiencywhilemaintainingtheoriginalsalesteamandnetwork.

2.ProcurementriskTheseverepressureonsafetyandenvironmentalprotectionhasledtothehighercostsofpartsmanufacturing,moredemandsforpriceadjustmentbysuppliers,andtheincreasedinstabilityofsuppliers.Therearesomerisksintheprocurementandsupplyofparts.

Countermeasures:TheCompanyshallhighlypayattentiontotheoperatingrisksofsuppliers,thesuppliers’dynamicwithrelativelyhighsupplyofparts,andthesuppliers’dynamicwithlittleenthusiasmforcooperationorwhosebusinessisbeingadjusted,formulatetargeteddisposalplans,andtakethequalitycostasonefactortochoosesuppliers.

3.QualityriskProductinnovationandupgradingandtheexpansioninsupportingfieldsareraisingincreasinglyhigherrequirementsforthequalityindicatorsofrelatedpartsandforthequalityofwholemachinematching.Countermeasures:TheCompanyshouldcontinuetofocusonquality,baseontheengagementofallemployees,raisetheawarenessforqualityassurance,beefupmutualinspectionofparts,intensifyon-the-spotappraisalofpartsqualitytoeliminateunqualifiedproducts,reinforceinspectionabilitiesandspotauditswithafocusonsuppliersofaverageorpoorqualityproducts,andgivefullplaytotheCompany’scomprehensivequalitymanagementsystemandexcellentqualitymanagementteam.

PartVSignificantEvents

IAnnualandExtraordinaryGeneralMeetingConvenedduringtheReportingPeriod

1.GeneralMeetingConvenedduringtheReportingPeriod

MeetingTypeInvestorparticipationratioConveneddateDisclosuredateIndextodisclosedinformation
The2018AnnualGeneralMeetingAnnualGeneralMeeting30.83%16May201917May20192019-019

2.ExtraordinaryGeneralMeetingConvenedatRequestofPreferenceShareholderswithResumedVotingRights

□Applicable√Notapplicable

IIInterimDividendPlanfortheReportingPeriod

□Applicable√NotapplicableTheCompanyhasnointerimdividendplan.IIICommitmentsoftheCompany’sActualController,Shareholders,ConnectedPartiesandAcquirer,aswellastheCompanyandOtherCommitmentMakers,FulfilledintheReportingPeriodorstillOngoingatPeriod-End

√Applicable□Notapplicable

CommitmentPromisorTypeofcommitmentDetailsofcommitmentDateofcommitmentmakingTermofcommitmentFulfillment
OthercommitmentsmadetominorityshareholdersChangchaiCompany,LimitedbonusRewardsPlanforShareholdersinNextThreeYears(2017-2019)Underthepremiseofpositivedistributiveprofit(remainingafter-taxprofitsaftermakingup11May2017Year2017-2019Ongoing
forthelossandextractingforthecommonreserves)inthisyearorhalfyearandabundantmoneyflowandnoinfluenceonthefollowing-upgoingconcernaftercashbonus,theprofitsallocatedbycasheveryyearshouldn’tbelowerthan10%oftheallocableprofitsfromparentcompany.Meanwhile,theaccumulatedallocableprofitsbycashinthearbitrarycontinuousthreeaccountingyearsshouldnotbelowerthan30%oftheannualaverageallocableprofitsinthosethreeyears.
FulfilledontimeYes
Specificreasonsforfailingtofulfillcommitmentsontimeandplansfornextstep(ifany)N/A

IVEngagementandDisengagementofCPAsFirm

HastheInterimfinancialreportbeenaudited?

□Yes√NoThisInterimReportisunaudited.VExplanationsGivenbyBoardofDirectorsandSupervisoryCommitteeRegarding“ModifiedAuditor’sReport”IssuedbyCPAsFirmfortheReportingPeriod

□Applicable√Notapplicable

VIExplanationsGivenbyBoardofDirectorsRegarding“ModifiedAuditor’sReport”IssuedforLastYear

□Applicable√Notapplicable

VIIBankruptcyandRestructuring

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.VIIILegalMattersSignificantlawsuitsorarbitrations:

√Applicable□Notapplicable

GeneralinformationInvolvedamount(RMB’0,000)ProvisionProgressDecisionsandeffectsExecutionofdecisionsDisclosuredateIndextodisclosedinformation
AboutthelawsuitcaseofShandongHongliGroupCo.,Ltd.,theaccusedcompanyowedaccumulativelyRMB14.36milliontotheCompany.TheCompanysuedtoChangzhouIntermediatePeople’sCourtin2001andsuedforcompulsoryexecutioninApril,2002.Currently,thedefendanthasstartedthebankruptcyprocedure.1,436NoJudgedforthesecondtrialN/AUnderthecompulsoryexecutionbythecourtandintheprocessofliquidationandbankruptcy

Otherlegalmatters:

□Applicable√Notapplicable

IXPunishmentsandRectifications

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

XCreditConditionsoftheCompanyaswellasitsControllingShareholderandActualController

□Applicable√Notapplicable

XIEquityIncentivePlans,EmployeeStockOwnershipPlansorOtherIncentiveMeasuresforEmployees

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.XIIMajorRelated-PartyTransactions

1.ContinuingRelated-PartyTransactions

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

2.Related-PartyTransactionsRegardingPurchaseorSalesofAssetsorEquityInterests

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

3.RelatedTransactionsRegardingJointInvestmentsinThirdParties

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

4.CreditsandLiabilitieswithRelatedParties

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

5.OtherMajorRelated-PartyTransactions

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

XIIIOccupationoftheCompany’sCapitalbytheControllingShareholderorItsRelatedPartiesforNon-OperatingPurposes

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.XIVMajorContractsandExecutionthereof

1.Entrustment,ContractingandLeases

(1)Entrustment

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

(2)Contracting

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

(3)Leases

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

2.MajorGuarantees

√Applicable□Notapplicable

(1)Guarantees

Unit:RMB'0,000

GuaranteesprovidedbytheCompanyforexternalparties(exclusiveofthoseforsubsidiaries)
ObligorDisclosuredateoftheguaranteelineannouncementLineofguaranteeActualoccurrencedate(Agreementsigningdate)ActualguaranteeamountTypeofguaranteeTermofguaranteeHavingexpiredornotGuaranteeforarelatedpartyornot
GuaranteesprovidedbytheCompanyforitssubsidiaries
ObligorDisclosuredateLineofguarantActualoccurrenceActualguaranteeTypeofguaranteeTermofguaranteeHavingGuarantee
oftheguaranteelineannouncementeedate(Agreementsigningdate)amountexpiredornotforarelatedpartyornot
ChangzhouChangchaiHoushengAgriculturalEquipmentCo.,Ltd.29November20182,00029November20182,000Jointliability1yearNoNo
TotalapprovedlineforsuchguaranteesintheReportingPeriod(B1)2,000TotalactualamountofsuchguaranteesintheReportingPeriod(B2)2,000
TotalapprovedlineforsuchguaranteesattheendoftheReportingPeriod(B3)2,000TotalactualbalanceofsuchguaranteesattheendoftheReportingPeriod(B4)2,000
Guaranteesprovidedbetweensubsidiaries
ObligorDisclosuredateoftheguaranteelineannouncementLineofguaranteeActualoccurrencedate(Agreementsigningdate)ActualguaranteeamountTypeofguaranteeTermofguaranteeHavingexpiredornotGuaranteeforarelatedpartyornot
Totalguaranteeamount(totalofthethreekindsofguaranteesabove)
TotalguaranteelineapprovedintheReportingPeriod(A1+B1+C1)2,000TotalactualguaranteeamountintheReportingPeriod(A2+B2+C2)2,000
TotalapprovedguaranteelineattheendoftheReportingPeriod(A3+B3+C3)2,000TotalactualguaranteebalanceattheendoftheReportingPeriod(A4+B4+C4)2,000
Totalactualguaranteeamount(A4+B4+C4)as%oftheCompany’snetassets0.94%
Ofwhich:
Balanceofguaranteesprovidedforshareholders,actualcontrollerandtheirrelatedparties(D)0
Balanceofdebtguaranteesprovideddirectlyorindirectlyforobligorswithanover70%debt/asset2,000
ratio(E)
Amountbywhichthetotalguaranteeamountexceeds50%oftheCompany’snetassets(F)0
Totalofthethreeamountsabove(D+E+F)2,000
Explanationonpossibilitytobearjointliabilityduetoundueguarantees(ifany)N/A
Explanationontheexternalguaranteesinviolationofstipulatedprocedures(ifany)N/A

Compoundguarantees

(2)IrregularitiesinProvisionofGuarantees

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

3.OtherMajorContracts

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.XVCorporateSocialResponsibility(CSR)

1.SignificantEnvironmentProtectionIndicatebytickmarkwhethertheCompanyoranyofitssubsidiariesisaheavilypollutingbusinessidentifiedbytheenvironmentalprotectionauthoritiesofChinaNoTheCompanyanditssubsidiariesarenotthemajorpolluteridentifiedbytheenvironmentalprotectionauthoritiesofChinaduringtheReportingPeriod.TheCompanyattachesgreatimportancetotheworkofenvironmentalprotection,andrequiresthesubsidiariestobuildcorrespondingenvironmentalprotectionfacilitiesaccordingtotheactualsituationofproductionandoperation,strictlycontrollingthepollutants,like“wastegas,wastewater,andwasteresidue”generatedfromtheproductionprocess.

2.MeasuresTakenforTargetedPovertyAlleviationTheCompanydidnottakeanytargetedmeasurestohelppeopleliftthemselvesoutofpovertyduringtheReportingPeriod,alsonosubsequentplans.

XVIOtherSignificantEvents

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

XVIISignificantEventsofSubsidiaries

□Applicable√Notapplicable

PartVIShareChangesandShareholderInformationI.ShareChanges

1.ShareChanges

Unit:share

BeforeIncrease/decreaseintheReportingPeriod(+/-)After
SharesPercentage(%)NewissuesSharesasdividendconvertedfromprofitSharesasdividendconvertedfromcapitalreservesOtherSubtotalSharesPercentage(%)
I.Restrictedshares00.00%00.00%
1.SharesheldbyState00.00%00.00%
2.Sharesheldbystate-ownedlegalperson00.00%00.00%
3.Sharesheldbyotherdomesticinvestors00.00%00.00%
Amongwhich:Sharesheldbydomesticlegalperson00.00%00.00%
Sharesheldbydomesticnaturalperson00.00%00.00%
4.Sharesheldbyforeigninvestors00.00%00.00%
Amongwhich:Sharesheldbyforeignlegalperson00.00%00.00%
Share00.00%00.00%
sheldbyforeignnaturalperson
II.Unrestrictedshares561,374,326100.00%561,374,326100.00%
1.RMBcommonshares411,374,32673.28%411,374,32673.28%
2.Domesticallylistedforeignshares150,000,00026.72%150,000,00026.72%
3.Overseaslistedforeignshares00.00%00.00%
4.Others00.00%00.00%
III.Totalshares561,374,326100.00%561,374,326100.00%

Reasonsforsharechanges:

□Applicable√NotapplicableApprovalofsharechanges:

□Applicable√NotapplicableTransferofshareownership:

□Applicable√NotapplicableProgressonanysharerepurchases:

□Applicable√NotapplicableProgressonreducingtherepurchasedsharesbymeansofcentralizedbidding:

□Applicable√NotapplicableEffectsofsharechangesonthebasicanddilutedearningspershare,equitypershareattributabletotheCompany’sordinaryshareholdersandotherfinancialindicatorsoftheprioryearandtheprioraccountingperiod,respectively:

□Applicable√NotapplicableOtherinformationthattheCompanyconsidersnecessaryorisrequiredbythesecuritiesregulatortobedisclosed:

□Applicable√Notapplicable

2.ChangesinRestrictedShares

□Applicable√NotapplicableII.IssuanceandListingofSecurities

□Applicable√NotapplicableIII.TotalNumberofShareholdersandTheirShareholdings

Unit:share

Totalnumberofordinaryshareholdersattheperiod-end55,742Totalnumberofpreferenceshareholderswithresumedvotingrightsattheperiod-end(ifany)(seenote8)0
5%orgreaterordinaryshareholdersorthetop10ordinaryshareholders
NameofshareholderNatureofshareholderShareholdingpercentage(%)Totalsharesheldattheperiod-endIncrease/decreaseduringtheReportingPeriodNumberofrestrictedsharesheldNumberofnon-restrictedsharesheldPledgedorfrozenshares
StatusNumber
ChangzhouInvestmentGroupCo.,LtdState-ownedlegalperson30.43%170,845,236170,845,236
KGIAsiaLimitedForeignlegalperson0.57%3,189,8453,189,845
HuangGuoliangDomesticnaturalperson0.27%1,528,8911,528,891
HuWenyongDomesticnaturalperson0.27%1,528,0661,528,066
LiSuinanDomesticnaturalperson0.27%1,507,8001,507,800
TaoXiaofangDomesticnaturalperson0.22%1,228,0001,228,000
XueHongDomesticnaturalperson0.22%1,220,0001,220,000
VanguardInvestmentAustraliaLtd-VanguardEmergingMarketStockIndexFund(Exchange)Foreignlegalperson0.21%1,196,7851,196,785
XieDeqingDomesticnaturalperson0.20%1,140,1001,140,100
CentralHuijinAssetManagementCo.,Ltd.State-ownedlegalperson0.20%1,107,9001,107,900
Strategicinvestororgenerallegalpersonbecomingatop-10ordinaryshareholderduetorightsissue(ifany)(seenote3)N/A
Relatedoracting-in-concertpartiesamongtheshareholdersaboveItisunknownwhetherthereisamongthetop10publicshareholdersandthetop10unrestrictedpublicshareholdersanyrelatedpartiesoracting-in-concertpartiesasdefinedintheAdministrativeMeasuresforInformationRegardingShareholdingAlteration.
Top10unrestrictedshareholders
NameofshareholderUnrestrictedsharesheldattheperiod-endSharesbytype
TypeShares
ChangzhouInvestmentGroupCo.,Ltd170,845,236RMBcommonshare170,845,236
KGIAsiaLimited3,189,845Domesticallylistedforeignshare3,189,845
HuangGuoliang1,528,891Domesticallylistedforeignshare1,528,891
HuWenyong1,528,066Domesticallylistedforeignshare1,528,066
LiSuinan1,507,800Domesticallylistedforeignshare1,507,800
TaoXiaofang1,228,000RMBcommonshare1,228,000
XueHong1,220,000Domesticallylistedforeignshare1,220,000
VanguardInvestmentAustraliaLtd-VanguardEmergingMarketStockIndexFund(Exchange)1,196,785RMBcommonshare1,196,785
XieDeqing1,140,100Domesticallylistedforeignshare1,140,100
CentralHuijinAssetManagementCo.,Ltd.1,107,900RMBcommonshare1,107,900
Relatedoracting-in-concertpartiesamongtop10unrestrictedpublicshareholders,aswellasItisunknownwhetherthereisamongthetop10publicshareholdersandthetop10unrestrictedpublicshareholdersanyrelatedpartiesoracting-in-concertpartiesasdefinedintheAdministrativeMeasuresfor
betweentop10unrestrictedpublicshareholdersandtop10shareholdersInformationRegardingShareholdingAlteration.
Top10ordinaryshareholdersinvolvedinsecuritiesmargintrading(ifany)(seenote4)N/A

Indicatebytickmarkwhetheranyofthetop10ordinaryshareholdersorthetop10unrestrictedordinaryshareholdersoftheCompanyconductedanypromissoryrepoduringtheReportingPeriod.

□Yea√NoNosuchcasesintheReportingPeriod.

IV.ChangeoftheControllingShareholderortheActualControllerChangeofthecontrollingshareholderintheReportingPeriod

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.ChangeoftheactualcontrollerintheReportingPeriod

□Applicable√NotapplicableNosuchcasesintheReportingPeriod.

PartVIIPreferredShares

□Applicable√NotapplicableNopreferredsharesintheReportingPeriod.

PartVIIIDirectors,Supervisors,SeniorManagementandStaff

IChangeinShareholdingsofDirectors,SupervisorsandSeniorManagement

□Applicable√NotapplicableTherewerenochangesinshareholdingsofdirectors,supervisors,andseniormanagementintheReportingPeriod.Fordetails,seeAnnualReportof2018.

IIChangesinDirectors,SupervisorsandSeniorManagement

√Applicable□Notapplicable

NameOfficetitleTypeDateReason
HeJianguangDirectorandvicechairmanoftheBoardLeft28January2019Jobturnover

PartIXCorporateBonds

Arethereanycorporatebondspubliclyofferedandlistedonthestockexchange,whichwereunduebeforetheapprovaldateofthisReportorwereduebutcouldnotberedeemedinfull?No

PartXFinancialStatements

I.Auditor’sReport

Whethertheinterimreporthasbeenaudited?

□Yes√NoTheinterimreportoftheCompanyhasnotbeenaudited.II.FinancialStatementsTheunitofthefinancialstatementsattached:RMB

1.ConsolidatedBalanceSheetPreparedbyChangchaiCompany,Limited

Unit:RMB

Item30June201931December2018
Currentassets:
Monetarycapital628,482,778.12800,960,036.69
Settlementreserve
Interbankloansgranted
Tradingfinancialassets
Financialassetsatfairvaluethroughprofitorloss
Derivativefinancialassets
Notesreceivable445,812,473.66495,370,782.47
Accountsreceivable743,272,680.28378,859,159.11
Financingbackedbyaccountsreceivable
Prepayments9,479,067.0611,352,297.10
Premiumsreceivable
Reinsurancereceivables
Receivablereinsurancecontractreserve
Otherreceivables10,675,479.559,244,584.42
Including:Interestreceivable0.000.00
Dividendsreceivable0.000.00
Financialassetspurchasedunderresaleagreements
Inventories480,107,549.12557,953,891.70
Contractassets
Assetsclassifiedasheldforsale
Currentportionofnon-currentassets
Othercurrentassets16,368,809.6834,357,608.97
Totalcurrentassets2,334,198,837.472,288,098,360.46
Non-currentassets:
Loansandadvancestocustomers
Investmentsindebtobligations
Available-for-salefinancialassets498,851,369.49
Investmentsinotherdebtobligations
Held-to-maturityinvestments
Long-termreceivables
Long-termequityinvestments0.00
Investmentsinotherequityinstruments601,731,811.25
Othernon-currentfinancialassets
Investmentproperty49,551,837.2350,656,007.63
Fixedassets473,064,733.73511,250,371.37
Constructioninprogress80,277,379.0589,090,384.71
Productivelivingassets
Oilandgasassets
Right-of-useassets
Intangibleassets100,425,529.49103,092,879.38
R&Dexpense
Goodwill
Long-termprepaidexpense
Deferredincometaxassets979,822.71979,822.71
Othernon-currentassets0.00
Totalnon-currentassets1,306,031,113.461,253,920,835.29
Totalassets3,640,229,950.933,542,019,195.75
Currentliabilities:
Short-termborrowings22,000,000.0027,000,000.00
Borrowingsfromcentralbank
Interbankloansobtained
Tradingfinancialliabilities
Financialliabilitiesatfairvaluethroughprofitorloss
Derivativefinancialliabilities
Notespayable498,805,800.00438,375,400.00
Accountspayable534,631,506.05591,754,875.77
Advancesfromcustomers58,809,277.6834,500,232.97
Financialassetssoldunderrepurchaseagreements
Customerdepositsandinterbankdeposits
Payablesforactingtradingofsecurities
Payablesforunderwritingofsecurities
Payrollpayable31,235,024.3250,500,592.99
Taxespayable2,964,557.127,066,085.89
Otherpayables192,072,806.77199,412,250.90
Including:Interestpayable0.00
Dividendspayable3,891,433.833,891,433.83
Handlingchargesandcommissionspayable
Reinsurancepayables
Contractliabilities
Liabilitiesdirectlyassociatedwithassetsclassifiedasheldforsale
Currentportionofnon-currentliabilities18,500,000.0018,500,000.00
Othercurrentliabilities2,664,523.792,082,985.18
Totalcurrentliabilities1,361,683,495.731,369,192,423.70
Non-currentliabilities:
Insurancecontractreserve
Long-termborrowings2,000,000.00
Bondspayable
Including:Preferredshares
Perpetualbonds
Leaseliabilities
Long-termpayables
Long-termpayrollpayable
Provisions
Deferredincome59,928,484.8459,928,484.84
Deferredincometaxliabilities63,288,082.2447,971,780.36
Othernon-currentliabilities
Totalnon-currentliabilities123,216,567.08109,900,265.20
Totalliabilities1,484,900,062.811,479,092,688.90
Owners’equity:
Sharecapital561,374,326.00561,374,326.00
Otherequityinstruments
Including:Preferredshares
Perpetualbonds
Capitalreserves164,328,665.43164,328,665.43
Less:Treasurystock
Othercomprehensiveincome351,736,375.00264,405,675.00
Specificreserve15,182,958.8315,182,958.83
Surplusreserves320,133,050.15320,133,050.15
Generalreserve
Retainedearnings722,907,018.25717,883,351.33
TotalequityattributabletoownersoftheCompanyastheparent2,135,662,393.662,043,308,026.74
Non-controllinginterests19,667,494.4619,618,480.11
Totalowners’equity2,155,329,888.122,062,926,506.85
Totalliabilitiesandowners’equity3,640,229,950.933,542,019,195.75

Legalrepresentative:ShiXinkunGeneralManager:ZhangXinHeadoftheaccountingdepartment:JiangHe

2.BalanceSheetoftheCompanyastheParent

Unit:RMB

Item30June201931December2018
Currentassets:
Monetarycapital581,281,428.17759,404,219.72
Tradingfinancialassets
Financialassetsatfairvaluethroughprofitorloss
Derivativefinancialassets
Notesreceivable437,789,558.88490,519,795.91
Accountsreceivable665,339,555.79300,357,283.81
Financingsbackedbyaccountsreceivable
Prepayments5,409,681.354,768,038.11
Otherreceivables23,668,652.7621,681,331.85
Including:Interestreceivable
Dividendsreceivable
Inventories346,525,723.89437,423,195.46
Contractassets
Assetsclassifiedasheldforsale
Currentportionofnon-currentassets
Othercurrentassets2,436,589.6723,099,858.67
Totalcurrentassets2,062,451,190.512,037,253,723.53
Non-currentassets:
Investmentsindebtobligations
Available-for-salefinancialassets470,940,000.00
Investmentsinotherdebtobligations
Held-to-maturityinvestments
Long-termreceivables
Long-termequityinvestments251,752,730.03241,752,730.03
Investmentsinotherequityinstruments573,682,000.00
Othernon-currentfinancialassets
Investmentproperty49,551,837.2350,656,007.63
Fixedassets383,536,146.88413,186,680.19
Constructioninprogress78,194,210.2587,007,215.91
Productivelivingassets
Oilandgasassets
Right-of-useassets
Intangibleassets71,081,380.6072,184,608.63
R&Dexpense
Goodwill
Long-termprepaidexpense
Deferredincometaxassets930,641.19930,641.19
Othernon-currentassets
Totalnon-currentassets1,408,728,946.181,336,657,883.58
Totalassets3,471,180,136.693,373,911,607.11
Currentliabilities:
Short-termborrowings5,000,000.0010,000,000.00
Tradingfinancialliabilities
Financialliabilitiesatfairvaluethroughprofitorloss
Derivativefinancialliabilities
Notespayable484,035,800.00425,995,400.00
Accountspayable500,784,658.07561,555,397.44
Advancesfromcustomers57,107,885.8332,072,387.55
Contractliabilities
Payrollpayable24,268,608.3543,597,759.22
Taxespayable988,338.922,443,767.89
Otherpayables178,675,594.58185,022,961.56
Including:Interestpayable
Dividendspayable3,243,179.973,243,179.97
Liabilitiesdirectlyassociatedwithassetsclassifiedasheldforsale
Currentportionofnon-currentliabilities18,500,000.0018,500,000.00
Othercurrentliabilities
Totalcurrentliabilities1,269,360,885.751,279,187,673.66
Non-currentliabilities:
Long-termborrowings
Bondspayable
Including:Preferredshares
Perpetualbonds
Leaseliabilities
Long-termpayables
Long-termpayrollpayable
Provisions
Deferredincome59,928,484.8459,928,484.84
Deferredincometaxliabilities62,071,125.0046,659,825.00
Othernon-currentliabilities
Totalnon-currentliabilities121,999,609.84106,588,309.84
Totalliabilities1,391,360,495.591,385,775,983.50
Owners’equity:
Sharecapital561,374,326.00561,374,326.00
Otherequityinstruments
Including:Preferredshares
Perpetualbonds
Capitalreserves183,071,147.70183,071,147.70
Less:Treasurystock
Othercomprehensiveincome351,736,375.00264,405,675.00
Specificreserve15,182,958.8315,182,958.83
Surplusreserves320,133,050.15320,133,050.15
Retainedearnings648,321,783.42643,968,465.93
Totalowners’equity2,079,819,641.101,988,135,623.61
Totalliabilitiesandowners’equity3,471,180,136.693,373,911,607.11

Legalrepresentative:ShiXinkunGeneralManager:ZhangXinHeadoftheaccountingdepartment:JiangHe

3.ConsolidatedIncomeStatement

Unit:RMB

ItemH12019H12018
1.Revenue1,115,829,845.591,186,760,892.26
Including:Operatingrevenue1,115,829,845.591,186,760,892.26
Interestincome
Premiumincome
Handlingchargeandcommissionincome
2.Costsandexpenses1,096,080,768.771,164,582,065.19
Including:Costofsales970,438,847.361,034,354,908.99
Interestexpense
Handlingchargeandcommissionexpense
Surrenders
Netclaimspaid
Netamountprovidedasinsurancecontractreserve
Expenditureonpolicydividends
Reinsurancepremiumexpense
Taxesandsurcharges4,997,355.735,739,473.26
Sellingexpense58,258,398.9852,228,075.86
Administrativeexpense34,102,694.8628,367,615.31
R&Dexpense30,064,283.4634,066,872.15
Financecosts-1,780,811.62-132,337.12
Including:Interestexpense1,567,625.501,805,097.10
Interestincome1,642,256.03891,663.17
Add:Otherincome129,300.00129,600.00
Returnoninvestment(“-”forloss)179,073.85376,091.68
Including:Shareofprofitorlossofjointventuresandassociates
Incomefromthederecognitionoffinancialassetsatamortizedcost(“-”forloss)
Foreignexchangegain(“-”forloss)
Netgainonexposurehedges(“-”forloss)
Gainonchangesinfairvalue(“-”forloss)
Creditimpairmentloss(“-”forloss)-5,260,420.00
Assetimpairmentloss(“-”forloss)-26,096.43-9,957,456.74
Assetdisposalincome(“-”forloss)988,535.95
3.Operatingprofit(“-”forloss)15,759,470.1922,684,518.75
Add:Non-operatingincome566,931.382,103,083.03
Less:Non-operatingexpense217,837.981,527,166.21
4.Profitbeforetax(“-”forloss)16,108,563.5923,260,435.57
Less:Incometaxexpense-2,998,475.834,352,526.65
5.Netprofit(“-”fornetloss)19,107,039.4218,907,908.92
5.1Byoperatingcontinuity
5.1.1Netprofitfromcontinuingoperations(“-”fornetloss)19,107,039.4218,907,908.92
5.1.2Netprofitfromdiscontinuedoperations(“-”fornetloss)
5.2Byownership
5.2.1NetprofitattributabletoownersoftheCompanyastheparent19,058,025.0718,638,557.66
5.2.1Netprofitattributabletonon-controllinginterests49,014.35269,351.26
6.Othercomprehensiveincome,netoftax87,330,700.00-126,198,225.00
AttributabletoownersoftheCompanyastheparent87,330,700.00-126,198,225.00
6.1Itemsthatwillnotbereclassifiedtoprofitorloss87,330,700.00
6.1.1Changescausedbyremeasurementsondefinedbenefitpensionschemes
6.1.2Othercomprehensiveincomethatwillnotbereclassifiedtoprofitorlossundertheequitymethod
6.1.3Changesinthefairvalueofinvestmentsinotherequityinstruments87,330,700.00
6.1.4Changesinthefairvalueofthecompany’screditrisks
6.1.5Other
6.2Itemsthatwillbereclassifiedtoprofitorloss-126,198,225.00
6.2.1Othercomprehensiveincomethatwillbereclassifiedtoprofitorlossundertheequitymethod
6.2.2Changesinthefairvalueofinvestmentsinotherdebtobligations
6.2.3Gain/Lossonchangesinthefairvalueofavailable-for-salefinancialassets-126,198,225.00
6.2.4Othercomprehensiveincomearisingfromthereclassificationoffinancialassets
6.2.5Gain/Lossarisingfromthereclassificationofheld-to-maturityinvestmentstoavailable-for-salefinancialassets
6.2.6Allowanceforcreditimpairmentsininvestmentsinotherdebtobligations
6.2.7Reserveforcashflowhedges
6.2.8Differencesarisingfromthetranslationofforeigncurrency-denominatedfinancialstatements
6.2.9Other
Attributabletonon-controllinginterests0.00
7.Totalcomprehensiveincome106,437,739.42-107,290,316.08
AttributabletoownersoftheCompanyastheparent106,388,725.07-107,559,667.34
Attributabletonon-controllinginterests49,014.35269,351.26
8.Earningspershare
8.1Basicearningspershare0.03390.0332
8.2Dilutedearningspershare0.03390.0332

WherebusinesscombinationsundercommoncontroloccurredintheCurrentPeriod,thenetprofitachievedby

theacquireesbeforethecombinationswasRMB,withtheamountforthesameperiodoflastyearbeingRMB.Legalrepresentative:ShiXinkunGeneralManager:ZhangXinHeadoftheaccountingdepartment:JiangHe

4.IncomeStatementoftheCompanyastheParent

Unit:RMB

ItemH12019H12018
1.Operatingrevenue1,033,329,175.581,121,335,123.15
Less:Costofsales907,286,315.49991,077,844.49
Taxesandsurcharges3,963,893.194,388,116.03
Sellingexpense53,346,830.9546,378,981.86
Administrativeexpense25,476,365.8823,307,342.62
R&Dexpense27,891,685.4230,051,019.61
Financecosts-3,010,192.35-1,920,963.99
Including:Interestexpense1,314,360.501,528,387.25
Interestincome1,165,423.09684,552.38
Add:Otherincome129,300.00129,600.00
Returnoninvestment(“-”forloss)0.0021,000.00
Including:Shareofprofitorlossofjointventuresandassociates
Incomefromthederecognitionoffinancialassetsatamortizedcost(“-”forloss)
Netgainonexposurehedges(“-”forloss)
Gainonchangesinfairvalue(“-”forloss)
Creditimpairmentloss(“-”forloss)-5,260,420.00
Assetimpairmentloss(“-”forloss)-26,096.43-9,924,969.03
Assetdisposalincome(“-”forloss)988,535.95
2.Operatingprofit(“-”forloss)14,205,596.5218,278,413.50
Add:Non-operatingincome230,353.361,760,229.91
Less:Non-operatingexpense166,954.641,525,338.21
3.Profitbeforetax(“-”forloss)14,268,995.2418,513,305.20
Less:Incometaxexpense-4,118,680.403,037,417.85
4.Netprofit(“-”fornetloss)18,387,675.6415,475,887.35
4.1Netprofitfromcontinuingoperations(“-”fornetloss)18,387,675.6415,475,887.35
4.2Netprofitfromdiscontinuedoperations(“-”fornetloss)
5.Othercomprehensiveincome,netoftax87,330,700.00-126,198,225.00
5.1Itemsthatwillnotbereclassifiedtoprofitorloss87,330,700.00
5.1.1Changescausedbyremeasurementsondefinedbenefitpensionschemes
5.1.2Othercomprehensiveincomethatwillnotbereclassifiedtoprofitorlossundertheequitymethod
5.1.3Changesinthefairvalueofinvestmentsinotherequityinstruments87,330,700.00
5.1.4Changesinthefairvalueofthecompany’screditrisks
5.1.5Other
5.2Itemsthatwillbereclassifiedtoprofitorloss-126,198,225.00
5.2.1Othercomprehensiveincomethatwillbereclassifiedtoprofitorlossundertheequitymethod
5.2.2Changesinthefairvalueofinvestmentsinotherdebtobligations
5.2.3Gain/Lossonchangesinthefairvalueofavailable-for-salefinancialassets-126,198,225.00
5.2.4Othercomprehensiveincomearisingfromthereclassificationoffinancialassets
5.2.5Gain/Lossarisingfromthereclassificationofheld-to-maturityinvestmentstoavailable-for-salefinancialassets
5.2.6Allowanceforcreditimpairmentsininvestmentsinotherdebtobligations
5.2.7Reserveforcashflowhedges
5.2.8Differencesarisingfromthetranslationofforeigncurrency-denominatedfinancialstatements
5.2.9Other
6.Totalcomprehensiveincome105,718,375.64-110,722,337.65
7.Earningspershare
7.1Basicearningspershare
7.2Dilutedearningspershare

Note:1.PayattentiontotheinfluenceoftheR&DexpenseoftheCompanyastheparentontheadministrativeexpense

Legalrepresentative:ShiXinkunGeneralManager:ZhangXinHeadoftheaccountingdepartment:JiangHe

5.ConsolidatedCashFlowStatement

Unit:RMB

ItemH12019H12018
1.Cashflowsfromoperatingactivities:
Proceedsfromsaleofcommoditiesandrenderingofservices922,256,275.091,052,665,606.90
Netincreaseincustomerdepositsandinterbankdeposits
Netincreaseinborrowingsfromcentralbank
Netincreaseinloansfromotherfinancialinstitutions
Premiumsreceivedonoriginalinsurancecontracts
Netproceedsfromreinsurance
Netincreaseindepositsandinvestmentsofpolicyholders
Interest,handlingchargesandcommissionsreceived
Netincreaseininterbankloansobtained
Netincreaseinproceedsfromrepurchasetransactions
Netproceedsforactingtradingofsecurities
Taxrebates21,598,658.8420,142,964.09
Cashgeneratedfromotheroperatingactivities8,300,459.206,122,580.97
Subtotalofcashgeneratedfromoperatingactivities952,155,393.131,078,931,151.96
Paymentsforcommoditiesandservices898,343,434.08861,702,539.28
Netincreaseinloansandadvancestocustomers
Netincreaseindepositsincentralbankandininterbankloansgranted
Paymentsforclaimsonoriginalinsurancecontracts
Netincreaseinfinancialassetsheldfortrading
Netincreaseininterbankloansgranted
Interest,handlingchargesandcommissionspaid
Policydividendspaid
Cashpaidtoandforemployees151,721,498.93171,524,903.87
Taxespaid17,834,800.1814,854,230.49
Cashusedinotheroperatingactivities38,483,364.7136,458,331.47
Subtotalofcashusedinoperatingactivities1,106,383,097.901,084,540,005.11
Netcashgeneratedfrom/usedinoperatingactivities-154,227,704.77-5,608,853.15
2.Cashflowsfrominvestingactivities:
Proceedsfromdisinvestment7,000,000.0013,534,013.89
Returnoninvestment179,073.85376,091.68
Netproceedsfromthedisposaloffixedassets,intangibleassetsandotherlong-livedassets988,535.95125,474.80
Netproceedsfromthedisposalofsubsidiariesandotherbusinessunits0.00
Cashgeneratedfromotherinvestingactivities
Subtotalofcashgeneratedfrominvestingactivities8,167,609.8014,035,580.37
Paymentsfortheacquisitionoffixedassets,intangibleassetsandotherlong-livedassets11,782,972.4618,849,002.37
Paymentsforinvestments12,638,441.76
Netincreaseinpledgedloansgranted
Netpaymentsfortheacquisitionofsubsidiariesandotherbusinessunits
Cashusedinotherinvestingactivities24,265,444.20
Subtotalofcashusedininvestingactivities24,421,414.2243,114,446.57
Netcashgeneratedfrom/usedininvestingactivities-16,253,804.42-29,078,866.20
3.Cashflowsfromfinancingactivities:
Capitalcontributionsreceived
Including:Capitalcontributionsbynon-controllingintereststosubsidiaries
Borrowingsobtained12,000,000.0017,000,000.00
Netproceedsfromissuanceofbonds
Cashgeneratedfromotherfinancingactivities
Subtotalofcashgeneratedfromfinancingactivities12,000,000.0017,000,000.00
Repaymentsofborrowings19,000,000.007,000,000.00
Paymentsforinterestanddividends15,977,861.2018,263,008.91
Including:Dividendspaidbysubsidiariestonon-controllinginterests
Cashusedinotherfinancingactivities
Subtotalofcashusedinfinancingactivities34,977,861.2025,263,008.91
Netcashgeneratedfrom/usedinfinancingactivities-22,977,861.20-8,263,008.91
4.Effectofforeignexchangeratechangesoncashandcash
equivalents
5.Netincreaseincashandcashequivalents-193,459,370.39-42,950,728.26
Add:Cashandcashequivalents,beginningoftheperiod687,079,639.59325,263,654.43
6.Cashandcashequivalents,endoftheperiod493,620,269.20282,312,926.17

Legalrepresentative:ShiXinkunGeneralManager:ZhangXinHeadoftheaccountingdepartment:JiangHe

6.CashFlowStatementoftheCompanyastheParent

Unit:RMB

ItemH12019H12018
1.Cashflowsfromoperatingactivities:
Proceedsfromsaleofcommoditiesandrenderingofservices825,164,929.97978,362,086.38
Taxrebates16,338,954.7114,838,384.91
Cashgeneratedfromotheroperatingactivities5,103,265.565,251,560.76
Subtotalofcashgeneratedfromoperatingactivities846,607,150.24998,452,032.05
Paymentsforcommoditiesandservices834,695,159.25801,461,497.18
Cashpaidtoandforemployees127,977,021.88143,561,299.80
Taxespaid9,992,032.8210,023,890.64
Cashusedinotheroperatingactivities30,159,658.6532,113,861.57
Subtotalofcashusedinoperatingactivities1,002,823,872.60987,160,549.19
Netcashgeneratedfrom/usedinoperatingactivities-156,216,722.3611,291,482.86
2.Cashflowsfrominvestingactivities:
Proceedsfromdisinvestment
Returnoninvestment21,000.00
Netproceedsfromthedisposaloffixedassets,intangibleassetsandotherlong-livedassets988,535.95102,774.58
Netproceedsfromthedisposalofsubsidiariesandotherbusinessunits
Cashgeneratedfromotherinvestingactivities
Subtotalofcashgeneratedfrominvestingactivities988,535.95123,774.58
Paymentsfortheacquisitionoffixedassets,intangibleassetsandotherlong-livedassets9,220,626.9717,662,045.01
Paymentsforinvestments10,000,000.000.00
Netpaymentsfortheacquisitionofsubsidiariesandotherbusinessunits
Cashusedinotherinvestingactivities
Subtotalofcashusedininvestingactivities19,220,626.9717,662,045.01
Netcashgeneratedfrom/usedininvestingactivities-18,232,091.02-17,538,270.43
3.Cashflowsfromfinancingactivities:
Capitalcontributionsreceived
Borrowingsobtained5,000,000.0010,000,000.00
Netproceedsfromtheissuanceofbonds
Cashgeneratedfromotherfinancingactivities
Subtotalofcashgeneratedfromfinancingactivities5,000,000.0010,000,000.00
Repaymentsofborrowings10,000,000.00
Paymentsforinterestanddividends15,404,432.8417,733,682.52
Cashusedinotherfinancingactivities0.00
Subtotalofcashusedinfinancingactivities25,404,432.8417,733,682.52
Netcashgeneratedfrom/usedinfinancingactivities-20,404,432.84-7,733,682.52
4.Effectofforeignexchangeratechangesoncashandcashequivalents
5.Netincreaseincashandcashequivalents-194,853,246.22-13,980,470.09
Add:Cashandcashequivalents,beginningoftheperiod651,854,206.79272,064,464.71
6.Cashandcashequivalents,endoftheperiod457,000,960.57258,083,994.62

Legalrepresentative:ShiXinkunGeneralManager:ZhangXinHeadoftheaccountingdepartment:JiangHe

7.ConsolidatedStatementsofChangesinOwners’EquityH12019

Unit:RMB

ItemH12019
EquityattributabletoownersoftheCompanyastheparentNon-controllinginterestsTotalowners’equity
SharecapitalOtherequityinstrumentsCapitalreservesLess:TreasurystockOthercomprehensiveincomeSpecificreserveSurplusreservesGeneralreserveRetainedearningsOtherSubtotal
PreferredsharesPerpetualbondsOther
1.Balancesasattheendoftheprioryear561,374,326.00164,328,665.43264,405,675.0015,182,958.83320,133,050.15717,883,351.332,043,308,026.7419,618,480.112,062,926,506.85
Add:Adjustmentsforchangedaccountingpolicies
Adjustmentsforcorrectionsofpreviouserrors
Adjustmentsforbusinesscombinationsundercommoncontrol
Otheradjustments
2.Balancesasatthebeginningoftheyear561,374,326.00164,328,665.43264,405,675.0015,182,958.83320,133,050.15717,883,351.332,043,308,026.7419,618,480.112,062,926,506.85
3.Increase/decreaseintheperiod(“-”fordecrease)87,330,700.005,023,666.9292,354,366.9249,014.3592,403,381.27
3.1Totalcomprehensiveincome87,330,700.0019,058,025.07106,388,725.0749,014.35106,437,739.42
3.2Capitalincreasedandreducedbyowners
3.2.1Ordinarysharesincreasedbyshareholders
3.2.2Capitalincreasedbyholdersofotherequityinstruments
3.2.3Share-basedpaymentsincludedinowners’equity
3.2.4Other
3.3Profit-14,034-14,034-14,03
distribution,358.15,358.154,358.15
3.3.1Appropriationtosurplusreserves
3.3.2Appropriationtogeneralreserve
3.3.3Appropriationtoowners(orshareholders)-14,034,358.15-14,034,358.15-14,034,358.15
3.3.4Other
3.4Transferswithinowners’equity
3.4.1Increaseincapital(orsharecapital)fromcapitalreserves
3.4.2Increaseincapital(orsharecapital)fromsurplusreserves
3.4.3Lossoffsetbysurplusreserves
3.4.4Changesindefinedbenefitpensionschemestransferredtoretainedearnings
3.4.5Othercomprehensiveincometransferredtoretainedearnings
3.4.6Other
3.5Specificreserve
3.5.1Increaseintheperiod
3.5.2Usedintheperiod
3.6Other
4.Balancesasattheendoftheperiod561,374,326.00164,328,665.43351,736,375.0015,182,958.83320,133,050.15722,907,018.252,135,662,393.6619,667,494.462,155,329,888.12

H12018

Unit:RMB

ItemH12018
EquityattributabletoownersoftheCompanyastheparentNon-controllinginterestsTotalowners’equity
SharecapitaOtherequityinstrumentsCapitalreserveLess:TreasurOthercompreSpecificSurplusGeneralRetainedOtherSubtotal
lPreferredsharesPerpetualbondsOthersystockhensiveincomereservereservesreserveearnings
1.Balancesasattheendoftheprioryear561,374,326.00164,328,665.43515,068,550.0013,289,059.21313,705,210.16679,131,047.062,246,896,857.8619,473,156.312,266,370,014.17
Add:Adjustmentsforchangedaccountingpolicies0.00
Adjustmentsforcorrectionsofpreviouserrors0.00
Adjustmentsforbusinesscombinationsundercommoncontrol0.00
Otheradjustments0.00
2.Balancesasatthebeginningoftheyear561,374,326.00164,328,665.43515,068,550.0013,289,059.21313,705,210.16679,131,047.062,246,896,857.8619,473,156.312,266,370,014.17
3.Increase/decreaseintheperiod(“-”fordecrease)-126,198,225.001,797,327.88-124,400,897.12269,351.26-124,131,545.86
3.1Totalcomprehensiveincome-126,198,225.0018,638,557.66-107,559,667.34269,351.26-107,290,316.08
3.2Capitalincreasedandreducedbyowners0.00
3.2.1Ordinarysharesincreasedbyshareholders0.00
3.2.2Capitalincreasedbyholdersofotherequityinstruments0.00
3.2.3Share-basedpaymentsincludedinowners’equity0.00
3.2.4Other0.00
3.3Profitdistribution-16,841,229.78-16,841,229.78-16,841,229.78
3.3.1Appropriationtosurplusreserves0.00
3.3.2Appropriationtogeneralreserve0.00
3.3.3Appropriationtoowners(orshareholders)-16,841,229.78-16,841,229.78-16,841,229.78
3.3.4Other0.00
3.4Transferswithinowners’equity0.00
3.4.1Increaseincapital(orsharecapital)fromcapitalreserves0.00
3.4.2Increaseincapital(orsharecapital)fromsurplusreserves0.00
3.4.3Lossoffsetbysurplusreserves0.00
3.4.4Changesindefinedbenefitpensionschemes0.00
transferredtoretainedearnings
3.4.5Othercomprehensiveincometransferredtoretainedearnings0.00
3.4.6Other0.00
3.5Specificreserve0.00
3.5.1Increaseintheperiod0.00
3.5.2Usedintheperiod0.00
3.6Other0.00
4.Balancesasattheendoftheperiod561,374,326.00164,328,665.43388,870,325.0013,289,059.21313,705,210.16680,928,374.942,122,495,960.7419,742,507.572,142,238,468.31

Legalrepresentative:ShiXinkunGeneralManager:ZhangXinHeadoftheaccountingdepartment:JiangHe

8.StatementsofChangesinOwners’EquityoftheCompanyastheParentH12019

Unit:RMB

ItemH12019
SharecapitalOtherequityinstrumentsCapitalreservesLess:TreasurystockOthercomprehensiveincomeSpecificreserveSurplusreservesRetainedearningsOtherTotalowners’equity
PreferredsharesPerpetualbondsOther
1.Balancesasattheendoftheprioryear561,374,326.00183,071,147.70264,405,675.0015,182,958.83320,133,050.15643,968,465.931,988,135,623.61
Add:Adjustmentsforchangedaccountingpolicies
Adjustmentsforcorrectionsofpreviouserrors
Otheradjustments
2.Balancesasatthebeginningoftheyear561,374,326.00183,071,147.70264,405,675.0015,182,958.83320,133,050.15643,968,465.931,988,135,623.61
3.Increase/decreaseintheperiod(“-”fordecrease)87,330,700.004,353,317.4991,684,017.49
3.1Totalcomprehensiveincome87,330,700.0018,387,675.64105,718,375.64
3.2Capitalincreasedandreducedbyowners
3.2.1Ordinarysharesincreasedbyshareholders
3.2.2Capitalincreasedbyholdersofotherequityinstruments
3.2.3Share-basedpaymentsincludedinowners’equity
3.2.4Other
3.3Profitdistribution-14,034,358.15-14,034,358.15
3.3.1Appropriationtosurplusreserves
3.3.2Appropriationtoowners(orshareholders)-14,034,358.15-14,034,358.15
3.3.3Other
3.4Transferswithinowners’equity
3.4.1Increaseincapital(orshare
capital)fromcapitalreserves
3.4.2Increaseincapital(orsharecapital)fromsurplusreserves
3.4.3Lossoffsetbysurplusreserves
3.4.4Changesindefinedbenefitpensionschemestransferredtoretainedearnings
3.4.5Othercomprehensiveincometransferredtoretainedearnings
3.4.6Other
3.5Specificreserve
3.5.1Increaseintheperiod
3.5.2Usedintheperiod
3.6Other
4.Balancesasatthe561,374183,071,1351,736,315,182,95320,133,0648,3212,079,819,6
endoftheperiod,326.0047.7075.008.8350.15,783.4241.10

H12018

Unit:RMB

ItemH12018
SharecapitalOtherequityinstrumentsCapitalreservesLess:TreasurystockOthercomprehensiveincomeSpecificreserveSurplusreservesRetainedearningsOtherTotalowners’equity
PreferredsharesPerpetualbondsOther
1.Balancesasattheendoftheprioryear561,374,326.00183,071,147.70515,068,550.0013,289,059.21313,705,210.16602,959,135.850.002,189,467,428.92
Add:Adjustmentsforchangedaccountingpolicies0.00
Adjustmentsforcorrectionsofpreviouserrors0.00
Otheradjustments0.00
2.Balancesasatthebeginningoftheyear561,374,326.00183,071,147.70515,068,550.0013,289,059.21313,705,210.16602,959,135.850.002,189,467,428.92
3.Increase/decreaseintheperiod(“-”fordecrease)-126,198,225.00-1,365,342.430.00-127,563,567.43
3.1Totalcomprehensiveincome-126,198,225.0015,475,887.350.00-110,722,337.65
3.2Capitalincreasedandreducedbyowners0.00
3.2.1Ordinarysharesincreasedbyshareholders0.00
3.2.2Capitalincreasedbyholdersofotherequityinstruments0.00
3.2.3Share-basedpaymentsincludedinowners’equity0.00
3.2.4Other0.00
3.3Profitdistribution-16,841,229.780.00-16,841,229.78
3.3.1Appropriationtosurplusreserves0.00
3.3.2Appropriationtoowners(or-16,841,229.780.00-16,841,229.78
shareholders)
3.3.3Other0.00
3.4Transferswithinowners’equity0.00
3.4.1Increaseincapital(orsharecapital)fromcapitalreserves0.00
3.4.2Increaseincapital(orsharecapital)fromsurplusreserves0.00
3.4.3Lossoffsetbysurplusreserves0.00
3.4.4Changesindefinedbenefitpensionschemestransferredtoretainedearnings0.00
3.4.5Othercomprehensiveincometransferredtoretainedearnings0.00
3.4.6Other0.00
3.5Specificreserve0.00
3.5.1Increaseintheperiod0.00
3.5.2Usedintheperiod0.00
3.6Other0.00
4.Balancesasattheendoftheperiod561,374,326.00183,071,147.70388,870,325.0013,289,059.21313,705,210.16601,593,793.420.002,061,903,861.49

Legalrepresentative:ShiXinkunGeneralManager:ZhangXinHeadoftheaccountingdepartment:JiangHe

III.CompanyProfile

ChangchaiCompany,Limited(hereinafterreferredtoas“theCompany”)wasfoundedon5May1994,whichisacompanylimitedbysharespromotedsolelybyChangzhouDieselEnginePlantthroughtheapprovalbytheStateCommissionforRestructuringtheEconomicSystemswithdocumentTGS[1993]No.9on15January1993bywayofpublicofferingofshares.WiththeapprovedofthePeople’sGovernmentofJiangsuProvinceSZF[1993]No.67,aswellasreexaminedandapprovedbyChinaSecuritiesRegulatoryCommission(“CSRC”)throughdocumentZJFSZ(1994)No.9,theCompanyinitiallyissuedAsharestothepublicfrom15March1994to30March1994.AsapprovedbytheShenzhenStockExchangethroughdocumentSZSFZ(1994)No.15,suchtradablesharesofthepublicgotlistingon1July1994atShenzhenStockExchangewith“SuChangchaiA”forshortofstock,aswellas“0570”asstockcode(presentstockcodeis“000570”).In1996,withtherecommendationoftheOfficeofthePeople’sGovernmentofJiangsuProvinceSZBH[1996]No.13,aswellasfirstreviewbyShenzhenMunicipalSecuritiesAdministrationOfficethroughSZBZ[1996]No.24,andapprovaloftheStateCouncilSecuritiesCommissionZWF[1996]No.27,theCompanyissued100millionBsharestoqualifiedinvestorson27August1996to30August1996,gettinglistedon13September1996.On9June2006,theCompanyheldashareholders’generalmeetingrelatedtoAsharesmarkettoexamineandapprovesharemergerreformplan,andperformedthesharemergerreformon19June2006.Asexaminedandapprovedatthe2

ndExtraordinaryGeneralMeetingof2009inSeptember2009,basedonthetotalsharecapitalof374,249,551sharesasat30June2009,theCompanyimplementedtheprofitdistributionplan,i.e.todistribute5bonussharesandcashofRMB0.80forevery10shares,withregisteredcapitalincreasedbyRMB187,124,775.00,aswellasregisteredcapitalofRMB561,374,326.00afterchange.Asat31December2015,thetotalsharecapitaloftheCompanyis561,374,326.00shares,aswellasregisteredcapitalofRMB561,374,326.00,whichverifiedbyJiangsuGongzhengTianyeCertifiedPublicAccountantsCompanyLimitedwithissuingCapitalVerificationReportSGC[2010]No.B002.AndtheunifiedsocialcreditcodeoftheenterprisebusinesslicenseoftheCompanyis91320400134792410W.TheCompany’sregisteredaddressissituatedatNo.123HuaideMiddleRoad,Changzhou,Jiangsu,aswellasitsheadofficelocatedatNo.123HuaideMiddleRoad,Changzhou,Jiangsu.TheCompanybelongstomanufacturingwithbusinessscopeincludingmanufacturingandsaleofdieselengine,dieselenginespartandcasting,grainharvestingmachine,rotarycultivators,walkingtractor,mouldandfixtures,assemblingandsaleofdieselgeneratingsetandpumpingunit.TheCompanymainlyengagedintheproductionandsalesofsmallandmedium-sizedsinglecylindersandmulti-cylinderdieselenginewiththelabelofChangchaiBrand.ThedieselengineproducedandsoldbytheCompanyweremainlyusedintractors,combineharvestmodels,lightcommercialvehicle,farmequipment,small-sizedconstructionmachinery,generatingsetsandshipbornemachineryandequipment,etc.TheCompany’smainbusinessremainedunchangedintheReportingPeriod.TheCompanyestablishedtheShareholders’GeneralMeeting,theBoardofDirectorsandtheSupervisoryCommittee,Corporateoffice,FinancialDepartment,PoliticalDepartment,InvestmentandDevelopmentDepartment,AuditDepartment,HumanRecoursesDepartment,ProductionDepartment,ProcurementDepartment,SalesCompany,ChiefEngineerOffice,TechnologyCenter,QADepartment,FoundryBranch,MachineProcessingBranch,Single-cylinderEnginebranch,Multi-cylinderEngineBranchandOverseasBusinessDepartmentintheCompany.ThefinancialreporthasbeenapprovedtobeissuedbytheBoardofDirectorson27August2019.TheconsolidatedscopeoftheCompanyoftheReportingPeriodincludestheCompanyastheparentand6

subsidiaries.ForthedetailsoftheconsolidatedscopeoftheReportingPeriodandthechangessituation,pleaserefertothechangesoftheconsolidatedscopeofthenotestothefinancialreportandthenotestotheequitiesamongotherentities.

IV.BasisforPreparationoftheFinancialReport

1.BasisforPreparationWiththegoing-concernassumptionasthebasisandbasedontransactionsandothereventsthatactuallyoccurred,theGrouppreparedfinancialstatementsinaccordancewithTheAccountingStandardsforBusinessEnterprises—BasicStandardissuedbytheMinistryofFinancewithDecreeNo.33andrevisedwithDecreeNo.76,thevariousspecificaccountingstandards,theApplicationGuidanceofAccountingStandardsforBusinessEnterprises,theInterpretationofAccountingStandardsforBusinessEnterprisesandotherregulationsissuedandrevisedfrom15February2006onwards(hereinafterjointlyreferredtoas“theAccountingStandardsforBusinessEnterprises”,“ChinaAccountingStandards”or“CAS”),aswellastheRulesforPreparationConventionofDisclosureofPublicOfferingCompaniesNo.15–GeneralRegulationsforFinancialReporting(revisedin2014)byChinaSecuritiesRegulatoryCommission.InaccordancewithrelevantprovisionsoftheAccountingStandardsforBusinessEnterprises,theGroupadoptedtheaccrualbasisinaccounting.Exceptforsomefinancialinstruments,whereimpairmentoccurredonanasset,animpairmentreservewaswithdrawnaccordinglypursuanttorelevantrequirements.

2.ContinuationTheCompanycomprehensivelyevaluatedtheinformationacquiredrecentlythattherewouldbenosuchfactorsinthe12monthsfromtheendoftheReportingPeriodthatwouldobviouslyinfluencethecontinuationcapabilityoftheCompanyandpredictedthattheoperatingactivitieswouldcontinueinthefuture12monthsoftheCompany.Thefinancialstatementcompiledbaseonthecontinuousoperation.V.ImportantAccountingPoliciesandEstimationsNotificationofspecificaccountingpoliciesandaccountingestimations:

TheCompanyandeachsubsidiaryaccordingtotheactualproductionandoperationcharacteristicsandinaccordwiththeregulationsoftherelevantASBE,formulatedcertainspecificaccountingpoliciesandaccountingestimations,whichmainlyreflectedinthewithdrawalmethodofthebaddebtprovisionoftheaccountsreceivable(NotesIII,11),themeasurementoftheinventory(NotesIII,12)andthedepreciationofthefixedassets(NotesIII,

16)etc.Asforthedetailsofthesignificantaccountingjudgmentandtheestimationsmadebythemanagementlayer,pleaserefertoNotesIII,30“Importantaccountingjudgmentandestimations”.

1.StatementofCompliancewiththeAccountingStandardsforBusinessEnterprisesThefinancialstatementspreparedbytheGroupareincompliancewithincompliancewiththeAccountingStandardsforBusinessEnterprises,whichfactuallyandcompletelypresenttheCompany’sandtheGroup’sfinancialpositions,businessresultsandcashflowsandotherrelevantinformation.

2.FiscalPeriodThefiscalperiodsaredividedintofiscalyearandmetaphase,thefiscalyearisfromJanuary1toDecember31andasthemetaphaseincludedmonthly,quarterlyandsemi-yearlyperiods.

3.OperatingCycleAnormaloperatingcyclereferstoaperiodfromtheGrouppurchasingassetsforprocessingtorealizingcashorcashequivalents.AnoperatingcyclefortheGroupis12months,whichisalsotheclassificationcriterionfortheliquidityofitsassetsandliabilities.

4.CurrencyUsedinBookkeepingRenminbiisfunctionalcurrencyoftheCompany.

5.AccountingMethodsforBusinessCombinationsundertheSameControlandBusinessCombinationsnotundertheSameControl

(1)Businesscombinationsunderthesamecontrol:

Abusinesscombinationunderthesamecontrolisabusinesscombinationinwhichallofthecombiningenterprisesareultimatelycontrolledbythesamepartyorthesamepartiesbothbeforeandafterthebusinesscombinationandonwhichthecontrolisnottemporary.Forthemergerofenterprisesunderthesamecontrol,iftheconsiderationofthemergingenterpriseisthatitmakespaymentincash,transfersnon-cashassetsorbearitsdebts,itshall,onthedateofmerger,regardtheshareofthebookvalueoftheowner'sequityofthemergedenterpriseastheinitialcostofthelong-termequityinvestment.Thedifferencebetweentheinitialcostofthelong-termequityinvestmentandthepaymentincash,non-cashassetstransferredaswellasthebookvalueofthedebtsbornebythemergingpartyshalloffsetagainstthecapitalreserve.Ifthecapitalreserveisinsufficienttodilute,theretainedearningsshallbeadjusted.Iftheconsiderationofthemergingenterpriseisthatitissuesequitysecurities,itshall,onthedateofmerger,regardtheshareofthebookvalueoftheowner'sequityofthemergedenterpriseastheinitialcostofthelong-termequityinvestment.Thetotalfacevalueofthestocksissuedshallberegardedasthecapitalstock,whilethedifferencebetweentheinitialcostofthelong-termequityinvestmentandtotalfacevalueofthesharesissuedshalloffsetagainstthecapitalreserve.Ifthecapitalreserveisinsufficienttodilute,theretainedearningsshallbeadjusted.Alldirectcostsforthebusinesscombination,includingexpensesforaudit,evaluatingandlegalservicesshallberecordedintotheprofitsandlossesatthecurrentperiod.Theexpensessuchasthehandlingchargesandcommissionetc,premiumincomeofdeductingtheequitysecurities,andasforthepremiumincomewasinsufficienttodilute,theretainedearningsshallbewrittendown.Owningtothereasonssuchastheadditionalinvestment,fortheequityinvestmentheldbeforeacquiringthecontrolrightofthecombinedparties,theconfirmedrelevantgainsandlosses,othercomprehensiveincomeandthechangesofothernetassetssincethedateoftheearlieronebetweenthedatewhenacquiringtheoriginalequityrightandthedatewhenthecombinepartiesandcombinedoneswereunderthesamecontroltothecombinationdate,shouldberespectivelywrittendownandcomparedwiththebeginningbalanceofretainedearningsorthecurrentgainsandlossesduringthestatementperiod.

(2)Businesscombinationsnotunderthesamecontrol

Abusinesscombinationnotunderthesamecontrolisabusinesscombinationinwhichthecombiningenterprisesarenotultimatelycontrolledbythesamepartyorthesamepartiesbothbeforeandafterthebusinesscombination.Thecombinationcostsoftheacquirerandtheidentifiablenetassetsobtainedbytheacquirerinabusinesscombinationshallbemeasuredatthefairvalues.Theacquirershallrecognizethepositivebalancebetweenthecombinationcostsandthefairvalueoftheidentifiablenetassetsitobtainsformstheacquireeasbusinessreputation.Thedirectrelevantexpensesoccurredfromtheenterprisecombinationshouldbeincludedinthecurrentgainsandlosseswhenoccurred.Thecombinationcostsoftheacquirerandtheidentifiablenetassetsobtainedbyitinthecombinationshallbemeasuredaccordingtotheirfairvaluesattheacquiringdate.ThedifferencebetweenthefairvalueoftheassetspaidoutbytheCompanyanditsbookvalueshouldbeincludedinthecurrentgainsandlosses.Thepurchasedatereferstothedatethatthepurchaseracquiresthecontrolrightoftheacquiree.Forthebusinesscombinationsnotunderthesamecontrolrealizedthroughstepbystepmultipletransaction,asfortheequityintereststhattheGroupholdsintheacquireebeforetheacquiringdate,theyshallbere-measuredaccordingtotheirfairvaluesattheacquiringdate;thepositivedifferencebetweentheirfairvaluesandcarryingamountsshallberecordedintotheinvestmentgainsfortheperiodincludingtheacquiringdate.Theequityholedbytheacquireewhichinvolvedwiththeothercomprehensiveincomeandtheotherowners’equitieschangesexceptforthenetgainsandlosses,othercomprehensiveincomeandtheprofitsdistributionandotherrelatedcomprehensivegainsandotherowners’equitieswhichinrelationtotheequityintereststhattheGroupholdsintheacquireebeforetheacquiringdateshouldbetransferredintothecurrentinvestmentincomeontheacquiringdate,exceptfortheothercomprehensiveincomeoccurredfromthere-measurementofthenetprofitsofthedefinedbenefitplansorthechangesofthenetassetsoftheinvestees.

6.MethodsforPreparingConsolidatedFinancialStatementsTheCompanyconfirmstheconsolidatedscopebasedonthecontrolandincludesthesubsidiarieswithactualcontrolrightintotheconsolidatedfinancialstatement.TheconsolidatedfinancialstatementoftheCompanyiscompiledaccordingtotheregulationsofNo.33ofASBE-ConsolidatedFinancialStatementandtherelevantregulationsandasforthewholesignificantcome-and-gobalance,investment,transactionandtheunrealizedprofitsshouldbewrittenoffwhencompilingtheconsolidatedfinancialstatement.Theportionofasubsidiary’sshareholders’equityandtheportionofasubsidiary’snetprofitsandlossesfortheperiodnotheldbytheGrouparerecognizedasminorityinterestsandminorityshareholderprofitsandlossesrespectivelyandpresentedseparatelyundershareholders’equityandnetprofitsintheconsolidationfinancialstatements.Theportionofasubsidiary’snetprofitsandlossesfortheperiodthatbelongtominorityinterestsispresentedastheitemof“minorityshareholderprofitsandlosses”underthebiggeritemofnetprofitsintheconsolidatedfinancialstatements.Wherethelossofasubsidiarysharedbyminorityshareholdersexceedstheportionenjoyedbyminorityshareholdersinthesubsidiary’sopeningowners’equity,minorityinterestsareoffset.TheaccountingpolicyoraccountingperiodofeachsubsidiaryisdifferentfromwhichoftheCompany,whichshallbeadjustedastheCompany;orsubsidiariesshallpreparefinancialstatementagainrequiredbytheCompanywhenpreparingtheconsolidatedfinancialstatements.Asfortheaddedsubsidiarycompanynotcontrolledbythesameenterprisepreparingtheconsolidatedfinancialstatement,shalladjustindividualfinancialstatementbasedonthefairvalueoftheidentifiablenetassetsontheacquisitiondate;asfortheaddedsubsidiarycompaniescontrolledbythesameenterprisepreparingthefinancialstatement,shallnotadjustthefinancialstatementofthesubsidiaries,namelysurvivedbyintegrationas

participatingintheconsolidationwhenthefinalcontrolpartystartsimplementingcontrolandshouldadjusttheperiod-beginamountoftheconsolidatedbalancesheetandatthesametimeadjusttherelevantitemsofthecomparedstatement.Asforthedisposedsubsidiaries,theoperationresultandthecashflowshouldbeincludedintheconsolidatedincomestatementandtheconsolidatedcashflowbeforethedisposingdate;thedisposedsubsidiariesofthecurrentperiod,shouldnotbeadjustedtheperiod-beginamountoftheconsolidatedbalancesheet.WheretheGrouplossescontrolonitsoriginalsubsidiariesduetodisposalofsomeequityinvestmentsorotherreasons,theresidualequityinterestsarere-measuredaccordingtothefairvalueonthedatewhensuchcontrolceases.Thesummationoftheconsiderationobtainedfromthedisposalofequityinterestsandthefairvalueoftheresidualequityinterests,minustheportionintheoriginalsubsidiary’snetassetsmeasuredonacontinuousbasisfromtheacquisitiondatethatisenjoyablebytheGroupaccordingtotheoriginalshareholdingpercentageinthesubsidiary,isrecordedininvestmentgainsfortheperiodwhentheGroup’scontrolonthesubsidiaryceases.Othercomprehensiveincomesinrelationtotheequityinvestmentandtheotherowners’equitieschangesexceptforthenetgainsandlosses,othercomprehensiveincomeandprofitsdistributionintheoriginalsubsidiaryaretreatedonthesameaccountingbasisastheacquireedirectlydisposestherelevantassetsorliabilities(thatis,exceptforthechangesinthenetliabilitiesorassetswithadefinedbenefitplanresultedfromre-measurementoftheoriginalsubsidiary,therestshallallbetransferredintocurrentinvestmentgains)whensuchcontrolceases.AndsubsequentmeasurementisconductedontheresidualequityinterestsaccordingtotheNo.2AccountingStandardforBusinessEnterprises-Long-termEquityInvestmentsortheNo.22AccountingStandardforBusinessEnterprises-RecognitionandMeasurementofFinancialInstruments.Forthedisposalofequityinvestmentbelongstoapackagedeal,shouldbeconsideredasatransactionandconductaccountingtreatment.However,Beforelosingcontrol,everydisposalcostandcorrespondingnetassetsbalanceofsubsidiaryofdisposalinvestmentareconfirmedasothercomprehensiveincomeinconsolidatedfinancialstatements,whichtogethertransferredintothecurrentprofitsandlossesinthelossofcontrol,whentheGrouplosingcontrolonitssubsidiary.Forthedisposaloftheequityinvestmentnotbelongstoapackagedeal,shouldbeexecutedaccountingtreatmentaccordingtotherelevantpoliciesofpartlydisposingtheequityinvestmentofthesubsidiariesunderthesituationnotlosethecontrolrightbeforelosingthecontrolright;whenlosingthecontrolright,theformershouldbeexecutedaccountingtreatmentaccordingtothegeneraldisposingmethodofthedisposalofthesubsidiaries.

7.ClassificationofJointArrangementsandAccountingTreatmentofJointOperationsTheGroupclassifiesjointarrangementsintojointoperationsandjointventures.AjointoperationreferstoajointarrangementwheretheGroupisthejointoperationspartyofthejointarrangementandenjoysassetsandhastobearliabilitiesrelatedtothearrangement.TheCompanyconfirmsthefollowingitemsrelatedtotheinterestsshareamongthejointoperationsandexecutesaccountingtreatmentaccordingtotheregulationsoftherelevantASBE:

(1)Recognizestheassetsthatitholdsandbearsinthejointoperationandrecognizesthejointly-heldassetsaccordingtotheGroup’sstakeinthejointoperation;

(2)Recognizestheliabilitiesthatitholdsandbearsinthejointoperationandrecognizesthejointly-heldliabilitiesaccordingtotheGroup’sstakeinthejointoperation;

(3)RecognizestheincomefromsaleoftheGroup’sshareintheoutputofthejointoperation

(4)Recognizestheincomefromsaleofthejointoperation’soutputsaccordingtotheGroup’sstakeinit

(5)RecognizestheexpensesolelyincurredtotheGroupandtheexpenseincurredtothejointoperationaccordingtotheGroup’sstakeinit.

8.RecognitionStandardforCashandCashEquivalentsIntheGroup’sunderstanding,cashandcashequivalentsincludecashonhand,anydepositthatcanbeusedforcover,andshort-term(usuallyduewithin3monthssincethedayofpurchase)andhighcirculatinginvestments,whichareeasilyconvertibleintoknownamountofcashandwhoserisksinchangeofvalueareminimal.

9.ForeignCurrencyBusinessesandTranslationofForeignCurrencyFinancialStatements

(1)ForeigncurrencybusinessConcerningtheforeign-currencytransactionsthatoccurred,theforeigncurrencyshallbeconvertedintotherecordingcurrencyaccordingtothemiddlepriceofthemarketexchangeratedisclosedbythePeople’sBankofChinaonthedateofthetransaction.Amongthesaidtransactionsthatoccurred,thoseinvolvingforeignexchangesshallbeconvertedaccordingtotheexchangeratesadoptedintheactualtransactions.Onthebalancesheetdate,theforeign-currencymonetaryassetsandthebalanceoftheliabilityaccountshallbeconvertedintotherecodingcurrencyaccordingtothemiddlepriceofthemarketexchangeratesdisclosedbythePeople’sBankofChinaontheBalanceSheetDate.Thedifferencebetweentherecording-currencyamountconvertedaccordingtotheexchangerateontheBalanceSheetDateandtheoriginalbookrecording-currencyamountshallberecognizedasgains/lossesfromforeignexchange.Andtheexchangegain/losscausedbytheforeign-currencyborrowingsrelatedtopurchasingfixedassetsshallbehandledaccordingtotheprincipleofcapitalizingborrowingexpenses;theexchangegain/lossincurredintheestablishmentperiodshallberecordedintotheestablishmentexpense;othersshallberecordedintothefinancialexpensesforthecurrentperiod.Onthebalancesheetdate,theforeign-currencynon-monetaryitemsmeasuredbyhistoricalcostshallbeconvertedaccordingtothemiddlepriceofthemarketexchangedisclosedbythePeople’sBankofChinaonthedateofthetransaction,withnochangesintheoriginalrecording-currencyamount;whiletheforeign-currencynon-monetaryitemsmeasuredbyfairvalueshallbeconvertedaccordingtothemiddlepriceofthemarketexchangedisclosedbythePeople’sBankofChinaonthedatewhenthefairvalueisrecognized,andtheexchangegain/losscausedthereofshallberecognizedasthegain/lossfromfairvaluechangesandrecordedintothegain/lossofthecurrentperiod.

(2)TranslationofforeigncurrencyTheassetsandliabilitiesitemsamongthebalancesheetoftheforeignoperationshallbetranslatedataspotexchangerateonthebalancesheetdate.Amongtheowner’sequityitems,exceptfortheitemsas“undistributedprofits”,otheritemsshallbetranslatedatthespotexchangerateatthetimewhentheyareincurred.Andtherevenuesandexpensesitemsamongthebalancesheetoftheforeignoperationshallbetranslatedattheapproximateexchangerateofthetransactiondate.Thedifferencecausedfromtheabovetransactionoftheforeigncurrencystatementshouldbelistedintheothercomprehensiveincomeamongtheowners’equities.

10.FinancialInstrumentsClassificationofFinancialInstruments

(1)TheCompanyclassifiesthefinancialassetsintothefollowingthreecategoriesbasedonthebusinessmodelforfinancialassetsmanagementandcharacteristicsofcontractualcashflowoffinancialassets:

①Financialassetsmeasuredatamortizedcost

②Financialassetsmeasuredatfairvalueandchangesthereofrecordedintoothercomprehensiveincome

③FinancialassetsatfairvaluethroughprofitorlossTheclassificationofdebtinstrumentinvestmentdependsontheCompany’sbusinessmodelinwhichitholdstheinvestment;theclassificationofequityinstrumentinvestmentdependsonwhethertheCompanyhasmadetheirrevocableoptionofmeasuringtheinvestmentatfairvaluewithchangesrecognizedintoothercomprehensiveincomeattheinitialrecognition.OnlywhenchangingthebusinessmodelofafinancialassetwilltheCompanyreclassifyallaffectedrelevantfinancialassets.

(2)Financialliabilitiesareclassifiedintothefollowingtwocategories:

①Financialliabilitiesatfairvaluethroughprofitorloss

②FinancialliabilitiesmeasuredatamortizedcostRecognitionBasisforFinancialInstruments:

(1)FinancialassetsmeasuredatamortizedcostThefinancialassetsoftheCompanyareclassifiedasfinancialassetsmeasuredatamortizedcostwhenmeetthefollowingconditionsatthesametime:

①ThebusinessmodeoftheCompanytomanagethefinancialassetstargetsatcollectingthecontractualcashflow.

②Thecontractofthefinancialassetsstipulatesthatthecashflowgeneratedinthespecificdateisthepaymentoftheinterestbasedontheprincipalandoutstandingprincipalamount.

(2)FinancialassetsmeasuredatfairvalueandchangesthereofrecordedintoothercomprehensiveincomeThefinancialassetsoftheCompanyareclassifiedasfinancialassetsmeasuredatfairvalueandchangesthereofrecordedintoothercomprehensiveincomewhenmeetthefollowingconditionsatthesametime:

①BusinessmodeformanagingfinancialassetsoftheCompanytakescontractcashflowcollectedastargetandsellingastarget.

②Thecontractofthefinancialassetsstipulatesthatthecashflowgeneratedinthespecificdateisthepaymentoftheinterestbasedontheprincipalandoutstandingprincipalamount.Atinitialrecognition,theCompanymaydesignatenon-tradingequityinstrumentinvestmentsasfinancialassetsmeasuredatfairvaluewithchangesrecognizedintoothercomprehensiveincome,presentthemasotherequityinstrumentinvestmentitems,andrecognizedividendincomewhenconditionsaremet(Thedesignationshouldnotberevokedoncemade).Suchdesignatedequityinstrumentinvestmentsshouldnotincludethefollowing:Thepurposeofacquiringthefinancialassetisforsaleinashortterm;atinitialrecognition,theequityinstrumentinvestmentispartofanidentifiablefinancialassetportfolioundercentralizedmanagement,andthereisobjectiveevidenceprovinganactualshort-termprofitmodelrecently;theinvestmentisaderivativeinstrument(excludingderivativeinstrumentsconformingwiththedefinitioninfinancialguaranteecontractsanddesignatedaseffectivehedginginstruments).

(3)FinancialassetsatfairvaluethroughprofitorlossTheCompanyclassifiesfinancialassetsexceptforabove-mentionedfinancialassetsmeasuredatamortizedcostandfinancialassetsmeasuredatfairvalueandchangesthereofrecordedintoothercomprehensiveincomeasfinancialassetsatfairvaluethroughprofitorloss.ForfinancialassetsformedfromcontingentconsiderationrecognizedbytheCompanyinbusinesscombinationsnotundercommoncontrol,theyshouldbeclassifiedasfinancialassetsmeasuredatfairvaluewithchanges

includedintocurrentprofits/losses.Atinitialrecognition,financialassetscanbedesignatedasthosemeasuredatfairvaluewithchangesincludedintocurrentprofits/losses(Thedesignationshouldnotberevokedoncemade)ifitcaneliminateorobviouslyreduceaccountingmismatching.Formixedcontractscontainingoneormoreembeddedderivativeswiththemastercontractnotclassifiedastheaforementionedfinancialassets,theCompanymaydesignatetheminentiretyasafinancialinstrumentmeasuredatfairvaluewithchangesincludedintocurrentprofits/losses,withtheexceptionofthefollowing:

①Theembeddedderivative(s)willnotcausesignificantchangestothecashflowofthemixedcontracts.

②Whendeterminingwhethertosplitsimilarmixedcontractsatinitialrecognition,theCompanyisabletodecidethattheembeddedderivativesincludedinthecontractsshouldnotbesplitalmostwithoutanyanalysis.Iftheprepaymentrightofembeddedloansallowstheholdertopayoffloansinadvanceatanamountclosetotheamortizedcost,thatprepaymentrightdoesnotneedtobesplit.

(4)FinancialliabilitiesatfairvaluethroughprofitorlossThiscategoryconsistsoftradingfinancialliabilities(includingderivativeinstrumentsbelongingtofinancialliabilities)andthosedesignatedasfinancialliabilitiesatfairvaluethroughprofitorloss.Inbusinesscombinationsnotundercommoncontrol,thefinancialliabilitiesformedfromcontingentconsiderationrecognizedbytheCompanyasapurchasershouldbetreatedinaccountingasfinancialliabilitiesmeasuredatfairvaluewithchangesincludedintocurrentprofits/losses.Atinitialrecognition,toprovidemorerelevantaccountinginformation,theCompanydesignatesfinancialliabilitiesthatmeetoneofthefollowingconditionsasfinancialliabilitiesmeasuredatfairvaluewithchangesincludedintocurrentprofits/losses(Thedesignationshallnotberevokedoncemade)

①Thefinancialliabilityisabletoeliminateorobviouslyreduceaccountingmismatching.

②Inaccordancewithcorporateriskmanagementorinvestmentstrategiesinofficialwrittendocuments,managementandperformanceappraisalsareconductedonfinancialliabilitiesportfolioorfinancialassetsandfinancialliabilitiesportfoliobasedonfairvalue,basedonwhichareportingisprovidedtokeymanagementpersonnelwithinacompany.

(5)FinancialliabilitiesmeasuredatamortizedcostTheCompanyclassifiesfinancialliabilitiesexceptforthefollowingasfinancialliabilitiesmeasuredatamortizedcost:

①Financialliabilitiesatfairvaluethroughprofitorloss

②Financialliabilitiesformedduetotransferoffinancialassetsfailingtocomplywiththederecognitionconditionorcontinuouslygettinginvolvedintransferredfinancialassets

③Financialguaranteecontractnotinthe①and②ofthisArticleandcommitmentsofloanswiththeinterestratelowerthanthemarketinterestratenotinthe①ofthisarticle.InitialMeasurementofFinancialInstruments:

Financialassetsorliabilitiesshallbemeasuredattheirfairvalueswheninitiallyrecognized.Forfinancialassetsorliabilitiesatfairvaluethroughprofitorloss,thetransactionexpensesthereofshallbedirectlyincludedintothecurrentprofitorloss;forotherfinancialassetsorliabilities,thetransactionexpensesthereofshallbeincludedintotheinitiallyrecognizedamount.Thefairvaluegenerallyisthetransactionpriceofrelevantfinancialassetsorliabilities.Whenthereisdifferencebetweenthefairvaluethereofandthetransactionpricethereof,treattheminthefollowingcases:

Atinitialrecognition,whenthefairvalueoffinancialassetsorfinancialliabilitiesisdeterminedbasedonthe

quotationsofthesameassetsorliabilitiesonactivemarketsorbythevaluationtechnologythatonlyusesobservablemarketdata,thedifferencebetweenthatfairvalueandthetradepriceshouldberecognizedasagainorloss.Whenthefairvalueoffinancialassetsorfinancialliabilitiesisrecognizedinotherwaysatinitialrecognition,thedifferencebetweenthatfairvalueandthetradepriceshouldbedeferred.Aftertheinitialrecognition,basedontheextentofchangesofafactorinanaccountingperiod,thedeferreddifferenceshouldberecognizedasagainorlossduringtheaccountingperiod.Suchfactorsshouldbelimitedtofactorsthatwillbeconsideredbymarketplayersinpricingthefinancialinstrument,includingtime.SubsequentMeasurementofFinancialInstruments:

Aftertheinitialrecognition,forvariousfinancialassets,thesubsequentmeasurementatamortizedcost,atfairvalueandchangesthereofrecordedintoothercomprehensiveincomeoratfairvaluethroughprofitorlossshallberespectivelymade.Theamortizedcostoffinancialassetsorfinancialliabilitiesshouldberecognizedbytheresultofmakingthefollowingadjustmentstotheinitiallyrecognizedamountofthefinancialassetsorfinancialliabilities:

Deducttherepaidprincipal.Addorminusthecumulativeamortizationformedfromtheamortizationofthedifferencebetweentheinitiallyrecognizedamountandtheamountonthematuritydateintheeffectiveinterestmethod.Deductcumulativewithdrawnprovisionsforlosses(applicabletofinancialassetsonly).Otherthanfinancialassets,gainsorlossesfromfinancialliabilitiesmeasuredatamortizedcostthatarenotpartofanyhedgingrelationshipareincludedintocurrentprofits/lossesatderecognition,orrecordedintoprofits/lossesfortherelatedperiodatamortizationintheeffectiveinterestmethod.WhentheCompanydesignatesfinancialliabilitiesasthosemeasuredatfairvaluewithchangesincludedintocurrentprofits/lossesinaccordancewithstandardsandregulationsatinitialrecognition,theamountofchangesinthefairvalueofthefinancialliabilitiesarisingfromthecreditriskchangesoftheCompanyitselfwillberecordedintoothercomprehensiveincome,andotherfairvaluechangeswillberecordedintocurrentprofits/losses.However,ifsuchaccountingtreatmentcausesorexpandstheaccountingmismatchinginprofits/losses,allgainsorlossesfromthefinancialliabilities(includingtheamountaffectedbycreditriskchangesoftheCompanyitself)willberecordedintocurrentprofits/losses.DerecognitionofFinancialInstruments:

(1)Financialassetsshallbederecognizedwhenmeetsoneofthefollowingconditions:

①Thecontractualrighttocollectthecashflowofthefinancialassetshasbeenterminated.

②ThefinancialassethasbeentransferredandthetransferconformstotheregulationsgoverningthederecognitionoffinancialassetsintheAccountingStandardsforBusinessEnterprisesNo.23-TransferofFinancialAssets.ThederecognitionoffinancialassetsorliabilitiesintheStandardsreferstothattheCompanytransferredthefinancialassetsorliabilitiespreviouslyrecognizedoutofthebalancesheet.

(2)DerecognitionconditionforfinancialliabilitiesIncaseofcurrentobligationoffinancialliabilities(orpartialfinancialliabilities)beingterminated,derecognitionofsuchfinancialliabilities(orpartialfinancialliabilities)isconductedbytheCompany.IftheCompany(borrower)concludesanagreementwiththelendertoreplaceoriginalfinancialliabilitieswithnewonesandcontacttermsofnewfinancialliabilitiesaredifferentfromthoseoforiginalfinancialliabilities,derecognitionoforiginalfinancialliabilitiesandrecognitionofnewfinancialliabilitiesshallbeconducted.Incaseofmaterialalterationofcontracttermsoforiginalfinancialliabilities(partialfinancialliabilities)bythe

Company,derecognitionoforiginalfinancialliabilitiesandrecognitionofnewfinancialliabilitiesaspermodifiedtermsshallbeconducted.Incaseofderecognitionoffinancialliabilities(partialfinancialliabilities),theCompanyincludesthebalancebetweenitscarryingvalueandpaymentconsideration(includingnon-cashassetstransferredoutorborneliabilities)intothecurrentprofitorloss.WhentheCompanyrepurchasespartoffinancialliabilities,theoverallbookvalueofthefinancialabilitieswillbedistributedintheproportionofthefairvalueofthepartcontinuingtoberecognizedandthatofthederecognizedpartontherepurchasedateintheoverallfairvalue.Thedifferencebetweenthebookvaluedistributedtothederecognizedpartandtheconsiderationpaid(includingnon-cashassetstransferredoutorliabilitiesborne)shouldberecordedintocurrentprofits/losses.RecognitionBasisandMeasurementMethodforTransferofFinancialAssets:

Intheeventofthetransferofafinancialasset,theCompanywillassesstheextenttowhichitretainstherisksandrewardsoftheassetandtreatstheminthefollowingcases:

(1)Ifalmostallrisksandrewardsofownershipofthefinancialassetaretransferred,thefinancialassetisderecognisedandtherightsandobligationsarisingorretainedinthetransferareseparatelyrecognizedasassetsorliabilities.

(2)Ifalmostallrisksandrewardsofownershipofthefinancialassetareretained,thefinancialassetiscontinuouslyrecognized.

(3)Ifalmostallrisksandrewardsofownershipofthefinancialassetareneithertransferrednorretained,theCompanyshalltreattheminthefollowingcasesaccordingtowhetherthecontroloverthefinancialassethasbeenretained:

①Ifthecontroloverthefinancialassethasnotbeenretained,theCompanyshallderecognizethefinancialasset,andseparatelyrecognizetherightsandobligationsarisingorretainedinthetransferasassetsorliabilities.

②Ifthecontroloverthefinancialassethasbeenretained,theCompanyshallcontinuouslyrecognizetherelatedfinancialassetandcorrespondingliabilitiesaccordingtotheextentofcontinuousinvolvementinthetransferredfinancialasset.TheextentofcontinuousinvolvementinthetransferredfinancialassetreferstotheextentofrisksorrewardsbornbytheCompanygeneratedfromthevaluevariationofthetransferredfinancialasset.Theprincipleofsubstanceoutweighingformalizationisadoptedforjudgingwhetherthetransferoffinancialassetsmeetstheaforementionedconditionsforthederecognitionoffinancialassets.TheCompanyclassifiesthetransferoffinancialassetsintowholetransferandpartialtransferoffinancialassets:

(1)Whenthewholetransferoffinancialassetsmeetsthederecognitionconditions,thedifferencebetweenthefollowingtwoitemsshouldberecordedintocurrentprofits/losses:

①bookvalueofthetransferredfinancialassetsonthedateofderecognition.

②sumoftheconsiderationreceivedfromthetransferofthefinancialassets,andthecorrespondingderecognizedportion(Thefinancialassetsinvolvedinthetransferarefinancialassetsmeasuredatfairvaluewithchangesrecordedintoothercomprehensiveincome)ofthecumulativefairvaluechangesoriginallydirectlyrecordedintoothercomprehensiveincome.

(1)Whenfinancialassetsarepartiallytransferredandthewholetransferredpartmeetsthederecognitionconditions,theoverallbookvalueofthefinancialassetsbeforethetransfershouldbeapportionedbetweenthederecognizedpartandthepartcontinuingtoberecognized(Insuchcase,theretainedserviceassetsshouldberegardedaspartofthefinancialassetscontinuingtoberecognized)bytheirrespectiverelativefairvaluesonthedateoftransfer,andthedifferencebetweenthefollowingtwoitemsshouldberecordedintocurrentprofits/losses:

①bookvalueofthederecognizedpartonthedateofderecognition.

②sumoftheconsiderationreceivedfromthederecognizedpart,andthecorrespondingderecognizedportion(Thefinancialassetsinvolvedinthetransferarefinancialassetsmeasuredatfairvaluewithchangesrecordedintoothercomprehensiveincome)ofthecumulativefairvaluechangesoriginallyrecordedintoothercomprehensiveincome.Whenthetransferoffinancialassetsdoesnotmeetthederecognitionconditions,thefinancialassetsshouldcontinuetoberecognizedandtheconsiderationreceivedshouldberecognizedasfinancialliabilities.RecognitionmethodoffairvalueoffinancialassetsandfinancialliabilitiesThefairvalueoffinancialliabilitiesorfinancialliabilitiesexistingonactivemarketsshouldberecognizedbyquotationsonactivemarkets;quotationsonactivemarketsincludesquotationsofrelatedassetsorliabilitiesthatareeasytoandcanbeobtainedregularlyfromexchanges,dealers,brokers,industrygroups,pricinginstitutionsorregulatoryauthorities,andthatcanrepresentmarkettransactionsthatactuallyandfrequentlyoccuronthebasisoffairtransactions.Forinitiallyobtainedorderivativefinancialassetsorfinancialliabilitiesundertaken,thefairvaluethereofshallberecognizedbasedonthemarkettransactionprice.Thefairvalueoffinancialassetsorliabilitieswithoutactivemarketshallberecognizedbyvaluationtechniques.Invaluation,theCompanyadoptsapplicablevaluationtechniquessupportedbysufficientutilizabledataandotherinformationincurrentcircumstances,selectsinputvaluesconsistentwithassetorliabilitycharacteristicsconsideredinrelevantassetorliabilitytransactionsofmarketparticipatorsandprioritizestheapplyingrelevantobservableinputvalues.Unobservableinputvaluesshallnotbeappliedunlessrelevantobservableinputvaluesarenotaccessibleorfeasible.ImpairmentAllowanceforFinancialAssets(excludingAccountsReceivable):

(1)Basedonexpectedcreditlosses,theCompanyevaluatestheexpectedcreditlossesoffinancialassetsmeasuredatamortizedcostandoffinancialassetsmeasuredatfairvaluewithchangesrecordedintoothercomprehensiveincome,carriesouttheaccountingtreatmentofimpairmentandrecognizestheprovisionsforlosses.Expectedcreditlossesrefertotheweightedaverageofthecreditlossesoffinancialinstrumentswithdefaultriskastheweight.CreditlossesrefertothedifferencebetweenallcontractcashflowsreceivablebytheCompanyinaccordancewithcontractsdiscountedbytheoriginaleffectiveinterestrateandallcashflowsexpectedtoreceive,aswellasthepresentvalueofallcashshortages.

(2)Whenoneormoreeventswithadverseeffectsontheexpectedfuturecashflowoffinancialassetsoccur,thefinancialassetsturnintofinancialassetswithcreditimpairment.Theevidenceforcreditimpairmentoffinancialassetsincludesthefollowingobservableinformation:

①Theissuerorthedebtorencounterssignificantfinancialdifficulties;

②Thedebtorbreachesthecontract,suchasdefaultoroverduepaymentofinterestsorprincipal;

③Thecreditormakesacompromiseforthedebtorwhichwouldbeimpossibleinanyothercircumstancesoutofeconomicorcontractualconsiderationrelatedtothedebtor’sfinancialdifficulties;

④Thedebtorwillprobablygobankruptorcarryoutotherfinancialrestructuring;

⑤Theissuerorthedebtor’sfinancialdifficultiesresultinthedisappearanceoftheactivemarketsofthefinancialassets;

⑥Afinancialassetwasboughtororiginatedwithabigdiscount,whichreflectsthefactofcreditlosses.Creditimpairmentoffinancialassetscanbecausedbymultipleeventstogetherandnotnecessarilybyseparatelyidentifiableevents.

(3)Forfinancialassetswithcreditimpairmentboughtororiginated,onlythecumulativechangesinexpectedcreditlossesduringthewholedurationasatthebalancesheetdatesinceinitialrecognitionwillberecognizedasprovisionsforlosses.Oneachbalancesheetdate,theamountofchangesinexpectedcreditlossesforthewholedurationwillbeincludedintocurrentprofits/lossesasimpairmentlossesorgains.Evenwhentheexpectedcreditlossesforthewholedurationrecognizedonthebalancesheetdatearelessthantheexpectedcreditlossesreflectedintheestimationofcashflowsatinitialrecognition,thefavorablechangesintheexpectedcreditlossesarerecognizedasimpairmentgains.

(4)Otherthanthecircumstancesofwithdrawalofprovisionsforlossesforfinancialinstrumentsintheaboveitem

(3),theCompanyevaluateswhetherthecreditriskofrelatedfinancialinstrumentshasincreasedsubstantiallyasateachbalancesheetdatesinceinitialrecognition,andmeasurestheprovisionsforlossesandrecognizesexpectedcreditlossesandthechangesaccordingtothefollowing:

①Ifthecreditriskofthefinancialinstrumentshasincreasedsubstantiallysinceinitialrecognition,theprovisionsforlosseswillbemeasuredbytheamountequivalenttotheexpectedcreditlossesofthefinancialinstrumentsforthewholeduration.RegardlessofwhethertheCompanyevaluatescreditlossesbasedonindividualfinancialinstrumentsorfinancialinstrumentportfolios,theamountofincreaseorreverseofprovisionsforlossesformedthereofshouldbeincludedintocurrentprofits/lossesasimpairmentlossesorgains.

②Ifthecreditriskofthefinancialinstrumentshasnotincreasedsubstantiallysinceinitialrecognition,theprovisionsforlosseswillbemeasuredbytheamountequivalenttotheexpectedcreditlossesofthefinancialinstrumentsforthenext12months.RegardlessofwhethertheCompanyevaluatescreditlossesbasedonindividualfinancialinstrumentsorfinancialinstrumentportfolios,theamountofincreaseorreverseofprovisionsforlossesformedthereofshouldbeincludedintocurrentprofits/lossesasimpairmentlossesorgains.Expectedcreditlossesforthenext12monthsrefertotheexpectedcreditlossesresultingfrompotentialdefaulteventsinrespectoffinancialinstrumentsinthe12months(whichshouldbetheexpecteddurationiftheexpecteddurationofthefinancialinstrumentsislessthan12months)followingthebalancesheetdate,whicharepartoftheexpectedcreditlossesforthewholeduration.TheCompanyshallconsiderallreasonableandwell-foundedinformation,includingforward-lookinginformation.Insomecircumstances,theCompanyconsiderswhetherthecreditriskhassubstantiallyincreasedbasedonportfoliostoensurethattheexpectedcreditlossesforthewholedurationwillberecognizedimmediatelyuponsubstantialincreaseofthecreditrisksincetheinitialrecognitionofthefinancialinstruments.OffsetofFinancialAssetsandFinancialLiabilities:

Financialassetsandfinancialliabilitiesshallbepresentedseparatelyinthebalancesheetandshallnotbeoffset.But,whenmeetingthefollowingconditionsatthesametime,thefinancialassetsandfinancialliabilitiesshallbepresentedinthebalancesheetwiththenetamountaftertheset-off:

(1)TheCompanyhasalegalrightthatiscurrentlyenforceabletosetofftherecognizedfinancialassetsandfinancialliabilities;

(2)TheCompanyintendseithertosettleonanetbasis,ortorealizethefinancialassetandsettlethefinancialliabilitysimultaneously.

11.NotesReceivableOnthebasisofexpectedcreditlosses,thecompanyevaluatestheexpectedcreditlossesoffinancialinstrumentsonthebasisofsingleitemandcombination,carriesoutimpairmenttreatmentandconfirmsthelossprovision.Forthenotesreceivable,thecompanydividesthenotesreceivableintobankacceptancebillcombinationand

commercialacceptancebillcombinationaccordingtothecreditriskcharacteristics,andcalculatestheexpectedcreditlossonthebasisofthecombination.Forthenotesreceivabledividedintoportfolios,thecompanyshall,whenevaluatingtheexpectedcreditlosses,considerthereasonableandreasonableinformationrelatedtothepastevents,thecurrentsituationandtheforecastoffutureeconomicconditions,determinetheexpectedcreditlossrateandcalculatetheexpectedcreditlosses.

12.AccountsReceivable

(1)AccountsReceivableForaccountsreceivable,regardlessofwhetheritcontainssignificantfinancingelements,thecompanyalwaysmeasuresitslossprovisioninaccordancewiththeamountequivalenttotheexpectedcreditlossinthewholeduration,andtheresultingincreaseorrefundedamountoflossprovisionisrecordedasimpairmentlossorprofitinthecurrentprofitandloss.Thecompanycombinestheaccountsreceivablewithsimilarcreditriskcharacteristics(aging),andestimatestheproportionofbaddebtprovisionfortheaccountsreceivablebasedonallreasonableandvalidinformation,includingforward-lookinginformation,asfollows:

AgingWithdrawalproportionofaccountsreceivableWithdrawalproportionofotherreceivables
Within1year(including1year)2.00%2.00%
1to2years5.00%5.00%
2to3years15.00%15.00%
3to4years30.00%30.00%
4to5years60.00%60.00%
Over5years100.00%100.00%

Ifthereisobjectiveevidencethatacertainaccountreceivablehassufferedfromcreditimpairment,thecompanyshallseparatelymakebaddebtprovisionfortheaccountreceivableandconfirmtheexpectedcreditloss.

(2)OtherreceivablesForthemeasurementofimpairmentlossofotherreceivables,themeasurementmethodofimpairmentlossoftheaforementionedreceivablesshallbeapplied.

13.InventoryIstheCompanysubjecttoanydisclosurerequirementsforspecialindustries?No

(1)CategoryofInventoryInventoryreferstotheheld-for-salefinishedproductsorcommodities,goodsinprocess,materialsconsumedintheproductionprocessortheprocessprovidingthelaborserviceetc.Inventoryismainlyincludingtherawmaterials,lowpricedandeasilywornarticles,unfinishedproducts,inventoriesandworkinprocess–outsourcedetc.

(2)PricingmethodPurchasingandstorageofthevariousinventoriesshouldbevaluedaccordingtotheplanedcostandthedispatchbecalculatedaccordingtotheweightedaveragemethod;carriedforwardthecostofthefinishedproducts

accordingtotheactualcostofthecurrentperiodandthesalescostaccordingtotheweightedaveragemethod.

(3)DeterminationbasisofthenetrealizablevalueofinventoryandwithdrawalmethodoftheprovisionforfallingpriceofinventoryAtthebalancesheetdate,inventoriesaremeasuredatthelowerofthecostsandnetrealizablevalue.Whenalltheinventoriesarecheckedroundly,forthosewhichweredestroyed,outdatedinallorinpart,soldataloss,etc,theCompanyshallestimatetheirrecoverablepartofitscostandwithdrawaltheinventoryfallingpricereserveattheyear-end.Wherethecostofthesingleinventoryitemishigherthanthenetrealizablevalue,theinventoryfallingpricereserveshallbewithdrawnandrecordedintoprofitsandlossesofthecurrentperiod.Ofwhich:inthenormalproductionandoperatingprocess,asforthecommoditiesinventorydirectlyforsalessuchasthefinishedproducts,commoditiesandthematerialsforsales,shouldrecognizethenetrealizablevalueaccordingtotheamountoftheestimatedsellingpriceoftheinventoryminusestheestimatedsellingexpensesandtherelevanttaxes;asforthematerialsinventoryneedstobeprocessedinthenormalproductionandoperatingprocess,shouldrecognizeitsnetrealizablevalueaccordingtotheamountoftheestimatedsellingpriceofthefinishedproductsminusesthecostpredictstobeoccurwhentheproductioncompletesandtheestimatedsellingexpensesaswellastherelevanttaxes;onthebalancesheetdate,forthesameinventorywithonepartagreedbythecontractpriceandotherpartsnotbythecontractprice,shouldberespectivelyrecognizedthenetrealizablevalue.Foritemsofinventoriesrelatingtoaproductlinethatareproducedandmarketedinthesamegeographicalarea,havethesameorsimilarendusersorpurposes,andcannotbepracticablyevaluatedseparatelyfromotheritemsinthatproductlineprovisionfordeclineinvalueisdeterminedonanaggregatebasis;forlargequantityandlowvalueitemsofinventories,provisionfordeclineinvalueismadebasedoncategoriesofinventories.

(4)Theperpetualinventorysystemismaintainedforstocksystem.

(5)Amortizationmethodoflow-valueconsumablesandpackagesOnetimeamortizationmethodisadoptedforlow-valueconsumablesandpackages.

14.AssetsHeldforSaleTheCompanyrecognizesthecomponents(orthenon-currentassets)whichmeetwiththefollowingconditionsasassetsheldforsale:

(1)Thecomponentsmustbeimmediatelysoldonlyaccordingtotheusualtermsofsellingthiskindofcomponentsunderthecurrentconditions;

(2)TheCompanyhadmadesolutionsondisposingthecomponents(orthenon-currentassets),forexample,theCompanyshouldgaintheapprovalfromtheshareholdersaccordingtotheregulationsandhadacquiredtheapprovedfromtheAnnualGeneralMeetingortherelevantauthorityinstitutions;

(3)TheCompanyhadsignedtheirrevocabletransformationagreementwiththetransferee;

(4)Thetransformationshouldbecompletedwithin1year.

15.Long-termEquityInvestments

(1)JudgmentstandardofjointcontrolandsignificantinfluencesJointcontrol,referstothecontroljointlyownedaccordingtotherelevantagreementonanarrangementbytheCompanyandtherelevantactivitiesofthearrangementshouldbedecidedonlyaftertheparticipantswhichsharethecontrolrightmakeconsensus.SignificantinfluencereferstothepoweroftheGroupwhichcouldanticipateinthefinanceandtheoperationpolicesoftheinvestees,butcouldnotcontrolorjointlycontroltheformulationofthepolicieswiththeotherparties.

(2)RecognitionforinitialinvestmentcostTheinitialinvestmentcostofthelong-termequityinvestmentshallberecognizedbyadoptingthefollowingwaysinaccordancewithdifferentmethodsofacquisition:

1)Asforthoseformsunderthesamecontroloftheenterprisecombine,ifthecombinepartytakesthecashpayment,non-cashassetstransformation,liabilitiesassumptionorequitysecuritiesissuanceasthecombinationconsideration,shouldtakethesharesofthebookvaluebytheultimatecontrolpartyintheconsolidatefinancialstatementoftheowners’equitiesofthecombinersacquiredonthemergerdateastheinitialinvestmentcost.Thedifferencebetweentheinitialinvestmentcostandthebookvalueofthepaidcombinationconsiderationorthetotalamountoftheissuedsharesofthelong-termequityinvestmentshouldbeadjustedthecapitalreserve;Ifthecapitalreserveisinsufficienttodilute,theretainedearningsshallbeadjusted.Toincludeeachdirectrelevantexpenseoccurredwhenexecutingtheenterprisemergerintothecurrentgainsandlosses;whilethehandlingchargesandcommissionoccursfromtheissuingtheequitysecuritiesorthebondsfortheenterprisemergershouldbeincludedintheinitialmeasurementamountoftheshareholders’equitiesortheliabilities.

2)Asforlong-termequityinvestmentacquiredthroughthemergerofenterprisesnotunderthesamecontrol,itsinitialinvestmentcostshallregardasthecombinationcostcalculatedbythefairvalueoftheassets,equityinstrumentissuedandliabilitiesincurredorundertakenonthepurchasedateaddingthedirectcostrelatedwiththeacquisition.Theidentifiableassetsofthecombinedpartyandtheliabilities(includingcontingentliability)undertakenonthecombiningdateshallbemeasuredatthefairvaluewithoutconsideringtheamountofminorityinterest.Theacquirershallrecognizethepositivebalancebetweenthecombinationcostsandthefairvalueoftheidentifiablenetassetsitobtainsfromtheacquireeasbusinessreputation.Theacquirershallrecordthenegativebalancebetweenthecombinationcostsandthefairvalueoftheidentifiablenetassetsitobtainsfromtheacquireeintotheconsolidatedincomestatementdirectly.Theagentexpenseandotherrelevantmanagementexpensessuchastheaudit,legalserviceandevaluationconsultationoccursfromtheenterprisemerger,shouldbeincludedinthecurrentgainsandlosseswhenoccur;whilethehandlingchargesandcommissionoccursfromtheissuingtheequitysecuritiesorthebondsfortheenterprisemergershouldbeincludedintheinitialmeasurementamountoftheshareholders’equitiesortheliabilities.

3)Long-termequityinvestmentobtainedbyothermeansTheinitialcostofalong-termequityinvestmentobtainedbymakingpaymentincashshallbethepurchasecostwhichisactuallypaid.Theinitialcostofalong-termequityinvestmentobtainedonthebasisofissuingequitysecuritiesshallbethefairvalueoftheequitysecuritiesissued.Theinitialcostofalong-termequityinvestmentofaninvestorshallbethevaluestipulatedintheinvestmentcontractoragreement,theunfairvaluestipulatedinthecontractoragreementshallbemeasuredatfairvalue.Asforlong-terminvestmentobtainedbytheexchangeofnon-monetaryassets,whereitiscommercialinnature,thefairvalueoftheassetssurrenderedshallberecognizedastheinitialcostofthelong-termequityinvestmentreceived;whereitisnotcommercialinnature,thebookvalueoftheassetssurrenderedshallberecognizedastheinitialcostofthelong-termequityinvestmentreceived.Theinitialcostofalong-termequityinvestmentobtainedbyrecombinationofliabilitiesshallberecognizedatfairvalueoflong-termequityinvestment.

(3)Subsequentmeasurementandrecognitionofprofitsandlosses

1)AninvestmentinthesubsidiarycompanyshallbemeasuredbyemployingthecostmethodWheretheCompanyhold,andisabletodoequityinvestmentwithcontroloveraninvestedentity,theinvestedentityshallbeitssubsidiarycompany.WheretheCompanyholdsthesharesofanentityover50%,or,whilethe

Companyholdsthesharesofanentitybelow50%,buthasarealcontroltothesaidentity,thenthesaidentityshallbeitssubsidiarycompany.

2)AninvestmentinthejointenterpriseorassociatedenterpriseshallbemeasuredbyemployingtheequitymethodWheretheCompanyhold,andisabletodoequityinvestmentwithjointcontrolwithotherpartiesoveraninvestedentity,theinvestedentityshallbeitsjointenterprise.WheretheCompanyhold,andisabletohaveequityinvestmentwithsignificantinfluencesonaninvestedentity,theinvestedentityshallbeitsassociatedentity.AftertheCompanyacquiredthelong-termequityinvestment,shouldrespectivelyrecognizeinvestmentincomeandothercomprehensiveincomeaccordingtothenetgainsandlossesaswellastheportionofothercomprehensiveincomewhichshouldbeenjoyedorbeshared,andatthesametimeadjustthebookvalueofthelong-termequityinvestment;correspondingreducethebookvalueofthelong-termequityinvestmentaccordingtoprofitswhichbedeclaredtodistributebytheinvesteesortheportionofthecalculationofcashdividendswhichshouldbeenjoyed;fortheotherchangesexceptforthenetgainsandlosses,othercomprehensiveincomeandtheowners’equityexceptfortheprofitsdistributionoftheinvestees,shouldadjustthebookvalueofthelong-termequityinvestmentaswellasincludeintheowners’equity.Theinvestingenterpriseshall,onthegroundofthefairvalueofallidentifiableassetsoftheinvestedentitywhenitobtainstheinvestment,recognizetheattributableshareofthenetprofitsandlossesoftheinvestedentityafteritadjuststhenetprofitsoftheinvestedentity.IftheaccountingpolicyadoptedbytheinvesteesisnotaccordwiththatoftheGroup,shouldbeadjustedaccordingtotheaccountingpoliciesoftheGroupandthefinancialstatementoftheinvesteesduringtheaccountingperiodandaccordingwhichtorecognizetheinvestmentincomeaswellasothercomprehensiveincome.ForthetransactionhappenedbetweentheCompanyandassociatedenterprisesaswellasjointventures,iftheassetslaunchedorsoldnotformintobusiness,theportionoftheunrealizedgainsandlossesoftheinternaltransaction,whichbelongstotheGroupaccordingtothecalculationoftheenjoyedproportion,shouldrecognizetheinvestmentgainsandlossesonthebasis.ButthelossesoftheunrealizedinternaltransactionhappenedbetweentheCompanyandtheinvesteeswhichbelongstotheimpairmentlossesofthetransferredassets,shouldnotbeneutralized.TheCompanyshallrecognizethenetlossesoftheinvestedenterpriseaccordingtothefollowingsequence:firstofall,towritedownthebookvalueofthelong-termequityinvestment.Secondly,ifthebookvalueofthelong-termequityinvestmentisinsufficientforwrittendown,shouldbecontinuedtorecognizedtheinvestmentlosseslimitedtothebookvalueofotherlong-termequitywhichformsofthenetinvestmentoftheinvesteesandtowrittendownthebookvalueofthelong-termaccountsreceivableetc.Lastly,throughtheabovehandling,forthoseshouldstillundertaketheadditionalobligationsaccordingtotheinvestmentcontractsortheagreements,itshallberecognizedastheestimatedliabilitiesinaccordancewiththeestimateddutiesandthenrecordedintoinvestmentlossesatcurrentperiod.Iftheinvestedentityrealizesanynetprofitslater,theGroupshall,aftertheamountofitsattributableshareofprofitsoffsetsagainstitsattributableshareoftheun-recognizedlosses,resumerecognizingitsattributableshareofprofits.Inthepreparationforthefinancialstatements,thebalanceexistedbetweenthelong-termequityinvestmentincreasedbyacquiringsharesofminorityinterestandtheattributablenetassetsonthesubsidiarycalculatedbytheincreasedsharesheldsincethepurchasedate(orcombinationdate),thecapitalreservesshallbeadjusted,ifthecapitalreservesarenotsufficienttooffset,theretainedprofitsshallbeadjusted;theCompanydisposedpartof

thelong-termequityinvestmentonsubsidiarieswithoutlosingitscontrollingrightonthem,thebalancebetweenthedisposedpriceandattributablenetassetsofsubsidiariesbydisposingthelong-termequityinvestmentshallberecordedintoowners’equity.Forotherwaysondisposaloflong-termequityinvestment,thebalancebetweenthebookvalueofthedisposedequityanditsactualpaymentgainedshallberecordedintocurrentprofitsandlosses.Forthelong-termequityinvestmentmeasuredbyadoptingequitymethod,iftheremainedequityafterdisposalstilladoptstheequitymethodformeasurement,theothercomprehensiveincomeoriginallyrecordedintoowners’equityshouldadoptthesamebasisoftheaccountingdisposaloftherelevantassetsorliabilitiesdirectlydisposedbytheinvesteesaccordingtothecorrespondingproportion.Theowners’equityrecognizedowningtothechangesoftheotherowners’equityexceptforthenetgainsandlosses,othercomprehensiveincomeandtheprofitsdistributionoftheinvestees,shouldbetransferredintothecurrentgainsandlossesaccordingtotheproportion.Forthelong-termequityinvestmentwhichadoptsthecostmethodofmeasurement,iftheremainedequitystilladoptthecostmethod,theothercomprehensiveincomerecognizedowningtoadoptingtheequitymethodformeasurementortherecognitionandmeasurementstandardsoffinancialinstrumentbeforeacquiringthecontroloftheinvestees,shouldadoptthesamebasisoftheaccountingdisposaloftherelevantassetsorliabilitiesdirectlydisposedbytheinvesteesandshouldbecarriedforwardintothecurrentgainsandlossesaccordingtotheproportion;thechangesoftheotherowners’equityexceptforthenetgainsandlosses,othercomprehensiveincomeandtheprofitsdistributionamongthenetassetsoftheinvesteeswhichrecognizedbyadoptingtheequitymethodformeasurement,shouldbecarriedforwardintothecurrentgainsandlossesaccordingtotheproportion.ForthosetheCompanylostthecontroloftheinvesteesbydisposingpartoftheequityinvestmentaswellastheremainedequityafterdisposalcouldexecutejointcontrolorsignificantinfluencesontheinvestees,shouldchangetomeasurebyequitymethodwhencompilingtheindividualfinancialstatementandshouldadjustthemeasurementoftheremainedequitytoequitymethodasadoptedsincethetimeacquired;iftheremainedequityafterdisposalcouldnotexecutejointcontrolorsignificantinfluencesontheinvestees,shouldchangetheaccountingdisposalaccordingtotherelevantregulationsoftherecognitionandmeasurementstandardsoffinancialinstrument,anditsdifferencebetweenthefairvalueandbookvalueonthedatelosethecontrolrightshouldbeincludedinthecurrentgainsandlosses.FortheothercomprehensiveincomerecognizedbyadoptingequitymethodformeasurementortherecognitionandmeasurementstandardsoffinancialinstrumentbeforetheGroupacquiredthecontroloftheinvestees,shouldexecutetheaccountingdisposalbyadoptingthesamebasisoftheaccountingdisposaloftherelevantassetsorliabilitiesdirectlydisposedbytheinvesteeswhenlosethecontrolofthem,whilethechangesoftheotherowners’equityexceptforthenetgainsandlosses,othercomprehensiveincomeandtheprofitsdistributionamongthenetassetsoftheinvesteeswhichrecognizedbyadoptingtheequitymethodformeasurement,shouldbecarriedforwardintothecurrentgainsandlossesaccordingtotheproportion.Ofwhich,forthedisposedremainedequitywhichadoptedtheequitymethodformeasurement,theothercomprehensiveincomeandtheotherowners’equityshouldbecarriedforwardaccordingtotheproportion;forthedisposedremainedequitywhichchangedtoexecutetheaccountingdisposalaccordingtotherecognitionandmeasurementstandardsoffinancialinstrument,theothercomprehensiveincomeandtheotherowners’equityshouldbecarriedforwardinfullamount.ForthosetheCompanylostthecontroloftheinvesteesbydisposingpartoftheequityinvestment,thedisposedremainedequityshouldchangetocalculateaccordingtotherecognitionandmeasurementstandardsoffinancialinstrument,anddifferencebetweenthefairvalueandbookvalueonthedatelosethecontrolrightshouldbeincludedinthecurrentgainsandlosses.Fortheothercomprehensiveincomerecognizedfromtheoriginalequityinvestmentbyadoptingtheequitymethod,shouldexecutetheaccountingdisposalbyadoptingthesamebasisoftheaccountingdisposaloftherelevantassetsorliabilitiesdirectlydisposedbytheinvesteeswhenterminatethe

equitymethodformeasurement,whilefortheowners’equityrecognizedowningtothechangesoftheotherowner’sequityexceptforthenetgainsandlosses,othercomprehensiveincomeandtheprofitsdistributionoftheinvestees,shouldbetransferredintothecurrentinvestmentincomewithfullamountwhenterminateadoptingtheequitymethod.

16.InvestmentPropertyMeasurementmodeofinvestmentrealestate:

MeasurementofcostmodelDepreciationoramortizationmethodTheinvestmentrealestateshallbemeasuredatitscost.Ofwhich,thecostofaninvestmentrealestatebyacquisitionconsistsoftheacquisitionprice,relevanttaxes,andotherexpensedirectlyrelegatedtotheasset;thecostofaself-builtinvestmentrealestatecomposesofthenecessaryexpensesforbuildingtheassettothehopedconditionforuse.Theinvestmentrealestateinvestedbyinvestorsshallberecordedatthevaluestipulatedintheinvestmentcontractsoragreements,buttheunfairvalueappointedinthecontractoragreementshallbeenteredintotheaccountbookatthefairvalue.Asforwithdrawalbasisofprovisionforimpairmentofinvestmentrealestates,pleaserefertowithdrawalmethodforprovisionforimpairmentoffixedassets.

17.FixedAssets

(1)RecognitionConditionsFixedassetsreferstothetangibleassetsthatsimultaneouslypossessthefeaturesasfollows:(a)theyareheldforthesakeofproducingcommodities,renderinglaborservice,rentingorbusinessmanagement;and(b)theirusefullifeisinexcessofonefiscalyear.ThefixedassetsareonlyrecognizedwhentherelevanteconomicbenefitsprobablyflowintheCompanyanditscostcouldbereliablemeasured.

(2)DepreciationMethod

CategoryoffixedassetsDepreciationmethoddepreciablelifeSalvagevalueAnnualdeprecation
HousingandbuildingStraight-linemethod20-402.50%-5%
MachineryequipmentStraight-linemethod6-156.67%-16.67%
TransportationequipmentStraight-linemethod5-1010%-20%
OtherequipmentStraight-linemethod5-1010%-20%

(3)RecognitionBasis,PricingandDepreciationMethodofFixedAssetsbyFinanceLeaseTheCompanyrecognizesthosemeetwiththefollowingoneorcertainstandardsasthefixedassetsbyfinancelease:

1)Theleasingcontracthadagreedthat(ormadethereasonablejudgmentaccordingtotherelevantconditionsontheleasestartingdate)whentheleasetermexpires,theownershipofleasingthefixedassetscouldbetransferredtotheCompany;

2)TheCompanyownsthechoosingrightforpurchasingandleasingthefixedassets,withthesetpurchasepricewhichisestimatedfarlowerthanthefairvalueofthefixedassetsbyfinanceleasewhenexecutingthechoosingright,sotheCompanycouldexecutethechoosingrightreasonablyontheleasestartingdate;

3)Eveniftheownershipofthefixedassetsnotbetransferred,theleaseperiodisof75%oraboveoftheusefullifeoftheleasefixedassets;

4)ThecurrentvalueoftheminimumleasepaymentontheleasestartingdateoftheCompanyisequalto90%oraboveofthefairvalueoftheleasefixedassetsontheleasestartingdate;thecurrentvalueoftheminimumleasereceiptsontheleasestartingdateoftheleaserisequalto90%oraboveofthefairvalueoftheleasefixedassetsontheleasestartingdate;

5)ThenatureoftheleaseassetsisspecialthatonlytheCompanycoulduseitifnotexecutelargetransformation.Thefixedassetsbyfinanceleaseshouldtaketheloweronebetweenthefairvalueoftheleasingassetsandthecurrentvalueoftheminimumleasepaymentontheleasestartingdateastheentryvalue.Asfortheminimumleasepaymentwhichberegardedastheentryvalueofthelong-termaccountspayable,itsdifferenceshouldberegardedastheunrecognizedfinancingexpense.Fortheinitialdirectexpensesoccurintheleasenegotiationsandthesigningprocessoftheleasecontractsthatattributetothehandlingexpenses,counselfees,travelexpensesandstamptaxesoftheleaseitems,shouldbeincludedinthecharter-inassetsvalue.Theunrecognizedfinancingexpensesshouldbeamortizedbyadoptingtheactualinterestrateduringtheperiodoftheleaseterm.Thefixedassetsbyfinanceleaseshalladoptthesamedepreciationpolicyforself-ownedfixedassets.Ifitisreasonabletobecertainthatthelesseewillobtaintheownershipoftheleasedassetwhentheleasetermexpires,theleasedassetshallbefullydepreciatedoveritsusefullife.Ifitisnotreasonabletobecertainthatthelesseewillobtaintheownershipoftheleasedassetattheexpiryoftheleaseterm,theleasedassetshallbefullydepreciatedovertheshorteroneoftheleasetermoritsusefullife

18.ConstructioninProgress

(1)ValuationoftheprogressinconstructionConstructioninprogressshallbemeasuredatactualcost.Self-operatingprojectsshallbemeasuredatdirectmaterials,directwagesanddirectconstructionfees;constructioncontractshallbemeasuredatprojectpricepayable;projectcostforplantengineeringshallberecognizedatvalueofequipmentsinstalled,costofinstallation,trailrunofprojects.Costsofconstructioninprocessalsoincludeborrowingcostsandexchangegainsandlosses,whichshouldbecapitalized.

(2)StandardizationonconstructioninprocesstransferredintofixedassetsandtimepointthereofTheconstructioninprocess,ofwhichthefixedassetsreachtothepredictedconditionforuse,shallcarryforwardfixedassetsonschedule.Theonethathasnotauditedthefinalaccountingshallrecognizethecostandmakedepreciationinlinewithvaluationvalue.Theconstructioninprocessshalladjusttheoriginalvaluationvalueatitshistoricalcostbutnotadjustthedepreciationthathasbeenmadeafterauditingthefinalaccounting.

19.BorrowingCosts

(1)RecognitionprincipleofcapitalizationofborrowingcostsTheborrowingcostsshallincludetheinterestonborrowings,amortizationofdiscountsorpremiumsonborrowings,ancillaryexpenses,andexchangebalanceonforeigncurrencyborrowings.Wheretheborrowingcostsoccurredbelongtospecificallyborrowedloanorgeneralborrowingusedfortheacquisitionandconstructionofinvestmentrealestatesandinventoriesoveroneyear(includingoneyear)shallbecapitalized,andrecordintorelevantassetscost.Otherborrowingcostsshallberecognizedasexpensesonthebasisoftheactualamountincurred,andshallberecordedintothecurrentprofitsandlosses.Theborrowingcostsshallnotbecapitalizedunlesstheysimultaneouslymeetthefollowingthreerequirements:(1)Theassetdisbursementshavealreadyincurred;(2)Theborrowingcostshavealreadyincurred;and(3)Theacquisitionandconstructionorproductionactivitieswhicharenecessarytopreparetheassetforitsintendeduseorsalehavealreadystarted.

(2)TheperiodofcapitalizationofborrowingcostsTheborrowingcostsarisingfromacquisitionandconstructionoffixedassets,investmentrealestatesandinventories,iftheymeettheabove-mentionedcapitalizationconditions,thecapitalizationoftheborrowingcostsshallbemeasuredintoassetcostbeforesuchassetsreachtotheintendeduseorsale,Whereacquisitionandconstructionoffixedassets,investmentrealestatesandinventoriesisinterruptedabnormallyandtheinterruptionperiodlastsformorethan3months,thecapitalizationoftheborrowingcostsshallbesuspended,andrecordedintothecurrentexpense,tilltheacquisitionandconstructionoftheassetsrestarts.Whenthequalifiedassetisreadyfortheintendeduseorsale,thecapitalizationoftheborrowingcostsshallbeceased,theborrowingcostsoccurredlatershallbeincludedintothefinancialexpensedirectlyatthecurrentperiod.

(3)MeasurementmethodofcapitalizationamountofborrowingcostsAsforspecificallyborrowedloansfortheacquisitionandconstructionorproductionofassetseligibleforcapitalization,theto-be-capitalizedamountofinterestsshallbedeterminedinlightoftheactualcostincurredofthespeciallyborrowedloanatthepresentperiodminustheincomeofinterestsearnedontheunusedborrowingloansasadepositinthebankorasatemporaryinvestment.Whereageneralborrowingisusedfortheacquisitionandconstructionorproductionofassetseligibleforcapitalization,theenterpriseshallcalculateanddeterminetheto-be-capitalizedamountofinterestsonthegeneralborrowingbymultiplyingtheweightedaverageassetdisbursementofthepartoftheaccumulativeassetdisbursementsminusthegeneralborrowingbythecapitalizationrateofthegeneralborrowingused.Thecapitalizationrateshallbecalculatedanddeterminedinlightoftheweightedaverageinterestrateofthegeneralborrowing.

20.IntangibleAssets

(1)PricingMethod,ServiceLife,andImpairmentTest

(1)PricingmethodofintangibleassetsIntangibleassetspurchasedshouldtaketheactualpaymentandtherelevantotherexpensesastheactualcost.Fortheintangibleassetsinvestedbytheinvestorsshouldberecognizedtheactualcostaccordingtothevalueoftheinvestmentcontractsoragreements,however,forthevalueofthecontractsoragreementsisnotfair,theactualcostshouldberecognizedaccordingtothefairvalue.Fortheintangibleassetsacquiresfromtheexchangeofthenon-currencyassets,ifownthecommercialnature,shouldberecordedaccordingtothefairvalueoftheswap-outassets;forthosenotownthecommercialnature,

shouldberecordedaccordingtothebookvalueoftheswap-outassets.Fortheintangibleassetsacquiresfromthedebtsreorganizationshouldberecognizedbythefairvalue.

(2)AmortizationmethodandtermofintangibleassetsAsfortheintangibleassetswithlimitedservicelife,whichareamortizedbystraight-linemethodwhenitisavailableforusewithintheserviceperiod,shallberecordedintothecurrentprofitsandlosses.TheCompanyshall,atleastattheendofeachyear,checktheservicelifeandtheamortizationmethodofintangibleassetswithlimitedservicelife.Whentheservicelifeandtheamortizationmethodofintangibleassetsaredifferentfromthosebefore,theyearsandmethodoftheamortizationshallbechanged.Intangibleassetswithuncertainservicelifemaynotbeamortized.However,theCompanyshallchecktheservicelifeofintangibleassetswithuncertainservicelifeduringeachaccountingperiod.Wherethereareevidencestoprovetheintangibleassetshavelimitedservicelife,itshallbeestimatedofitsservicelife,andbeamortizedaccordingtotheabovemethodmentioned.TherightstouselandoftheCompanyshallbeamortizedaccordingtotherestservicelife.

(2)AccountingPolicesofInternalR&DExpensesTheinternalresearchanddevelopmentprojectsofanenterpriseshallbeclassifiedintoresearchphaseanddevelopmentphase:theterm“research”referstothecreativeandplannedinvestigationtoacquireandunderstandnewscientificortechnologicalknowledge;theterm“development”referstotheapplicationofresearchachievementsandotherknowledgetoacertainplanordesign,priortothecommercialproductionoruse,soastoproduceanynewmaterial,deviceorproduct,orsubstantiallyimprovedmaterial,deviceandproduct.TheCompanycollectstheexpensesofthecorrespondingphasesaccordingtotheabovestandardofclassifyingtheresearchphaseandthedevelopmentphase.Theresearchexpendituresforitsinternalresearchanddevelopmentprojectsofanenterpriseshallberecordedintotheprofitorlossforthecurrentperiod.Thedevelopmentexpendituresforitsinternalresearchanddevelopmentprojectsofanenterprisemaybecapitalizedwhentheysatisfythefollowingconditionssimultaneously:itisfeasibletechnicallytofinishintangibleassetsforuseorsale;itisintendedtofinishanduseorselltheintangibleassets;theusefulnessofmethodsforintangibleassetstogenerateeconomicbenefitsshallbeproved,includingbeingabletoprovethatthereisapotentialmarketfortheproductsmanufacturedbyapplyingtheintangibleassetsorthereisapotentialmarketfortheintangibleassetsitselfortheintangibleassetswillbeusedinternally;itisabletofinishthedevelopmentoftheintangibleassets,andabletouseorselltheintangibleassets,withthesupportofsufficienttechnologies,financialresourcesandotherresources;thedevelopmentexpendituresoftheintangibleassetscanbereliablymeasured.

21.ImpairmentofLong-termAssetsFornon-currentfinancialAssetsoffixedAssets,projectsunderconstruction,intangibleAssetswithlimitedservicelife,investingrealestatewithcostmodel,long-termequityinvestmentofsubsidiaries,cooperativeenterprisesandjointventures,theGroupshouldjudgewhetherdecreaseinvalueexistsonthedateofbalancesheet.Recoverableamountsshouldbetestedfordecreaseinvalueifitexists.OtherintangibleAssetsofreputationanduncertainservicelifeandothernon-accessibleintangibleassetsshouldbetestedfordecreaseinvaluenomatterwhetheritexists.Iftherecoverableamountislessthanbookvalueinimpairmenttestresults,theprovisionforimpairmentofdifferencesshouldincludeinimpairmentloss.Recoverableamountswouldbethehigherofnetvalueofassetfairvaluedeductingdisposalchargesorpresentvalueofpredictedcashflow.Assetfairvalueshouldbedetermined

accordingtonegotiatedsalespriceoffairtrade.Ifnosalesagreementexistsbutwithassetactivemarket,fairvalueshouldbedeterminedaccordingtotheBuyer’spriceoftheasset.Ifnosalesagreementorassetactivemarketexists,assetfairvaluecouldbeacquiredonthebasisofbestinformationavailable.Disposalexpensesincludelegalfees,taxes,cartageorotherdirectexpensesofmerchantableAssetsrelatedtoassetdisposal.PresentvalueofpredictedassetcashflowshouldbedeterminedbytheproperdiscountrateaccordingtoAssetsinserviceandpredictedcashflowoffinaldisposal.AssetdepreciationreservesshouldbecalculatedonthebasisofsingleAssets.IfitisdifficulttopredicttherecoverableamountsforsingleAssets,recoverableamountsshouldbedeterminedaccordingtothebelongingassetgroup.Assetgroupistheminimumassetcombinationproducingcashflowindependently.Inimpairmenttest,bookvalueofthebusinessreputationinfinancialreportshouldbesharedtobeneficialassetgroupandassetgroupcombinationincollaborationofbusinessmerger.Itisshowninthetestthatifrecoverableamountsofsharedbusinessreputationassetgrouporassetgroupcombinationarelowerthanbookvalue,itshoulddeterminetheimpairmentloss.Impairmentlossamountshouldfirstlybedeductedandsharedtothebookvalueofbusinessreputationofassetgrouporassetgroupcombination,thendeductbookvalueofallassetsaccordingtoproportionsofotherbookvalueofaboveassetsinassetgrouporassetgroupcombinationexceptbusinessreputation.Aftertheassetimpairmentlossisdetermined,recoverablevalueamountswouldnotbereturnedinfuture.

22.Long-termDeferredExpensesLong-termdeferredexpansesoftheCompanyshallberecordedinlightoftheactualexpenditure,andamortizedaveragelywithinbenefitperiod.Incaseofnobenefitinthefutureaccountingperiod,theamortizedvalueofsuchprojectthatfailstobeamortizedshallbetransferredintotheprofitsandlossesofthecurrentperiod.

23.Payroll

(1)AccountingTreatmentofShort-termCompensationShort-termcompensationmainlyincludingsalary,bonus,allowancesandsubsidies,employeeservicesandbenefits,medicalinsurancepremiums,birthinsurancepremium,industrialinjuryinsurancepremium,housingfund,laborunionexpenditureandpersonneleducationfund,non-monetarybenefitsetc.Theshort-termcompensationactuallyhappenedduringtheaccountingperiodwhentheactivestaffofferingtheservicefortheGroupshouldberecognizedasliabilitiesandisincludedinthecurrentgainsandlossesorrelevantassetscost.Ofwhichthenon-monetarybenefitsshouldbemeasuredaccordingtothefairvalue.

(2)AccountingTreatmentoftheWelfareafterDemissionTheCompanyclassifiesthewelfareplansafterdemissionintodefinedcontributionplansanddefinedbenefitplans.WelfareplansafterdemissionreferstotheagreementonthewelfareafterdemissionreachesbetweentheCompanyandtheemployees,ortheregulationsormethodsformulatedbytheCompanyforprovidingthewelfareafterdemissionfortheemployees.Ofwhich,definedcontributionplansreferstothewelfareplansafterdemissionthattheCompanynomoreundertakethefurtherpaymentobligationsafterthepaymentofthefixedexpensesfortheindependentfunds;definedbenefitplans,referstothewelfareplansafterdemissionexceptforthedefinedcontributionplans.Definedcontributionplans

DuringtheaccountingperiodthattheCompanyprovidingtheservicefortheemployees,theCompanyshouldrecognizetheliabilitiesaccordingtothedepositedamountcalculatedbydefinedcontributionplans,andshouldbeincludedinthecurrentgainsandlossesortherelevantassetscost.

(3)AccountingTreatmentoftheDemissionWelfareTheCompanyshouldrecognizethepayrollpaymentliabilitiesoccurfromthedemissionwelfareaccordingtotheearlierdatebetweenthefollowingtwoconditionsandincludewhichinthecurrentgainsandlosseswhenprovidingthedemissionwelfarefortheemployees:theCompanycouldnotunilaterallywithdrawthedemissionwelfareowningtotherelieveplansofthelaborrelationshiporreduction;whentheCompanyrecognizingthecostsorexpensesrelatedtothereorganizationinvolveswiththedemissionwelfarepayments.

(4)AccountingTreatmentofOtherLong-termWelfareforStaffNaught

24.Provisions

(1)CriteriaofestimatedliabilitiesOnlyiftheobligationpertinenttoacontingenciesshallberecognizedasanestimateddebtswhenthefollowingconditionsaresatisfiedsimultaneously:

1)ThatobligationisacurrentobligationoftheCompany;

2)ItislikelytocauseanyeconomicbenefittoflowoutoftheCompanyasaresultofperformanceoftheobligation;

3)Theamountoftheobligationcanbemeasuredinareliableway.

(2)MeasurementofestimatedliabilitiesTheCompanyshallmeasuretheestimateddebtsinaccordancewiththebestestimateofthenecessaryexpensesfortheperformanceofthecurrentobligation.TheCompanyshallcheckthebookvalueoftheestimateddebtsontheBalanceSheetDate.Ifthereisanyconclusiveevidenceprovingthatthesaidbookvaluecan’ttrulyreflectthecurrentbestestimate,theCompanyshall,subjecttochange,makeadjustmenttocarryingvaluetoreflectthecurrentbestestimate.

25.RevenueIstheCompanysubjecttoanydisclosurerequirementsforspecialindustries?NoHasimplementednewstandardsgoverningrevenueornot

□Yes√No

(1)Recognitionofrevenuefromsaleofgoods:therevenuefromsellingshallberecognizedbythefollowingconditions:ThesignificantrisksandrewardsofownershipofthegoodshavebeentransferredtothebuyerbytheCompany;theCompanyretainsneithercontinuousmanagementrightthatusuallykeepsrelationwiththeownershipnoreffectivecontroloverthesoldgoods;therelevantamountofrevenuecanbemeasuredinareliable

way;therelevantrevenueandcostsofsellinggoodscanbemeasuredinareliableway.Theamountoftherevenuefromsellingshallascertaintherevenueincurredbysellinggoodsinaccordancewiththereceivedorreceivablepricestipulatedinthecontractoragreementsignedbetweentheenterpriseandthebuyer,unlessthereceivedorreceivableamountasstipulatedinthecontractoragreementisunfair.

(2)Recognitionofrevenuefromprovidinglaborservices:Whenthetotalrevenueandcostsfromprovidinglaborcanbemeasuredinareliableway;therelevanteconomicbenefitsarelikelytoflowintotheenterprise;thescheduleofcompletionunderthetransactioncanbemeasuredinareliableway,therevenuefromprovidinglaborshallberecognized.IftheCompanycanreliablyestimatetheoutcomeofatransactionconcerningthelaborservicesitprovides,itshallrecognizetherevenuefromprovidingservicesemployingthepercentage-of-completionmethodonthedateofthebalancesheet,otherwisetherevenuefromtheprovidingoflaborservicesshallberecognizedinaccordancewiththeamountofthecostoflaborservicesincurredandexpectedtobecompensated.TheCompanyrecognizedthecompletionprocessofthetransactionconcerningthelaborservicesaccordingtotheproportionoftheoccurredcostoftheestimatedtotalcost.Thetotalamountoftherevenuefromprovidingservicesshouldberecognizedaccordingtothecontractpricereceivedorreceivablefromtheacceptingofthelaborservicesortheagreementpriceexceptforthoseunfairprices.

(3)Recognitionoftherevenuefromtransferringuserightsofassets:Whentherelevanteconomicbenefitsarelikelytoflowintotheenterprisesandtheamountofrevenuescanbemeasuredinareliableway,therevenuefromabalienatingtherighttouseassetsshallberecognized.Theamountofinterestrevenueshouldbemeasuredandconfirmedinaccordancewiththelengthoftimeforwhichtheenterprise'scashisusedbyothersandtheactualinterestrate;theamountofroyaltyrevenueshouldbemeasuredandconfirmedinaccordancewiththeperiodandmethodofchargingasstipulatedintherelevantcontractoragreement;asfortherentalrevenue:theamountoftherentalrevenuefromtheoperationleaseshouldberecognizedaccordingtothestraight-linemethodduringeachperiodoftheleasetermoraccruedintothecurrentgainsandlossesifrentalactualoccurred.

26.GovernmentSubsidies

(1)TypeAgovernmentsubsidymeansthemonetaryornon-monetaryassetsobtainedfreebyanenterprisefromthegovernment.Governmentsubsidiesconsistofthegovernmentsubsidiespertinenttoassetsandgovernmentsubsidiespertinenttoincomeaccordingtotherelevantgovernmentdocuments.Forthosethegovernmentdocumentsnotdefinitestipulatetheassistanceobject,thejudgmentbasisoftheCompanyclassifiesthegovernmentsubsidiespertinenttoassetsandgovernmentsubsidiespertinenttoincomeis:

whetherareusedforpurchasingorconstructingorforformingthelong-termassetsbyothermethods.

(2)RecognitionofGovernmentSubsidiesThegovernmentsubsidiesshouldberecognizedonlywhenmeetwiththeattachedconditionsofthegovernmentsubsidiesaswellascouldbeacquired.Ifthegovernmentsubsidiesarethemonetaryassets,shouldbemeasuredaccordingtothereceivedorreceivableamount;andforthegovernmentsubsidiesarethenon-monetaryassets,shouldbemeasuredbyfairvalue.

(3)AccountingTreatmentThegovernmentsubsidiespertinenttoassetsshallberecognizedasdeferredincome,andincludedinthecurrentgainsandlossesoroffsetthebookvalueofrelatedassetswithintheusefullivesoftherelevantassetswithareasonableandsystematicmethod.Governmentsubsidiespertinenttoincomeusedtocompensatetherelevantcosts,expensesorlossesoftheCompanyinthesubsequentperiodshallberecognizedasdeferredincome,andshallbeincludedinthecurrentprofitandlossduringtheperiodofconfirmingtherelevantcosts,expensesorlosses;thoseusedtocompensatetherelevantcosts,expensesorlossesoftheCompanyalreadyhappenedshallbeincludedinthecurrentgainsandlossesorusedtooffsetrelevantcostsdirectly.Forgovernmentsubsidiesthatincludebothassets-relatedandincome-relatedparts,theyshouldbedistinguishedseparatelyforaccountingtreatment;forgovernmentsubsidiesthataredifficulttobedistinguished,theyshouldbeclassifiedasincome-related.GovernmentsubsidiesrelatedtothedailyactivitiesoftheCompanyshallbeincludedintootherincomeorusedtooffsetrelevantcostsbythenatureofeconomicbusiness;thoseunrelatedshallbeincludedintonon-operatingincome.Thegovernmentsubsidiesrecognizedwithrelevantdeferredincomebalancebutneedtoreturnshallbeusedtooffsetthebookbalanceofrelevantdeferredincome,theexcessivepartshallbeincludedinthecurrentgainsandlossesoradjustingthebookvalueofassetsforthegovernmentsubsidiesassets-relatedthatoffsetthebookvalueofrelevantassetswhentheyareinitiallyrecognized;thosebelongtoothercasesshallbedirectlyincludedinthecurrentgainsandlosses.

27.DeferredIncomeTaxAssets/DeferredIncomeTaxLiabilities

(1)BasisofrecognizingthedeferredincometaxassetsAccordingtothedifferencebetweenthebookvalueoftheassetsandliabilitiesandtheirtaxbasis,Adeferredtaxassetsshallbemeasuredinaccordwiththetaxratesthatareexpectedtoapplytotheperiodwhentheassetisrealizedortheliabilityissettled.TherecognitionofthedeferredincometaxassetsislimitedbytheincometaxpayablethattheCompanyprobablygainsfordeductingthedeductibletemporarydifferences.Atthebalancesheetdate,wherethereisstrongevidenceshowingthatsufficienttaxableprofitwillbeavailableagainstwhichthedeductibletemporarydifferencecanbeutilized,thedeferredtaxassetunrecognizedinpriorperiodshallberecognized.TheCompanyassessesthecarryingamountofdeferredtaxassetatthebalancesheetdate.Ifit’sprobablethatsufficienttaxableprofitwillnotbeavailableagainstwhichthedeductibletemporarydifferencecanbeutilized,theCompanyshallwritedownthecarryingamountofdeferredtaxasset,orreversetheamountwrittendownlaterwhenit’sprobablethatsufficienttaxableprofitwillbeavailable.

(2)BasisofrecognizingthedeferredincometaxliabilitiesAccordingtothedifferencebetweenthebookvalueoftheassetsandliabilitiesandtheirtaxbasis,Adeferredtaxliabilitiesshallbemeasuredinaccordwiththetaxratesthatareexpectedtoapplytotheperiodwhentheassetisrealizedortheliabilityissettled.

28.Lease

(1)AccountingTreatmentofOperatingLeaseLesseeinanoperatingleaseshalltreattheleasepaymentunderanoperatingleaseasarelevantassetcostorthecurrentprofitorlossonastraight-linebasisovertheleaseterm.Theinitialdirectcostsincurredshallbe

recognizedasthecurrentprofitorloss;Contingentrentsshallbechargedasexpensesintheperiodsinwhichtheyareincurred.Lessorsinanoperatingleaseshallberecognizedasthecurrentprofitorlossonastraight-linebasisovertheleaseterm;Initialdirectcostsincurredbylessorsshallberecognizedasthecurrentprofitorloss;theinitialdirectexpensesoccurshouldbedirectlyincludedinthecurrentgainsandlossesexceptforthosewithlargeramountandbecapitalizedaswellasbeincludedinthegainsandlossesbystages.Contingentrentsshallbechargedasexpensesintheperiodsinwhichtheyareincurred.

(2)AccountingTreatmentsofFinancialLeaseWhentheCompanyasthelessee,Ontheleasebeginningdate,theCompanyshallrecordtheloweroneofthefairvalueoftheleasedassetandthepresentvalueoftheminimumleasepaymentsontheleasebeginningdateastheenteringvalueinanaccount,recognizetheamountoftheminimumleasepaymentsastheenteringvalueinanaccountoflong-termaccountpayable,andtreatthebalancebetweentherecordedamountoftheleasedassetandthelong-termaccountpayableasunrecognizedfinancingchargesandtheoccurredinitialdirectexpenses,shouldberecordedintheleaseassetsvalue.Duringeachleaseperiod,shouldrecognizethecurrentfinancingexpensesbyadoptingtheactualinterestrate.WhentheCompanyastheleasorandonthebeginningdateoftheleaseterm,theCompanyshallrecognizethesumoftheminimumleasereceiptsontheleasebeginningdateandtheinitialdirectcostsastheenteringvalueinanaccountofthefinancingleasevaluesreceivable,andrecordtheunguaranteedresidualvalueatthesametime.Thebalancebetweenthesumoftheminimumleasereceipts,theinitialdirectcostsandtheunguaranteedresidualvalueandthesumoftheirpresentvaluesshallberecognizedasunrealizedfinancingincome.Duringeachleaseperiod,shouldrecognizethecurrentfinancingrevenuesadoptingtheactualinterestrate.

29.OtherSignificantAccountingPoliciesandEstimates

(1)OperationterminationOperationterminationreferstothecomposepartthatmeetwithoneofthefollowingconditionswhichhadbeendisposedbytheGrouporbeclassifiedtoheld-to-soldaswellascouldbeindividuallydistinguishedinoperatingandcompilingthefinancialstatement:

1)Thecomposepartrepresentsanindividualmainbusinessoramainoperationarea;

2)Thecomposepartisapartintendstodisposeandplananindividualmainbusinessoramainoperationarea;

3)Thecomposepartisasubsidiarywhichbeacquiredonlyforresold.

(2)HedgingaccountingTheterm“hedging”referstooneormorehedginginstrumentswhicharedesignatedbyanenterpriseforavoidingtherisksofforeignexchange,interestrate,commodityprice,stockprice,creditandetc.,andwhichisexpectedtomakethechangesinfairvalueorcashflowofhedginginstrument(s)tooffsetallorpartofthechangesinthefairvalueorcashflowofthehedgeditem.Theterm“hedginginstrument”shallrefertoaderivativeinstrumentwhichisdesignatedbyanenterpriseforhedgingandbywhichitisexpectedthatchangesinitsfairvalueorcashflowcanoffsetthechangesinfairvalueorcashflowofthehedgeditem.Forahedgingofforeignexchangerisk,anon-derivativefinancialassetornon-derivativefinancialliabilitymaybeusedasahedginginstrument.The“hedgeditem”shallrefertothefollowingitemswhichmakeanenterprisefacedtochangesinfairvalueorcashflowandaredesignatedasthehedgedobjectives.

Thehedgingshouldbeexecutedbythehedgingaccountingmethodswhensatisfyingthefollowingconditionsatthesametime:

1)Atthecommencementofthehedging,theenterpriseshallspecifythehedgingrelationshipformally(namelytherelationshipbetweenthehedginginstrumentandthehedgeditem)andprepareaformalwrittendocumentonthehedgingrelationship,riskmanagementobjectivesandthestrategiesofhedging.

2)Thehedgingexpectationishighlyefficientandmeetstheriskmanagementstrategy,whichisconfirmedforthehedgingrelationshipbyenterpriseattheverybeginning.

3)Foracashflowhedgingofforecasttransaction,theforecasttransactionshallbelikelytooccurandshallmaketheenterprisefacedtotheriskofchangesincashflow,whichwillultimatelyaffecttheprofitsandlosses.

4)Theeffectivenessofhedgingcanbereliablymeasured.

5)Thehedgingishighlyeffectiveinaccountingperiodinwhichthehedgingrelationshipisspecified.

30.ChangesinMainAccountingPoliciesandEstimates

(1)ChangeofAccountingPolicies

√Applicable□Notapplicable

ChangestotheaccountingpoliciesandwhyApprovalprocessRemark
TheNoticeonRevisingandIssuingtheFormatsof2019FinancialStatementsforGeneralEnterprisesissuedbytheMinistryofFinanceon30April2019requiresthecompanieswhichhaveimplementedthenewstandardsgoverningfinancialinstrumentsbutnotthenewstandardsgoverningrevenueandleaseorcompanieswhichhaveimplementedthenewstandardsgoverningfinancialinstrumentsandrevenuebutnotthenewstandardsgoverningleasetoadjustitemsoffinancialstatementsinlinewithrequirementsinAppendix1andAppendix2ofthisNotice.On27August2019,theCompanyheldthe20thMeetingofthe8thBoardofDirectorsandthe16thMeetingofthe8thSupervisoryCommitteeandapprovedtheProposalonChangesofSomeAccountingPoliciesReferto(1)ofothernotesfordetails
TheCompanystartstoimplementtheAccountingStandardsforBusinessEnterprisesNo.22-RecognitionandMeasurementofFinancialInstruments,AccountingStandardsforBusinessEnterprisesNo.23-TransferofFinancialAssets,AccountingStandardsforBusinessEnterprisesNo.24-HedgeAccountingandAccountingStandardsforBusinessEnterprisesNo.37-PresentationofFinancialInstruments,whichrevisedandissuedbytheMinistryofFinanceinMarch2017andhereinaftercollectivelyreferredtoasnewstandardsgoverningfinancialinstrumentssince1January2019whichstipulatethatthecompanyshallclassifyandmeasurefinancialinstrumentsinaccordancewithregulationsontheexecutiondate,whenthedataofcomparativeOn9April2019,theCompanyheldthe17thMeetingofthe8thBoardofDirectorsand13thMeetingofthe8thSupervisoryCommitteeandapprovedtheProposalonChangesinSomeAccountingPoliciesReferto(2)ofothernotesfordetails

Othernotes:

(1)InfluenceofChangesinFormatsofFinancialstatementsAffecteditemsintheconsolidatedbalancesheetandamountthereof:

financialstatementsofprioryearsdonotcomplywiththenewstandards,noadjustmentismadebytheCompany.

31December2018

31December20181January2019
Notesreceivableandaccountsreceivable874,229,941.58Notesreceivable495,370,782.47
Accountsreceivable378,859,159.11
Notespayableandaccountspayable1,030,130,275.77Notespayable438,375,400.00
Accountspayable591,754,875.77

AffecteditemsinthebalancesheetoftheCompanyastheparentandamountthereof:

31December20181January2019
Notesreceivableandaccountsreceivable790,877,079.72Notesreceivable490,519,795.91
Accountsreceivable300,357,283.81
Notespayableandaccountspayable987,550,797.44Notespayable425,995,400.00
Accountspayable561,555,397.44

(2)InfluenceofExecutionofNewStandardsGoverningFinancialInstrumentsAffecteditemsintheconsolidatedbalancesheetandamountthereof:

Item31December2018Affectedamount1January2019
AffectedbyclassificationandmeasurementAffectedbyimpairmentoffinancialassets
Available-for-salefinancialassets498,851,369.49-498,851,369.49
Otherinvestmentsinequityinstruments498,851,369.49498,851,369.49

AffecteditemsinthebalancesheetoftheCompanyastheparentandamountthereof:

Item31December2018Affectedamount1January2019
AffectedbyclassificationandmeasurementAffectedbyimpairmentoffinancialassets
Available-for-salefinancialassets470,940,000.00-470,940,000.00
Otherinvestmentsinequityinstruments470,940,000.00470,940,000.00

(2)ChangesinAccountingEstimates

□Applicable√Notapplicable

(3)AdjustmentstotheFinancialStatementsattheBeginningoftheFirstExecutionYearofanyNewStandardsGoverningFinancialInstruments,RevenueorLeases

√Applicable□NotapplicableConsolidatedBalanceSheet

Unit:RMB

Item31December20181January2019Adjusted
Currentassets:
Monetarycapital800,960,036.69800,960,036.69
Settlementreserve
Interbankloansgranted
Tradingfinancialassets
Financialassetsatfairvaluethroughprofitorloss
Derivativefinancialassets
Notesreceivable495,370,782.47495,370,782.47
Accountsreceivable378,859,159.11378,859,159.11
Financingbackedbyaccountsreceivable
Prepayments11,352,297.1011,352,297.10
Premiumsreceivable
Reinsurancereceivables
Receivablereinsurancecontractreserve
Otherreceivables9,244,584.429,244,584.42
Including:Interestreceivable
Dividendsreceivable
Financialassetspurchasedunderresaleagreements
Inventories557,953,891.70557,953,891.70
Contractassets
Assetsclassifiedasheldforsale
Currentportionofnon-currentassets
Othercurrentassets34,357,608.9734,357,608.97
Totalcurrentassets2,288,098,360.462,288,098,360.46
Non-currentassets:
Loansandadvancestocustomers
Investmentsindebtobligations
Available-for-salefinancialassets498,851,369.49-498,851,369.49
Investmentsinotherdebtobligations
Held-to-maturityinvestments
Long-termreceivables
Long-termequityinvestments
Investmentsinotherequityinstruments498,851,369.49498,851,369.49
Othernon-currentfinancialassets
Investmentproperty
Fixedassets50,656,007.6350,656,007.63
Constructioninprogress511,250,371.37511,250,371.37
Productivelivingassets89,090,384.7189,090,384.71
Oilandgasassets
Right-of-useassets
Intangibleassets103,092,879.38103,092,879.38
R&Dexpense
Goodwill
Long-termprepaidexpense
Deferredincometaxassets979,822.71979,822.71
Othernon-currentassets
Totalnon-currentassets1,253,920,835.291,253,920,835.29
Totalassets3,542,019,195.753,542,019,195.75
Currentliabilities:
Short-termborrowings27,000,000.0027,000,000.00
Borrowingsfromcentralbank
Interbankloansobtained
Tradingfinancialliabilities
Financialliabilitiesatfairvaluethroughprofitorloss
Derivativefinancialliabilities
Notespayable438,375,400.00438,375,400.00
Accountspayable591,754,875.77591,754,875.77
Advancesfromcustomers34,500,232.9734,500,232.97
Financialassetssoldunderrepurchaseagreements
Customerdepositsandinterbankdeposits
Payablesforactingtradingofsecurities
Payablesforunderwritingofsecurities
Payrollpayable50,500,592.9950,500,592.99
Taxespayable7,066,085.897,066,085.89
Otherpayables199,412,250.90199,412,250.90
Including:Interestpayable
Dividendspayable3,891,433.833,891,433.83
Handlingchargesandcommissionspayable
Reinsurancepayables
Contractliabilities
Liabilitiesdirectlyassociatedwithassetsclassifiedasheldforsale
Currentportionofnon-currentliabilities18,500,000.0018,500,000.00
Othercurrentliabilities2,082,985.182,082,985.18
Totalcurrentliabilities1,369,192,423.701,369,192,423.70
Non-currentliabilities:
Insurancecontractreserve
Long-termborrowings2,000,000.002,000,000.00
Bondspayable
Including:Preferredshares
Perpetualbonds
Leaseliabilities
Long-termpayables
Long-termpayrollpayable
Provisions
Deferredincome59,928,484.8459,928,484.84
Deferredincometaxliabilities47,971,780.3647,971,780.36
Othernon-currentliabilities
Totalnon-currentliabilities109,900,265.20109,900,265.20
Totalliabilities1,479,092,688.901,479,092,688.90
Owners’equity:
Sharecapital561,374,326.00561,374,326.00
Otherequityinstruments
Including:Preferredshares
Perpetualbonds
Capitalreserves164,328,665.43164,328,665.43
Less:Treasurystock
Othercomprehensiveincome264,405,675.00264,405,675.00
Specificreserve15,182,958.8315,182,958.83
Surplusreserves320,133,050.15320,133,050.15
Generalreserve
Retainedearnings717,883,351.33717,883,351.33
TotalequityattributabletoownersoftheCompanyastheparent2,043,308,026.742,043,308,026.74
Non-controllinginterests19,618,480.1119,618,480.11
Totalowners’equity2,062,926,506.852,062,926,506.85
Totalliabilitiesandowners’equity3,542,019,195.753,542,019,195.75

NoteforadjustmentBalanceSheetoftheCompanyastheParent

Unit:RMB

Item31December20181January2019Adjusted
Currentassets:
Monetarycapital759,404,219.72759,404,219.72
Tradingfinancialassets
Financialassetsatfairvaluethroughprofitorloss
Derivativefinancialassets
Notesreceivable490,519,795.91490,519,795.91
Accountsreceivable300,357,283.81300,357,283.81
Financingsbackedbyaccountsreceivable
Prepayments4,768,038.114,768,038.11
Otherreceivables21,681,331.8521,681,331.85
Including:Interestreceivable
Dividendsreceivable
Inventories437,423,195.46437,423,195.46
Contractassets
Assetsclassifiedasheldforsale
Currentportionofnon-currentassets
Othercurrentassets23,099,858.6723,099,858.67
Totalcurrentassets2,037,253,723.532,037,253,723.53
Non-currentassets:
Investmentsindebtobligations
Available-for-salefinancialassets470,940,000.00-470,940,000.00
Investmentsinotherdebtobligations
Held-to-maturityinvestments
Long-termreceivables
Long-termequityinvestments241,752,730.03241,752,730.03
Investmentsinotherequityinstruments470,940,000.00470,940,000.00
Othernon-currentfinancialassets
Investmentproperty50,656,007.6350,656,007.63
Fixedassets413,186,680.19413,186,680.19
Constructioninprogress87,007,215.9187,007,215.91
Productivelivingassets
Oilandgasassets
Right-of-useassets
Intangibleassets72,184,608.6372,184,608.63
R&Dexpense
Goodwill
Long-termprepaidexpense
Deferredincometaxassets930,641.19930,641.19
Othernon-currentassets
Totalnon-currentassets1,336,657,883.581,336,657,883.58
Totalassets3,373,911,607.113,373,911,607.11
Currentliabilities:
Short-termborrowings10,000,000.0010,000,000.00
Tradingfinancialliabilities
Financialliabilitiesatfairvaluethroughprofitorloss
Derivativefinancialliabilities
Notespayable425,995,400.00425,995,400.00
Accountspayable561,555,397.44561,555,397.44
Advancesfromcustomers32,072,387.5532,072,387.55
Contractliabilities
Payrollpayable43,597,759.2243,597,759.22
Taxespayable2,443,767.892,443,767.89
Otherpayables185,022,961.56185,022,961.56
Including:Interestpayable
Dividendspayable3,243,179.973,243,179.97
Liabilitiesdirectlyassociatedwithassetsclassifiedasheldforsale
Currentportionofnon-currentliabilities18,500,000.0018,500,000.00
Othercurrentliabilities
Totalcurrentliabilities1,279,187,673.661,279,187,673.66
Non-currentliabilities:
Long-termborrowings
Bondspayable
Including:Preferredshares
Perpetualbonds
Leaseliabilities
Long-termpayables
Long-termpayrollpayable
Provisions
Deferredincome59,928,484.8459,928,484.84
Deferredincometaxliabilities46,659,825.0046,659,825.00
Othernon-currentliabilities
Totalnon-currentliabilities106,588,309.84106,588,309.84
Totalliabilities1,385,775,983.501,385,775,983.50
Owners’equity:
Sharecapital561,374,326.00561,374,326.00
Otherequityinstruments
Including:Preferredshares
Perpetualbonds
Capitalreserves183,071,147.70183,071,147.70
Less:Treasurystock
Othercomprehensiveincome264,405,675.00264,405,675.00
Specificreserve15,182,958.8315,182,958.83
Surplusreserves320,133,050.15320,133,050.15
Retainedearnings643,968,465.93643,968,465.93
Totalowners’equity1,988,135,623.611,988,135,623.61
Totalliabilitiesandowners’equity3,373,911,607.113,373,911,607.11

Noteforadjustment

(4)RetroactiveAdjustmentstoComparativeDataofPriorYearswhenFirstExecutionofanyNewStandardsGoverningFinancialInstrumentsorLeases

□Applicable√NotapplicableVI.Taxation

1.MainTaxesandTaxRate

CategoryoftaxesTaxbasisTaxrate
VATPayabletosalesrevenue17%,16%,13%,11%,10%,6%
UrbanmaintenanceandconstructiontaxTaxableturnoveramountTaxpaidinaccordancewiththetaxregulationsoftaxunitslocation
EnterpriseincometaxTaxableincome25%or15%or5%
EducationsurchargeTaxableturnoveramount5%

Notesofthedisclosuresituationofthetaxpayingbodieswithdifferententerprisesincometaxrate

NameIncometaxrate
ChangzhouHoushengInvestmentCo.,Ltd.5%
ChangchaiCo.,Ltd.15%
ChangchaiWanzhouDieselEngineCo.,Ltd.15%
ChangzhouChangchaiBenniuDieselEngineFittingsCo.,Ltd.25%
ChangzhouChangchaiHoushengAgriculturalEquipmentCo.,Ltd.25%
ChangzhouFujiChangchaiRobinGasolineEngineCo.,Ltd.25%
JiangsuChangchaiMachineryCo.,Ltd.25%

2.TaxPreferenceIn2018,theCompanyhasbeenidentifiedasHigh-techEnterprises,therefore,itenjoys15-percentpreferentialrateforcorporateincometax;theCompany’scontrollingsubsidiary—ChangchaiWanzhouDieselEngineCo.,Ltd.,thecontrollingsubsidiarycompany,shallpaythecorporateincometaxattaxrate15%from1January2011to31December2020inaccordancewiththeNoticeoftheMinistryofFinance,theGeneralAdministrationofCustomsofPRCandtheNationalAdministrationofTaxationaboutthePreferentialTaxPoliciesfortheWesternDevelopment.Changzhouhoushenginvestmentco.,LTD.,aholdingsubsidiary,willcollectenterpriseincometaxatareducedrateof5%fromJanuary1,2019solsticeonDecember31,2021accordingtothenoticeofimplementingthepreferentialtaxreductionandexemptionpolicyforsmallandmicroenterprisesissuedbytheministryoffinanceandthestateadministrationoftaxation.

3.OtherVII.NotestoMajorItemsintheConsolidatedFinancialStatementsoftheCompany

1.MonetaryCapital

Unit:RMB

ItemEndingbalanceBeginningbalance
Cashonhand401,268.09441,363.70
Bankdeposits493,219,001.11684,620,907.41
Othermonetarycapital134,862,508.92115,897,765.58
Total628,482,778.12800,960,036.69

AttheendofReportingPeriod,themonetaryfundoftheCompanyusedrestrictedlywasRMB134,862,508.92,amongwhichcashdepositofbankacceptancebillwasRMB134,862,508.92.

2.NotesReceivable

(1)NotesReceivableListedbyCategory

Unit:RMB

ItemEndingbalanceBeginningbalance
Bankacceptancebill445,812,473.66495,370,782.47
Total445,812,473.66495,370,782.47

Pleaserefertotherelevantinformationofdisclosureofbaddebtprovisionofotheraccountsreceivableifadoptingthegeneralmodeofexpectedcreditlosstowithdrawbaddebtprovisionofnotesreceivable.

□Applicable√Notapplicable

(2)NotesReceivablewhichHadEndorsedbytheCompanyorhadDiscountedandhadnotDueontheBalanceSheetDateatthePeriod-end

Unit:RMB

ItemAmountofrecognitionterminationattheperiod-endAmountofnotterminatedrecognitionattheperiod-end
Bankacceptancebill412,187,005.64
Total412,187,005.64

3.AccountsReceivable

(1)AccountsReceivableDisclosedbyCategory

Unit:RMB

CategoryEndingbalanceBeginningbalance
CarryingamountBaddebtprovisionCarryingvalueCarryingamountBaddebtprovisionCarryingvalue
AmountProportionAmountWithdrawalproportionAmountProportionAmountWithdrawalproportion
Accountsreceivableforwhichbaddebtprovisionseparatelyaccrued31,080,167.943.12%30,192,731.5297.14%887,436.4232,020,727.535.13%31,133,291.1197.23%887,436.42
Ofwhich:
Accountsreceivablewithsignificantsingleamountforwhichbaddebtprovisionseparatelyaccrued28,205,070.582.83%27,317,634.1696.85%887,436.4228,205,070.584.52%27,317,634.1696.85%887,436.42
Accountsreceivablewithinsignificantsingleamountforwhichbaddebtprovisionseparatelyaccrued2,875,097.360.29%2,875,097.36100.00%0.003,815,656.950.61%3,815,656.95100.00%0.00
Accountsreceivablewithdrawalofbaddebtprovisionbygroup965,983,824.5496.88%223,598,580.6823.15%742,385,243.86591,489,450.6694.87%213,517,727.9736.10%377,971,722.69
Ofwhich:
Total997,063,992.48100.00%253,791,312.2025.45%743,272,680.28623,510,178.19100.00%244,651,019.0839.24%378,859,159.11

Accountsreceivableforwhichbaddebtprovisionseparatelyaccrued:

Unit:RMB

NameEndingbalance
CarryingamountBaddebtprovisionWithdrawalproportionReasonforwithdrawal
Customer11,902,326.581,902,326.58100.00%Difficulttorecover
Customer21,161,700.00580,850.0050.00%Expectedtodifficultlyrecover
Customer36,215,662.646,215,662.64100.00%Difficulttorecover
Customer42,484,497.342,177,910.9287.66%Expectedtodifficultlyrecover
Customer53,279,100.003,279,100.00100.00%Expectedtodifficultlyrecover
Customer62,068,377.012,068,377.01100.00%Expectedtodifficultlyrecover
Customer75,359,381.005,359,381.00100.00%Difficulttorecover
Customer82,584,805.832,584,805.83100.00%Difficulttorecover
Customer91,679,109.541,679,109.54100.00%Difficulttorecover
Customer101,470,110.641,470,110.64100.00%Expectedtodifficultlyrecover
Other2,875,097.362,875,097.36100.00%Expectedtodifficultlyrecover
Total31,080,167.9430,192,731.52----

Accountsreceivablewithdrawalofbaddebtprovisionbygroup:

Unit:RMB

AgingEndingbalance
CarryingamountBaddebtprovisionWithdrawalproportion
Subtotalofwithin1year721,064,680.6814,421,293.612.00%
1to2years25,520,630.471,276,031.525.00%
2to3years9,204,859.371,380,728.9115.00%
3to4years4,527,490.281,358,247.0830.00%
4to5years1,259,710.47755,826.2860.00%
Over5years204,406,453.27204,406,453.27100.00%
Total965,983,824.54223,598,580.68--

Notesofthebasisofrecognizingthegroup:

Pleaserefertotherelevantinformationofdisclosureofbaddebtprovisionofotheraccountsreceivableifadoptingthegeneralmodeofexpectedcreditlosstowithdrawbaddebtprovisionofaccountsreceivable.

□Applicable√NotapplicableDisclosurebyaging

Unit:RMB

AgingEndingbalance
Within1year(including1year)721,064,680.68
1to2years25,520,630.47
2to3years9,204,859.37
Over3years241,273,821.96
3to4years4,527,490.28
4to5years2,421,410.47
Over5years234,324,921.21
Total997,063,992.48

(2)BadDebtProvisionWithdrawn,ReversedorRecoveredintheReportingPeriodInformationofwithdrawalofbaddebtprovision:

Unit:RMB

ItemBeginningbalanceChangesintheReportingPeriodEndingbalance
WithdrawalReversalorrecoveryWrite-off
Baddebtprovision244,651,019.089,140,293.12253,791,312.20
Total244,651,019.089,140,293.12253,791,312.20

(3)Top5oftheEndingBalanceoftheAccountsReceivableCollectedaccordingtotheArrearsPartyAttheperiod-end,thetotaltop5oftheendingbalanceoftheaccountsreceivablecollectedaccordingtothearrearspartywasRMB506,859,995.98accountingfor51.05%ofthetotalendingbalanceofaccountsreceivable.AndtheendingbalanceofbaddebtprovisionwithdrawnwasRMB10,137,199.92.

4.Prepayments

(1)ListbyAgingAnalysis

Unit:RMB

AgingEndingbalanceBeginningbalance
AmountProportionAmountProportion
Within1year7,211,398.1976.08%9,535,876.4084.01%
1to2years642,569.546.78%437,529.703.85%
2to3years256,574.652.71%57,536.240.51%
Over3years1,368,524.6814.44%1,321,354.7611.63%
Total9,479,067.06--11,352,297.10--

(2)Top5oftheEndingBalanceofthePrepaymentsCollectedaccordingtothePrepaymentTargetAttheperiod-end,thetotaltop5oftheendingbalanceoftheprepaymentscollectedaccordingtotheprepaymenttargetwasRMB2,155,392.45accountingfor22.74%ofthetotalendingbalanceofprepayments.

5.OtherReceivables

Unit:RMB

ItemEndingbalanceBeginningbalance
Interestreceivable0.00
Dividendreceivable0.00
Otherreceivables10,675,479.559,244,584.42
Total10,675,479.559,244,584.42

(1)Otherreceivables

1)OtherReceivablesClassifiedbyAccountsNature

Unit:RMB

NatureEndingcarryingvalueBeginningcarryingvalue
Marginandcashpledge4,200.004,200.00
Intercoursefunds26,523,461.4025,451,250.34
Pettycashandborrowingsbyemployees1,392,153.091,232,153.09
Other15,865,412.5215,546,601.57
Total43,785,227.0142,234,205.00

2)WithdrawalofBadDebtProvision

□Applicable√NotapplicableDisclosurebyaging

Unit:RMB

AgingEndingbalance
Within1year(including1year)8,679,465.27
1to2years1,854,683.70
2to3years320,558.17
Over3years32,930,519.87
3to4years152,883.41
4to5years70,403.10
Over5years32,707,233.36
Total43,785,227.01

3)BadDebtProvisionWithdrawn,ReversedorRecoveredintheReportingPeriodInformationofwithdrawalofbaddebtprovision:

Unit:RMB

CategoryBeginningbalanceChangesintheReportingPeriodEndingbalance
WithdrawalReversalorrecovery
Otherreceivables32,989,620.58120,126.8833,109,747.46
Total32,989,620.58120,126.8833,109,747.46

4)Top5oftheEndingBalanceoftheOtherReceivablesCollectedaccordingtotheArrearsParty

Unit:RMB

NameoftheentityNatureEndingbalanceAgingProportiontoendingbalanceofotherreceivables%Endingbalanceofbaddebtprovision
ChangzhouChangjiangCastingMaterialsCo.,Ltd.Intercoursefunds5,000,000.00Within1year11.42%100,000.00
ChangzhouCompressorsFactoryIntercoursefunds2,940,000.00Over5years6.71%2,940,000.00
ChangchaiGroupImp.&Exp.Co.,Ltd.Intercoursefunds2,853,188.02Over5years6.52%2,853,188.02
ChangzhouNewDistrictAccountingCentreIntercoursefunds1,626,483.25Over5years3.71%1,626,483.25
ChangzhouGroupSettlementCentreIntercoursefunds1,140,722.16Over5years2.61%1,140,722.16
Total--13,560,393.43--30.97%8,660,393.43

6.InventoryWhethertheCompanyhasexecutedthenewincomestandards

√Yes□No

(1)CategoryofInventory

Unit:RMB

ItemEndingbalanceBeginningbalance
CarryingamountFallingpricereservesofinventoryorCarryingvalueCarryingamountFallingpricereservesofinventoryorCarryingvalue
depreciationreservesofcontractperformancecostdepreciationreservesofcontractperformancecost
Rawmaterials85,753,215.705,761,479.7779,991,735.93134,454,498.935,845,504.24128,608,994.69
Goodsinprocess150,248,131.4124,091,709.62126,156,421.79166,798,553.3424,187,100.54142,611,452.80
Materialsprocessedoncommission12,093,880.811,075,756.4311,018,124.3813,330,233.29993,300.1812,336,933.11
Finishedgoods277,626,321.8516,116,367.39261,509,954.46288,979,920.4616,035,855.03272,944,065.43
Lowpricedandeasilywornarticles3,654,121.302,222,808.741,431,312.563,632,711.202,180,265.531,452,445.67
Total529,375,671.0749,268,121.95480,107,549.12607,195,917.2249,242,025.52557,953,891.70

WhethertheCompanyneedstocomplywiththedisclosurerequirementsofShenzhenStockExchangeIndustryInformationDisclosureGuidelinesNo.4-ListedcompaniesengagedinseedindustryandplantingbusinessNo

(2)FallingPriceReservesofInventoriesandDepreciationReservesofContractPerformanceCost

Unit:RMB

ItemBeginningbalanceIncreaseDecreaseEndingbalance
WithdrawalOtherReverseorwrite-offOther
Rawmaterials5,845,504.240.000.0084,024.470.005,761,479.77
Goodsinprocess24,187,100.540.000.0095,390.920.0024,091,709.62
Materialsprocessedoncommission993,300.1882,456.250.000.000.001,075,756.43
Finishedgoods16,035,855.0380,512.360.000.000.0016,116,367.39
Lowpricedandeasilywornarticles2,180,265.5342,543.210.000.000.002,222,808.74
Total49,242,025.52205,511.820.00179,415.390.0049,268,121.95

7.OtherCurrentAssetsWhethertheCompanyhasexecutedthenewincomestandards

√Yes□No

Unit:RMB

ItemEndingbalanceBeginningbalance
TheVATtaxcredits6,768,809.6825,962,369.29
Bankfinancialproducts0.000.00
Prepaidexpense87,542.2186,761.81
Securitiescompanyfinancialproduct9,500,000.008,253,873.41
Other12,457.7954,604.46
Total16,368,809.6834,357,608.97

8.Long-termEquityInvestment

Unit:RMB

InvesteesBeginningbalance(carryingvalue)Increase/decreaseEndingbalance(carryingvalue)Endingbalanceofdepreciationreserves
AdditionalinvestmentReducedinvestmentGainorlossrecognizedundertheequitymethodAdjustmentofothercomprehensiveincomeChangesinotherequityCashbonusorprofitannouncedtoissueWithdrawalofdepreciationreservesOther
I.Jointventures
II.Associatedenterprises
BeijingTsinghuaIndustrialInvestmentManagementCo.,44,182.500.000.000.000.000.000.000.000.0044,182.5044,182.50
Ltd.
Subtotal44,182.500.000.000.000.000.000.000.000.0044,182.5044,182.50
Total44,182.500.000.000.000.000.000.000.000.0044,182.5044,182.50

9.OtherEquityInstrumentInvestment

Unit:RMB

ItemEndingbalanceBeginningbalance
FotonAutomobile342,465,000.00262,990,000.00
BankofJiangsu130,680,000.00107,460,000.00
JiangsuExpresswayCo.,Ltd.537,000.00490,000.00
JiangsuLianceElectromechanicalTechnologyCo.,Ltd.7,200,000.007,200,000.00
ChangzhouSynergeticInnovationPrivateEquityFund(LimitedPartnership)100,000,000.00100,000,000.00
KailongHighTechnologyCo.,Ltd.20,001,268.0020,001,268.00
GuizhouWarmenPharmaceuticalCo,Ltd.200,104.80200,104.80
GuizhouAndaEnergyTechnologyCo.,Ltd.195,297.49195,297.49
HenanLantianGasCo.,Ltd.160,744.76160,744.76
AnhuiHofoElectromechanicalCo.,Ltd.138,441.76
HebeiSongheRecyclingResourcesCo.,Ltd.104,699.44104,699.44
HunanLitianHigh-techMaterialsCo.,Ltd.49,255.0049,255.00
Total601,731,811.25498,851,369.49

Non-tradingequityinstrumentinvestmentdisclosedbycategory

Unit:RMB

ItemDividendincomerecognizedAccumulativegainsAccumulativelossesAmountofothercomprehensivetransferredtoretainedearningsReasonforassigningtomeasurebyfairvalueofwhichchangesbeincludedtoothercomprehensiveincomeReasonforothercomprehensiveincometransferredtoretainedearnings
ChangzhouJudgedby
SynergeticInnovationPrivateEquityFund(LimitedPartnership)managementlayermeaningfully
JiangsuLianceElectromechanicalTechnologyCo.,Ltd.Judgedbymanagementlayermeaningfully
KailongHighTechnologyCo.,Ltd.Judgedbymanagementlayermeaningfully
FotonAutomobileJudgedbymanagementlayermeaningfully
BankofJiangsuJudgedbymanagementlayermeaningfully
JiangsuExpresswayCo.,Ltd.Judgedbymanagementlayermeaningfully

OnApril9,2019,thecompany'seighthseventeenboardmeetings,reviewedandadoptedthe"aboutthecompanyinvolvedinthefinancialassetsheldbythebusinessloanrefinancingbill,agreethatthecompanywill,nomorethan100millionsharesheldby"fukudacar"sharesand18millionsharesofstockbankinjiangsuprovincetoparticipateintorefinancesecuritieslendingtransactions.Attheendofthereportingperiod,thecompanystillhad280,000sharesoffotonmotorduringtheloanperiod.

10.InvestmentProperty

(1)InvestmentPropertyAdoptingtheCostMeasurementMode

√Applicable□Notapplicable

Unit:RMB

ItemHousesandLanduseConstructioninTotal
buildingsrightprogress
I.Originalcarryingvalue87,632,571.1487,632,571.14
1.Beginningbalance
2.Increasedamountoftheperiod
(1)Outsourcing
(2)Transferfrominventories/fixedassets/constructioninprogress
(3)Enterprisecombinationincrease
3.Decreasedamountoftheperiod
(1)Disposal
(2)Othertransfer
4.Endingbalance87,632,571.1487,632,571.14
II.Accumulativedepreciationandaccumulativeamortization
1.Beginningbalance36,976,563.5136,976,563.51
2.Increasedamountoftheperiod1,104,170.401,104,170.40
(1)Withdrawaloramortization1,104,170.401,104,170.40
3.Decreasedamountoftheperiod
(1)Disposal
(2)Othertransfer
4.Endingbalance38,080,733.9138,080,733.91
III.Depreciationreserves
1.Beginningbalance
2.Increasedamountoftheperiod
(1)Withdrawal
3.Decreasedamountoftheperiod
(1)Disposal
(2)Othertransfer
4.Endingbalance
IV.Carryingvalue
1.Endingcarryingvalue49,551,837.2349,551,837.23
2.Beginningcarryingvalue50,656,007.6350,656,007.63

(2)InvestmentPropertyAdoptedtheFairValueMeasurementCode

□Applicable√Notapplicable

11.FixedAssets

Unit:RMB

ItemEndingbalanceBeginningbalance
Fixedassets473,064,733.73511,250,371.37
Total473,064,733.73511,250,371.37

(1)ListofFixedAssets

Unit:RMB

ItemHousesandbuildingsMachineryequipmentTransportationequipmentOtherequipmentTotal
I.Originalcarryingvalue
1.Beginningbalance447,076,373.55936,110,914.9418,083,828.5344,422,389.461,445,693,506.48
2.Increasedamountoftheperiod
(1)Purchase
(2)Transferfromconstructioninprogress0.006,833,909.020.00172,389.137,006,298.15
(3)Enterprisecombinationincrease
3.Decreasedamountoftheperiod
(1)Disposalorscrap1,369,274.573,257,085.784,626,360.35
4.Endingbalance447,076,373.55941,575,549.3918,083,828.5341,337,692.811,448,073,444.28
II.Accumulativedepreciation
1.Beginningbalance265,778,832.18619,622,564.6413,341,638.0334,205,985.26932,949,020.11
2.Increasedamountoftheperiod8,608,066.5833,218,854.431,263,298.281,974,286.0045,064,505.29
(1)Withdrawal8,608,066.5833,218,854.431,263,298.281,974,286.0045,064,505.29
3.Decreasedamountoftheperiod0.001,242,002.260.003,256,927.594,498,929.85
(1)Disposalorscrap0.001,242,002.260.003,256,927.594,498,929.85
4.Endingbalance274,386,898.76651,599,416.8114,604,936.3132,923,343.67973,514,595.55
III.Depreciationreserves
1.Beginningbalance1,494,115.001,494,115.00
2.Increasedamountoftheperiod
(1)Withdrawal
3.Decreasedamountoftheperiod
(1)Disposalorscrap
4.Endingbalance1,494,115.001,494,115.00
IV.Carrying
value
1.Endingcarryingvalue172,689,474.79288,482,017.583,478,892.228,414,349.14473,064,733.73
2.Beginningcarryingvalue181,297,541.37314,994,235.304,742,190.5010,216,404.20511,250,371.37

12.ConstructioninProgress

Unit:RMB

ItemEndingbalanceBeginningbalance
Constructioninprogress80,277,379.0589,090,384.71
Total80,277,379.0589,090,384.71

(1)ListofConstructioninProgress

Unit:RMB

ItemEndingbalanceBeginningbalance
CarryingamountDepreciationreservesCarryingvalueCarryingamountDepreciationreservesCarryingvalue
Trialproductionworkshopprojecttechnologycenter14,349,461.8014,349,461.8014,349,461.8014,349,461.80
Castingrenovationproject396,000.00396,000.00396,000.00396,000.00
Expansioncapacityofmulti-cylinder(The2ndPeriod)11,375,531.7411,375,531.7411,371,098.2411,371,098.24
DieselEngineCylinderBody23,485,515.7023,485,515.7019,061,813.9519,061,813.95
FlexibleManufacturingLine
35KVSubstation1,402,649.071,402,649.071,321,959.411,321,959.41
Equipmenttobeinstalledandpaymentforprojects29,268,220.7429,268,220.7442,590,051.3142,590,051.31
Total80,277,379.0580,277,379.0589,090,384.7189,090,384.71

(2)ChangesinSignificantConstructioninProgressduringtheReportingPeriod

Unit:RMB

ItemBudgetBeginningbalanceIncreasedamountTransferredinfixedassetsOtherdecreasedamountEndingbalanceProportionofaccumulatedinvestmentinconstructionstobudgetJobscheduleAccumulatedamountofinterestcapitalizationOfwhich:AmountofcapitalizedinterestsfortheReportingPeriodCapitalizationrateofinterestsfortheReportingPeriodCapitalresources
Trialproductionworkshopprojecttechnology2,289.6314,349,461.800.000.000.0014,349,461.8062.67%Uncompleted0.000.000.00%Other
center
Expansioncapacityofmulti-cylinder(The2ndPeriod)7,019.0011,371,098.244,433.500.0011,375,531.7491.94%Uncompleted0.000.000.00%Other
DieselEngineCylinderBodyFlexibleManufacturingLine11,604.0019,061,813.954,423,701.750.000.0023,485,515.7043.40%Uncompleted0.000.000.00%Other
35KVSubstation1,321,959.4180,689.660.000.001,402,649.07Uncompleted0.000.000.00%Other
Total20,912.6346,104,333.404,508,824.910.000.0050,613,158.31----0.000.000.00%--

13.IntangibleAssets

(1)ListofIntangibleAssets

Unit:RMB

ItemLanduserightSoftwareLicensefeeTotal
I.Originalcarryingvalue
1.Beginningbalance144,770,507.8511,517,579.945,488,000.00161,776,087.79
2.Increasedamountoftheperiod
(1)Purchase
(2)InternalR&D
(3)Businesscombinationincrease
3.Decreasedamountoftheperiod
(1)Disposal
4.Endingbalance144,770,507.8511,517,579.945,488,000.00161,776,087.79
II.Accumulatedamortization
1.Beginningbalance48,128,022.519,549,052.641,006,133.2658,683,208.41
2.Increasedamountoftheperiod1,486,425.13906,524.78274,399.982,667,349.89
(1)Withdrawal1,486,425.13906,524.78274,399.982,667,349.89
3.Decreasedamountoftheperiod
(1)Disposal
4.Endingbalance59,614,447.6410,455,577.421,280,533.2461,350,558.30
III.Depreciationreserves
1.Beginningbalance
2.Increasedamountoftheperiod
(1)Withdrawal
3.Decreasedamountoftheperiod
(1)Disposal
4.Endingbalance
IV.Carryingvalue
1.Endingcarryingvalue95,156,060.211,062,002.524207466.76100,425,529.49
2.Beginningcarryingvalue96,642,485.341,968,527.304,481,866.74103,092,879.38

14.DeferredIncomeTaxAssets/DeferredIncomeTaxLiabilities

(1)DeferredIncomeTaxAssetsthatHadnotBeenOff-set

Unit:RMB

ItemEndingbalanceBeginningbalance
DeductibletemporarydifferenceDeferredincometaxassetsDeductibletemporarydifferenceDeferredincometaxassets
Provisionforimpairmentofassets6,401,000.68979,822.716,401,000.68979,822.71
Total6,401,000.68979,822.716,401,000.68979,822.71

(2)DeferredIncomeTaxLiabilitiesHadNotBeenOff-set

Unit:RMB

ItemEndingbalanceBeginningbalance
DeductibletemporarydifferenceDeferredincometaxliabilitiesDeductibletemporarydifferenceDeferredincometaxliabilities
Assetsevaluationappreciationforbusinesscombinationnotunderthesamecontrol4,867,828.961,216,957.245,247,821.441,311,955.36
Changesinfairvalueofotherequityinstrumentinvestment413,807,500.0062,071,125.00311,065,500.0046,659,825.00
Total418,675,328.9663,288,082.24316,313,321.4447,971,780.36

(3)ListofUnrecognizedDeferredIncomeTaxAssets

Unit:RMB

ItemEndingbalanceBeginningbalance
Deductabletemporarydifference320,481,664.50320,481,664.50
Total320,481,664.50320,481,664.50

15.OtherNon-currentAssetsWhethertheCompanyhasexecutedthenewincomestandards

√Yes□No

Unit:RMB

ItemEndingbalanceBeginningbalance
CarryingamountDepreciationreservesCarryingvalueCarryingamountDepreciationreservesCarryingvalue
Entrustedloans0.000.000.004,000,000.004,000,000.000.00
Total0.000.000.004,000,000.004,000,000.000.00

16.Short-termBorrowings

(1)CategoryofShort-termBorrowings

Unit:RMB

ItemEndingbalanceBeginningbalance
Mortgageloans7,000,000.007,000,000.00
Guaranteedloans10,000,000.0010,000,000.00
Creditloans5,000,000.0010,000,000.00
Total22,000,000.0027,000,000.00

17.NotesPayable

Unit:RMB

CategoryEndingbalanceBeginningbalance
Bank’sacceptancebill498,805,800.00438,375,400.00
Total498,805,800.00438,375,400.00

18.AccountsPayable

(1)ListofAccountsPayable

Unit:RMB

ItemEndingbalanceBeginningbalance
Loans534,631,506.05591,754,875.77
Total534,631,506.05591,754,875.77

19.AdvancesfromCustomersWhethertheCompanyhasexecutedthenewincomestandards

√Yes□No

(1)ListofAdvancesfromCustomers

Unit:RMB

ItemEndingbalanceBeginningbalance
Loans58,809,277.6834,500,232.97
Total58,809,277.6834,500,232.97

20.PayrollPayable

(1)ListofPayrollPayable

Unit:RMB

ItemBeginningbalanceIncreaseDecreaseEndingbalance
I.Short-termsalary50,500,592.99130,770,536.38150,036,105.0531,235,024.32
II.Post-employmentbenefit-definedcontributionplans16,142,912.9716,142,912.97
Total50,500,592.99146,913,449.35166,179,018.0231,235,024.32

(2)ListofShort-termSalary

Unit:RMB

ItemBeginningbalanceIncreaseDecreaseEndingbalance
1.Salary,bonus,allowance,subsidy41,939,857.83110,265,454.00129,160,534.4023,044,777.43
2.Employeewelfare89,592.741,568,150.281,467,821.58189,921.44
3.Socialinsurance7,901,233.357,901,233.35
Ofwhich:Medicalinsurancepremiums6,550,754.266,550,754.26
Work-relatedinjuryinsurance653,467.90653,467.90
Maternityinsurance697,011.19697,011.19
4.Housingfund8,704,590.008,704,590.00
5.Laborunionbudgetandemployeeeducationbudget8,471,142.422,331,108.752,801,925.728,000,325.45
Total50,500,592.99130,770,536.38150,036,105.0531,235,024.32

(3)ListofDefinedContributionPlans

Unit:RMB

ItemBeginningbalanceIncreaseDecreaseEndingbalance
1.Basicpensionbenefits15,706,350.3115,706,350.31
2.Unemploymentinsurance436,562.66436,562.66
Total16,142,912.9716,142,912.97

21.TaxesPayable

Unit:RMB

ItemEndingbalanceBeginningbalance
VAT1,063,147.40876,055.81
Corporateincometax1,789,869.443,665,483.92
Personalincometax18,174.27140,662.05
Urbanmaintenanceandconstructiontax20,540.15993,210.56
Propertytax30,187.8894,256.40
Landusetax21,000.00100,135.19
Stampduty6,673.854,594.61
EducationSurcharge14,671.54116,355.46
Comprehensivefees0.001,075,134.76
Environmentalprotectiontax292.59197.13
Total2,964,557.127,066,085.89

22.OtherPayables

Unit:RMB

ItemEndingbalanceBeginningbalance
Interestpayable0.00
Dividendspayable3,891,433.833,891,433.83
Otherpayables188,181,372.94195,520,817.07
Total192,072,806.77199,412,250.90

(1)DividendsPayable

Unit:RMB

ItemEndingbalanceBeginningbalance
Ordinarysharedividends3,243,179.973,243,179.97
Dividendsfornon-controllingshareholders648,253.86648,253.86
Total3,891,433.833,891,433.83

Otherexplanations,includingimportantdividendspayablethathavenotbeenpaidformorethanoneyear,shalldisclosethereasonforthenon-payment:shareholdershavenotreceiveddividendsformorethanoneyear.

(2)OtherPayables

1)OtherPayablesListedbyNatureofAccount

Unit:RMB

ItemEndingbalanceBeginningbalance
Margin&cashpledged4,067,802.523,369,213.08
Intercoursefundsamongunits15,026,254.3210,977,924.77
Intercoursefundsamongindividuals452,065.24375,201.04
Salesdiscountandthreeguarantees150,267,114.56144,278,468.99
Other18,368,136.3036,520,009.19
Total188,181,372.94195,520,817.07

23.CurrentPortionofNon-currentLiabilities

Unit:RMB

ItemEndingbalanceBeginningbalance
Currentportionoflong-termborrowings18,500,000.0018,500,000.00
Total18,500,000.0018,500,000.00

24.OtherCurrentLiabilitiesWhethertheCompanyhasexecutedthenewincomestandards

√Yes□No

Unit:RMB

ItemEndingbalanceBeginningbalance
Electriccharge2,664,523.792,082,985.18
Total2,664,523.792,082,985.18

25.DeferredIncome

Unit:RMB

ItemBeginningbalanceIncreaseDecreaseEndingbalanceReasonforformation
Governmentsubsidies59,928,484.840.000.0059,928,484.84
Total59,928,484.8459,928,484.84--

Iteminvolvinggovernmentsubsidies:

Unit:RMB

ItemBeginningbalanceAmountofnewlysubsidyAmountrecordedintonon-operatingincomeintheReportingPeriodAmountrecordedintootherincomeintheReportingPeriodAmountoffsetcostintheReportingPeriodOtherchangesEndingbalanceRelatedtoassets/relatedtoincome
Electriccontrolofdieselengineresearchanddevelopmentandindustrializationallocations646,800.00646,800.00Relatedtoassets
Nationalmajorprojectspecialallocations28,770,000.0028,770,000.00Relatedtoassets
Removecompensation20,511,684.8420,511,684.84Relatedtoassets
Researchand10,000,000.0010,000,000.00Relatedtoassets

26.ShareCapital

Unit:RMB

developmentandindustrializationallocationsofnationalIII/IVstandardhigh-poweredefficientdieselengineforagriculturaluseBeginning

balance

BeginningbalanceIncrease/decrease(+/-)Endingbalance
NewsharesissuedBonussharesBonusissuefromprofitOtherSubtotal
Thesumofshares561,374,326.00561,374,326.00

27.CapitalReserves

Unit:RMB

ItemBeginningbalanceIncreaseDecreaseEndingbalance
Capitalpremium(premiumonstock)143,990,690.24143,990,690.24
Othercapitalreserves20,337,975.1920,337,975.19
Total164,328,665.43164,328,665.43

28.OtherComprehensiveIncome

Unit:RMB

ItemBeginningbalanceReportingPeriodEndingbalance
IncomebeforetaxationintheCurrentPeriodLess:RecordedinothercomprehensiveincomeinpriorperiodandtransferredinprofitorlossintheCurrentPeriodLess:RecordedinothercomprehensiveincomeinpriorperiodandtransferredinretainedearningsintheCurrentPeriodLess:IncometaxexpenseAttributabletoownersoftheCompanyastheparentaftertaxAttributabletonon-controllinginterestsaftertax
I.Othercomprehensiveincomethatwillnotbereclassifiedtoprofitorloss264,405,675.00102,742,000.000.000.0015,411,300.0087,330,700.00351,736,375.00
Changesinfairvalueofotherequityinstrumentinvestment264,405,675.00102,742,000.000.000.0015,411,300.0087,330,700.00351,736,375.00
Totalofothercomprehensiveincome264,405,675.00102,742,000.0015,411,300.0087,330,700.000.00351,736,375.00

29.SpecificReserve

Unit:RMB

ItemBeginningbalanceIncreaseDecreaseEndingbalance
Safetyproductioncost15,182,958.8315,182,958.83
Total15,182,958.8315,182,958.83

30.SurplusReserves

Unit:RMB

ItemBeginningbalanceIncreaseDecreaseEndingbalance
Statutorysurplusreserves306,976,192.25306,976,192.25
Discretionalsurplusreserves13,156,857.9013,156,857.90
Total320,133,050.15320,133,050.15

31.RetainedEarnings

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Beginningbalanceofretainedearningsbeforeadjustments717,883,351.33679,131,047.06
Beginningbalanceofretainedearningsafteradjustments717,883,351.33679,131,047.06
Add:NetprofitattributabletoownersoftheCompanyastheparent19,058,025.0718,638,557.66
Less:Withdrawalofstatutorysurplusreserves
Dividendofordinarysharespayable14,034,358.1516,841,229.78
Endingretainedearnings722,907,018.25680,928,374.94

32.OperatingRevenueandCostofSales

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
OperatingrevenueCostofsalesOperatingrevenueCostofsales
Mainoperations1,099,044,681.77958,911,511.171,170,216,312.131,021,184,769.09
Otheroperations16,785,163.8211,527,336.1916,544,580.1313,170,139.90
Total1,115,829,845.59970,438,847.361,186,760,892.261,034,354,908.99

WhethertheCompanyhasexecutedthenewincomestandards

√Yes□No

33.TaxesandSurtaxes

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Urbanmaintenanceand574,471.12845,650.36
constructiontax
EducationSurcharge266,336.51642,651.03
Propertytax1,986,524.352,069,927.39
Landusetax1,713,504.951,586,101.00
Stampduty456,518.80513,699.80
Other81,443.68
Total4,997,355.735,739,473.26

34.SellingExpense

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Officeexpenses2,915,326.323,386,449.10
Employee’sremuneration12,563,212.2513,325,262.47
Salespromotionalexpense3,165,350.004,262,413.37
Threeguarantees31,616,012.4723,686,879.68
Transportcharge1,767,281.302,858,745.16
Other6,231,216.644,708,326.08
Total58,258,398.9852,228,075.86

35.AdministrativeExpense

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Officeexpenses6,785,232.655,654,457.09
Employee’sremuneration11,852,036.5812,037,442.78
Depreciationandamortization7,665,203.655,697,101.23
Transportfees1,205,423.261,056,769.14
Repaircharge992,564.621,032,605.25
Safetyexpenses1,005,623.68414,850.19
Other4,596,610.422,474,389.63
Total34,102,694.8628,367,615.31

36.R&DExpense

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Directinputexpense19,912,601.4421,463,512.92
Employee’sremuneration8,459,434.3410,053,265.32
Depreciationandamortization1,367,141.441,406,084.20
EntrustedR&Dcharges0.00700,000.00
Other325,106.24444,009.71
Total30,064,283.4634,066,872.15

37.FinanceCosts

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Interestexpense1,567,625.501,805,097.10
Less:Interestincome1,642,256.03891,663.17
Netforeignexchangegainsorlosses-1,047,246.55-1,336,510.72
Other-658,934.54290,739.67
Total-1,780,811.62-132,337.12

38.OtherIncome

Unit:RMB

SourcesReportingPeriodSameperiodoflastyear
Governmentsubsidies129,300.00129,600.00

39.InvestmentIncome

Unit:RMB

ItemReportingPeriodSamePeriodoflastyear
Investmentincomereceivedfromholdingofavailable-for-salefinancialassets21,000.00
Investmentincomereceivedfromdisposalofsecuritiescompanies’financialproducts179,073.85355,091.68
Total179,073.85376,091.68

40.CreditImpairmentLoss

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Baddebtlossofotherreceivables-9,260,420.00
Entrustedloanimpairmentloss4,000,000.00
Total-5,260,420.00

41.AssetImpairmentLossWhethertheCompanyhasexecutedthenewincomestandards

√Yes□No

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
I.Baddebtloss-9,843,236.55
II.Lossoninventoryvaluationandcontractperformancecost-26,096.43-114,220.19
Total-26,096.43-9,957,456.74

42.ProceedsfromAssetsDisposal

Unit:RMB

SourcesReportingPeriodSameperiodoflastyear
Fixedassetdisposalincome988,535.950.00

43.Non-operatingIncome

Unit:RMB

ItemReportingPeriodSameperiodoflastyearAmountrecordedinthecurrentnon-recurringprofitorloss
Incomegeneratedfromdisposalofcurrentassets324,516.28913,253.12324,516.28
Gainsfromdisposalofnon-currentassets220,802.18
Incomefrompenalty6,021.73
Other242,415.10963,006.00242,415.10
Total566,931.382,103,083.03566,931.38

44.Non-operatingExpense

Unit:RMB

ItemReportingPeriodSameperiodoflastyearAmountrecordedinthecurrentnon-recurring
profitorloss
Lossondisposalofnon-currentassets215,077.98759,756.94215,077.98
Lossondisposalofcurrentassets585,214.30
Other2,760.00182,194.972,760.00
Total217,837.981,527,166.21217,837.98

45.IncomeTaxExpense

(1)ListofIncomeTaxExpense

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Currentincometaxexpense-2,998,475.834,352,526.65
Total-2,998,475.834,352,526.65

(2)AdjustmentProcessofAccountingProfitandIncomeTaxExpense

Unit:RMB

ItemReportingPeriod
Profitbeforetaxation16,108,563.59
Currentincometaxexpenseaccountedatstatutory/applicabletaxrate2,416,284.53
Influenceofapplyingdifferenttaxratesbysubsidiaries1,285,450.52
Influenceofincometaxbeforeadjustment-6,700,210.88
Incometaxexpense-2,998,475.83

46.CashFlowStatement

(1)CashGeneratedfromOtherOperatingActivities

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Subsidyandappropriation129,300.00129,600.00
Otherintercoursesincash6,528,903.175,101,317.80
Interestincome1,642,256.03891,663.17
Total8,300,459.206,122,580.97

(2)CashUsedinOtherOperatingActivities

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Sellingexpensepaidincash22,265,032.5421,006,830.47
Administrativeexpensepaidincash15,584,623.2514,557,302.97
Handlingcharge275,426.54282,442.51
Other358,282.38611,755.52
Total38,483,364.7136,458,331.47

Notes:

47.SupplementalInformationforCashFlowStatement

(1)SupplementalInformationforCashFlowStatement

Unit:RMB

SupplementalinformationReportingPeriodSameperiodoflastyear
1.Reconciliationofnetprofittonetcashflowsgeneratedfromoperatingactivities----
Netprofit19,107,039.4218,907,908.92
Add:Provisionforimpairmentofassets5,286,516.439,957,456.74
Depreciationoffixedassets,ofoil-gasassets,ofproductivebiologicalassets45,064,505.2945,126,800.50
Depreciationofright-to-useassets0.000.00
Amortizationofintangibleassets2,667,349.893,009,252.65
Amortizationoflong-termdeferredexpenses0.000.00
Lossesondisposaloffixedassets,intangibleassetsandotherlong-termassets(gainsby“-”)-988,535.95521,857.30
Lossesonthescrappingoffixedassets(gainsby“-”)0.000.00
Lossesonthechangesinfairvalue(gainsby“-”)0.000.00
Financialexpenses(gainsby“-”)-1,780,811.62668,251.41
Investmentlosses(gainsby“-”)0.00-376,091.68
Decreaseindeferredincometaxassets(increaseby“-”)0.000.00
Increaseindeferredincometaxliabilities(decreaseby“-”)0.000.00
Decreaseininventory(increaseby“-”)77,794,149.7284,613,078.27
Decreaseinaccountsreceivablefromoperatingactivities(increaseby“-”)-400,095,623.42-250,092,116.94
Increaseinpayablesfromoperatingactivities(decreaseby“-”)80,746,953.0584,973,677.86
Other-2,976,019.99-2,918,928.18
Netcashflowsgeneratedfromoperatingactivities-154,227,704.77-5,608,853.15
2.Investingandfinancingactivitiesthatdonotinvolvingcashreceiptsandpayment:----
Debttransferredascapital0.00
Convertiblecorporatebondduewithinoneyear0.00
Fixedassetsfromfinancinglease0.00
3.Netincreaseincashandcashequivalents----
Endingbalanceofcash493,620,269.20282,312,926.17
Less:Beginningbalanceofcash687,439,682.49325,263,654.43
Less:Beginningbalanceofcashequivalents0.00
Netincreaseincashandcashequivalents-193,459,370.39-42,950,728.26

(2)CashandCashEquivalents

Unit:RMB

ItemEndingbalanceBeginningbalance
I.Cash476,941,653.95687,439,682.49
Including:Cashonhand401,268.09441,363.70
Bankdepositondemand470,286,840.55684,620,907.41
Othermonetarycapitalondemand2,001,365.452,017,368.48

48.AssetswithRestrictedOwnershiporRighttoUse

Unit:RMB

ItemEndingcarryingvalueReasonforrestriction
Monetarycapital134,862,508.92Ascashdepositforbankacceptancebill
Housesandbuildings2,936,446.13Mortgagedforborrowingsfrombanks
Landuseright995,328.00Mortgagedforborrowingsfrombanks
Machineryequipment48,181,935.62Mortgagedforborrowingsfrombanks
Total186,976,218.67--

49.ForeignCurrencyMonetaryItems

(1)ForeignCurrencyMonetaryItems

Unit:RMB

ItemEndingforeigncurrencybalanceExchangerateEndingbalanceconvertedtoRMB
Monetarycapital----
Ofwhich:USD5,085,852.326.874034,960,148.85
HKD275,388.800.8797242,259.52
SGD54,427.955.0805276,521.20
Accountsreceivable----
Ofwhich:USD9,846,283.216.874067,683,350.78
EUR
HKD

50.GovernmentSubsidy

(1)BasicInformationonGovernmentSubsidy

Unit:RMB

CategoryAmountListeditemsAmountrecordedinthecurrentprofitorloss
TractorprojectofLuoyanghillyland66,000.00Otherincome66,000.00
Specificfundformunicipal-levelforeigntradedevelopment63,300.00Otherincome63,300.00

VIII.ChangesofConsolidationScope

1.ChangesinCombinationScopeforOtherReasonsNotetochangesincombinationscopeforotherreasons(suchasnewlyestablishmentorliquidationofsubsidiaries,etc.)andrelevantinformation:

TheinformationofnewlyestablishmentofsubsidiariesOn25February2019,theinterimboardmeetingheldbyChangchaiCompany,Limited(hereinafterreferredas“theCompany”),examinedandapprovedtheproposalofestablishingwholly-ownedsubsidiarytoimplementtheproductionprojectoflightdutyengineandcasting,agreedtheCompanytosetupawholly-ownedsubsidiaryinRMB300milliontoimplementtheproductionproject.ThesubsidiarycompletedtheregistrationproceduresandgainedthebusinesslicenseissuedbyAdministrativeApprovalBureauofChangzhouNationalHigh-techIndustryDevelopmentZone(XinbeiDistrict)withthecorporatenameofJiangsuChangchaiMachineryCo.,Ltd.andtheregisteredcapitalRMB300million.Forthedetailedinformation,seetheAnnouncementofForeignInvestmentandEstablishingtheWholly-ownedSubsidiary(AnnouncementNo.2019-004)andAnnouncementofProceduresofForeignInvestmentandEstablishingtheWholly-ownedSubsidiary(AnnouncementNo.2019-005)inSecurityTimes,TaKungPaoandthecninfowebsiteonFebruary26,2019andMarch7,2019.

IX.EquityinOtherEntities

1.EquityinSubsidiary

(1)Subsidiaries

NameMainoperatingplaceRegistrationplaceNatureofbusinessHoldingpercentage(%)Wayofgaining
DirectlyIndirectly
ChangchaiWanzhouDieselEngineCo.,Ltd.ChongqingChongqingIndustry60.00%Set-up
ChangzhouChangchaiBenniuDieselEngineFittingsCo.,Ltd.ChangzhouCityChangzhouCityIndustry99.00%1.00%Set-up
ChangzhouHoushengInvestmentCo.,Ltd.ChangzhouCityChangzhouCityService100.00%Set-up
ChangzhouChangchaiHoushengAgriculturalEquipmentCo.,Ltd.ChangzhouCityChangzhouCityIndustry70.00%25.00%Set-up
ChangzhouFujiChangchaiRobinGasolineEngineCo.,Ltd.ChangzhouCityChangzhouCityIndustry100.00%Combinationnotunderthesamecontrol
JiangsuChangchaiMachineryCo.,Ltd.ChangzhouCityChangzhouCityIndustry100.00%Set-up

Notestoholdingproportioninsubsidiarydifferentfromvotingproportion:

Basisofholdinghalforlessvotingrightsbutstillcontrollingtheinvesteeandholdingmorethanhalfofthevotingrightsbutnotcontrollingtheinvestee:

Significantstructuralentitiesandcontrollingbasisinthescopeofcombination:

BasisofdeterminingwhethertheCompanyistheagentortheprincipal:

(2)SignificantNon-wholly-ownedSubsidiary

Unit:RMB

NameShareholdingproportionofnon-controllinginterestsTheprofitorlossattributabletothenon-controllinginterestsDeclaringdividendsdistributedtonon-controllinginterestsBalanceofnon-controllinginterestsattheperiod-end
ChangchaiWanzhouDieselEngineCo.,Ltd.40.00%
ChangzhouChangchaiHoushengAgriculturalEquipmentCo.,Ltd.5.00%

(3)TheMainFinancialInformationofSignificantNotWholly-ownedSubsidiary

Unit:RMB

NameEndingbalanceBeginningbalance
CurrentassetsNon-currentassetsTotalassetsCurrentliabilitiesNon-currentliabilityTotalliabilitiesCurrentassetsNon-currentassetsTotalassetsCurrentliabilitiesNon-currentliabilityTotalliabilities
ChangchaiWanzhouDieselEngineCo.,Ltd.112,303,839.9127,016,071.00139,319,910.9122,588,500.690.0022,588,500.69110,589,006.9527,493,776.10138,082,783.0519,608,386.992,000,000.0021,608,386.99
ChangzhouChangchaiHoushengAgricultural33,803,254.87567,302.3534,370,557.2233,567,100.580.0033,567,100.5835,776,302.79625,680.7236,401,983.5135,028,512.300.0035,028,512.30

Unit:RMB

EquipmentCo.,Ltd.

Name

NameReportingPeriodSameperiodoflastyear
OperatingrevenueNetprofitTotalcomprehensiveincomeCashflowsfromoperatingactivitiesOperatingrevenueNetprofitTotalcomprehensiveincomeCashflowsfromoperatingactivities
ChangchaiWanzhouDieselEngineCo.,Ltd.23,600,857.49257,014.16257,014.16-862,600.3327,534,782.67603,341.04603,341.04-817,231.49
ChangzhouChangchaiHoushengAgriculturalEquipmentCo.,Ltd.6,815,423.91-570,014.57-570,014.57-1,101,489.2311,788,194.43560,296.88560,296.88-6,844,681.85

(4)FinancialSupportorOtherSupportsProvidedtoStructuralEntitiesIncorporatedintotheScopeofConsolidatedFinancialStatementsTheCompanyprovidedChangzhouChangchaiHoushengAgriculturalEquipmentCo.,Ltd.bankloanguaranteewithRMB20millionattheendoftheperiod.

2.EquityintheStructuredEntityExcludedintheScopeofConsolidatedFinancialStatementsNotestothestructuredentityexcludedinthescopeofconsolidatedfinancialstatements:

In2017,theCompanysetupChangzhouXietongPrivateEquityFund(LimitedPartnership)togetherwithSynergeticInnovationFundManagementCo.,Ltd.throughjointinvestment.On18October2018,newpartnerswereadded.InlinewiththerevisedPartnershipAgreement,thegeneralpartnerisSynergeticInnovationFundManagementCo.,Ltd.,andthelimitedpartnersareChangchaiCompany,Limited,ChangzhouZhongyouPetroleumSalesCo.,Ltd.,ChangzhouFuelCo.,Ltd.,TongYinzhuandTongYinxin.InaccordancewiththePartnershipAgreement,thelimitedpartnerdoesnotexecutethepartnershipaffairs.Thus,theCompanydoesnotcontrolChangzhouXietongPrivateEquityFund(LimitedPartnership)anddidnotincludeitintothescopeofconsolidatedfinancialstatements.

X.TheRiskRelatedtoFinancialInstrumentsThegoaloftheCompany’sriskmanagementwasgainingthebalancebetweentheriskandincome,andreducedthenegativeimpacttotheoperationperformanceoftheCompanyinthelowestlevelandmaximizedtheinterestsofshareholdersandotherequityinvestors.Baseontheriskmanagementgoal,thebasisstrategyoftheCompany’sriskmanagementwastorecognizedandanalyzeallkindsofriskthattheCompanyfaced,setupsuitableriskbottomlineandconductriskmanagement,andsupervisedtheriskstimelyandreliablyandcontroltheriskwithinthelimitedscope.ThemainrisksoftheCompanyduetofinancialinstrumentswerecreditrisk,liquidityriskandmarketrisk.Themanagementlevelhadreviewedandapprovedthepoliciestomanagetherisks,whichsummarizedasfollows:

(I)CreditRiskCreditriskwasonepartyofthecontractfailedtofulfilltheobligationsandcauseslossoffinancialassetsoftheotherparty.ThecreditofriskoftheCompanymainlywasrelatedtoaccountreceivable,inordertocontroltherisk,theCompanyconductthefollowingmethods.TheCompanyonlyconductsrelatedtransactionwithapprovedandreputablethirdparty,inlinewiththepolicyoftheCompany,theCompanyneedtoconductcredit-checkfortheclientsadoptingwayofcredittoconducttransaction.Inaddition,theCompanycontinuouslymonitorsthebalanceofaccountreceivabletoensuretheCompanywouldnotfacethesignificantbaddebtrisk.(II)LiquidityRiskLiquidityriskisreferredtotheriskofincurringcapitalshortagewhenperformingsettlementobligationinthewayofcashpaymentorotherfinancialassets.ThepoliciesoftheCompanyaretoensurethattherewassufficientcashtopaythedueliabilities.TheliquidityriskwascentralizedcontrolledbythefinancialdepartmentoftheCompany.Thefinancialdepartmentsthroughsupervisingthebalanceofthecashandsecuritiescanbeconverttocashatanytimeandtherollingpredictionofcashflowinfuture12monthstoensuretheCompanyhassufficientcashtopaytheliabilitiesunderthecaseofallreasonableprediction.(III)MarketRiskMarketriskisrefertoriskofthefairvalueorfuturecashflowoffinancialinstrumentchangedduetothechangeofmarketprice,includingforeignexchangeraterisk,interestraterisk.

1.InterestRateRiskInterestrateriskisreferstofluctuationriskofthefairvalueorfuturecashflowoffinancialinstrumentchangeduetothechangeofmarketprice.

2.ForeignExchangeRiskForeignexchangerateriskisreferredtotheriskincurredformthechangeofexchangerate.AsfortheCompany’sexportbusiness,customerswillbegivenacertaincreditterm,iftheRMBappreciatesagainstthedollar,thecompany'saccountsreceivablewillincurforeigncurrencyexchangeloss.XI.TheDisclosureofFairValue

1.EndingFairValueofAssetsandLiabilitiesatFairValue

Unit:RMB

ItemEndingfairvalue
Fairvaluemeasurementitemsatlevel1Fairvaluemeasurementitemsatlevel2Fairvaluemeasurementitemsatlevel3Total
I.Consistentfairvaluemeasurement--------
(III)Otherequityinstrumentinvestment473,682,000.00473,682,000.00
Totalassetsconsistentlymeasuredbyfairvalue473,682,000.00473,682,000.00
II.Inconsistentfairvaluemeasurement--------

XII.RelatedPartyandRelated-partyTransactions

1.InformationRelatedtotheCompanyastheParentoftheCompany

NameRegistrationplaceNatureofbusinessRegisteredcapitalProportionofshareheldbytheCompanyastheparentagainsttheCompanyProportionofvotingrightsownedbytheCompanyastheparentagainsttheCompany
ChangzhouInvestmentGroupCo.,Ltd.No.23,25,27,29YanlingWestRoadInvestmentserviceRMB1.2billion30.43%30.43%

Notes:InformationontheCompanyastheparentTheCompanyastheparentoftheCompanyisChangzhouInvestmentGroupCo.,Ltd.whichisthewholly-ownedsubsidiaryofChangzhouPeople’sGovernment.InaccordancewithChangzhouPeople’sGovernmentDocument(CZF[2006]No.62),boththeCompanyandChangzhouInvestmentGroupCo.,Ltd.areenterpriseswhichChangzhouPeople’sGovernmentauthorizesChangzhouGovernmentState-ownedAssetsSupervisionandAdministrationCommissiontoperformdutiesofinvestors.Thus,afterthesharertransfer,ChangzhouInvestmentGroupCo.,Ltd.isthecontrollingshareholderoftheCompanyandChangzhouGovernmentState-ownedAssetsSupervisionandAdministrationCommissionisstilltheactualcontrolleroftheCompany.

2.SubsidiariesoftheCompanyRefertoNoteIXEquityinOtherEntitiesfordetails.

3.InformationontheJointVenturesandAssociatedEnterprisesoftheCompanyRefertoNoteIXEquityinOtherEntitiesfordetailsofsignificantjointventuresorassociatedenterprisesoftheCompany.

4.InformationonOtherRelatedParties

NameRelationshipwiththeCompany
SynergeticInnovationFundManagementCo.,Ltd.ThedirectoroftheCompanyservesastheseniormanagementofthecompany

5.Related-partyTransactions

No.

6.OtherNo.XIII.CommitmentsandContingency

1.SignificantCommitmentsSignificantcommitmentsonbalancesheetdateAsof30June2019,therewasnosignificantcommitmentfortheCompanytodisclose.

2.Contingency

(1)SignificantContingencyonBalanceSheetDate

NameofdefendantDateofacceptedNameofthelitigationorarbitrationinstitutionsAmountinvolved(RMB’0,000)Remark
ShandongHongliGroupCo.,Ltd.27June2001ChangzhouIntermediatePeople'sCourt1,436.00Underthebankruptcyandliquidation
Total1,436.00

Notes:

AboutthelawsuitcaseofShandongHongliGroupCo.,Ltd.,theaccusedcompanyowedaccumulativelyRMB

14.36milliontotheCompany.TheCompanysuedtoChangzhouIntermediatePeople’sCourtin2001andsuedforcompulsoryexecutioninApril2002.Currently,thedefendanthasstartedthebankruptcyprocedure.Theaforesaidpaymenthasarrangedforthefullprovisionforbaddebts.

(2)InDespiteofnoSignificantContingencytoDisclose,theCompanyShallAlsoMakeRelevantStatementsTherewasnosignificantcontingencyintheCompany.XIV.EventsafterBalanceSheetDate

1.SignificantNon-adjustedEvents

Unit:RMB

ItemContentInfluencenumbertothefinancialpositionandoperatingresultsReasonofinabilitytoestimateinfluencenumber
SignificantforeigninvestmentTheCompanyacceptedthetransferofcapitalcontributionrightwithRMB50millionofJiangsuHoushengNewEnergyTechnologyCo.,Ltd.fromChangzhouSynergeticInnovationPrivateEquityFund(LimitedPartnership)inJuly2019,andhassubscribedthecapitalcontribution.Underthepilotproductionstage,itisuncertainforthefutureoperationcondition

XV.OtherSignificantEvents

1.SegmentInformation

(1)BasisforDeterminationofSegmentsandGoverningAccountingPoliciesDuetotheoperationscopeoftheCompanyandsubsidiariesweresimilar,theCompanyconductcommonmanagement,didnotdividebusinessunit,sotheCompanyonlymadesinglebranchreport.

(2)OtherSignificantTransactionsandEventswithInfluenceonInvestors’Decision-makingTherearenosignificanttransactionsandeventswithinfluenceoninvestors’decision-makingattheperiod-end.

XVI.NotesofMainItemsintheFinancialStatementsoftheCompanyastheParent

1.AccountsReceivable

(1)AccountsReceivableDisclosedbyCategory

Unit:RMB

CategoryEndingbalanceBeginningbalance
CarryingamountBaddebtprovisionCarryingvalueCarryingamountBaddebtprovisionCarryingvalue
AmountProportionAmountWithdrawalproportionAmountProportionAmountWithdrawalproportion
Accountsreceivableforwhichbaddebtprovisionseparatelyaccrued31,068,167.943.46%30,180,731.5297.14%887,436.4235,823,767.016.85%32,806,077.1491.58%3,017,689.87
Ofwhich:
Accountsreceivablewithsignificantsingleamountforwhichbaddebtprovisionseparatelyaccrued28,205,070.583.14%27,317,634.1696.85%887,436.4232,008,110.066.12%28,990,420.1990.57%3,017,689.87
Accountsreceivablewithinsignificantsingleamountforwhichbaddebtprovisionseparatelyaccrued2,863,097.360.32%2,863,097.36100.00%0.003,815,656.950.73%3,815,656.95100.00%
Accountsreceivablewithdrawalofbaddebtprovisionofby866,444,672.0596.54%201,992,552.6823.31%664,452,119.37487,566,507.8893.15%190,226,913.9439.02%297,339,593.94
group
Ofwhich:
Total897,512,839.99100.00%232,173,284.2025.87%665,339,555.79523,390,274.89100.00%223,032,991.0842.61%300,357,283.81

Accountsreceivableforwhichbaddebtprovisionseparatelyaccrued:

Unit:RMB

NameEndingbalance
CarryingamountBaddebtprovisionWithdrawalproportionReasonforwithdrawal
Customer11,902,326.581,902,326.58100.00%Difficulttorecover
Customer21,161,700.00580,850.0050.00%Expectedtodifficultlyrecover
Customer36,215,662.646,215,662.64100.00%Difficulttorecover
Customer42,484,497.342,177,910.9287.66%Expectedtodifficultlyrecover
Customer53,279,100.003,279,100.00100.00%Expectedtodifficultlyrecover
Customer62,068,377.012,068,377.01100.00%Expectedtodifficultlyrecover
Customer75,359,381.005,359,381.00100.00%Difficulttorecover
Customer82,584,805.832,584,805.83100.00%Difficulttorecover
Customer91,679,109.541,679,109.54100.00%Difficulttorecover
Customer101,470,110.641,470,110.64100.00%Expectedtodifficultlyrecover
Other2,863,097.362,863,097.36100.00%Expectedtodifficultlyrecover
Total31,068,167.9430,180,731.52----

Accountsreceivablewithdrawalofbaddebtprovisionofbygroup:

Unit:RMB

NameEndingbalance
CarryingamountBaddebtprovisionWithdrawalproportion
Within1year(including1year)653,939,222.8413,078,784.462.00%
0.00
1to2years19,477,754.24973,887.715.00%
2to3years5,005,462.35750,819.3515.00%
3to4years875,236.20262,570.8630.00%
4to5years551,265.32330,759.1960.00%
Over5years186,595,731.10186,595,731.10100.00%
Total866,444,672.05201,992,552.68--

Notestothebasisforthedeterminationofthegroups:

Pleaserefertotherelevantinformationofdisclosureofbaddebtprovisionofotheraccountsreceivableifadoptingthegeneralmodeofexpectedcreditlosstowithdrawbaddebtprovisionofaccountsreceivable.

□Applicable√Notapplicable

(2)BadDebtProvisionWithdrawn,ReversedorRecoveredintheReportingPeriodInformationofwithdrawalofbaddebtprovision:

Unit:RMB

CategoryBeginningbalanceChangesintheReportingPeriodEndingbalance
WithdrawalReversalorrecoveryWrite-off
Baddebtprovision223,032,991.089,140,293.12232,173,284.20
Total223,032,991.089,140,293.12232,173,284.20

(3)Top5AccountsReceivableinEndingBalanceCollectedaccordingtotheArrearsPartyThetotaltop5accountsreceivableinendingbalancecollectedaccordingtothearrearspartywasRMB506,859,995.98,accountingfor56.47%ofthetotalendingbalanceofaccountsreceivable.ThecorrespondingendingbalanceofbaddebtprovisionwithdrawnwasRMB10,137,199.92.

2.OtherReceivables

Unit:RMB

ItemEndingbalanceBeginningbalance
Otherreceivables23,668,652.7621,681,331.85
Total23,668,652.7621,681,331.85

(1)OtherReceivables

1)OtherReceivablesClassifiedbyNature

Unit:RMB

NatureEndingcarryingamountBeginningcarryingamount
Cashdepositandmargin4,200.004,200.00
Intercoursefundsamongunits36,584,562.5036,267,607.16
Pettycashandborrowingsbyemployees625,874.64596,876.87
Other17,125,861.5115,364,366.83
Total54,340,498.6552,233,050.86

2)WithdrawalofBadDebtProvisionChangesofcarryingamountwithsignificantamountchangedoflossprovisioninthecurrentperiod

□Applicable√NotapplicableDisclosurebyaging

Unit:RMB

AgingEndingbalance
Within1year(including1year)27,175,672.59
1to2years1,795,421.38
2to3years269,006.89
3to4years96,930.77
4to5years60,094.33
Over5years24,943,372.69
Total54,340,498.65

3)BadDebtProvisionWithdrawal,ReversedorRecoveredintheReportingPeriodInformationofwithdrawalofbaddebtprovision

Unit:RMB

CategoryBeginningbalanceChangesintheReportingPeriodEndingbalance
WithdrawalReversalorrecovery
Baddebtprovision30,551,719.01120,126.8830,671,845.89
Total30,551,719.01120,126.8830,671,845.89

4)Top5oftheEndingBalanceofOtherReceivablesCollectedaccordingtotheArrearsParty

Unit:RMB

NameoftheentityNatureEndingbalanceAgingProportiontoendingbalanceoftotalotherreceivables%Endingbalanceofbaddebtprovision
ChangzhouChangchaiBenniuDieselEngineFittingsCo.,Ltd.Intercoursefunds10,000,000.00Within1year18.40%200,000.00
ChangzhouChangchaiHoushengAgriculturalEquipmentCo.,Ltd.Intercoursefunds8,360,314.98Within1year15.38%167,206.30
ChangzhouCompressorsFactoryIntercoursefunds2,940,000.00Over5years5.41%2,940,000.00
ChangchaiGroupImp.&Exp.Co.,Ltd.Intercoursefunds2,853,188.02Over5years5.25%2,853,188.02
ChangzhouNewDistrictAccountingCentreIntercoursefunds1,626,483.25Over5years3.00%1,626,483.25
Total--25,779,986.25--47.44%7,786,877.57

3.Long-termEquityInvestment

Unit:RMB

ItemEndingbalanceBeginningbalance
CarryingamountDepreciationreserveCarryingvalueCarryingamountDepreciationreserveCarryingvalue
Investmenttosubsidiaries251,752,730.03251,752,730.03241,752,730.03241,752,730.03
Investmenttojointventuresandassociatedenterprises44,182.5044,182.500.0044,182.5044,182.5044,182.50
Total251,796,912.5344,182.50251,752,730.03241,796,912.5344,182.50241,752,730.03

(1)InvestmenttoSubsidiaries

Unit:RMB

InvesteeBeginningbalance(carryingvalue)Increase/decreaseEndingbalance(carryingvalue)Endingbalanceofdepreciationreserve
AdditionalinvestmentReducedinvestmentWithdrawalofdepreciatioOther
nreserve
ChangchaiWanzhouDieselEngineCo.,Ltd.51,000,000.000.000.000.000.0051,000,000.000.00
ChangzhouChangchaiBenniuDieselEngineFittingsCo.,Ltd.96,466,500.000.000.000.000.0096,466,500.000.00
ChangzhouHoushengInvestmentCo.,Ltd.40,000,000.000.000.000.000.0040,000,000.000.00
ChangzhouChangchaiHoushengAgriculturalEquipmentCo.,Ltd.7,000,000.000.000.000.000.007,000,000.000.00
ChangzhouFujiChangchaiRobinGasolineEngineCo.,Ltd.47,286,230.030.000.000.000.0047,286,230.030.00
JiangsuChangchaiMachineryCo.,Ltd.0.0010,000,000.000.000.000.0010,000,000.000.00
Total241,752,730.0310,000,000.00251,752,730.03

(2)InvestmenttoJointVenturesandAssociatedEnterprises

Unit:RMB

InvestBeginIncrease/decreaseEndinEndin
eeningbalance(carryingvalue)AdditionalinvestmentReducedinvestmentGainsandlossesrecognizedundertheequitymethodAdjustmentofothercomprehensiveincomeChangesofotherequityCashbonusorprofitsannouncedtoissueWithdrawalofimpairmentprovisionOthergbalance(carryingvalue)gbalanceofdepreciationreserve
I.Jointventures
II.Associatedenterprises
BeijingTsinghuaXingyeIndustrialInvestmentManagementCo.,Ltd.44,182.5044,182.5044,182.50
Subtotal44,182.5044,182.5044,182.50
Total44,182.5044,182.5044,182.50

4.OperatingRevenueandCostofSales

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
OperatingrevenueCostofsalesOperatingrevenueCostofsales
Mainoperations1,016,544,011.76895,758,979.301,105,442,892.03978,595,283.86
Otheroperations16,785,163.8211,527,336.1915,892,231.1212,482,560.63
Total1,033,329,175.58907,286,315.491,121,335,123.15991,077,844.49

WhethertheCompanyhasexecutedthenewincomestandards

√Yes□No

5.InvestmentIncome

Unit:RMB

ItemReportingPeriodSameperiodoflastyear
Investmentincomefromholdingofheld-to-maturityinvestment0.0021,000.00
Total0.0021,000.00

XVII.SupplementaryMaterials

1.ItemsandAmountsofNon-recurringProfitorLoss

√Applicable□Notapplicable

Unit:RMB

ItemAmountNote
Gains/lossesonthedisposalofnon-currentassets988,535.95
Governmentgrantsrecognizedinthecurrentperiod,exceptforthoseacquiredintheordinarycourseofbusinessorgrantedatcertainquotasoramountsaccordingtothegovernment’sunifiedstandards129,300.00
Gain/lossfromchangeoffairvalueoftradingassetsandliabilities,andderivativefinancialassetsandliabilities,andinvestmentgainsfromdisposaloftradingfinancialassetsandliabilities,derivativefinancialassetsandliabilities,andothercreditors’investment,otherthanvalidhedgingrelatedtotheCompany’scommonbusinesses179,073.85
Reversedportionsofimpairmentallowancesforloanbymandatewhicharetestedindividuallyforimpairment4,000,000.00
Othernon-operatingincomeandexpensesotherthantheabove349,093.41
Less:Incometaxeffects822,508.89
Non-controllinginterestseffects-7,375.16
Total4,830,869.48--

Notes:Thenon-recurringitemsshallbepresentedbytheamountbeforetax.ExplainthereasonsiftheCompanyclassifiesanitemasannon-recurringgain/lossaccordingtothedefinitionintheExplanatoryAnnouncementNo.1onInformationDisclosureforCompaniesOfferingTheirSecuritiestothePublic—Non-recurringGainsandLosses,orclassifiesanyextraordinarygain/lossitemmentionedinthesaidexplanatoryannouncementasarecurrentgain/lossitem?Applicable√Notapplicable

2.ReturnonEquityandEarningsPerShare

ProfitasofReportingPeriodWeightedaverageROE(%)EPS(Yuan/share)
EPS-basicEPS-diluted
NetprofitattributabletoordinaryshareholdersoftheCompany0.97%0.03390.0339
NetprofitattributabletoordinaryshareholdersoftheCompanyafterdeductionofnon-recurringprofitorloss0.73%0.02530.0253

3.DifferencesbetweenAccountingDataunderDomesticandOverseasAccountingStandards

(1)DifferencesofNetProfitandNetAssetsDisclosedinFinancialReportsPreparedunderInternationalandChineseAccountingStandards

□Applicable√Notapplicable

(2)DifferencesofNetProfitandNetAssetsDisclosedinFinancialReportsPreparedunderOverseasandChineseAccountingStandards

□Applicable√Notapplicable

PartXIDocumentsAvailableforReference

(I)ThefinancialstatementssignedandsealedbytheCompany’slegalrepresentative,GeneralManagerandheadofthefinancialdepartment(accountantincharge).(II)TheoriginalsofalltheCompany’sdocumentsandannouncementswhichweredisclosedonthewebsitedesignatedbytheCSRCduringtheReportingPeriod.(III)TheInterimReportdisclosedinothersecuritiesmarkets.Theabove-mentioneddocumentsavailableforreferenceareallkeptintheSecretariatoftheBoardofDirectorsoftheCompanyandtheShenzhenStockExchange.ThisInterimReporthasbeenpreparedinbothChineseandEnglish.Shouldtherebeanydiscrepanciesormisunderstandingsbetweenthetwoversions,theChineseversionshallprevail.

TheBoardofDirectorsChangchaiCompany,Limited

29August2019


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